All right, great. We're. As you can see, we're gonna mix it up a little bit here. We're turning this into a, this next session into a fireside chat, so please send in your questions through the app. Obviously, I've got quite a few, but please send them in, if you have a minute. Joining us is Richard Adkerson, Chairman of the Board and CEO of Freeport-McMoRan. Freeport, as I think many of you know, is the largest copper producer globally, publicly traded copper producer globally, also a major producer of gold. Assets North America, South America, Indonesia. Richard has been. Molybdenum. molybdenum. True. increasingly important, moly. Richard's been with Freeport for a couple of years. he's one of the, you know, most senior executives in the, in the copper industry. He's been there since, I think, the 1990s. 80s now. Obviously, he's steered the company through quite a few changes over the years. Currently, I would argue they are, one of the, you know, best positioned times for the company in terms of capitalizing on that. What we think is a very strong outlook for copper and molybdenum and gold. Richard, with that, I'm gonna start it off with a pretty broad question, if you don't mind. If you could just share with us, you know, 40 years ago versus now in the copper industry, two or three of the most significant changes that you've seen, and what you think are the implications for the copper industry over the next 40 years. Yeah. Thanks. First of all, it's great to be back here at the BMO conference. It's a fun time every year. I think, this is, I think at least my first one was 20 years ago or more. I really enjoy and appreciate BMO, making the effort to have this kinda conference. It's really special. I've actually been an employee of Freeport since 1989, although I worked with the company for a number of years before that, I mean, all through the 80s, as the company was being created. I've been around the company a long time. First trip to Indonesia was 1988. The way I think about it, and this had a really strong reason for why we are here today, is after we developed the Grasberg mine in Indonesia during the 1990s and we're going into 2000s and early 2000s, you know, global economy was bad, copper prices were very low. At that time, we didn't think Freeport should continue as a single asset company. You know, it was 1/3 gold and 2/3 copper, and we tried to sell the company or divide it and do all sorts of things. Up until that point, and I became CEO in 2003, copper had been driven by the industrialized countries. It was a commodity most closely linked with industrial production, and so copper prices would rise and fall with the business cycles. The industry was highly fragmented at that time. Companies were much smaller than they are today, and there were a lot of known deposits, primarily in Latin America, so that when prices jumped up, there would be investments made, there'd be a time lag, and you end up with this copper cycle. Up to that point, there was a copper cycle. China emerged in 2003. Just a year or two earlier, prices dropped below $0.70. China came in with a boom. I remember an early conference, may have been yours, may have been the other one in 2003. Met with all the CEOs of the industry, I was a new CEO at the time. Nobody expected the price of copper to go to $1.90. There was one of the big companies, economists said the long-term price of copper was, real price was $0.80 and dropping. You know, by 2006, it was $4. $4. We made a commitment to copper at that time with Freeport, when we couldn't sell the company. I went down to South America. I said, "Where are the new projects coming from?" Because the conventional wisdom was there'd be new projects. There weren't new projects like there had been in the past. That led us to do the Phelps Dodge deal in 2007, which has been just a great deal, and looking back at it. The next era of time was China. China was the sole source of global growth in copper up until very, very recently. It grew more than anybody expected. That was kind of the Chinese era. Now I see a new era of copper demand that everybody here is talking about. People focus on investments in carbon reduction, and that's going to be a big source of demand. You know, the amount of copper that's going into electric vehicles, energy generation, and the supporting infrastructure. 70% of copper goes into electricity in some form, and all that's going to require more electrical infrastructure. I still believe in global growth and rising standards of living over time around the world. We're increasingly comfortable with Freeport's commitment to copper, and that is our strategy, is to be the foremost copper company in the world. We got a great set of assets, great team. We've done projects of size all over the world with different kinds of technology. We've got a great resource base to work over. We're very comfortable with that, feel very good about it, and increasingly so after we've solved some company-specific issues along the way, that, we really like where we are, where the commodity is, and what our future looks like. Okay. just on a short-term basis, there was a bit of a, an issue at the mill in Grasberg in February. I was wondering if you'd just give us an update on the mill. Is it running? If so, what's the status? Many in the industry have read enough about Grasberg to know that its setting is just unbelievable. I mean, it's high in the mountains of New Guinea, really steep elevations, and constant rainfall. The road leading up to Grasberg, the U.N. has designated as the wettest spot on Earth. That's very unusual for copper mines. Copper mines are typically in arid locations. It rains virtually every day there, 200-400 inches a year at the mine. Think about that. In Phoenix, it rains less than seven inches a year, and we have that kind of rainfall. Our mill, which traditionally has been the largest valued insurance site in the world, you know, it's, and it's set, and we've just expanded and expanded over the years, and it's set in this steep ravine that just goes straight up like that. Over years, we've taken steps to mitigate rockfall and to try to divert water off. We had an incredible rain burst for a short period of time that came there. For those of you from the U.S., and Canada, read about what happened at Yellowstone Park a couple years ago. It was a similar sort of event. It was just a rush of debris and water that came down into our mill area. Fortunately, none of our people were injured. Unfortunately, a couple of downstream artisanal miners were swept away. It turns out that the physical damage to the mill was limited. It was more of a debris situation, and we've had instances like this over the years. This was probably the most severe, and being at the mill was particularly an issue. It did cause us to cease operations at the mill for a period of time, and then mining was ultimately affected. Our team's been experienced. We've come back a long ways. We've now, all of our mines are operating, the mill is operating. The impacts, we're still getting our arms around to let the market know for the first quarter, but should not be significant for the year, and we're taking steps to mitigate it. Just one of those things that you have to deal with, and it's hard business. Okay. Switching gears a little bit to the broader industry. Freeport over the years has been in and out of the M&A side of the business, and I'm just wondering, what are your views towards M&A opportunities in this sector over the next three years? The next three years are very uncertain. I don't tell anybody here. You know, we got just things overhanging the global economy right now that none of us can predict, and everybody's trying to understand and adjust to it, and governments are trying to deal with it. I think that's just a real uncertain question for three years. With the long-term outlook for copper being so positive, with the opportunities to grow through exploration and development being limited for a number of factors, I think that will inevitably lead to M&A activity. Okay. Freeport's balance sheet is very strong. It's got- Nice pipeline. That being said, you know, historically there's been some appetite for growth within Freeport in terms of, inorganic acquisition opportunities. Will Freeport participate? You know, is Freeport a buyer, basically? Our strategy's focused on this great set of assets we have to grow internally, that is in large part in the United States, which is really a great place to do business from a mining company. We also have a very significant growth opportunity in Chile, which is, you know, currently, a bit up in the air with the political situation going on there. We're working with the government and having some positive discussions about extending our operating rights in Indonesia beyond the current 2041 limitation. That 2041 date's been there for a very long time. It was in our contract, now under our mining permit. We really haven't done extensive delineation drilling in the Grasberg district, even in the ore bodies that we're currently producing. With the success in getting that extension is not immediate, but boy, the value proposition for the long-term future of our company is really, really important. That's what we're focused on. You'll probably wanna ask about this leaching technology, which is a huge opportunity for Freeport, that's emerging. It's not, you know, it's not been defined yet, but that's what we're really focused in on right now. What are the next steps in developing mines? The world will ultimately need the mine at our El Abra mine in Chile. We have a whole series of good growth opportunities in the U.S. We're investing in a new underground mine, Looks small in Indonesia, but it's a 90,000 ton per day block cave, the Kucing Liar mine in Indonesia, which will help sustain our production there, and it has life beyond 2041 too. That's what we're really focused on. Otherwise, you know, when I step back and look at M&A in the mining industry broadly and with Freeport's experience, when companies try to force a strategy to say we wanna achieve a strategic goal and force an M&A idea to do that, the results have often not been good. I think it's much better to be opportunistic about things, which we were about Phelps Dodge. When they wouldn't acquire us, all of a sudden the financial markets came into place. For our company that had been very small. I mean, two years before Phelps Dodge, I spent a month on the roads to raise $200 million, literally. All of a sudden, we did a deal that had a combined market cap of $38 billion, the largest high-yield financing ever done in any industry, the largest bank term loan. It was all because opportunity came about and we acted on it. We don't have a strategy, but if an opportunity comes up that we can act on, it makes sense for our shareholders and doesn't distract us from our longer term strategy of developing our own resources, then we'll consider it. Good to know. All right. There's a question- I'm not sure how much you know from that, but anyway. Well, at least you said we'll consider it. We'll consider it, absolutely. 'cause you have shot it down in the past. You said, no. I think you have. Moly prices and sustainability of moly prices in your view, and will Freeport have any interest in expanding its existing platform? Our expansion will come back from maximizing operations which had been constrained because of past low moly. You look at the history of moly prices and man, it's a rollercoaster. They've been up and down. It's important to us. We're the world's largest producer of molybdenum. We have two standalone molybdenum mines in Colorado, and it's a byproduct in several of our mines. It's a big incremental value for us like this higher price is like a copper expansion project in terms of revenues. It's a small market, so I see us maximizing what we have and not looking to do anything other than that. You know, with expanding of our copper mines that have moly byproducts, that would be a source of future volume growth. Okay. South America, decent amount of social political unrest lately. Can you comment about Freeport's exposure there at Cerro Verde? Any disruptions either at or near the assets and any situation there? Man, I'm so proud of our Cerro Verde team. I mean, it's a big mine. I mean, you know, it's the largest milling complex, concentrate milling complex in the world. It's located adjacent to the city of Arequipa, which has over the years had social unrest issues. During COVID, 'cause our workers lived in the city and commuted out to the mine, you know, we were able to sustain operations really effectively by building some housing and working with the community. The team there has done great. It's, you know, it's kinda the modern copper mine, big resource, low grade. Have to move a lot of material to recover and process it to recover the copper. We've done a great job of developing community relationships by supporting the city, by providing fresh water and then building a wastewater collection system. Previously, they were just dumping all their wastewater into the river there, and the ecology of the river was terrible. When we did that, it made the city more modern, but also improved life for the downstream agriculture interests. We have a positive relationship there. We've had some disruption, but not major as a result of the recent protests. We had to do some supply chain issues, but, you know, we're up to normal production there now and really feel good about our ability to continue to operate effectively in Peru. We're not really looking at new investments there, but focusing on this great mine we have there. Chile is a different story with the uncertainties about the direction of the government with respect to fiscal terms for mining. I did meet with President Boric at APEC in Bangkok this fall and really have an appreciation of what he's dealing with. Things are changing and we believe we'll get to a point of where it's economic for us to go full speed ahead with El Abra, but that's not now. We're doing planning, we're developing water supplies and being prepared to make a major investment there with our partner Codelco. Switching gears to the industry in general. One of the common themes we're already hearing, is pretty big valuation gap under, you know, between metals and mining and EVs. We've heard some presentations earlier today that laid that out, I thought, really well. What in your opinion can the metal and mining sector do to help itself close that gap? We'll run our businesses in the right way, you know, responsibly and safely, you know, and focus on doing things in the right way. You're not gonna get governments to let you do things that are contrary to the interest of local communities and groups. You just gotta find ways of bridging those gaps. That's been the big lesson of my career, and starting in Indonesia, you know, so long ago, is you can't rely on contracts internationally like you can in the U.S. You have to have ways of gathering support from people, and communities and governments that change and times change. It's hard work. In terms of how we get valued, I think that's coming. I mean, if we carry out our strategy of building our resources and having economical production, unless there's just some unforeseen catastrophe in the world, inevitably copper prices have got to be higher. There's just not the copper there to meet the demand that's coming out of the world as we see it in the future. Just went out with Caterpillar to observe a trial of their new prototype electric haul truck. You know, the thing's got 8,000 lbs of copper in it, in that one truck. Then you've got batteries that weigh enormous amounts. They're short-lived. They have to be, you know, trolley-assisted recharging as they work, and you gotta have all the electrical support to support that. That's just a microcosm of what the world faces as it tries to deal with carbon issues. It's just gonna be remarkable. I think there'll be a lot of changes made in terms of conservation, substitution, technology advances, all that stuff to help meet it. I can't see any way that happens without a really much higher copper price than we have today. I think if for Freeport, and I'm not gonna tell other companies how to run their business, but if we stick to our knitting, keep our balance sheet strong, you know, focus on these relatively low-risk asset mines. Mining's always risky, but we have relatively low-risk assets. We don't have to go off into troublesome jurisdictions and do deals. There may be an opportunity for us like there was in 2007, 2008 in the Congo when we did Tenke. We had to sell that asset. We are really focused on these resources that we have, the team we have, being safe. Have a hell of a problem right now with getting workers in the United States. I mean, that's kinda common for a lot of industries, but it is affecting our mine rates and has some effect on our growth opportunities. All of these things are building up to constraints to supply that were always there 20 years ago, but they've gotten more and more challenging, and the demand has gotten more and more better. Here we are being this large copper producer with a set of assets, a strong balance sheet. We just, you know, we need to maintain our position, do things in the right way, and be at the forefront of technology advances and all the other things that are going on. I think the market's gonna come. I really believe that. I'm not gonna tell you when, but I believe it's a great opportunity for us. You mentioned just a minute ago labor challenges in the U.S. Can you expand on that a little bit? How do they compare to, you know, historical challenges with labor? We've had other challenges before when we acquired Phelps Dodge, when Arizona was I think the fastest growing state in the country and investing everywhere. It's hard to get miners. You know, our mines are in remote locations. It's hard work and, so we've had these challenges before, but it's really persistent right now. We've got 1,300 job openings in our U.S. operations. For us, and I know that other countries have it, but for us, we don't have problems in Peru and Indonesia. I mean, our jobs are sought after there. In the U.S., there's some social changes, I think, that's coming out of COVID, where people are making some value decisions about how they wanna live their lives. We've increased our pay. Our pay is very competitive and attractive, we're working hard to do it. The ultimate answer, I believe, is gonna be automation. You know, we're investing in automation because I think it's just a real challenge in getting workers. Right now it's affecting our mine rates. You know, it's had an impact on our decision at our Bagdad mine, remote area of northwest Arizona, trying to get workers to come there to live to allow us to expand it. It's a, it's a real issue. There's a question here from the app, broad question. Do you worry that the mining industry might be blamed for slowing down the energy transition through lack of investment? Yeah. No. I love Warren Buffett's comment this morning about stock buybacks. I just thought that was great. If I live to be 90, I hope I can say some Buffett kind of things later in my life. I thought that was just great because, you know, the mining industry is going to be criticized for it. You know, for us at Freeport, it's a relatively new deal for us to have cash flows to distribute to shareholders. You know, we had to go through a tough time. We've got to establish financial policy for doing that. It in no way detracts from investments for us. You know, we have the wherewithal to do investments. There are other factors that'll drive the timing for investments. You know, there'll be that. You know, the world is gonna come to need copper, and we gotta work to produce it, and all these other things will just be sideshows. I believe that there will be a time when copper is gonna be very valuable and when Freeport's assets are gonna be really valuable because the assets we've accumulated over all these years and the strategy that we have to build a company around those assets and a team that can operate them very well and develop new things. I just You know, at this stage in my career, I could not be more happy about where our company is and where our future is, and that hasn't always been the case with me at Freeport, but it is right now. Appreciate the opportunity to talk to all of you. If you have questions, anybody who wants to challenge me, you know, let me know. I've been saying that for a long time. If anybody has a different view, 'cause I lived through the oil industry in the 80s. I saw shale oil come about in the 80s. I saw conservation happen in the early 80s that took the sail out of the high copper oil prices then. I've lived through these sorts of things. I keep looking for them in the copper industry. Is there gonna be a shale oil moment? You know, this leaching thing is gonna be a good thing, but it's not gonna be an industry-wide game changer. It's gonna be really big for Freeport. Morenci is the largest leaching operation in the world. We've got all these old leach stacks around the U.S. that have a lot of copper in them, so. you know. There will be changes. I mean, it's not just gonna be a static situation for now. Conservation, innovation, technology, substitution, although there's limits to what substitution could do. I really, I keep saying it, I really like where commodity as a copper is and where Freeport is with that commodity. That's a great opportunity to wrap it up. That's a great summation. Thank you very much. Thank you.