Freeport-McMoRan Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Carlos De Alba - Morgan Stanley - Analyst : Yeah, good morning everyone. Thank you very much. Kathleen, I wanted to check with you, what is the expected cost reduction or efficiency gains in terms of volumes that you would expect for the Bagdad autonomous haulage system when it is fully in place and running at capacity? A range would be quite useful just to get a sense of the potential lift in results.

Question: Carlos De Alba - Morgan Stanley - Analyst : Thank you very much.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Good morning, Kathleen. My question is on Indonesia and the new smelter and how that links into the to the concentrate export permit. Are you aiming to proactively extend the allowance to export concentrate beyond the midyear point. Or could we again see a situation whether it delays to shipments in Q3? And then linked to that, can you give any sort of color or guidance on how long you expect the new smelter to take to ramp up towards full capacity? Thank you.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Okay. That's great to hear. Thank you.

Question: Katja Jancic - BMO Capital Markets - Analyst : Thank you for taking my question. Maybe on the potential Bagdad expansion. If I'm not mistaken, the feasibility study was completed in '23. So is the $3.5 billion CapEx still attainable in this environment, especially with tariffs and other inflationary pressures?

Question: Katja Jancic - BMO Capital Markets - Analyst : Thanks, Kathleen.

Question: Timna Tanners - Wolfe Research - Analyst : Hey, good morning. I want to ask a bigger picture question, if I could. In light of the different levels of support being provided to the copper industry from the US government. Are there any measures that you can take to accelerate some of these efforts? Do you think about adding smelting? The world is oversupplied, clearly, but not in the US. Any update on the 45X benefits? Just like to hear about what incremental you might be able to do given the new initiatives that we hear about from the term administration. Thanks again.

Question: Timna Tanners - Wolfe Research - Analyst : Okay. Thanks for the overview. We'll look forward to updates from you and from the administration.

Question: Daniel Major - UBS Equities - Analyst : Hi, thanks for taking my questions. There is a question on the change in the cost guidance for North America. I noticed site production and delivery costs have increased somewhat, albeit not that much. But note in note 6 in the presentation, it said that this excludes the impact of additional tariff costs. Can you give us a sense of what those impacts are? I think you mentioned a 5% increase in cost of purchased inputs, how much of your cost base does that account for? And what's the upside to this number if you're unable to mitigate some of those impacts?

Question: Daniel Major - UBS Equities - Analyst : Okay. Sorry, just a quick follow-up on the same subject. What proportion of the cost base is exposed to energy, particularly oil, Obviously, we're seeing some benefit there?

Question: Daniel Major - UBS Equities - Analyst : Great thanks a lot.

Question: Christopher Lafemina - Jefferies - Analyst : Hi, thanks for the opportunity. Hi Kathleen, Richard, Maree. Hope you're doing well. Just wanted to ask on the buybacks. So you've been running a net debt level that's well below your targeted net debt threshold. And you're kind of entering this period now where free cash flow should materially improve when you have this COMEX premium, you have high gold prices, you're going to have rising volumes, cost in the US coming down. I mean, everything is kind of heading in the right direction. And cash flow should get very strong, and your share price has been kind of a victim of the macro, and it's been relatively weak, recovering a little bit now, but still at a low level. And back when your stock was in the 50s and free cash flow was zero, it made sense to not be, maybe not be really accelerating the pace of the buybacks. But I would think where we are today and where you're heading the attractiveness of repurchasing your shares really almost can't be beat. And especially when you consider the focus is on kind of a pivot to growth, you can shrink your share count, you can grow your volumes on a per share basis in an accretive way, and you can use free cash flow to do that and maintain a very strong balance sheet, which is a pretty compelling combination of factors. So just really wondering how you think about potentially ramping up the buyback if market conditions continue to be as they are, I mean, back in the 30s, do you just buy back more aggressively now? Or do you want to save money for the capital projects you have in the pipeline? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Christopher Lafemina - Jefferies - Analyst : That's great, thank you for that.

Question: Bob Brackett - Sanford C. Bernstein & Co., LLC - Analyst : Thanks. Good morning. Returning back to Bagdad 2X expansion. If I think about the discretionary CapEx being put into Bagdad 2X expansion this year, it's almost $0.5 billion. You've stated a few hundred million, $300 million perhaps next year. If the price of admission is $3.5 billion, and you've effectively sunk approaching $800 million the investment decision is always going to be a money for a decision. And doesn't that make it more and more obvious that Bagdad 2X is going to move forward?

Question: Bob Brackett - Sanford C. Bernstein & Co., LLC - Analyst : Very clear. Thanks for that.

Question: Lawson Winder - BofA Global Research - Analyst : Thank you very much, operator. Good morning, Richard, Kathleen and Maree. Thank you for fitting me in. Just thinking about the US policy environment and the fact that Freeport is by far the largest player in the United States. And then looking at it from a merger and acquisition overlay point of view, I mean does it make sense for Freeport to potentially be accumulating assets in the US today?

Question: Lawson Winder - BofA Global Research - Analyst : Okay, great. Thank you so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian MacArthur - Raymond James - Analyst : Good morning and thank you for taking my question. You talked about earlier in Indonesia, you have permits to the September 30, and you can use the smelter in the fourth quarter to meet your shipments this year. And you also took down your guidance for cost this year. Was that just the gold price being higher? Or did you make an assumption that the 7.5% export tax went away in the fourth quarter at Indonesia because the smelter is up and running? Or should I think of that duty going away as an upside as I go into 2026? Or how do you see that developing?

Question: Brian MacArthur - Raymond James - Analyst : Great. That's very clear.

Question: William Peterson - JPMorgan - Analyst : Yeah, hi, good morning team, and thanks for speaking to the end. I might have missed it, but on leaching, you're recently our sustained 200 million per year. I guess you saw a modest decline in the first quarter, quarter on quarter. Was this decline just kind of typical variability? And maybe more importantly, looking ahead, what are the key areas to improve to reach your 75 million pound quarterly rate exiting the year? I guess how should we think about the trajectory?

Question: William Peterson - JPMorgan - Analyst : Yes. If I can follow up on the leaching and also in the last part of your answer. I guess in terms of the supply chain, both the raw materials, additives, equipment, heating sources, are you using non-China sources for these, I guess, currently key projects? And I guess on the path to 800, are you able to achieve that with a non-China supply chain more to the point, can you achieve this with the US based supply chain?

Question: William Peterson - JPMorgan - Analyst : Terrific. Thanks again and nice job in a quarterly execution.