Freeport-McMoRan Inc Q3 2024 Earnings Call Transcript

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

Question: Chris LaFemina - Jefferies - Analyst : Thanks, operator. Hi Kathleen, hi Richard, I hope you're doing well. Just wanted to ask a couple of questions about Indonesia. And first, on smelter fire with the insurance. Kathleen, you mentioned that the insurance would cover the costs for repairs. What if there is a situation where there's a delay to being able to export concentrate. Do you have any business interruption insurance that might cover the cost of loss shipments or any insurance that might cover the incremental royalties that you had have to pay on concentrate on exports?

Question: Chris LaFemina - Jefferies - Analyst : Very good. Thanks. And then just secondly, on Indonesia as well. So the $1 billion of restricted cash, which I think is what, 30% of the export proceeds and it's held for 90 days in Indonesian banks. Does that restricted cash policy continue even after the smelter ramps up? And can you just remind us of kind of the background behind that and what the reason for that cash restriction is? Thanks.

Question: Chris LaFemina - Jefferies - Analyst : That's very helpful. Thank you for that.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Good morning, Kath. A couple more on the smelter, I'm afraid. Firstly, I appreciate you're still assessing the situation, but can you give some high-level guidance on the length of delay that we're talking about? Is it 3 months? Could it be substantially longer than that. And then in terms of the government reaction, do you think -- and the export extension, do you think this will be just a formality and received in good time? Or could there be a risk that it could be delayed beyond the year end? And then a quick one, just separate to the smelter on the Cerro Verde stake increase its small, but probably the best type of M&A that you can do. Is this a one-off? Or do you think there could be more opportunities to increase your stake? Thank you.

Question: Liam Fitzpatrick - Deutsche Bank - Analyst : Okay. Thank you.

Question: Bob Brackett - Bernstein Research - Analyst : Hey, good morning. A question back to Indonesia. But this is around IUPK. If I overly analyze the 2Q versus 3Q, there was an expectation that you might file for IUPK extension in 2024 in the 2Q release, but in 3Q, it feels a little more vague. Am I over-interpreting? Or is there anything about the end of the year and filing that, that matters to you specifically?

Question: Bob Brackett - Bernstein Research - Analyst : Very clear. A quick follow-up. Can you tease us a little with the pre-feasibility study launched on Safford Lone Star, what should really broad goalposts, what sort of opportunity should we think about?

Question: Bob Brackett - Bernstein Research - Analyst : Great color. Thanks, Kath.

Question: Michael Dudas - Vertical Research Partners - Analyst : Good morning, David, Richard, and Kathleen.

Question: Michael Dudas - Vertical Research Partners - Analyst : Maybe you could shed -- I appreciate the comments about North America and the impact on some of your initiatives on the cost side. But maybe you could give a sense of how quickly some of these efficiency initiatives will be moving forward, looking at the marketplace for labor, how where do you stand on that? And is there a normalized level or expectation away from the improvement from the leaching contribution that we'd see a moderation in the mining cost, of course, recognizing that the great issues that you've been dealing with.

Question: Orest Wowkodaw - Scotiabank GBM - Analyst : Hi. Good morning. My question is around the same lines with respect to cost. I mean with North American cost above $3 in South America around $2.50, I understand that you're working on some cost reduction initiatives. But should we think about sort of the go-forward run rate for costs in North America were in the $2.50 to $3 range post these initiatives with South America more in the $2.25 to $2.50 a pound. Like is that just the new reality of today's cost environment?

Question: Orest Wowkodaw - Scotiabank GBM - Analyst : Just as a follow-up to that, I mean, we've seen North American costs creep up seemingly quarter over quarter. Where do you see that inflection point? Should we -- do you think we peaked here at $3.14 a pound or could we still see those costs flatline or go higher before they start coming down on the new leaching?

Question: Orest Wowkodaw - Scotiabank GBM - Analyst : Thank you.

Question: Daniel Major - UBS Equities - Analyst : Hi there. Can you hear me okay?

Question: Daniel Major - UBS Equities - Analyst : Great. Thank you. Thanks for the questrion. Yeah, the first one, just on the sort of M&A capital allocation. You've acquired some more stock in Cerro Verde, but as you mentioned, you need a willing seller. I guess two parts to the question. assuming you can't buy any more stock in Cerro Verde going forward, should we expect Freeport share buybacks in Q4 and into Q1 of next year? That's the first part of the question.

Question: Daniel Major - UBS Equities - Analyst : Thanks --

Question: Daniel Major - UBS Equities - Analyst : Great. Thanks.. And maybe a follow-up, if I could, just on bigger picture, M&A, you're obviously seeing larger scale transactions starting to become more prominent in the sector. Is this something that you see as an opportunity going forward before some of these larger assets potentially get kind of taken off the market?

Question: Daniel Major - UBS Equities - Analyst : Great. Thanks very much.

Question: Lawson Winder - BofA Global Research - Analyst : Hi. Thank you, Operator. Good morning, Kathleen and Richard. Thank you for taking the question and thanks for the update. I just wanted to ask about capital allocation, particularly with respect to the larger projects. So I'm thinking of Bagdad and thinking of El Abra. I'm thinking as now Lone Star. Would it be fair to characterize your decision-making as one where you would wait on a decision on Bagdad until you have the information on the study that you're now expecting at the end of next year for both El Abra and Lone Star?

Question: Lawson Winder - BofA Global Research - Analyst : Okay. That's perfect, actually. And then just my follow-up would be just thinking about 2025 CapEx I mean, how would you handicap thinking about that? I mean should we be thinking about 2025 CapEx being sort of in line with 24x smelter? Or should we be thinking about the possibility of a commitment at some point in '25, that would be cash out lower next year?

Question: Lawson Winder - BofA Global Research - Analyst : Yeah, fantastic. Thanks again for the update, guys.

Question: Bennett Moore - JPMorgan - Analyst : Good morning Kathleen and Richard. This is Bennett on for Bill. Thank you for taking my questions. I wanted to start real quick, if you could provide any updates on some of your smaller and near-term discretionary projects on slide 23, namely increasing stacking at Lone Star, Atlantic Copper recycling and the improvements at the Grasberg mill.

Question: Bennett Moore - JPMorgan - Analyst : Thanks for that. And then real quick, if I could just ask about the progress of the cleanup work going on at Grasberg, you've had success with placing this remote pumping equipment that you were speaking to last quarter?

Question: Bennett Moore - JPMorgan - Analyst : Thank you (inaudible).