What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-08 · 737 added, 268 removed, 855 unchanged (54% of the section changed)

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and significant operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

Our results for first-quarter 2024 reflect strong operating performance, with significant increases in consolidated copper and gold sales volumes from PT Freeport Indonesia (PT-FI) compared to first-quarter 2023.

We remain focused on reliable execution of our plans, enhancing our productivity and cost performance, generating strong cash flow and building value through our organic growth pipeline.

Market fundamentals for copper have been positive, supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand.

With our solid financial position, we are a leading producer of copper with multiple options for future growth and an experienced team with a track record of accomplishment.

Our near-term organic development pipeline is highlighted by our leach innovation initiatives, which we continue to advance through incorporation of new applications, technologies and data analytics to our leaching processes.

Incremental copper production from these initiatives totaled 51 million pounds in first-quarter 2024, compared with 22 million pounds in first-quarter 2023.

Construction of the Manyar smelter and precious metals refinery (PMR) (collectively, the Indonesia smelter projects) in Gresik, Indonesia, are advancing on schedule with a target of May 2024 for substantial construction completion.

Once completed, the Indonesia smelter projects will complement our large-scale, long-lived, low-cost operations in the Grasberg minerals district.

Net income attributable to common stockholders totaled $473 million in first-quarter 2024, compared with $663 million in first-quarter 2023.

The decrease in first-quarter 2024, compared to first-quarter 2023, primarily reflects higher income attributable to noncontrolling interests at our Indonesia operations.

We remain focused on execution of our operating plans, enhancing productivity, controlling costs and initiatives to build and advance optionality in our organic growth portfolio.

We continue to make progress on our leach innovation initiatives, with incremental copper production from these initiatives totaling 106 million pounds for the first six months of 2024, more than double amounts for the first six months of 2023.

We have a favorable long-term outlook for copper, supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand.

During second-quarter 2024, PT Freeport Indonesia (PT-FI) began commissioning of its new copper smelter and is working to execute a safe and efficient ramp-up to full capacity by year-end 2024.

Additionally, construction continues on the adjoining precious metals refinery (PMR) with full production expected by year-end 2024.

Upon completion and full ramp-up of the new smelter and PMR (collectively, the new downstream processing facilities), PT-FI will be a fully integrated producer of refined copper and gold.

Our results for the second quarter and first six months of 2024 were impacted by previously announced shipping delays in Indonesia during June 2024 associated with the timing of renewing PT-FI’s copper concentrate and anode slimes export licenses, which expired on May 31, 2024.

On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024 when the full ramp-up of PT-FI’s new smelter is expected.

Net income attributable to common stockholders totaled $616 million in second-quarter 2024 and $1.1 billion for the first six months of 2024, compared with $343 million in second-quarter 2023 and $1.0 billion for the first six months of 2023.

The increase in the 2024 periods, compared to the 2023 periods, primarily reflects higher average realized prices on copper and gold sales, and lower interest expense as a result of interest charges in 2023 recognized for Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court (refer to Note 4), partly offset by increased operating costs, and higher income tax expense and income attributable to noncontrolling interests at our South America and Indonesia operations.

Refer to “Consolidated Results” for further discussion.

At March 31, 2024, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $5.2 billion, $6.1 billion including $0.9 billion of current restricted cash associated with a portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks.

Net debt totaled $0.3 billion, excluding $3.0 billion of debt for the Indonesia smelter projects.

At June 30, 2024, we had consolidated debt of $9.4 billion and consolidated cash and cash equivalents of $5.3 billion, $6.2 billion including $0.9 billion of current restricted cash associated with a portion of PT-FI's export proceeds required to be temporarily deposited in Indonesia banks.

Net debt totaled $0.3 billion, excluding $3.0 billion of debt for PT-FI’s new downstream processing facilities.

Refer to “Net Debt” for reconciliations of consolidated debt, consolidated cash and cash equivalents and current restricted cash associated with PT-FI's export proceeds to net debt.

At March 31, 2024, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

At June 30, 2024, we had $3.0 billion of availability under our revolving credit facility, and PT-FI and Cerro Verde had $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

Refer to Note 4 and “Capital Resources and Liquidity” for further discussion of our debt balances and transactions.

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South America operations 1.17

Indonesia operations 1.73 a

Indonesia operations 1.67

Gold (millions of recoverable ounces)

Molybdenum (millions of recoverable pounds)

PT-FI’s current export licenses for copper concentrates and anode slimes extend through May 2024.

Consolidated sales volume estimates include exports of copper concentrates and anode slimes by PT-FI from June 2024 through December 2024 totaling 0.4 billion pounds of copper and 0.9 million ounces of gold.

Does not foot because of rounding.

Includes 50 million pounds produced by our North America copper mines and South America operations and 32 million pounds produced by our Molybdenum mines.

Consolidated sales volumes in second-quarter 2024 are expected to approximate 1.0 billion pounds of copper, 500 thousand ounces of gold and 21 million pounds of molybdenum.

Consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 90 million pounds of copper and 120 thousand ounces of gold that will be processed by the Indonesia smelter projects and sold as refined metal in future periods.

PT-FI is working with the Indonesia government to obtain approvals to continue exports of copper concentrates and anode slimes beyond May 2024 and until the Indonesia smelter projects are fully commissioned and reach designed operating conditions, which is currently expected by year-end 2024.

We cannot predict if PT-FI will obtain approval timely, if at all, to continue exports of copper concentrates and anode slimes beyond May 2024.

If exports were prohibited or limited, or additional financial impacts resulting from Indonesia regulations were to be assessed prior to PT-FI’s Indonesia smelter projects becoming operational by year-end 2024, PT-FI may be required to reduce production levels or be subject to additional costs, which could adversely impact our revenues and operations.

Consolidated sales volumes in third-quarter 2024 are expected to approximate 1.0 billion pounds of copper, 475 thousand ounces of gold and 20 million pounds of molybdenum.

Consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 100 million pounds of copper and 120 thousand ounces of gold that will be processed by PT-FI’s new downstream processing facilities and sold as refined metal in 2025.

Projected sales volumes are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024;

the timing of the ramp-up of the Indonesia smelter projects;

weather-related conditions, including ongoing El Niño weather impacts;

the timing of the ramp-up of PT-FI’s new smelter in Indonesia;

weather-related conditions;

timing of shipments and other factors detailed in the “Cautionary Statement” below.

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Consolidated Unit Net Cash Costs

Consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.57 per pound of copper for the year 2024 (including $1.57 per pound of copper in second-quarter 2024), based on achievement of current volume and cost estimates, and assuming average prices of $2,300 per ounce of gold and $20.00 per pound of molybdenum for the remainder of 2024.

Consolidated unit net cash costs (net of by-product credits) for our copper mines are expected to average $1.63 per pound of copper for the year 2024 (including $1.71 per pound of copper in third-quarter 2024), based on achievement of current sales volume and cost estimates, and assuming average prices of $2,300 per ounce of gold and $20.00 per pound of molybdenum for the second half of 2024.

Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum.

The impact of price changes on consolidated unit net cash costs for the year 2024 would approximate $0.04 per pound of copper for each $100 per ounce change in the average price of gold and $0.02 per pound of copper for each $2 per pound change in the average price of molybdenum during the remainder of 2024.

The impact of price changes on consolidated unit net cash costs for the year 2024 would approximate $0.02 per pound of copper for each $100 per ounce change in the average price of gold and $0.01 per pound of copper for each $2 per pound change in the average price of molybdenum for the second half of 2024.

Consolidated Operating Cash Flows

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and other factors.

Our consolidated operating cash flows are estimated to approximate $7.4 billion, net of $0.2 billion of working capital and other uses, for the year 2024, based on current sales volume and cost estimates, extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024, and assuming average prices of $4.25 per pound for copper, $2,300 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2024.

Our consolidated operating cash flows are estimated to approximate $7.2 billion for the year 2024, based on current sales volume and cost estimates, and assuming average prices of $4.25 per pound of copper, $2,300 per ounce of gold and $20.00 per pound of molybdenum for the second half of 2024.

Estimated consolidated operating cash flows for the year 2024 also reflect an estimated income tax provision of $2.7 billion (refer to “Consolidated Results – Income Taxes” for further discussion of our projected income tax rate for the year 2024).

The impact of price changes on consolidated operating cash flows for the year 2024 would approximate $270 million for each $0.10 per pound change in the average price of copper, $105 million for each $100 per ounce change in the average price of gold and $90 million for each $2 per pound change in the average price of molybdenum for the remainder of 2024.

The impact of price changes for the second half of 2024 on consolidated operating cash flows would approximate $200 million for each $0.10 per pound change in the average price of copper, $80 million for each $100 per ounce change in the average price of gold and $50 million for each $2 per pound change in the average price of molybdenum.

Consolidated Capital Expenditures

Capital expenditures are expected to approximate $4.6 billion for the year 2024, including $2.3 billion for major mining projects and $1.0 billion for the Indonesia smelter projects.

Projected capital expenditures for the Indonesia smelter projects in 2024 exclude capitalized interest and $0.3 billion of estimated commissioning and owner’s costs.

Projected capital expenditures for major mining projects include $1.1 billion for planned projects, primarily associated with underground mine development in the Grasberg minerals district and potential expansion projects in North America, and $1.2 billion for discretionary growth projects.

We closely monitor market conditions and will continue to adjust our operating plans, including capital expenditures, to protect our liquidity and preserve our asset values, as necessary.

Capital expenditures for the Indonesia smelter projects for the remainder of 2024 are expected to be funded with availability under PT-FI’s revolving credit facility.

Following is a summary of expected capital expenditures for the year 2024 (in billions):

Major mining projects $ 2.3 a

PT-FI’s new downstream processing facilities 1.0 b

Primarily includes underground mine development, supporting mill and power capital costs in the Grasberg minerals district and expansion projects in North America.

Excludes capitalized interest and $0.3 billion of estimated commissioning and owner’s costs.

Capital expenditures for PT-FI’s new downstream processing facilities are expected to be funded with PT-FI’s cash flows from operations and availability under PT-FI’s revolving credit facility.

We closely monitor market conditions and will adjust our operating plans, including capital expenditures, to protect our liquidity and preserve our asset values, as necessary.

Prices for copper, gold and molybdenum are affected by numerous factors beyond our control and can fluctuate significantly (for further discussion refer to “Risk Factors” contained in Part I, Item 1A.

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The following graphs present the London Metal Exchange (LME) copper settlement price, the London Bullion Market Association (London) PM gold price, and the Platts Metals Daily Molybdenum Dealer Oxide weekly average price since January 2014.

This graph presents LME copper settlement prices and the combined reported stocks of copper at the LME, Commodity Exchange Inc., and the Shanghai Futures Exchange from January 2014 through March 2024.

During first-quarter 2024, LME copper settlement prices ranged from a low of $3.67 per pound to a high of $4.07 per pound, averaged $3.83 per pound and settled at $3.96 per pound on March 28, 2024.

Upward momentum in copper prices has continued in second-quarter 2024, and the LME copper settlement price was $4.52 per pound on April 30, 2024, bolstered by expectations of tight supplies and optimism about demand.

We believe fundamentals for copper are favorable and that future demand will be supported by copper’s critical role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, continued urbanization in developing countries and growing connectivity globally.

This graph presents London PM gold prices from January 2014 through March 2024.

During first-quarter 2024, London PM gold prices ranged from a low of $1,985 per ounce to a high of $2,214 per ounce, averaged $2,070 per ounce and closed at $2,214 per ounce on March 28, 2024.

Gold prices hit a record high during first-quarter 2024, propelled by U.S.

This graph presents LME copper settlement prices and the combined reported stocks of copper at the LME, Commodity Exchange Inc., and the Shanghai Futures Exchange from January 2014 through June 2024.

During second-quarter 2024, LME copper settlement prices ranged from a low of $4.05 per pound to a record high of $4.92 per pound, averaged $4.42 per pound and settled at $4.30 per pound on June 28, 2024.

The decline in copper prices from the highs in May 2024, reflect market uncertainties in China.

The LME copper settlement price was $4.09 per pound on July 31, 2024.

We believe fundamentals for copper are favorable with limited available supplies and growing demand supported by copper’s critical role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, continued urbanization in developing countries and growing connectivity globally.

This graph presents London PM gold prices from January 2014 through June 2024.

During second-quarter 2024, London PM gold prices ranged from a low of $2,265 per ounce to a record high of $2,427 per ounce, averaged $2,338 per ounce and closed at $2,331 per ounce on June 28, 2024.

Record high gold prices in second-quarter 2024 were propelled by U.S.

interest rate cut expectations and strong safe-haven demand.

In April 2024, a new record high was reached ($2,402 per ounce on April 12, 2024) and the London PM gold price was $2,307 per ounce on April 30, 2024.

This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2014 through March 2024.

During first-quarter 2024, the weekly average price of molybdenum ranged from a low of $19.34 per pound to a high of $20.42 per pound, averaged $19.93 per pound and was $19.81 per pound on March 28, 2024.

During first-quarter 2024, overall global demand for molybdenum was mixed with steady demand from energy, power generation, aerospace and defense sectors, and some weakness in the construction sector.

The London PM gold price was $2,426 per ounce on July 31, 2024.

This graph presents the Platts Metals Daily Molybdenum Dealer Oxide weekly average price from January 2014 through June 2024.

During second-quarter 2024, the weekly average price of molybdenum ranged from a low of $19.57 per pound to a high of $23.52 per pound, averaged $21.78 per pound and was $22.74 per pound on June 28, 2024.

Overall global demand for molybdenum is driven by energy, power generation, aerospace, defense and construction sectors.

We believe fundamentals for molybdenum are positive with favorable demand drivers and limited supply.

The Platts Metals Daily Molybdenum Dealer Oxide weekly average price was $20.63 per pound on April 26, 2024.

The Platts Metals Daily Molybdenum Dealer Oxide weekly average price was $22.25 per pound on July 26, 2024.

CONSOLIDATED RESULTS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

SUMMARY FINANCIAL DATA

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$ 6,624 $ 5,737 $ 12,945 $ 11,126

Operating income a

Operating income a,c

$ 2,049 $ 1,410

Net income attributable to common stock c

$ 3,683 $ 3,011

Net income attributable to common stock b,c

Diluted net income per share of common stock $ 0.42 $ 0.23 $ 0.75 $ 0.69

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Restricted cash and cash equivalents, current $ 1,030 g

$ 119 $ 1,030 g

Total debt, including current portion

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Refer to Note 8 for a summary of revenues and operating income by operating division.

Includes (unfavorable) favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $(7) million ($(2) million to net income attributable to common stock) in first-quarter 2024 and $210 million ($72 million to net income attributable to common stock) in first-quarter 2023.

Includes favorable (unfavorable) adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $166 million ($56 million to net income attributable to common stock) in second-quarter 2024, $(118) million ($(45) million to net income attributable to common stock) in second-quarter 2023, $28 million ($9 million to net income attributable

to common stock) for the first six months of 2024 and $182 million ($61 million to net income attributable to common stock) for the first six months of 2023.

Refer to Note 5 for further discussion.

We defer recognizing profits on intercompany sales until final sales to third parties occur.

Refer to “Operations – Smelting and Refining” for a summary of net impacts from changes in these deferrals.

Includes net international tax credits of $181 million, which were offset by charges of $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies and $56 million of revisions to environmental obligation estimates and $16 million of other net charges.

Includes net charges totaling $94 million, primarily associated with net adjustments to environmental obligations, contested tax matters and asset impairments in North America.

Working capital and other uses totaled $97 million in first-quarter 2024 and $452 million in first-quarter 2023.

Includes $0.9 billion at March 31, 2024, associated with a portion of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.

Three Months Ended March 31,

Changes in these deferrals attributable to variability in intercompany volumes resulted in net additions (reductions) to operating income totaling $137 million ($41 million to net income attributable to common stock) in second-quarter 2024, $(39) million ($(21) million to net income attributable to common stock) in second-quarter 2023, $120 million ($36 million to net income attributable to common stock) for the first six months of 2024 and $72 million ($27 million to net income attributable to common stock) for the first six months of 2023.

Refer to “Operations – Smelting and Refining.”

Includes net charges totaling $51 million in second-quarter 2024 and $52 million for the first six months of 2024, primarily associated with revisions to environmental obligation estimates and related litigation reserves, and nonrecurring labor-contract charges at Cerro Verde.

The first six months of 2024 also include charges associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies, offset by international tax credits.

Includes net charges totaling $157 million in second-quarter 2023 and $251 million for the first six months of 2023, primarily associated with charges for contested tax rulings issued by the Peruvian Supreme Court, environmental obligations, an accrual for a potential administrative fine in Indonesia, and impairments and contract-cancellation costs.

Working capital and other sources (uses) totaled $73 million in second-quarter 2024, $250 million in second-quarter 2023, $(24) million for the first six months of 2024 and $(202) million for the first six months of 2023.

Includes $0.9 billion at June 30, 2024, associated with a portion of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

SUMMARY OPERATING DATA

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Average realized price per pound $ 4.48 $ 3.84

$ 4.25 $ 3.91

Site production and delivery costs per pound a

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Sales, excluding purchases

361 495 929 765

Average realized price per ounce $ 2,299 $ 1,942 $ 2,236 $ 1,946

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Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs.

For reconciliations of per pound unit net cash costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”

Consolidated revenues totaled $6.3 billion in first-quarter 2024 and $5.4 billion in first-quarter 2023.

Revenues from our mining operations and processing facilities primarily include the sale of copper in concentrate, copper cathode, copper rod, gold in concentrate and anode slimes, and molybdenum.

For reconciliations of per pound unit net cash costs (credits) by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”

Consolidated revenues totaled $6.6 billion in second-quarter 2024, $5.7 billion in second-quarter 2023, $12.9 billion for the first six months of 2024 and $11.1 billion for the first six months of 2023.

Revenues from our mining operations and processing facilities primarily include the sale of copper cathode, copper in concentrate, copper rod, gold in concentrate and anode slimes, and molybdenum.

Refer to Note 8 for a summary of product revenues.

Following is a summary of changes in our consolidated revenues between periods (in millions):

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

Consolidated revenues - 2023 period $ 5,737 $ 11,126

Higher sales volumes:

(Lower) higher sales volumes:

Copper (378) 695

Gold (262) 319

Molybdenum 20 50

(Lower) higher average realized prices:

Higher (lower) average realized prices:

Copper 596 693

Molybdenum (53) (255)

Adjustments for prior period provisionally priced copper sales 284 (154)

Lower Atlantic Copper revenues (83)

Lower revenues from purchased copper (38)

Higher treatment charges (28)

Higher Atlantic Copper revenues 152 69

Higher revenues from purchased copper 228 190

Lower treatment charges 52 24

Higher royalties and export duties (77) (276)

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Sales Volumes.

Consolidated copper and gold sales volumes increased in first-quarter 2024, compared to first-quarter 2023, primarily reflecting higher mining and milling rates and ore grades at PT-FI.

Consolidated sales volumes for the second quarter and first six months of 2024 were impacted by previously announced shipping delays in Indonesia associated with the timing of renewing PT-FI’s copper concentrate and anode slimes export licenses, which expired on May 31, 2024.

On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024 when the full ramp-up of PT-FI’s new smelter is expected.

The increase in consolidated copper and gold sales volumes for the first six months of 2024, compared to the first six months of 2023, primarily reflects higher mining and milling rates and ore grades at PT-FI.

Realized Prices.

Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold and molybdenum.

Average realized prices in first-quarter 2024, compared with first-quarter 2023, were 4% lower for copper, 10% higher for gold and 33% lower for molybdenum.

Average realized copper prices include net favorable adjustments to current period provisionally priced copper sales totaling $73 million in first-quarter 2024 and $21 million in first-quarter 2023.

As discussed in Note 6, substantially all

of our copper concentrate and some cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date).

Average realized prices in second-quarter 2024, compared with second-quarter 2023, were 17% higher for copper, 18% higher for gold and 11% lower for molybdenum.

Average realized prices for the first six months of 2024, compared with the first six months of 2023, were 9% higher for copper, 15% higher for gold and 23% lower for molybdenum.

Average realized copper prices include net favorable (unfavorable) adjustments to current period provisionally priced copper sales totaling $15 million in second-quarter 2024, $(52) million in second-quarter 2023, $219 million for the first six months of 2024 and $(121) million for the first six months of 2023.

As discussed in Note 5, substantially all of our copper concentrate and some cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date).

We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on provisionally priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until final pricing on the date of settlement.

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Prior Period Provisionally Priced Copper Sales.

Net (unfavorable) favorable adjustments to prior periods’ provisionally priced copper sales ( i.e.

, provisionally priced sales at December 31, 2023 and 2022) recorded in consolidated revenues totaled $(7) million in first-quarter 2024 and $210 million in first-quarter 2023.

Net favorable (unfavorable) adjustments to prior periods’ provisionally priced copper sales ( i.e.

, provisionally priced sales at March 31, 2024 and 2023, and December 31, 2023 and 2022) recorded in consolidated revenues totaled $166 million in second-quarter 2024, $(118) million in second-quarter 2023, $28 million for the first six months of 2024 and $182 million for the first six months of 2023.

Refer to Notes 5 and 8 for a summary of total adjustments to prior period and current period provisionally priced sales.

At March 31, 2024, we had provisionally priced copper sales totaling 229 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.01 per pound, subject to final pricing over the next several months.

We estimate that each $0.05 change in the price realized from the March 31, 2024, recorded provisional price would have an approximate $22 million effect on 2024 revenues ($7 million to our 2024 net income attributable to common stock).

The LME copper price settled at $4.52 per pound on April 30, 2024.

At June 30, 2024, we had provisionally priced copper sales totaling 188 million pounds (net of intercompany sales and noncontrolling interests) recorded at an average of $4.33 per pound, subject to final pricing over the next several months.

We estimate that each $0.05 change in the price realized from the June 30, 2024, recorded

provisional price would have an approximate $18 million effect on 2024 revenues ($6 million to 2024 net income attributable to common stock).

The LME copper price settled at $4.09 per pound on July 31, 2024.

Atlantic Copper Revenues.

Atlantic Copper revenues totaled $673 million in first-quarter 2024, compared with $756 million in first-quarter 2023.

Lower revenues in first-quarter 2024, compared with first-quarter 2023, primarily reflect lower copper prices and sales volumes.

Atlantic Copper revenues totaled $900 million in second-quarter 2024 and $1.6 billion for the first six months of 2024, compared with $748 million in second-quarter 2023 and $1.5 billion for the first six months of 2023.

Higher revenues in the 2024 periods, compared with the 2023 periods, primarily reflect higher copper prices and sales volumes.

Purchased Copper.

We purchase copper cathode primarily for processing by our Rod & Refining operations.

Lower revenues associated with purchased copper in first-quarter 2024, compared to first-quarter 2023, primarily reflects

lower volumes.

The volumes of copper purchases vary depending on cathode production from our operations and totaled 42 million pounds in first-quarter 2024 and 48 million pounds in first-quarter 2023.

Higher revenues associated with purchased copper in second-quarter 2024, compared to second-quarter 2023, primarily reflects higher volumes.

The volumes of copper purchases vary depending on cathode production from our operations and totaled 64 million pounds in second-quarter 2024, 19 million pounds in second-quarter 2023, 106 million for the first six months of 2024 and 67 million for the first six months of 2023.

Treatment Charges.

Revenues from our copper concentrate sales are recorded net of treatment charges ( i.e., fees paid to smelters that are generally negotiated annually), which will vary with the sales volumes and the price of copper.

The increase in treatment charges in first-quarter 2024, compared to first-quarter 2023, primarily reflects higher copper sales volumes.

The decrease in treatment charges in the 2024 periods, compared to the 2023 periods, primarily reflects lower copper concentrate sales volumes because of previously announced shipping delays in Indonesia associated with the timing of renewing PT-FI’s copper concentrate export license.

Royalties and Export Duties.

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Royalties will vary with the volume of metal sold and the prices of copper and gold.

PT-FI is currently being assessed export duties for copper concentrates at a rate of 7.5%, compared to an export duty rate of 2.5% in first-quarter 2023.

PT-FI incurred export duties totaling $156 million in first-quarter 2024 and $17 million in first-quarter 2023.

Refer to Note 13 of our 2023 Form 10-K for further discussion of export duties.

Indonesia export duties of 2.5% were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50%, and were reinstated at a rate of 7.5% in July 2023 under a revised regulation.

As discussed in Note 7, PT-FI will continue to pay export duties of 7.5% on copper concentrates during the smelter ramp-up period pursuant to Indonesia regulations.

PT-FI incurred export duties totaling $75 million in second-quarter 2024, $231 million for the first six months of 2024 and $18 million for the first six months of 2023.

Production and Delivery Costs

Consolidated production and delivery costs totaled $3.8 billion in first-quarter 2024 and $3.2 billion in first-quarter 2023.

Higher costs in first-quarter 2024, compared to first-quarter 2023, primarily reflected increased operating rates, particularly at PT-FI.

Additionally, first-quarter 2024 included charges totaling $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies (refer to Note 8 for further discussion).

Consolidated production and delivery costs totaled $3.9 billion in second-quarter 2024, $3.5 billion in second-quarter 2023, $7.7 billion for the first six months of 2024 and $6.7 billion for the first six months of 2023.

Higher costs in the 2024 periods, compared to the 2023 periods, primarily reflect higher costs of copper purchases at our downstream operations.

Additionally, the first six months of 2024 included higher operating rates at PT-FI and charges totaling $98 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies (refer to Note 7 for further discussion).

Site Production and Delivery Costs Per Pound.

Site production and delivery costs for our copper mining operations primarily include labor, energy and other commodity-based inputs, such as sulfuric acid, explosives, steel, reagents, liners and tires.

Lower consolidated site production and delivery costs (before net noncash and other costs) for our copper mines of $2.32 per pound of copper in first-quarter 2024, compared to $2.57 per pound of copper in first-quarter 2023, primarily reflects higher metal volumes in Indonesia.

Consolidated site production and delivery costs (before net noncash and other costs) for our copper mines averaged $2.56 per pound of copper in second-quarter 2024, $2.39 per pound of copper in second-quarter 2023, $2.43 per pound of copper for the first six months of 2024 and $2.47 per pound of copper for the first six months of 2023.

Refer to “Operations – Unit Net Cash Costs” and “Operations – Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

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Depreciation will vary under the unit-of-production (UOP) method as a result of changes in sales volumes and the related UOP rates at our mining operations.

Increased consolidated depreciation, depletion and amortization (DD&A) of $595 million in first-quarter 2024, compared to $399 million in first-quarter 2023, primarily reflects higher sales volumes at PT-FI.

Consolidated depreciation, depletion and amortization (DD&A) totaled $509 million in second-quarter 2024, $547 million in second-quarter 2023, $1.1 billion for the first six months of 2024 and $0.9 billion for the first six months of 2023.

Environmental Obligations and Shutdown Costs

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Shutdown costs include care-and-maintenance costs and any litigation, remediation or related expenditures associated with closed facilities or operations.

Net charges for environmental obligations and shutdown costs totaled $56 million in both first-quarter 2024 and 2023.

Net revisions to long-term historical environmental obligations totaled

$23 million in second-quarter 2024, $60 million in second-quarter 2023, $79 million for the first six months of 2024 and $116 million for the first six months of 2023.

Refer to Note 7 for further discussion.

Interest Expense, Net

Consolidated interest costs (before capitalization) totaled $175 million in first-quarter 2024 and $207 million in first-quarter 2023, which included $25 million associated with Cerro Verde’s contested tax rulings issued by the Peru Supreme Court in first-quarter 2023.

Consolidated interest costs (before capitalization) totaled $181 million in second-quarter 2024 and $356 million for the first six months of 2024, compared to $234 million in second-quarter 2023 and $441 million for the first six months of 2023, which included $50 million in second-quarter 2023 and $74 million for the first six months of 2023 associated with Cerro Verde’s contested tax rulings issued by the Peru Supreme Court.

Capitalized interest varies with the level of qualifying assets associated with our development projects and average interest rates on our borrowings.

Higher capitalized interest of $86 million in first-quarter 2024, compared to $56 million in first-quarter 2023 resulted from increased construction and development projects in process, primarily for the Indonesia smelter projects.

Capitalized interest totaled $93 million in second-quarter 2024, $62 million in second-quarter 2023, $179 million for the first six months of 2024 and $119 million for the first six months of 2023.

The increase in capitalized interest costs in the 2024 periods, compared to the 2023 periods, resulted from increased construction and development projects in process, primarily related to PT-FI’s new downstream processing facilities.

Refer to “Capital Resources and Liquidity – Investing Activities” for discussion of capital expenditures associated with our major development projects.

Other Income, Net

Other income, net, totaled $129 million in first-quarter 2024 and $88 million in first-quarter 2023.

The increase in other income, net, primarily reflects a credit of $26 million in first-quarter 2024 associated with the reduction in the accrual to indemnify PT Mineral Industri Indonesia (MIND ID) from potential losses arising from historical tax disputes (refer to Note 4 for additional discussion) and higher foreign currency exchange gains.

Other income, net, totaled $69 million in second-quarter 2024, $24 million in second-quarter 2023, $198 million for the first six months of 2024 and $112 million for the first six months of 2023.

The 2023 periods include a $69 million charge associated with Cerro Verde’s contested tax rulings issued by the Peruvian Supreme Court.

The first six months of 2024 include a credit of $26 million associated with the reduction in the accrual to indemnify PT Mineral Industri Indonesia (MIND ID) from potential losses arising from historical tax disputes (refer to Note 3).

Following is a summary of the approximate amounts used in the calculation of our consolidated income tax provision (in millions, except percentages):

Three Months Ended March 31,

Six Months Ended June 30,

Income (Loss) a

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Indonesia 2,977 36% (1,081) 1,986 37% (737)

PT-FI historical tax matters 16 N/A 182 d

Eliminations and other 34 N/A — e

Rate adjustment f

Cerro Verde historical tax matters — N/A — (142) d

PT-FI historical tax matters 16 e

Eliminations and other 182 N/A (49) f

Rate adjustment g

— N/A 3 — N/A (15)

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Represents income (loss) before income taxes, equity in affiliated companies' net earnings, and noncontrolling interests.

In addition to our North America Copper Mines, which had operating income of $153 million in first-quarter 2024 and $364 million in first-quarter 2023 (refer to Note 9), the U.S.

jurisdiction reflects legacy non-operating sites and corporate-level expenses, which include interest expense associated with FCX’s senior notes and general and administrative expenses.

Additionally, first-quarter 2024 also included charges of $109 million associated with assumed oil and gas abandonment obligations, and both first-quarter 2024 and 2023 included charges of $56 million for revisions to environmental obligation estimates.

In addition to our North America Copper Mines, which had operating income of $417 million for the first six months of 2024 and $668 million for the first six months of 2023 (refer to Note 8), the U.S.

jurisdiction reflects non-operating sites and corporate-level expenses, which include interest expense associated with FCX’s senior notes and general and administrative expenses.

jurisdiction also includes net charges associated with oil and gas abandonment obligations and revisions to environmental obligation estimates.

Includes a valuation allowance release on prior year unbenefited net operating losses.

Refer to Note 4 for further discussion.

Reflects net charges associated with contested tax rulings issued by the Peruvian Supreme Court.

Refer to Note 3 for further discussion of net credits associated with closure of PT-FI’s 2021 corporate income tax audit and resolution of a framework for disputed tax matters.

Includes a tax benefit of $13 million associated with a favorable Supreme Court ruling in Spain, which reversed a 2016 tax law limiting Atlantic Copper’s use of net operating losses.

In accordance with applicable accounting rules, we adjust our interim provision for income taxes equal to our consolidated tax rate.

Assuming achievement of current sales volume and cost estimates, and average prices of $4.25 per pound for copper, $2,300 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2024, we estimate our consolidated effective tax rate for the year 2024 would approximate 35% (which reflects an estimated effective tax rate of 37% for the remainder of 2024).

Changes in projected sales volumes and average prices during 2024 would incur tax impacts at estimated effective rates of 39% for Peru, 36% for Indonesia and 0% for the U.S.

Assuming achievement of current sales volume and cost estimates and average prices of $4.25 per pound of copper, $2,300 per ounce of gold and $20.00 per pound of molybdenum for the second half of 2024, we estimate our consolidated effective tax rate for the year 2024 would approximate 36% (which reflects an estimated effective

tax rate of 38% for the second half of 2024).

Changes in projected sales volumes and average prices during 2024 would incur tax impacts at estimated effective rates of 39% for Peru, 36% for Indonesia and 0% for the U.S., which excludes any impact from the U.S.

Inflation Reduction Act of 2022.

Our projected estimated effective tax rate of 0% for the U.S.

for the year 2024 may be adjusted as additional guidance is released by the U.S.

Department of the Treasury on key provisions of the U.S.

Inflation Reduction Act of 2022 (refer to Note 4 for further discussion).

for the year 2024 may be adjusted as regulations and additional guidance are released by the Internal Revenue Service and U.S.

Department of the Treasury on key provisions of the Act (refer to Note 3).

Noncontrolling Interests

Net income attributable to noncontrolling interests, which is primarily associated with our noncontrolling shareholders at PT-FI, Cerro Verde and El Abra, totaled $689 million in first-quarter 2024 and $386 million in first-quarter 2023 (refer to Note 9 for net income attributable to noncontrolling interests for each of our business segments).

Net income attributable to noncontrolling interests, which is primarily associated with our noncontrolling shareholders at PT-FI, Cerro Verde and El Abra, totaled $0.7 billion in second-quarter 2024, $0.4 billion in second-quarter 2023, $1.4 billion for the first six months of 2024 and $0.8 billion for the first six months of 2023 (refer to Note 8 for net income attributable to noncontrolling interests for each of our business segments).

Beginning January 1, 2023, our economic and ownership interest in PT-FI is 48.76%, except for net income associated with the settlement of historical tax matters in first-quarter 2024 and approximately 190 thousand ounces of gold sales in first-quarter 2023, which were attributed based on the economics prior to January 1, 2023 ( i.e.

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Refer to Note 1 for further discussion.

Based on achievement of current sales volume and cost estimates, extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024, and assuming average prices of $4.25 per pound of copper, $2,300 per ounce of gold and $20.00 per pound of molybdenum for the remainder of 2024, we estimate that net income attributable to noncontrolling interests will approximate $2.7 billion for the year 2024.

The impact of price changes on net income attributable to noncontrolling interests for the year 2024 would approximate $0.2 billion for each $0.25 per pound change in the average price of copper for the remainder of 2024.

Based on achievement of current sales volume and cost estimates, and assuming average prices of $4.25 per pound of copper, $2,300 per ounce of gold and $20.00 per pound of molybdenum for the second half of 2024, we estimate that net income attributable to noncontrolling interests will approximate $2.6 billion for the year 2024.

The impact of price changes on net income attributable to noncontrolling interests for the year 2024 would approximate $0.1 billion for each $0.25 per pound change in the average price of copper for the second half of 2024.

The actual amount will depend on many factors, including relative performance of each business segment, commodity prices, costs and other factors.

Responsible Production

2023 Annual Report on Sustainability.

In April 2024, we published our 2023 Annual Report on Sustainability marking our 23rd year of reporting on our sustainability progress.

We are committed to building upon our achievements in sustainability and our position as a leading responsible copper producer.

The Copper Mark.

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In late 2023, we achieved our initial annual run rate target of approximately 200 million pounds of copper.

Incremental copper production from these initiatives totaled 51 million pounds in first-quarter 2024, compared with 22 million pounds in first-quarter 2023.

We are pursuing opportunities to apply recent operational enhancements on a larger scale and are testing new technology applications that we believe have the potential for significant increases in recoverable metal beyond the current run rate.

Incremental copper production from these initiatives totaled 55 million pounds in second-quarter 2024 (compared with 29 million pounds in second-quarter 2023) and 106 million pounds for the first six months of 2024 (compared with 51 million pounds for the first six months of 2023).

We are pursuing opportunities to apply recent operational enhancements on a larger scale and we are testing new innovative technology applications that we believe have the potential for significant increases in recoverable metal beyond the current run rate.

Feasibility and Optimization Studies

We are engaged in various studies associated with potential future expansion projects primarily at our mining operations.

The costs for these studies are charged to production and delivery costs as incurred and totaled

$34 million in first-quarter 2024, compared with $50 million in first-quarter 2023.

The costs for these studies are charged to production and delivery costs as incurred and totaled $38 million in second-quarter 2024, $51 million in second-quarter 2023, $72 million for the first six months of 2024 and $101 million for the first six months of 2023.

We estimate the costs of these studies will approximate $200 million for the year 2024, subject to market conditions and other factors.

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We manage seven copper operations in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico.

We also operate a copper smelter in Miami, Arizona.

In addition to copper, certain of these operations produce molybdenum concentrate, gold and silver.

All of the North America operations are wholly owned, except for Morenci.

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In late 2023, we completed technical and economic studies, which indicated the opportunity to construct new concentrating facilities to increase copper production by 200 to 250 million pounds per year, which is more than double Bagdad’s current annual production rate.

Estimated incremental project capital costs approximate $3.5 billion (excluding infrastructure that would be required in the long-range plans).

Estimated incremental project capital costs approximate $3.5 billion.

Expanded operations would provide improved efficiency and reduce unit net cash costs through economies of scale.

Project economics indicate that the expansion would require an incentive copper price in the range of $3.50 to $4.00 per pound and would require approximately three to four years to complete.

The decision to proceed and timing of the potential expansion will take into account overall copper market conditions, availability of labor and other factors, including progress on conversion of the existing haul truck fleet to autonomous and expanding housing alternatives to support long-range plans.

Project economics indicate that the expansion would require an incentive copper price in the range of $3.50 to $4.00 per pound and approximately three to four years to complete.

The decision of whether to proceed and timing of the potential expansion will take into account overall copper market conditions, availability of labor and other factors, including progress on conversion of the existing haul truck fleet to autonomous and expanding housing alternatives to support long-range plans.

In parallel, we are advancing activities for expanded tailings infrastructure projects required under long-range plans in order to advance the potential construction timeline.

We are completing projects at our Safford/Lone Star operation to increase volumes to achieve 300 million pounds of copper per year from oxide ores, which reflects expansion of the initial design capacity of 200 million pounds of copper per year.

Additionally, positive drilling conducted in recent years indicate a large, mineralized district with opportunities to expand production significantly.

We are completing metallurgical testing and mine development planning and are commencing pre-feasibility studies for a potential significant expansion.

Pre-feasibility studies are expected to be completed in late 2025.

The decision to proceed and timing of the potential expansion will take into account results of technical and economic studies, overall copper market conditions and other factors.

Additionally, positive drilling conducted in recent years indicates a large, mineralized district with opportunities to pursue a major expansion project.

We have commenced pre-feasibility studies for a potential significant expansion and expect to complete these studies in late 2025.

The decision of whether to proceed and timing of the potential expansion will take into account results of technical and economic studies, overall copper market conditions and other factors.

Operating Data.

Following is summary consolidated operating data for the North America copper mines:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Operating Data, Net of Joint Venture Interests

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Refer to “Consolidated Results” for our consolidated molybdenum sales, which include sales of molybdenum produced at the North America copper mines.

Our consolidated copper sales volumes from North America of 331 million pounds in first-quarter 2024 approximated first-quarter 2023 copper sales volumes of 332 million pounds reflecting lower ore grades, partly offset by improved leach recovery performance.

We continue to drive initiatives to enhance productivity and improve equipment reliability to offset declines in ore grades.

Our consolidated copper sales volumes from North America totaled 292 million pounds in second-quarter 2024, 339 million pounds in second-quarter 2023, 623 million pounds for the first six months of 2024 and 671 million pounds for the first six months of 2023.

Lower copper sales in the 2024 periods, compared with the 2023 periods, primarily reflect lower ore grades and planned mill maintenance, partly offset by improved leach recovery performance.

We continue to advance initiatives to enhance productivity and improve equipment reliability to offset declines in ore grades.

North America copper sales are estimated to approximate 1.3 billion pounds for the year 2024.

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Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended March 31,

Three Months Ended June 30,

By- Product Method Co-Product Method By- Product Method Co-Product Method

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Molybdenum sales (millions of recoverable pounds) a

Six Months Ended June 30,

By- Product Method Co-Product Method By- Product Method Co-Product Method

Copper Molyb-

Revenues, excluding adjustments $ 4.28 $ 4.28 $ 19.18 $ 4.03 $ 4.03 $ 25.52

Site production and delivery, before net noncash

and other costs shown below

3.35 3.03 16.35 2.92 2.55 17.81

By-product credits (0.40) — — (0.57) — —

Treatment charges 0.13 0.13 — 0.13 0.12 —

Unit net cash costs 3.08 3.16 16.35 2.48 2.67 17.81

DD&A 0.35 0.32 1.22 0.30 0.26 1.24

Noncash and other costs, net 0.13 b

0.12 0.39 0.19 b

Total unit costs 3.56 3.60 17.96 2.97 3.09 20.11

Revenue adjustments, primarily for pricing

on prior period open sales

— — — 0.02 0.02 —

Gross profit per pound $ 0.72 $ 0.68 $ 1.22 $ 1.08 $ 0.96 $ 5.41

Copper sales (millions of recoverable pounds) 626 626 676 676

Molybdenum sales (millions of recoverable pounds) a

Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

Includes charges totaling $0.05 per pound of copper in first-quarter 2024 and $0.08 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

First-quarter 2023 also includes charges totaling $0.05 per pound of copper related to asset impairments.

Includes charges totaling $0.05 per pound of copper in second-quarter 2024 and for the first six months of 2024, and $0.08 per pound of copper in second-quarter 2023 and for the first six months of 2023 for feasibility and optimization studies.

Our North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $2.98 per pound of copper in first-quarter 2024 were higher than first-quarter 2023 unit net cash costs of $2.45 per pound, primarily reflecting higher mining costs and lower molybdenum by-product credits.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $3.19 per pound of copper in second-quarter 2024 and $3.08 per pound for the first six months of 2024 were higher than second-quarter 2023 unit net cash costs of $2.51 per pound and $2.48 per pound for the first six months of 2023, primarily reflecting the impact of lower copper production volumes, higher mining costs and lower molybdenum by-product credits.

Because certain assets are depreciated on a straight-line basis, North America’s average unit depreciation rate may vary with asset additions and the level of copper production and sales.

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Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $3.00 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the remainder of 2024.

North America’s average unit net cash costs for the year 2024 would change by approximately $0.03 per pound for each $2 per pound change in the average price of molybdenum for the remainder of 2024.

Average unit net cash costs (net of by-product credits) for our North America copper mines are expected to approximate $3.10 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the second half of 2024.

North America’s average unit net cash costs for the year 2024 would change by approximately $0.02 per pound for each $2 per pound change in the average price of molybdenum for the second half of 2024.

South America

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Our South America operations also sell a portion of their copper concentrate production to Atlantic Copper.

In addition to copper, Cerro Verde produces molybdenum concentrate and silver.

In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.

Labor Matters.

In April 2024, Cerro Verde reached a new four-year collective labor agreement (CLA) with one of its two unions and expects to begin negotiations in the near term with its other union.

Cerro Verde expects to incur nonrecurring charges of approximately $80 million associated with the new CLA, and may incur additional nonrecurring charges in connection with negotiations with its other union.

In April 2024, Cerro Verde reached a new four-year collective labor agreement (CLA) with one of its two unions and incurred nonrecurring charges of $65 million in second-quarter 2024 associated with the new CLA.

Cerro Verde expects to begin negotiations with a second union group prior to the expiration of its CLA on August 31, 2024, and may incur additional charges in connection with these negotiations.

Development Activities.

At the El Abra operations in Chile, we have drilled out and modeled a large sulfide resource that would support a potential major mill project similar to the large-scale concentrator at Cerro Verde.

At the El Abra operations in Chile, we have completed substantial drilling and evaluations to model a large sulfide resource that would support a potential major mill project similar to the large-scale concentrator at Cerro Verde.

We are engaged in planning for a potential submission of an environmental impact statement by year-end 2025, subject to ongoing stakeholder engagement and economic evaluations.

In parallel, we are updating our technical studies and economic models to incorporate recent capital cost trends.

In parallel, we are updating our technical studies and economic models to incorporate recent capital costs.

Preliminary estimates, which remain under review, indicate that the project economics would be supported using an incentive copper price of less than $4.00 per pound.

The decision of whether to proceed and timing of the potential project will take into account overall copper market conditions, required permitting and other factors.

Operating Data.

Following is summary consolidated operating data for South America operations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Copper (millions of recoverable pounds)

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Refer to “Consolidated Results” for our consolidated molybdenum sales volumes, which include sales of molybdenum produced at Cerro Verde.

Our consolidated copper sales from South America operations of 284 million pounds in first-quarter 2024 were lower than 302 million pounds in first-quarter 2023, primarily reflecting lower volumes of leach ore placed in stockpiles and lower milling rates associated with mill maintenance.

Molybdenum production in first-quarter 2024 was significantly lower than first-quarter 2023 as a result of mill maintenance and the impact of certain ore types on recoveries.

Copper sales from South America operations are expected to approximate 1.1 billion for the year 2024, which assume no significant impacts to water availability, which is being monitored closely in light of ongoing El Niño weather patterns.

Our consolidated copper sales from South America operations totaled 302 million pounds in second-quarter 2024, 304 million pounds in second-quarter 2023, 586 million pounds for the first six months of 2024 and 606 million pounds for the first six months of 2023.

The 2024 periods, compared to the 2023 periods reflect lower volumes of leach ore placed in stockpiles, partly offset by higher leach ore grades.

The first six months of 2024, compared to the first six months of 2023, also reflect lower milling rates associated with mill maintenance.

Copper sales from South America operations are expected to approximate 1.2 billion pounds for the year 2024.

Refer to “Outlook” for projected molybdenum sales volumes.

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Three Months Ended March 31,

Three Months Ended June 30,

Method Co-Product

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Revenues, excluding adjustments $ 4.39 $ 4.39 $ 3.78 $ 3.78

Site production and delivery, before net noncash and other costs shown below 2.61 2.47 2.54 2.27

Site production and delivery, before net noncash and other costs shown below 2.74 a

2.49 2.43 2.22

By-product credits (0.45) — (0.37) —

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DD&A 0.38 0.34 0.44 0.39

Noncash and other costs, net 0.06 a

Noncash and other costs, net 0.06 b

Total unit costs 2.90 3.06 2.80 2.90

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Copper sales (millions of recoverable pounds) 302 302 304 304

Includes charges totaling $0.04 per pound of copper in first-quarter 2024 and $0.03 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

Six Months Ended June 30,

Method Co-Product

Method By-Product

Method Co-Product

Revenues, excluding adjustments $ 4.27 $ 4.27 $ 3.85 $ 3.85

Site production and delivery, before net noncash and other costs shown below 2.68 a

2.48 2.49 2.25

By-product credits (0.33) — (0.45) —

Treatment charges 0.17 0.17 0.19 0.19

Royalty on metals 0.01 0.01 0.01 0.01

Unit net cash costs 2.53 2.66 2.24 2.45

DD&A 0.38 0.35 0.40 0.35

Noncash and other costs, net 0.06 b

Total unit costs 2.97 3.07 2.72 2.87

Revenue adjustments, primarily for pricing on prior period open sales 0.05 0.05 0.11 0.11

Gross profit per pound $ 1.35 $ 1.25 $ 1.24 $ 1.09

Copper sales (millions of recoverable pounds) 586 586 606 606

Includes $0.22 per pound of copper in second-quarter 2024 and $0.11 per pound of copper for the first six months of 2024 associated with nonrecurring labor-related charges at Cerro Verde associated with a new CLA.

Includes charges totaling $0.04 per pound of copper in second-quarter 2024, second-quarter 2023, and for the first six months of 2024, and $0.03 per pound of copper for the first six months of 2023, each for feasibility and optimization studies.

Our South America operations have varying cost structures because of differences in ore grades and characteristics, processing costs, by-product credits and other factors.

Average unit net cash costs (net of by-product credits) for South America operations of $2.60 per pound of copper in first-quarter 2024 were higher than first-quarter 2023 unit net cash costs of $2.20 per pound, primarily reflecting lower molybdenum by-product credits and lower copper volumes.

Average unit net cash costs (net of by-product credits) for South America operations of $2.46 per pound of copper in second-quarter 2024 and $2.53 per pound for the first six months of 2024 were higher than second-quarter 2023 unit net cash costs of $2.28 per pound and $2.24 per pound for the first six months of 2023, primarily reflecting nonrecurring labor-contract charges at Cerro Verde associated with a new CLA and higher mining costs.

Second-quarter 2024 unit net cash costs benefited from the impact of higher molybdenum by-product credits, while the first six months of 2024 had lower molybdenum by-product credits and copper volumes.

Revenues from Cerro Verde’s copper concentrate sales are recorded net of treatment charges, which will vary with Cerro Verde’s sales volumes and the price of copper.

Because certain assets are depreciated on a straight-line basis, South America’s unit depreciation rate may vary with asset additions and the level of copper production and sales.

Higher DD&A rates per pound of copper in the 2023 periods primarily reflect a correction in the useful lives of certain fixed assets at Cerro Verde, which resulted in additional depreciation being recognized in second-quarter 2023.

Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods.

Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

Average unit net cash costs (net of by-product credits) for South America operations are expected to approximate $2.51 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the remainder of 2024.

Average unit net cash costs (net of by-product credits) for South America operations are expected to approximate $2.47 per pound of copper for the year 2024, based on achievement of current sales volume and cost estimates, and assuming an average price of $20.00 per pound of molybdenum for the second half of 2024.

PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Central Papua, Indonesia.

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PT-FI's results are consolidated in our financial statements.

Upon completion and full ramp-up of the Indonesia smelter projects, PT-FI will be a fully integrated producer of refined copper and gold.

Other than copper concentrate delivered to PT Smelting for further processing into refined products, most of PT-FI’s copper concentrate is sold under long-term contracts.

Upon completion and full ramp-up of PT-FI’s new downstream processing facilities, PT-FI will be a fully integrated producer of refined copper and gold.

Other than copper concentrate delivered to PT Smelting and PT-FI’s new smelter for further processing into refined products, most of PT-FI’s copper concentrate is sold under long-term contracts.

Labor Matters.

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PT-FI did not recognize any significant nonrecurring costs associated with the new CLA.

Regulatory Matters.

Over the past several years, the Indonesia government has enacted various laws and regulations related to downstream processing of various products, including copper concentrates.

In 2018, PT-FI agreed to expand its domestic smelting and refining capacity and has made substantial progress towards completion (refer to “Indonesia Smelting and Refining” below).

PT-FI’s current export licenses for copper concentrate and anode slimes extend through May 2024.

PT-FI is working with the Indonesia government to obtain approvals to continue exports of copper concentrates and anode slimes until the Indonesia smelter projects are fully commissioned and reach designed operating conditions, which is currently expected by year-end 2024.

PT-FI also continues to discuss the applicability of the Indonesia government’s revised regulation on duties for various exported products, including copper concentrates, because of inconsistencies with its special mining license (IUPK).

PT-FI is currently being assessed export duties on copper concentrates at a rate of 7.5% and incurred export duties totaling $156 million in first-quarter 2024.

Refer to Notes 12, 13 and 14 of our 2023 Form 10-K for further discussion of Indonesia regulatory matters.

Mining Rights.

The Indonesia government is updating regulations that would enable PT-FI to apply for an extension of its IUPK beyond 2041.

Regulatory Matters and Mining Rights.

On May 31, 2024, export licenses expired for several exporters, including PT-FI.

In second-quarter 2024, the Indonesia government issued various regulations to allow, under certain conditions, continued exports of copper concentrates and anode slimes through December 2024.

On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024 when the full ramp-up of PT-FI’s new smelter is expected.

PT-FI will continue to pay a 7.5% export duty on copper concentrates during the smelter ramp-up period pursuant to Indonesia regulations.

As further discussed in FCX’s 2023 Form 10-K, PT-FI’s current special mining license (IUPK) enables it to conduct operations in the Grasberg minerals district through 2041.

On May 30, 2024, the Indonesia government issued a regulation applicable to the country’s mineral and coal industries which outlines requirements for the granting of IUPK extensions.

The regulation provides that IUPK holders may be granted a life-of-mine extension provided certain conditions are met, including ownership of integrated downstream processing facilities that have entered the operational stage;

domestic ownership of at least 51% and agreement with a state-owned enterprise for an additional 10% ownership;

and commitments for additional exploration and increases in refining capacity, each as approved by the Ministry of Energy and Minerals.

Application for extension may be submitted at any time up to one year prior to the current IUPK expiration.

PT-FI expects to apply for an extension under this new regulation during 2024.

An extension would enable continuity of large-scale operations for the benefit of all stakeholders and provide growth options through additional resource development opportunities in the highly attractive Grasberg minerals district.

Operating and Development Activities.

Over a multi-year investment period, PT-FI has successfully commissioned three large-scale underground mines in the Grasberg minerals district (Grasberg Block Cave, Deep Mill Level Zone and Big Gossan), which provided production volumes of 0.5 billion pounds of copper and 0.5 million ounces of gold in first-quarter 2024.

Milling rates for ore from these underground mines averaged 219,500 metric tons of ore per day in first-quarter 2024, a 33% increase from 164,800 metric tons of ore per day in first-quarter 2023.

In December 2023, PT-FI completed the installation of new milling facilities allowing it to further leverage the success of the underground mines and provide sustained large-scale production volumes.

PT-FI is completing a mill recovery project with the installation of a new copper cleaner circuit in the second half of 2024.

Milling rates averaged 196,900 metric tons of ore per day during second-quarter 2024, which reflected reduced rates in June 2024 because of the delay in obtaining PT-FI’s export licenses, and 208,200 metric tons of ore per day for the first six months of 2024, a 12% increase from 186,100 metric tons of ore per day for the first six months of 2023.

PT-FI is completing a mill recovery project with the installation of a new copper cleaner circuit, which is expected to begin commissioning in the second half of 2024.

Natural Gas Facilities.

PT-FI plans to transition its existing energy source from coal to liquefied natural gas, which would meaningfully reduce PT-FI’s Scope 1 greenhouse gas emissions at the Grasberg minerals district.

PT-FI is planning investments in a new gas-fired combined cycle facility.

Capital expenditures for the new facilities, to be incurred over the next four years, approximate $1 billion representing an incremental cost of $0.4 billion compared to previously planned investments to refurbish the existing coal units.

PT-FI’s planned investments in a new gas-fired combined cycle facility is expected to be incurred over the next four years, at a cost of approximately $1 billion, which represents an incremental cost of $0.4 billion compared to previously planned investments to refurbish the existing coal units.

Long-term mine development activities are ongoing for PT-FI’s Kucing Liar deposit in the Grasberg minerals district, which is expected to produce over 7 billion pounds of copper and 6 million ounces of gold between 2029 and the end of 2041.

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Kucing Liar will benefit from substantial shared infrastructure and PT-FI’s experience and long-term success in block-cave mining.

Indonesia Smelting and Refining.

In connection with PT-FI’s 2018 agreement with the Indonesia government to secure the extension of its long-term mining rights, PT-FI agreed to expand its domestic smelting and refining capacity.

Construction progress of the Manyar smelter in Gresik, Indonesia (with a capacity to process approximately 1.7 million metric tons of copper concentrate per year) is advancing on schedule with a target of May 2024 for substantial construction completion, which will be followed by a ramp-up period through December 2024.

Construction of the smelter has an estimated cost of $3.0 billion, including $2.8 billion for a construction contract (excluding capitalized interest and $0.3 billion of estimated commissioning and owner’s costs) and $0.2 billion for investment in a desalination plant.

The PMR is being constructed to process gold and silver from the Manyar smelter and PT Smelting.

Construction is in progress with commissioning expected during the second half of 2024.

Current cost estimates total $665 million.

During first-quarter 2024, capital expenditures for the Indonesia smelter projects totaled $0.5 billion and are expected to approximate $1.0 billion for the year 2024.

Projected capital expenditures for the Indonesia smelter projects in 2024 exclude capitalized interest and $0.3 billion of estimated commissioning and owner’s costs.

Capital expenditures for the Indonesia smelter projects for the remainder of 2024 are expected to be funded with availability under PT-FI’s revolving credit facility.

Downstream Processing Facilities.

PT-FI substantially completed construction of its new smelter in June 2024 and commenced commissioning operations.

The new smelter has a capacity to process approximately 1.7 million metric tons of copper concentrate per year and is expected to begin producing copper cathodes in the coming months with ramp-up to full production targeted by year-end 2024 in line with previous expectations.

The PMR is being constructed to process gold and silver from the new smelter and PT Smelting.

Construction is in progress with full production expected by year-end 2024.

During the first six months of 2024, capital expenditures for the new downstream processing facilities totaled $0.7 billion and are expected to approximate $1.0 billion for the year 2024, excluding capitalized interest and $0.3 billion

of estimated commissioning and owner’s costs.

As of June 30, 2024, $3.8 billion has been incurred to date for the projects.

In December 2023, PT Smelting completed an expansion of its capacity by 30% to 1.3 million metric tons of copper concentrate per year.

The project was funded by PT-FI with borrowings totaling approximately $250 million that are expected to convert to equity in late second-quarter 2024, increasing PT-FI’s ownership in PT Smelting to approximately 65% from 39.5%.

The project was funded by PT-FI with borrowings totaling $254 million that converted to equity effective June 30, 2024, increasing PT-FI’s ownership in PT Smelting to 66% from 39.5%.

As discussed in Note 1, PT-FI continues to account for its investment in PT Smelting under the equity method.

Operating Data.

Following is summary consolidated operating data for Indonesia operations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Copper (millions of recoverable pounds)

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Total 196,900 207,100

208,200 186,100

Average ore grades:

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Gold 77.0 76.7 77.3 77.4

PT-FI’s consolidated sales of 493 million pounds of copper and 564 thousand ounces of gold in first-quarter 2024 were more than double first-quarter 2023 sales of 198 million pounds of copper and 266 thousand ounces of gold, primarily reflecting higher mining and milling rates and ore grades.

First-quarter 2023 sales were also impacted by weather-related disruptions and the initial deferral of sales recognition related to the PT Smelting tolling arrangement.

Consolidated sales volumes from PT-FI are expected to approximate 1.7 billion pounds of copper and 2.0 million ounces of gold for the year 2024, which includes exports of copper concentrates and anode slimes from June 2024 through December 2024 totaling 0.4 billion pounds of copper and 0.9 million ounces of gold.

Additionally, PT-FI’s consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 90 million pounds of copper and 120 thousand ounces of gold that will be processed by the Indonesia smelter projects and sold as refined metal in future periods.

PT-FI’s consolidated copper and gold sales volumes for the second quarter and first six months of 2024 were impacted by previously announced shipping delays in Indonesia associated with the timing of renewing PT-FI’s copper concentrate and anode slimes export licenses, which expired on May 31, 2024.

On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024 when the full ramp-up of PT-FI’s new smelter is expected.

PT-FI’s consolidated copper sales volumes totaled 337 million pounds in second-quarter 2024, 386 million pounds in second-quarter 2023, 830 million pounds for the first six months of 2024 and 584 million pounds for the first six months of 2023.

PT-FI’s consolidated copper sales volumes for the 2024 periods benefited from higher ore grades and higher consolidated copper sales volumes for the first six months of 2024 also reflect higher mining and milling rates.

PT-FI’s consolidated gold sales volumes totaled 356 thousand ounces in second-quarter 2024, 492 thousand ounces in second-quarter 2023, 920 thousand ounces for the first six months of 2024 and 758 thousand ounces for the first six months of 2023.

PT-FI’s consolidated gold sales volumes for the first six months of 2024 benefited from higher mining and milling rates.

Consolidated sales volumes from PT-FI are expected to approximate 1.7 billion pounds of copper and 1.8 million ounces of gold for the year 2024.

Consolidated copper and gold production volumes from PT-FI for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 100 million pounds of copper and 120 thousand ounces of gold that will be processed by the new downstream processing facilities and sold as refined metal in 2025.

Projected sales volumes are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode

slimes beyond May 2024;

the timing of ramp-up of PT-FI’s new smelter;

weather-related conditions;

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Refer to “Product Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash credits per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

Three Months Ended March 31,

Three Months Ended June 30,

By-Product Method Co-Product Method By-Product Method Co-Product Method

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Treatment charges 0.36 0.23 119 0.39 0.23 118

Export duties 0.32 0.19 104 0.09 0.05 25

Export duties a

0.23 0.14 74 — — —

Royalty on metals 0.27 0.17 90 0.24 0.14 72

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DD&A 0.74 0.47 242 0.71 0.42 216

Noncash and other costs, net 0.05 a

0.03 16 0.16 a

Noncash and other costs, net 0.19 b,c

0.12 62 0.20 c,d

Total unit costs 0.72 2.14 1,110 0.82 2.03 1,035

Revenue adjustments, primarily for pricing on prior period open sales 0.28 0.28 86 (0.14) (0.14) 1

Gross profit per pound/ounce $ 4.00 $ 2.58 $ 1,275 $ 2.86 $ 1.65 $ 908

Copper sales (millions of recoverable pounds) 337 337 386 386

Gold sales (thousands of recoverable ounces) 356 492

Six Months Ended June 30,

By-Product Method Co-Product Method By-Product Method Co-Product Method

Copper Gold Copper Gold

Revenues, excluding adjustments $ 4.23 $ 4.23 $ 2,236 $ 3.83 $ 3.83 $ 1,946

Site production and delivery, before net noncash and other costs shown below 1.55 0.96 508 1.93 1.14 578

Gold, silver and other by-product credits (2.59) — — (2.68) — —

Treatment charges 0.36 0.22 116 0.38 0.23 115

Export duties a

0.28 0.17 91 0.03 0.02 9

Royalty on metals 0.25 0.16 85 0.26 0.15 73

Unit net cash (credits) costs (0.15) 1.51 800 (0.08) 1.54 775

DD&A 0.70 0.43 230 0.72 0.43 217

Noncash and other costs, net 0.10 b,c

0.07 34 0.18 c,d

Total unit costs 0.65 2.01 1,064 0.82 2.08 1,047

Revenue adjustments, primarily for pricing on prior period open sales 0.01 0.01 (7) 0.19 0.19 22

PT Smelting intercompany profit — — — 0.19 0.11 58

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Gold sales (thousands of recoverable ounces) 920 758

Includes charges totaling $0.03 per pound of copper in first-quarter 2024 for the Indonesia smelter projects’ operational readiness and startup costs and $0.07 per pound of copper in first-quarter 2023 for feasibility and optimization studies.

PT-FI’s unit net cash credits (including gold, silver and other by-product credits) were $0.12 per pound of copper in first-quarter 2024 and $0.08 per pound of copper in first-quarter 2023.

The favorable unit net cash credits in first-quarter 2024, compared to first-quarter 2023, primarily reflect higher sales volumes, partially offset by lower by-product credits and higher export duties.

Export duties of 2.5% were eliminated effective March 29, 2023, upon verification that construction progress of the new smelter exceeded 50%, and were reinstated at a rate of 7.5% in July 2023 under a revised regulation.

As discussed above and in Note 7, PT-FI will continue to pay export duties of 7.5% on copper concentrates during the smelter ramp-up period pursuant to Indonesia regulations.

Includes charges totaling $0.10 per pound of copper in second-quarter 2024 and $0.04 per pound of copper for the first six months of 2024 for amounts capitalized in prior years associated with construction of the new downstream processing facilities.

Includes charges totaling $0.06 per pound of copper in second-quarter 2024 and $0.04 per pound of copper for the first six months of 2024 for operational readiness and startup costs associated with the new downstream processing facilities and $0.03 per pound of copper in second-quarter 2023 and $0.04 per pound of copper for the first six months of 2023 for feasibility and optimization studies.

Includes charges totaling $0.14 per pound of copper in second-quarter 2023 and $0.09 per pound of copper for the first six months of 2023 associated with a potential administrative fine.

PT-FI’s unit net cash credits (including gold, silver and other by-product credits) were $0.21 per pound of copper in second-quarter 2024 and $0.15 per pound of copper for the first six months of 2024, compared to $0.09 per pound of copper in second-quarter 2023 and $0.08 per pound of copper for the first six months of 2023.

Favorable unit net cash credits in the 2024 periods, compared with the 2023 periods, primarily reflect lower costs associated with timing of sales related to previously announced shipping delays, partly offset by higher export duties.

Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold.

PT-FI’s royalties totaled $118 million in first-quarter 2024 and $58 million in first-quarter 2023.

PT-FI is currently being assessed export duties for copper concentrates at a rate of 7.5%, compared to an export duty rate of 2.5% in first-quarter 2023.

Export duties totaled $156 million in first-quarter 2024 and $17 million in first-quarter 2023.

Refer to Note 13 of our 2023 Form 10-K for further discussion of PT-FI’s export duties.

PT-FI’s royalties totaled $90 million in second-quarter 2024, $92 million in second-quarter 2023, $209 million for the first six months of 2024 and $150 million for the first six months of 2023.

Export duties totaled $75 million in second-quarter 2024, $231 million for the first six months of 2024 and $18 million for the first six months of 2023.

Refer to Note 7 for further discussion of PT-FI’s export duties.

Because certain assets are depreciated on a straight-line basis, PT-FI’s unit depreciation rate may vary with asset additions and the level of copper production and sales.

The DD&A rate per pound of copper is expected to be higher in the second half of 2024, compared with the 2024 and 2023 periods, as the downstream processing facilities are placed into service.

Revenue adjustments primarily result from changes in prices on provisionally priced copper sales recognized in prior periods.

Refer to “Consolidated Results – Revenues” for further discussion of adjustments to prior period provisionally priced copper sales.

PT Smelting’s intercompany profit in first-quarter 2023 represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting.

PT Smelting’s intercompany profit for the first six months of 2023 represents the change in the deferral of 39.5% of PT-FI’s profit on sales to PT Smelting.

Beginning in 2023, PT-FI’s commercial arrangement with PT Smelting changed to a tolling arrangement and there are no further sales from PT-FI to PT Smelting.

Average unit net cash credits (including gold, silver and other by-product credits) for PT-FI are expected to approximate $0.12 per pound of copper for the year 2024, based on achievement of current sales volumes and cost estimates, and assuming an average price of $2,300 per ounce of gold for the remainder of 2024.

PT-FI’s average unit net cash credits for the year 2024 would change by approximately $0.09 per pound of copper for each $100 per ounce change in the average price of gold for the remainder of 2024.

Refer to Note 1 for further discussion of PT-FI’s equity investment in PT Smelting.

Average unit net cash credits (including gold, silver and other by-product credits) for PT-FI are expected to approximate $0.07 per pound of copper for the year 2024, based on achievement of current sales volumes and cost estimates, and assuming an average price of $2,300 per ounce of gold for the second half of 2024.

PT-FI’s average unit net cash credits for the year 2024 would change by approximately $0.06 per pound of copper for each $100 per ounce change in the average price of gold for the second half of 2024.

PT-FI’s projected sales volumes and unit net cash credits for the year 2024 are dependent on operational performance;

extension of PT-FI’s export licenses for copper concentrates and anode slimes beyond May 2024;

the timing of the ramp-up of PT-FI’s new smelter in Indonesia;

weather-related conditions;

timing of shipments;

and other factors.

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The majority of the molybdenum concentrate produced at the Climax and Henderson mines, as well as from our North America copper mines and South America operations, is processed at our conversion facilities.

Operating Activities.

Production from the primary molybdenum operations totaled 8 million pounds of molybdenum in each of first-quarter 2024 and 2023.

Operating and Development Activities.

Production from the primary molybdenum operations totaled 7 million pounds of molybdenum in each of second-quarter 2024 and 2023 and 15 million pounds during both the first six months of 2024 and 2023.

Refer to “Consolidated Results” for our consolidated molybdenum operating data, which includes sales of molybdenum produced at our primary molybdenum operations and from our North America copper mines and South America operations.

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This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Average unit net cash costs for the primary molybdenum operations of $15.80 per pound of molybdenum in first-quarter 2024 were higher than average unit net cash costs of $12.24 per pound in first-quarter 2023, primarily reflecting higher costs for contract labor and maintenance supplies.

Average unit net cash costs for the primary molybdenum operations of $19.41 per pound of molybdenum in second-quarter 2024 and $17.50 per pound for the first six months of 2024 were higher than average unit net cash costs of $15.99 per pound in second-quarter 2023 and $13.95 per pound for the first six months of 2023, primarily reflecting higher transitional contract-labor costs and operating and maintenance supply costs.

Average unit net cash costs for the primary molybdenum operations are expected to approximate $17.00 per pound of molybdenum for the year 2024, based on achievement of current sales volumes and cost estimates.

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We wholly own and operate the Miami smelter in Arizona, Atlantic Copper (a smelter and refinery in Spain), and the El Paso refinery in Texas.

PT-FI also has a 39.5% ownership interest in PT Smelting, a copper smelter and refinery in Gresik, Indonesia (refer to Note 3 of our 2023 Form 10-K) and expects to complete the Indonesia smelter projects in 2024, which will smelt and refine copper concentrate from PT-FI as well as process anode slimes.

As a result, PT-FI’s operations will be

fully integrated, and treatment charges reflecting the cost of smelting and refining operations will be recorded in production and delivery costs (refer to “Indonesia Mining – Indonesia Smelting and Refining” above).

In June 2024, PT-FI substantially completed construction of its new smelter in Indonesia and commenced commissioning operations.

Further, PT-FI expects to complete its new PMR by year-end 2024.

The new smelter will smelt and refine copper concentrate from PT-FI and the PMR will process anode slimes from the new smelter and PT Smelting.

PT-FI also has a 66% (39.5% prior to June 30, 2024) ownership interest in PT Smelting, a copper smelter and refinery in Gresik, Indonesia (refer to Note 1).

As a result, PT-FI’s operations will be fully integrated and treatment charges reflecting the cost of smelting and refining operations will be recorded in production and delivery costs (refer to “Indonesia Operations – Downstream Processing Facilities” above).

Atlantic Copper smelts and refines copper concentrate and markets refined copper and precious metals in slimes.

In first-quarter 2024, Atlantic Copper’s copper concentrate purchases included 42% from our copper mining operations and 58% from third parties.

During the first six months of 2024, Atlantic Copper’s copper concentrate purchases included 30% from our copper mining operations and 70% from third parties.

Atlantic Copper’s treatment charges, which consist of a base rate per pound of copper and per ounce of gold, are generally fixed and represent a cost to our mining operations and income to Atlantic Copper ( i.e.

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We defer recognizing profits on sales from our mining operations to Atlantic Copper until final sales to third parties occur.

Changes in these deferrals attributable to variability in intercompany volumes resulted in net (reductions) additions to operating income totaling $(17) million ($(5) million to net income attributable to common stock) in first-quarter 2024 and $111 million ($48 million to net income attributable to common stock) in first-quarter 2023.

First-quarter 2023 benefited from the recognition of previously deferred profits on PT-FI sales to PT Smelting following the change in the commercial arrangements from a concentrate sales agreement to a tolling agreement (refer to Note 3 of our 2023 Form 10-K for further discussion).

Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ net income attributable to common stock totaled $63 million at March 31, 2024.

Our net deferred profits on our inventories at Atlantic Copper to be recognized in future periods’ operating income totaled $97 million ($30 million to net income attributable to common stock) at June 30, 2024.

Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in our net deferred profits and quarterly earnings.

FCX currently expects the deferral of profit recognition on sales to Atlantic Copper in third-quarter 2024 to result in a reduction to operating income of approximately $50 million (approximately $15 million to

net income attributable to common stock), which will be recognized in future periods as Atlantic Copper sells final refined products to third parties.

In May 2024, the U.S.

Environmental Protection Agency (EPA) amended its rule establishing standards for hazardous air pollutant emissions from primary copper smelters.

We are evaluating this final rule to determine to what extent we would need to modify our processes and equipment and the costs involved, which could be significant.

We expect that this final rule will impact our Miami, Arizona smelter operations, which processes a significant portion of the copper concentrate produced by our North America copper mines.

We have appealed the EPA’s final rule to the Court of Appeals for the D.C.

Circuit, and we have filed a petition for reconsideration to EPA, including updated information on cost and implementation of the final rule.

Refer to “Governmental Regulations – Environmental and Reclamation Matters” in Items 1 and 2.

“Business and Properties” contained in Part I of our 2023 Form 10-K for additional information on new and revised environmental regulatory requirements that may result in substantial increased costs for our business.

CAPITAL RESOURCES AND LIQUIDITY

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We expect to maintain a strong balance sheet and liquidity position as we focus on building long-term value in our business, executing our operating plans safely, responsibly and efficiently, and prudently managing costs and capital expenditures.

Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our available cash and cash equivalents plus our projected consolidated operating cash flows of $7.4 billion for the year 2024 exceed our expected consolidated capital expenditures of $4.6 billion (which includes $1.0 billion for the Indonesia smelter projects that are expected to be funded with availability under PT-FI’s revolving credit facility).

Based on current sales volume, cost and metal price estimates discussed in “Outlook,” our available cash and cash equivalents plus our projected consolidated operating cash flows of $7.2 billion for the year 2024 exceed our expected consolidated capital expenditures of $4.7 billion (which includes $2.3 billion for major mining projects and $1.0 billion for PT-FI’s new downstream processing facilities) for the year 2024.

We have cash on hand and the financial flexibility to fund capital expenditures and our other cash requirements for the next twelve months, including noncontrolling interest distributions, income tax payments, current common stock dividends (base and variable) and any share or debt repurchases.

At March 31, 2024, we had $5.2 billion in consolidated cash and cash equivalents and FCX, PT-FI and Cerro Verde have $3.0 billion, $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

At March 31, 2024, we had $1.0 billion in current restricted cash and cash equivalents, including $0.9 billion associated with PT-FI's export proceeds temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.

At June 30, 2024, we had $5.3 billion in consolidated cash and cash equivalents, and FCX, PT-FI and Cerro Verde have $3.0 billion, $1.75 billion and $350 million, respectively, of availability under their revolving credit facilities.

On July 31, 2024, PT-FI borrowed $250 million under its revolving credit facility to fund capital expenditures for PT-FI’s new downstream processing facilities.

At June 30, 2024, we had $1.0 billion in current restricted cash and cash equivalents, including $0.9 billion associated with PT-FI's export proceeds temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.

Financial Policy.

Our financial policy is aligned with our strategic objectives of maintaining a solid balance sheet, providing cash returns to shareholders and advancing opportunities for future growth.

The policy includes a base dividend and a performance-based payout framework, whereby up to 50% of available cash flows generated after planned capital spending and distributions to noncontrolling interests would be allocated to shareholder returns and the balance to debt reduction and investments in value enhancing growth projects, subject to us maintaining our net debt at a level not to exceed the net debt target of $3.0 billion to $4.0 billion (excluding debt for the Indonesia smelter projects).

Our Board of Directors (Board) reviews the structure of the performance-based payout framework at least annually.

At March 31, 2024, net debt totaled $0.3 billion (which was net of $0.9 billion of current restricted cash associated with PT-FI’s export proceeds), excluding $3.0 billion of debt for the Indonesia smelter projects.

At June 30, 2024, FCX’s net debt, excluding $3.0 billion of debt for PT-FI’s new downstream processing facilities, totaled $0.3 billion (which was net of $0.9 billion of current restricted cash associated with PT-FI’s export proceeds).

Refer to "Net Debt" for further discussion.

On March 27, 2024, our Board declared cash dividends totaling $0.15 per share on our common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable, performance-based cash dividend), which were paid on May 1, 2024, to common stockholders of record as of April 15, 2024.

Based on current market conditions, the base and variable dividends on our common stock are anticipated to total $0.60 per share for 2024 (including the dividends paid on February 1, 2024, and May 1, 2024), comprised of a $0.30 per share base dividend and $0.30 per share variable dividend.

The declaration and payment of dividends (base or variable) is at the discretion of our Board and will depend on our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board.

On June 26, 2024, our Board declared cash dividends totaling $0.15 per share on our common stock (including a $0.075 per share quarterly base cash dividend and a $0.075 per share quarterly variable, performance-based cash dividend), which were paid on August 1, 2024, to common stockholders of record as of July 15, 2024.

Based on current market conditions, the base and variable dividends on our common stock are anticipated to total $0.60 per share for 2024 (including the dividends paid on February 1, 2024, May 1, 2024, and August 1, 2024), comprised of a $0.30 per share base dividend and $0.30 per share variable dividend.

The declaration and payment of dividends (base or variable) are at the discretion of our Board and will depend on our financial results, cash requirements, global economic conditions and other factors deemed relevant by our Board.

In July 2024, FCX acquired 1.2 million shares of its common stock for a total cost of $59 million ($50.48 average cost per share) bringing total purchases under its $5.0 billion share repurchase program to 49.0 million shares of common stock for a cost of $1.9 billion ($38.64 average cost per share).

The timing and amount of share repurchases is at the discretion of management and will depend on a variety of factors.

The share repurchase program may be modified, increased, suspended or terminated at any time at our Board’s discretion.

Following is a summary of the U.S.

and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at March 31, 2024 (in billions):

and international components of consolidated cash and cash equivalents available to the parent company, net of noncontrolling interests’ share, taxes and other costs at June 30, 2024 (in billions):

Cash at domestic companies $ 2.6

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through dividends that are subject to applicable withholding taxes and noncontrolling interests’ share.

At March 31, 2024, consolidated debt totaled $9.4 billion, with a weighted-average interest rate of 5.2%.

At June 30, 2024, consolidated debt totaled $9.4 billion, with a weighted-average interest rate of 5.2%.

Substantially all of our outstanding debt is fixed rate.

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Our total debt has an average remaining duration of approximately 10 years.

At March 31, 2024, we had no borrowings and $7 million in letters of credit issued under our $3.0 billion revolving credit facility, and there were no borrowings under PT-FI’s $1.75 billion revolving credit facility or Cerro Verde’s $350 million revolving credit facility.

Refer to Note 4 for further discussion.

Operating Activities

We generated operating cash flows of $1.9 billion (net of $0.1 billion of working capital and other uses) in first-quarter 2024 and $1.1 billion (net of $0.5 billion of working capital and other uses) in first-quarter 2023.

Higher operating cash flows in first-quarter 2024, compared with first-quarter 2023, primarily reflects higher copper and gold sales volumes and higher gold prices.

We generated operating cash flows of $3.9 billion for the first six months of 2024 and $2.7 billion for the first six months of 2023.

Higher operating cash flows for the first six months of 2024, compared with the first six months of 2023, primarily reflects higher copper and gold sales volumes and higher average realized prices.

Investing Activities

Capital Expenditures.

Capital expenditures, including capitalized interest, totaled $1.3 billion in first-quarter 2024, including $0.4 billion for major mining projects, primarily associated with underground development activities in the Grasberg minerals district, and $0.5 billion for the Indonesia smelter projects.

Capital expenditures, including capitalized interest, totaled $1.1 billion in first-quarter 2023, including $0.4 billion for major mining projects, primarily associated with underground development activities in the Grasberg minerals district, and $0.3 billion for the Indonesia smelter projects.

Capital expenditures, including capitalized interest, totaled $2.4 billion for the first six months of 2024 and $2.3 billion for the first six months of 2023, including amounts for major mining projects ($0.9 billion for the first six months of 2024 and $0.8 billion for the first six months of 2023), primarily associated with underground development activities in the Grasberg minerals district and for PT-FI’s new downstream processing facilities ($0.7 billion for the first six months of 2024 and $0.8 billion for the first six months of 2023).

Financing Activities

Debt Transactions.

Net repayments of debt totaled $1.0 billion in first-quarter 2023 reflecting the repayment of our 3.875% Senior Notes that matured in March 2023.

Net repayments of debt totaling $1.1 billion for the first six months of 2023 reflected the repayment of our 3.875% Senior Notes that matured in March 2023.

Cash Dividends on Common Stock.

We paid cash dividends on our common stock totaling $0.2 billion in each of first-quarter 2024 and 2023.

We paid cash dividends on our common stock totaling $0.4 billion during each of the first six months of 2024 and 2023.

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Cash Dividends and Distributions Paid to Noncontrolling Interests.

Cash dividends and distributions paid to noncontrolling interests at our international operations totaled $102 million in first-quarter 2024 (none in first-quarter 2023).

Cash dividends and distributions paid to noncontrolling interests at our international operations totaled $0.7 billion (including $0.6 billion from PT-FI) for the first six months of 2024 and $0.3 billion (including $0.2 billion from PT-FI ) for the first six months of 2023.

Cash dividends and distributions to noncontrolling interests vary based on the operating results and cash requirements of our consolidated subsidiaries.

Contributions from Noncontrolling Interests.

We received equity contributions totaling $50 million in first-quarter 2023 from MIND ID, primarily associated with receipt of the final capital contribution in accordance with the PT-FI shareholders agreement.

CONTRACTUAL OBLIGATIONS

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We perform a comprehensive annual review of our environmental obligations and AROs and also review changes in facts and circumstances associated with these obligations at least quarterly.

As discussed in Note 8, we recorded charges totaling $56 million for revisions to our environmental obligations in first-quarter 2024, primarily for preliminary adjustments associated with an interim action workplan for a former processing facility in Steubenville, Ohio, and for groundwater remediation in Blackwell, Oklahoma associated with a historical smelter site.

In addition, we recorded ARO additions totaling $365 million in first-quarter 2024, including $256 million at our mining operations primarily associated with revised closure plans and cost estimates to reflect our commitment to the Global Industry Standard on Tailings Management, and $109 million associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies.

Refer to Note 12 “Environmental” and “AROs” of our 2023 Form 10-K for further information about contingencies associated with environmental matters and AROs.

As discussed in Note 7, we recorded net charges totaling $79 million for the first six months of 2024, primarily associated with changes in cost estimates for former processing facilities and historical smelter sites.

In addition, we recorded net ARO additions totaling $0.4 billion in the first six months of 2024, including $0.3 billion at mining operations primarily associated with revised closure plans and cost estimates to reflect our commitment to the Global Industry Standard on Tailings Management and $0.1 billion at our oil and gas properties primarily associated with assumed abandonment obligations resulting from bankruptcies of other companies.

Refer to Note 12 of our 2023 Form 10-K for further information about contingencies associated with environmental matters and AROs.

Litigation and Other Contingencies

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There were no significant updates to previously reported accounting standards included in Note 1 of our 2023 Form 10-K.

We believe that net debt provides investors with information related to the performance-based payout framework in our financial policy, which requires us to maintain our net debt at a level not to exceed the net debt target of $3 billion to $4 billion (excluding debt for the Indonesia smelter projects).

CRITICAL ACCOUNTING ESTIMATES

MD&A is based on our consolidated financial statements, which have been prepared in conformity with U.S.

The preparation of these statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

We base these estimates on historical experience and on assumptions that we consider reasonable under the circumstances;

however, reported results could differ from those based on the current estimates under different assumptions or conditions.

For a description of our critical accounting estimates that require us to make the most difficult, subjective or complex judgments, refer to our 2023 Form 10-K.

We have not changed any of these policies from those previously disclosed in that report.

We believe that net debt provides investors with information related to the performance-based payout framework in our financial policy, which requires us to maintain our net debt at a level not to exceed the net debt target of $3 billion to $4 billion, excluding debt for PT-FI’s new downstream processing facilities.

We define net debt as consolidated debt less (i) consolidated cash and cash equivalents and (ii) current restricted cash associated with PT-FI's export proceeds.

2 unchanged sentences

Our net debt, which may not be comparable to similarly titled measures reported by other companies, follows (in billions):

As of March 31, 2024

As of June 30, 2024

Current portion of debt $ 0.8

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current restricted cash associated with PT-FI’s export proceeds b

FCX net debt 3.3

debt for Indonesia smelter projects c

FCX net debt, excluding debt for the Indonesia smelter projects $ 0.3

FCX net debt 3.3 a

debt for PT-FI’s new downstream processing facilities c

FCX net debt, excluding debt for PT-FI’s new downstream processing facilities $ 0.3

Does not foot because of rounding.

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We believe unit net cash costs (credits) per pound of copper and molybdenum are measures that provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations.

We use these measures for the same purpose and for monitoring operating performance by our mining operations.

We use this measure for the same purpose and for monitoring operating performance by our mining operations.

This information differs from measures of performance determined in accordance with U.S.

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North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In millions) By-Product Co-Product Method

9 unchanged sentences

Total costs 1,079 1,093 120 38 1,251

Other revenue adjustments, primarily for pricing

on prior period open sales 3 3 — — 3

Gross profit $ 281 $ 267 $ 10 $ 4 $ 281

11 unchanged sentences

Total unit costs 3.68 3.73 18.41

Other revenue adjustments, primarily for pricing

on prior period open sales 0.01 0.01 —

Gross profit per pound $ 0.96 $ 0.91 $ 1.56

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Noncash and other costs, net — 37 —

Other revenue adjustments, primarily for pricing

on prior period open sales 3 — —

Eliminations and other 4 6 —

6 unchanged sentences

Includes gold and silver product revenues and production costs.

Includes charges totaling $15 million ($0.05 per pound of copper) for feasibility studies.

Includes charges totaling $14 million ($0.05 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other segments as presented in Note 8.

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(In millions) By-Product Co-Product Method

11 unchanged sentences

on prior period open sales (11) (11) — — (11)

Gross profit $ 411 $ 366 $ 41 $ 4 $ 411

Gross profit (loss) $ 320 $ 280 $ 46 $ (6) $ 320

Copper sales (millions of recoverable pounds) 341 341

30 unchanged sentences

Includes gold and silver product revenues and production costs.

Includes charges totaling $27 million ($0.08 per pound of copper) for feasibility and optimization studies and $16 million ($0.05 per pound of copper) related to asset impairments.

Includes charges totaling $26 million ($0.08 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other segments as presented in Note 8.

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs

Six Months Ended June 30, 2024

(In millions) By-Product Co-Product Method

Method Copper Molybdenum a

Revenues, excluding adjustments $ 2,676 $ 2,676 $ 265 $ 81 $ 3,022

Site production and delivery, before net noncash

and other costs shown below 2,096 1,898 226 65 2,189

By-product credits (253) — — — —

Treatment charges 83 80 — 3 83

Net cash costs 1,926 1,978 226 68 2,272

DD&A 217 197 17 3 217

Noncash and other costs, net 82 c

Total costs 2,225 2,251 248 72 2,571

Gross profit $ 451 $ 425 $ 17 $ 9 $ 451

Copper sales (millions of recoverable pounds) 626 626

Molybdenum sales (millions of recoverable pounds) a

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments $ 4.28 $ 4.28 $ 19.18

Site production and delivery, before net noncash

and other costs shown below 3.35 3.03 16.35

By-product credits (0.40) — —

Treatment charges 0.13 0.13 —

Unit net cash costs 3.08 3.16 16.35

DD&A 0.35 0.32 1.22

Noncash and other costs, net 0.13 c

Total unit costs 3.56 3.60 17.96

Gross profit per pound $ 0.72 $ 0.68 $ 1.22

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 3,022 $ 2,189 $ 217

Treatment charges (2) 81 —

Noncash and other costs, net — 82 —

Eliminations and other 18 23 1

North America copper mines 3,038 2,375 218

Other mining d

12,799 8,107 853

Corporate, other & eliminations (2,892) (2,763) 33

As reported in our consolidated financial statements $ 12,945 $ 7,719 $ 1,104

Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

Includes gold and silver product revenues and production costs.

Includes charges totaling $30 million ($0.05 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other mining operations as presented in Note 8.

North America Copper Mines Product Revenues, Production Costs and Unit Net Cash Costs

Six Months Ended June 30, 2023

(In millions) By-Product Co-Product Method

Method Copper Molybdenum a

Revenues, excluding adjustments $ 2,723

$ 2,723 $ 412 $ 86 $ 3,221

Site production and delivery, before net noncash

and other costs shown below 1,975 1,720 288 78 2,086

By-product credits (387) — — — —

Treatment charges 88 83 — 5 88

Net cash costs 1,676 1,803 288 83 2,174

DD&A 202 178 20 4 202

Noncash and other costs, net 127 c

Total costs 2,005 2,089 325 89 2,503

Other revenue adjustments, primarily for pricing

on prior period open sales 13 13 — — 13

Gross profit (loss) $ 731 $ 647 $ 87 $ (3) $ 731

Copper sales (millions of recoverable pounds) 676 676

Molybdenum sales (millions of recoverable pounds) a

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments $ 4.03

$ 4.03 $ 25.52

Site production and delivery, before net noncash

and other costs shown below 2.92 2.55 17.81

By-product credits (0.57) — —

Treatment charges 0.13 0.12 —

Unit net cash costs 2.48 2.67 17.81

DD&A 0.30 0.26 1.24

Noncash and other costs, net 0.19 c

Total unit costs 2.97 3.09 20.11

Other revenue adjustments, primarily for pricing

on prior period open sales 0.02 0.02 —

Gross profit per pound $ 1.08 $ 0.96 $ 5.41

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 3,221 $ 2,086 $ 202

Treatment charges (9) 79 —

Noncash and other costs, net — 127 —

Other revenue adjustments, primarily for pricing

on prior period open sales 13 — —

Eliminations and other 35 37 —

North America copper mines 3,260 2,329 202

Other mining d

11,068 7,441 712

Corporate, other & eliminations (3,202) (3,056) 32

As reported in our consolidated financial statements $ 11,126 $ 6,714 $ 946

Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.

Includes gold and silver product revenues and production costs.

Includes charges totaling $53 million ($0.08 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other mining operations as presented in Note 8.

South America Operations Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In millions) By-Product Co-Product Method

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Site production and delivery, before net noncash

and other costs shown below 828 b

By-product credits (136) — — —

Treatment charges 48 48 — 48

Royalty on metals 3 2 1 3

Net cash costs 743 804 89 893

DD&A 114 102 12 114

Noncash and other costs, net 19 c

Total costs 876 925 101 1,026

Other revenue adjustments, primarily for pricing

on prior period open sales 87 87 3 90

Gross profit $ 537 $ 488 $ 49 $ 537

Copper sales (millions of recoverable pounds) 302 302

Gross profit per pound of copper:

Revenues, excluding adjustments $ 4.39 $ 4.39

Site production and delivery, before net noncash

and other costs shown below 2.74 b

By-product credits (0.45) —

Treatment charges 0.16 0.16

Royalty on metals 0.01 0.01

Unit net cash costs 2.46 2.66

DD&A 0.38 0.34

Noncash and other costs, net 0.06 c

Total unit costs 2.90 3.06

Other revenue adjustments, primarily for pricing

on prior period open sales 0.29 0.29

Gross profit per pound $ 1.78 $ 1.62

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 1,473 $ 842 $ 114

Treatment charges (48) — —

Royalty on metals (3) — —

Noncash and other costs, net — 19 —

Other revenue adjustments, primarily for pricing

on prior period open sales 90 — —

Eliminations and other (1) (1) —

South America operations 1,511 860 114

Other mining d

6,546 4,508 378

Corporate, other & eliminations (1,433) (1,493) 17

As reported in our consolidated financial statements $ 6,624 $ 3,875 $ 509

Includes silver sales of 0.9 million ounces ($29.63 per ounce average realized price).

Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.

Includes nonrecurring charges totaling $65 million ($0.22 per pound of copper) associated with labor-related charges at Cerro Verde associated with a new CLA.

Includes charges totaling $12 million ($0.04 per pound of copper) for feasibility studies.

Represents the combined total for our other segments as presented in Note 8.

South America Operations Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended June 30, 2023

(In millions) By-Product Co-Product Method

Method Copper Other a

Revenues, excluding adjustments $ 1,153 $ 1,153 $ 128 $ 1,281

Site production and delivery, before net noncash

and other costs shown below 741 678 82 760

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South America Operations Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

(In millions) By-Product Co-Product Method

2 unchanged sentences

Site production and delivery, before net noncash

and other costs shown below 1,571 b

1,456 142 1,598

By-product credits (192) — — —

Treatment charges 99 99 — 99

Royalty on metals 4 4 — 4

Net cash costs 1,482 1,559 142 1,701

DD&A 222 204 18 222

Noncash and other costs, net 37 c

Total costs 1,741 1,799 161 1,960

Other revenue adjustments, primarily for pricing

on prior period open sales 32 32 — 32

Gross profit $ 790 $ 732 $ 58 $ 790

Copper sales (millions of recoverable pounds) 586 586

Gross profit per pound of copper:

Revenues, excluding adjustments $ 4.27 $ 4.27

Site production and delivery, before net noncash

and other costs shown below 2.68 b

By-product credits (0.33) —

Treatment charges 0.17 0.17

Royalty on metals 0.01 0.01

Unit net cash costs 2.53 2.66

DD&A 0.38 0.35

Noncash and other costs, net 0.06 c

Total unit costs 2.97 3.07

Other revenue adjustments, primarily for pricing

on prior period open sales 0.05 0.05

Gross profit per pound $ 1.35 $ 1.25

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 2,718 $ 1,598 $ 222

Treatment charges (99) — —

Royalty on metals (4) — —

Noncash and other costs, net — 37 —

Other revenue adjustments, primarily for pricing

on prior period open sales 32 — —

Eliminations and other — (2) —

South America operations 2,647 1,633 222

Other mining d

13,190 8,849 849

Corporate, other & eliminations (2,892) (2,763) 33

As reported in our consolidated financial statements $ 12,945 $ 7,719 $ 1,104

Includes silver sales of $1.8 million ounces ($28.49 per ounce average realized price).

Also reflects sales of molybdenum produced by Cerro Verde to FCX’s molybdenum sales company at market-based pricing.

Includes nonrecurring charges totaling $65 million ($0.11 per pound of copper) associated with labor-related charges at Cerro Verde associated with a new CLA.

Includes charges totaling $23 million ($0.04 per pound of copper) for feasibility studies.

Represents the combined total for our other mining operations as presented in Note 8.

South America Operations Product Revenues, Production Costs and Unit Net Cash Costs

Six Months Ended June 30, 2023

(In millions) By-Product Co-Product Method

Method Copper Other a

Revenues, excluding adjustments $ 2,331 $ 2,331 $ 301 $ 2,632

Site production and delivery, before net noncash

and other costs shown below 1,508 1,363 179 1,542

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Includes charges totaling $19 million ($0.03 per pound of copper) for feasibility studies.

Represents the combined total for our other segments as presented in Note 9.

Represents the combined total for our other mining operations as presented in Note 8.

Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In millions) Co-Product Method

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Includes silver sales of 1.3 million ounces ($28.70 per ounce average realized price).

Includes charges totaling $15 million ($0.03 per pound of copper) for the Indonesia smelter projects’ operational readiness and startup costs.

Includes charges totaling $34 million ($0.10 per pound of copper) related to the reversal of previously capitalized land lease depreciation, which related to prior years.

Also, includes charges totaling $20 million ($0.06 per pound of copper) for PT-FI’s new downstream processing facilities’ operational readiness and startup costs.

Represents tolling costs paid to PT Smelting.

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Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(In millions) Co-Product Method

5 unchanged sentences

Treatment charges 151 90 58 3 151

Royalty on metals 92 55 36 1 92

Net cash (credits) costs (34) 577 374 17 968

DD&A 275 164 106 5 275

Noncash and other costs, net 77 b

Total costs 318 787 510 23 1,320

Other revenue adjustments, primarily for pricing

on prior period open sales (54) (54) 1 — (53)

Gross profit $ 1,101 $ 632 $ 447 $ 22 $ 1,101

Copper sales (millions of recoverable pounds) 386 386

Gold sales (thousands of recoverable ounces) 492

Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments $ 3.82 $ 3.82 $ 1,942

Site production and delivery, before net noncash

and other costs shown below 1.88

Gold, silver and other by-product credits (2.60) — —

Treatment charges 0.39 0.23 118

Royalty on metals 0.24 0.14 72

Unit net cash (credits) costs (0.09) 1.49 759

DD&A 0.71 0.42 216

Noncash and other costs, net 0.20 b

Total unit costs 0.82 2.03 1,035

Other revenue adjustments, primarily for pricing

on prior period open sales (0.14) (0.14) 1

Gross profit per pound/ounce $ 2.86 $ 1.65 $ 908

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 2,474 $ 725 $ 275

Treatment charges (92) 59 c

Royalty on metals (92) — —

Noncash and other costs, net — 77 —

Other revenue adjustments, primarily for pricing

on prior period open sales (53) — —

Indonesia operations 2,237 861 275

Other mining d

5,109 4,245 253

Corporate, other & eliminations (1,609) (1,557) 19

As reported in our consolidated financial statements $ 5,737 $ 3,549 $ 547

Includes silver sales of 1.8 million ounces ($23.07 per ounce average realized price).

Includes charges totaling $55 million ($0.14 per pound of copper) associated with a potential administrative fine and charges totaling $12 million ($0.03 per pound of copper) for feasibility and optimization studies.

Primarily represents tolling costs paid to PT Smelting.

Represents the combined total for our other mining operations as presented in Note 8.

Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Six Months Ended June 30, 2024

(In millions) Co-Product Method

By-Product Method Copper Gold Silver & Other a

Revenues, excluding adjustments $ 3,512 $ 3,512 $ 2,056 $ 102 $ 5,670

Site production and delivery, before net noncash

and other costs shown below 1,289 799 467 23 1,289

Gold, silver and other by-product credits (2,152) — — — —

Treatment charges 295 183 107 5 295

Export duties 231 143 84 4 231

6 unchanged sentences

on prior period open sales 7 7 (5) (1) 1

Gross profit $ 2,977 $ 1,851 $ 1,072 $ 54 $ 2,977

Copper sales (millions of recoverable pounds) 830 830

Gold sales (thousands of recoverable ounces) 920

Gross profit per pound of copper/per ounce of gold:

Revenues, excluding adjustments $ 4.23 $ 4.23 $ 2,236

Site production and delivery, before net noncash

and other costs shown below 1.55 0.96 508

Gold, silver and other by-product credits (2.59) — —

Treatment charges 0.36 0.22 116

Export duties 0.28 0.17 91

Royalty on metals 0.25 0.16 85

Unit net cash (credits) costs (0.15) 1.51 800

DD&A 0.70 0.43 230

Noncash and other costs, net 0.10 b

Total unit costs 0.65 2.01 1,064

Other revenue adjustments, primarily for pricing

on prior period open sales 0.01 0.01 (7)

Gross profit per pound/ounce $ 3.59 $ 2.23 $ 1,165

Reconciliation to Amounts Reported

Revenues and Delivery DD&A

Totals presented above $ 5,670 $ 1,289 $ 583

Treatment charges (138) 157 c

Export duties (231) — —

Royalty on metals (209) — —

Noncash and other costs, net — 87 —

Other revenue adjustments, primarily for pricing

on prior period open sales 1 — —

Indonesia operations 5,093 1,533 583

Other mining d

10,744 8,949 488

Corporate, other & eliminations (2,892) (2,763) 33

As reported in our consolidated financial statements $ 12,945 $ 7,719 $ 1,104

Includes silver sales of 3.4 million ounces ($26.76 per ounce average realized price)

Includes charges totaling $34 million ($0.04 per pound of copper) related to the reversal of previously capitalized land lease depreciation, which related to prior years.

Also, includes charges totaling $35 million ($0.04 per pound of copper) for PT-FI’s new downstream processing facilities’ operational readiness and startup costs.

Represents tolling costs paid to PT Smelting.

Represents the combined total for our other mining operations as presented in Note 8.

Indonesia Operations Product Revenues, Production Costs and Unit Net Cash (Credits) Costs

Six Months Ended June 30, 2023

(In millions) Co-Product Method

By-Product Method Copper Gold Silver & Other a

Revenues, excluding adjustments $ 2,238 $ 2,238 $ 1,474 $ 73 $ 3,785

Site production and delivery, before net noncash

and other costs shown below 1,124

665 438 21 1,124

Gold, silver and other by-product credits (1,564) — — — —

Treatment charges 224 133 87 4 224

Export duties 18 10 7 1 18

Royalty on metals 150 92 55 3 150

Net cash (credits) costs (48) 900 587 29 1,516

DD&A 423 250 165 8 423

Noncash and other costs, net 107 b

Total costs 482 1,213 794 39 2,046

Other revenue adjustments, primarily for pricing

on prior period open sales 114 114 18 (1) 131

PT Smelting intercompany profit 112 66 44 2 112

21 unchanged sentences

Totals presented above $ 3,785 $ 1,124 $ 423

Treatment charges (52) 22 —

Treatment charges (143) 81 c

Export duties (18) — —

6 unchanged sentences

Indonesia operations 3,605 1,199 423

Other mining c

Other mining d

10,723 8,571 491

2 unchanged sentences

Includes silver sales of 2.7 million ounces ($23.28 per ounce average realized price).

Includes net charges totaling $13 million ($0.07 per pound of copper) for feasibility and optimization studies.

Represents the combined total for our other segments as presented in Note 9.

Includes a charge of $55 million ($0.09 per pound of copper) associated with a potential administrative fine and charges totaling $25 million ($0.04 per pound of copper) for feasibility and optimization studies.

Primarily represents tolling costs paid to PT Smelting.

Represents the combined total for our other mining operations as presented in Note 8.

Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs

Three Months Ended March 31,

Three Months Ended June 30,

(In millions) 2024 2023

6 unchanged sentences

Total costs 156 125

Gross profit $ 10 $ 107

Gross (loss) profit $ (12) $ 31

Molybdenum sales (millions of recoverable pounds) a

Gross profit per pound of molybdenum:

Gross (loss) profit per pound of molybdenum:

Revenues, excluding adjustments a

7 unchanged sentences

Total unit costs 22.42 18.59

Gross profit per pound $ 1.26 $ 13.47

Gross (loss) profit per pound $ (1.71) $ 4.69

Reconciliation to Amounts Reported

Three Months Ended March 31, 2024 Revenues and Delivery DD&A

Three Months Ended June 30, 2024 Revenues and Delivery DD&A

Totals presented above $ 144 $ 129 $ 16

6 unchanged sentences

As reported in our consolidated financial statements $ 6,624 $ 3,875 $ 509

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Totals presented above $ 156 $ 101 $ 14

11 unchanged sentences

Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America copper mines and South America operations.

Molybdenum Mines Product Revenues, Production Costs and Unit Net Cash Costs

Six Months Ended June 30,

(In millions) 2024 2023

Revenues, excluding adjustments a

Site production and delivery, before net noncash

and other costs shown below 245 192

Treatment charges and other 13 13

Net cash costs 258 205

Noncash and other costs, net 8 9

Total costs 298 248

Gross (loss) profit $ (2) $ 138

Molybdenum sales (millions of recoverable pounds) a

Gross (loss) profit per pound of molybdenum:

Revenues, excluding adjustments a

$ 20.05 $ 26.36

Site production and delivery, before net noncash

and other costs shown below 16.63 13.10

Treatment charges and other 0.87 0.85

Unit net cash costs 17.50 13.95

DD&A 2.19 2.32

Noncash and other costs, net 0.51 0.64

Total unit costs 20.20 16.91

Gross (loss) profit per pound $ (0.15) $ 9.45

Reconciliation to Amounts Reported

Six months ended June 30, 2024 Revenues and Delivery DD&A

Totals presented above $ 296 $ 245 $ 32

Treatment charges and other (13) — —

Noncash and other costs, net — 8 —

Molybdenum mines 283 253 32

Other mining b

15,554 10,229 1,039

Corporate, other & eliminations (2,892) (2,763) 33

As reported in our consolidated financial statements $ 12,945 $ 7,719 $ 1,104

Six months ended June 30, 2023

Totals presented above $ 386 $ 192 $ 34

Treatment charges and other (13) — —

Noncash and other costs, net — 9 —

Molybdenum mines 373 201 34

Other mining b

13,955 9,569 880

Corporate, other & eliminations (3,202) (3,056) 32

As reported in our consolidated financial statements $ 11,126 $ 6,714 $ 946

Reflects sales of the Molybdenum mines’ production to our molybdenum sales company at market-based pricing.

On a consolidated basis, realizations are based on the actual contract terms for sales to third parties;

as a result, our consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.

Represents the combined total for our other segments as presented in Note 8.

Also includes amounts associated with our molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North America and South America copper mines.

CAUTIONARY STATEMENT

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capital expenditures;

operating plans;

PT-FI’s construction and completion of additional domestic smelting and refining capacity in Indonesia in accordance with the terms of its IUPK;

extension of PT-FI’s IUPK beyond 2041;

operating plans (including mine sequencing);

PT-FI’s commissioning and ramp up of its new smelter and completion and full production at the PMR;

potential extension of PT-FI’s IUPK beyond 2041;

export licenses;

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export volumes;

timing of shipments of inventoried production;

our commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks;

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Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, supply of and demand for, and prices of the commodities we produce, primarily copper;

PT-FI’s ability to continue to export and sell copper concentrates and anode slimes;

changes in export duties, including results of proceedings to dispute export duties;

completion of additional domestic smelting and refining capacity in Indonesia;

PT-FI’s ability to continue to export and sell copper concentrates and anode slimes through full ramp-up of its new downstream processing facilities;

changes in export duties;

achieving full ramp-up of new downstream processing facilities;

completion and full production at the PMR;

production rates;

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satisfaction of requirements in accordance with PT-FI's IUPK to extend mining rights from 2031 through 2041;

discussions relating to the extension of PT-FI’s IUPK beyond 2041;

process relating to the extension of PT-FI’s IUPK beyond 2041;

cybersecurity risks;

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Further, we may make changes to our business plans that could affect our results.

We undertake no obligation to update any forward-looking statements, which speak only as of the date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes.

We undertake no obligation to update any forward-looking statements, which speak only as of the

date made, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes.

This report on Form 10-Q also contains measures such as net debt and unit net cash costs (credits) per pound of copper and molybdenum, which are not recognized under U.S.

Refer to “Operations – Unit Net Cash Costs” and “Operations - Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

Refer to “Operations – Unit Net Cash Costs” and “Operations – Unit Net Cash (Credits) Costs” for further discussion of unit net cash costs (credits) associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs (credits) by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

Refer to “Net Debt” for reconciliations of consolidated debt, consolidated cash and cash equivalents, and current restricted cash associated with PT-FI’s export proceeds to net debt.

For forward-looking unit net cash costs (credits) per pound of copper and molybdenum measures, we are unable to provide a reconciliation to the most comparable GAAP measure without unreasonable effort because estimating such GAAP measures and providing a meaningful reconciliation is extremely difficult and requires a level of precision that is unavailable for these future periods and the information needed to reconcile these measures is dependent upon future events, many of which are outside of our control as described above.

Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis