This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

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With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

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Modern Board 2023-Freeport-McMoRan

The Phoenix-based mining company supplies about 9% of the world’s mined copper and is led by CEO and board chair Richard Adkerson. FCX has <a href="https://www.fcx.com/about/board-of-directors">12 members</a> on its board, including David Abney, former CEO of UPS; Lydia Kennard, CEO of KDG Construction Consulting; and John Stephens, former AT&amp;T CFO. In February, the company appointed its president, Kathleen Quirk, to the board. FCX has grappled with an ongoing <a href="https://www.reuters.com/markets/commodities/copper-miner-freeport-mcmoran-beats-profit-estimates-2023-04-21/">labor shortage</a> in the copper mining industry in recent months. Its metals are critical to support decarbonization efforts and the green energy transition. In its 2022<a href="https://www.fcx.com/sustainability"> sustainability report</a>—its 22nd to date—the company outlined its ESG performance, covering human rights, responsible supply-chain practices, and ethics, among other matters. There are five women members on its 12-person board.

Fortune Modern Board 25

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F500-2021-215-Freeport-McMoRan

The mining company is based out of the Freeport-McMoRan Center in Phoenix and mines for minerals including gold and copper.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-221-Freeport-McMoRan

The Phoenix-based mining company extracts copper, gold, and molybdenum from sites in North and South America and Indonesia. It closed one of its New Mexico mines in April when workers contracted the coronavirus; the company has since announced furloughs and cuts to executive compensation.

This year's Fortune 500 marks the 65th running of the list.

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Phoenix-based Freeport-McMoRan was founded more than 100 years ago in Freeport, Texas, as a sulfur-mining company. The company merged in 1981 with McMoRan Oil and Gas as a fossil fuel and mining conglomerate under the Freeport-McMoRan name. In more recent years, the company has focused its business on metals mining, specifically with a goal of becoming the world leader in copper, which is growing in demand because of its use in renewable energy, electric vehicles, data centers, and more. With a global mining footprint throughout the Americas—from Arizona to Chile—and in Indonesia, Freeport also mines heavily in gold and molybdenum, which is used in steel and other alloys.

Q2 2026

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Freeport-McMoRan (FCX): Company Profile, Stock Price, News, Rankings

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Freeport-McMoRan

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I'd now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Regina, and good morning, everyone. Welcome to the Freeport-McMoRan conference call. Earlier this morning, FCX reported its Q2 2026 operating and financial results. A copy of today's press release with supplemental schedules and slides are available on our website, fcx.com. Today's conference call is being broadcast live on the internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements. Actual results may differ materially.

Please refer to the cautionary language included in our press release and slides into the risk factors described in our SEC filings, all of which are available on our website. Also on the call with me today are Richard Adkerson, Chairman of the Board, Kathleen Quirk, President and Chief Executive Officer, Maree Robertson, Executive Vice President and Chief Financial Officer, and other senior members of our management team. Richard will make some opening remarks, Kathleen and Maree will review our slide materials. We'll open up the call for questions. Richard?

Thanks, David, and thanks, everyone, for joining us today. We're pleased to release FCX's Q2 results. They can be described in a single word, progress. Freeport-McMoRan and our shareholders continue to benefit from our longstanding strategy centered on our leadership position in copper and from our portfolio of long-lived assets with established track records for operational excellence, project development, and capital allocation. Electricity means copper. As the world continues to electrify, it will need what we produce more than ever. Freeport-McMoRan is particularly well-positioned to grow as the market grows in the future. Our team today will talk with you about the great progress we have achieved in the Q2 across our global business. Notably, the positive execution of the Grasberg ramp up and the strong operational execution and financial performance achieved in the Americas. Our large-scale, long-lived production with our attractive growth pipeline positions Freeport-McMoRan exceptionally well.

Our aspiration continues to be foremost in copper. Kathleen and I visited Jakarta and a mine site in Papua in June. I've been traveling to Indonesia regularly since 1988. Each time I visit, I'm inspired both by Freeport-McMoRan's accomplishments in Papua and in Gresik and by how the Republic of Indonesia has developed and progressed over the years. The best lies ahead for Indonesia and for PT Freeport-McMoRan Indonesia. I am blessed and proud to have been personally experienced and been part of this growth and progress. Our Freeport-McMoRan global family is proud of the commitment and significant progress achieved by our team in Papua in the ramp up of the Grasberg Block Cave Mine. The Grasberg team has great morale and enthusiasm as it continues to execute exceptionally well.

We look forward to ongoing progress with the Grasberg recovery and to completing our mine rights extension with the government of Indonesia so that Freeport-McMoRan can continue to generate benefits for all stakeholders in the decades to come. We are also proud of the demonstrable progress being achieved by America's team through the application of modern and innovative technology to increase production and lower costs to generate increasing profits from our mature mines. It's truly impressive and again, the best lies ahead. Our CEO, Kathleen Quirk, will now lead our discussion.

Great. Thank you, Richard, and thanks all of you for participating on our call today where we will review our Q2 performance and update you on our initiatives, projects, and attractive future outlook. You'll hear today about the work our teams are doing across our global business to drive value. The progress we've made to restore large-scale production at Grasberg safely and sustainably, the advancement of operational excellence and new technology initiatives in the U.S., and progress on opportunities for an exciting new phase of organic growth. Starting with slide three, we provide the highlights of our Q2. Our sales of copper and unit cash costs were better than our forecast. We made steady progress on the Grasberg ramp up. Combined with the favorable metal price backdrop, we generated significant margins, cash flows, and earnings.

The strength and diversity of our portfolio comes through in the results with our U.S. mining operations contributing 2.4 times more operating income in the first half of 2026 compared with last year's first half, with strong conversion to the bottom line. This is further demonstrated by a 65% increase in our consolidated net income for the first half of 2026 compared with last year's first half. Our Grasberg ramp-up plans are on track, together with ongoing initiatives to increase production in the Americas, we are positioned for future volume and margin growth. We are advancing our future growth options with a series of projects in progress to scale production from our innovative leach initiatives. We are nearing an investment decision for a major expansion of our Bagdad mine in Arizona and advancing our regulatory work in Chile for a significant expansion at our El Abra mine.

During the quarter, we increased our ownership in Cerro Verde through the opportunistic purchase of Cerro Verde shares in the open market, bringing total purchases over an approximate two-year timeframe to over $300 million, increasing our ownership by 2% to over 55%. In addition, we returned $600 million to shareholders in the first half, including roughly $200 million in share repurchases. Our financial position remains strong and markets for our products are positive, providing a solid foundation to invest in value-enhancing growth while returning cash to shareholders. On slide four, we reiterate our ongoing priorities, which are centered on our drive for increasing shareholder value. Disciplined execution of our plans, including our ramp-up progress at Grasberg, crystallizing the value of our Americas leach opportunity, adopting new technologies to improve performance, and investing in profitable growth, will enable us to build significant value in our business.

Our team is committed to the success of these initiatives, dedicated to overcoming challenges along the way, and steadfast in our drive for excellence in all that we do. Turning to the copper markets on slide five. As a leading global supplier of copper, Freeport-McMoRan is strategically well-positioned and benefits from copper's essential and increasingly important role in the global economy. Copper's superior thermal conductivity makes it the metal of electrification, and the world is quickly becoming more electrified. Globally, copper demand is expected to rise in a number of applications, including the massive requirements for the power grid to support new technologies. LME price copper prices averaged $5.93 per pound year-to-date through June and closed yesterday at $6.30 per pound on the LME, an increase of about 12% since the start of the year.

In the U.S., COMEX copper is currently trading at an approximate 2% premium to LME pricing. As we speak with our customers across the U.S., they continue to report robust copper demand and order books associated with AI data centers and related energy infrastructure and improved demand from the auto sector, which is more than offsetting weakness in private construction. Recent reports out of China, the world's major consumer of copper, reflect continued strength in copper demand associated with power grid and electrical infrastructure and significant exports of Chinese-manufactured copper-containing goods. Visible inventories in China continue to draw to multi-year lows, and exchange inventories located outside of the U.S. are exceptionally tight. As we look forward, it's clear the market will require additional copper supplies to meet growing demand.

At Freeport-McMoRan, we have a valuable, geographically diverse portfolio of copper assets and are strategically well-situated for the long term with large-scale production, long live reserves and resources, and a portfolio of low-risk brownfield expansion opportunities to serve a growing market. I'm going to move to the operating highlights by geographic region, and that's on slide six. Starting with the U.S., we are making important and tangible progress in increasing mining and processing rates. Our equipment reliability metrics are improving with a key example at Morenci, where Q2 mining rates were 30% higher than the average achieved over the last five years. A great accomplishment. Sustaining the higher mining rates will translate into improved copper production over time, and we expect copper production to grow in the coming quarters.

Our innovative leach initiative continues to show promise. A number of projects are in motion targeting meaningful potential to scale. The deployment of our first internally developed additive is producing results. We're planning to field test two additional high-potential additives in the coming quarters. Pilot testing at Morenci is underway, where we are testing heated leaching solution in our existing stockpiles. We know that increasing temperatures in our stockpiles will enhance recoveries. Our work is focused on finding the most effective engineering and cost solution to achieve this. We remain encouraged with the ability to achieve further scale in the near term and unlock our long-term path to 800 million pounds per annum from this initiative. We are also continuing to incorporate innovation into our basic mining practices and see significant value in using emerging technologies to enhance operating performance.

In South America, performance was positive as the Cerro Verde team effectively navigated mine and mill constraints. Despite the challenges, mining and milling rates during the quarter exceeded expectations. Sales and cost performance was slightly better than estimates going into the quarter. At El Abra, our operation in Chile, in partnership with Codelco, there is significant activity currently with a leach pad extension. Plans to conduct testing in the back half of 2026 of heated stockpile injections to enhance leach recoveries. We are pleased with the engagement with the Chilean government following the submittal in March of our environmental impact study for a major expansion at El Abra. We continue to advance this process. We're very pleased to report steady progress with the ramp-up of the Grasberg Block Cave mine during the Q2.

As you'll see from the chart, production rates at the Grasberg Block Cave doubled during the quarter from an April average of 34,000 tons per day to an average of 69,000 tons per day in June. Upgrades to the material handling system for our automated rail system are progressing on schedule. We continue to advance work for a restart of Production Block One South in 2027. Are progressing a series of risk mitigation initiatives. Consistent with our April update, we continue to target overall rates in the district approximating 65% of full capacity in the second half of this year, reach 80% by mid-2027, and approach full capacity by the end of 2027. The team is doing excellent work executing the phased ramp-up safely and efficiently. We continue to de-risk the plans and increase confidence in the long-term outlook.

After reaching a memorandum of understanding with the Indonesian government earlier this year to extend our operating rights for the life of the resource, we submitted a formal extension application in June in accordance with agreed MOU terms. Formal license approval would provide continuity of large-scale operations, enhance future growth options. Durable benefits to Freeport-McMoRan Indonesia's many stakeholders. Turning to growth on slide seven. As we talked about, market fundamentals point to requirements for additional copper supply. Freeport is really well-positioned to grow supply with a robust organic growth pipeline. We benefit from a portfolio of projects which can be developed from Freeport's known resources in jurisdictions where we have established history and experience. We have progressed a number of these projects to where we now have line of sight to more advanced stages.

We're entering a period of growth in our Americas business with near and medium-term opportunities to scale our leach initiatives and more than double production at our Bagdad mine in Arizona. We have longer-term growth in the Safford Lone Star District and an exciting project at El Abra in Chile. As we talked about, the extension of rights at Grasberg will open up additional opportunities longer term. These projects are all brownfield in nature and leverage our existing infrastructure, our experienced workforces, and relationships with key stakeholders and communities to move more quickly with less risk than a greenfield project. We're using innovative approaches to improve efficiencies, reduce cost and capital intensity, and shorten lead times for our projects. The high-potential, low-cost innovative leach initiative is an excellent example of using new technologies to maximize value from our existing resources.

Our low capital intensity associated with the leach initiative makes it one of the more attractive investment return projects within our industry. We talked about the results from the existing additive that we're testing, and we expect additional results to come in coming quarters from both new additives that we're deploying and heated leach solutions to provide support to achieve our near-term scaling objectives and to define the pathway to significantly higher leach production over time. We're finalizing the investment case for a major expansion at our Bagdad mine in northwest Arizona and expect to be in a position to move towards a final decision in the second half of this year. The project benefits from a large resource in an established operating environment, opportunities to capture economies of scale, and an attractive fiscal regime in the U.S.

We've studied the project extensively, and it would make Bagdad the second-largest copper mine in the U.S. behind our flagship Morenci mine, and we've taken a number of steps to de-risk the project execution. We're continuing to finalize our capital cost estimates. We're working closely with vendors and contractors as we advance engineering to retest our capital cost estimates and update economic evaluation. While our review is ongoing, preliminary indications based on current market conditions indicate capital in the $4.5 billion range, which is approximately 30% above the estimate prepared in 2023. The increase reflects commodity and labor escalation, revisions to project scope, and updated estimates associated with additional engineering. With enhancements to the operating model, the project still remains supported at a $4 per pound price of copper well below current markets, with significant long-term exposure to favorable copper markets.

As a reminder, there are no major permitting hurdles. We've done a significant amount of planning and early work and can complete the project within a three-to-four-year time frame. Studies are continuing in the Safford Lone Star District, very excited about this, to evaluate the optimal expansion and development options. We continue to work to capitalize on the large undeveloped resource we have in an established U.S. mining district, which is near the Morenci mine. At El Abra, we have a great opportunity with our partner Codelco to develop a large-scale expansion. This is a significant resource with total copper reserves at El Abra approaching the size of the large position we have at Cerro Verde. The Chilean government is enthusiastic about the project and is working with us to achieve a timely review of the application.

The project positions us extremely well to transform El Abra from a relatively small current producer to a significant contributor in Freeport-McMoRan's portfolio. Again, the theme of this is an established mining operation located in a low-risk jurisdiction. In Indonesia, we also benefit from a large resource position and have a long history and successful track record. We continue to progress the Kucing Liar project in Indonesia to sustain a low-cost, long-term production profile in the Grasberg district, and a life of mine extension opens up additional future growth options. Moving to slide eight, where we talk about Freeport-McMoRan as America's copper champion, where a significant portion of our reserves, resources, and future growth are located in the U.S. Freeport-McMoRan is an important American copper producer and is by far the largest contributor to the U.S. copper market with an established and successful franchise dating back to the late 1800s.

We're aggressively pursuing a series of initiatives to enhance our U.S. business through innovation, automation, and investment in expanded facilities. We're targeting adding production with low incremental costs to improve profitability and resiliency of our U.S. business. In an industry where development lead times can span more than a decade, our U.S. business is strongly positioned with the potential for a 60% increase in copper production over the coming years. Our team is very positive about these opportunities, and they represent a value driver of significance for Freeport-McMoRan. In addition to an impressive outlook for growth, recent performance in our U.S. business is notably positive, coming in as our highest earnings contributor across the portfolio year-to-date. This highlights the exposure of our business in the U.S., the favorable copper markets, and the strength of Freeport-McMoRan's diversified portfolio under a broad range of market conditions.

I'll now turn the call over to Maree, who will review the financial outlook, and then we'll take your questions.

Thanks, Kathleen. On slide nine, we show our three-year outlook for sales volumes of copper, gold, and molybdenum, which remains broadly consistent with our April estimates. As we move through 2026, we expect a large increase in second half sales volumes driven by higher volumes at Grasberg and our U.S. operations. As you'll see in the reference materials on Slide 20, our second half copper sales are expected to be over 20% higher than the first half, and gold sales more than 65% higher. To 2027, we expect annual copper sales to increase by more than 20% compared with 2026, and gold volumes to increase by more than 50%, with additional growth projected in 2028 for both copper and gold. Our teams remain focused on disciplined execution of our plans globally, including the phased ramp-up progress at Grasberg, which is well underway, and growth volumes in the U.S.

On last quarter's call, we discussed the cost pressures impacting our business in connection with the conflict in the Middle East and the volatility in oil and related products, as well as sulfur and acid. While markets remain volatile, our current estimate for 2026 average unit net cash costs approximates $1.90 per pound, slightly below the April estimate of $1.95 per pound, with higher by-product credits more than offsetting other unit cost increases. Putting together our projected volumes and cost estimates, we show modeled results on Slide 10 for EBITDA and cash flow at various copper prices ranging from $5-$7 copper. These are modeled results using the average of 2027 and 2028 with current volume and cost estimates and holding gold flat at $4,000 per ounce and molybdenum flat at $30 per pound.

Annual EBITDA would range from approximately $13 billion per annum at $5 copper to $20 billion at $7 copper, with operating cash flows ranging from approximately $9.5 billion per year at $5 and $15.5 billion at $7 copper. We show sensitivities to various commodities on the right. You will note we are highly leveraged to copper prices, with each $0.10 per pound change equating to approximately $390 million in annual EBITDA in the 2027, 2028 periods. We also have exposure to gold prices, with each $100 per ounce change in price approximating $105 million in annual EBITDA. To molybdenum, which has shown significant price strength in recent months. Each $1 per pound change in molybdenum approximates $85 million per annum. With our long-lived reserves and large-scale production, we are well-positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework.

Slide 11 shows our current forecast for capital expenditures in 2026 and 2027. Our 2026 capital remains consistent with our prior forecast, and 2027 capital expenditures are estimated at $4.8 billion, approximately $300 million above the April estimate, reflecting investments in upgraded mining equipment and revised cost estimates. The discretionary projects are expected to approximate $1.6 billion in 2026 and $1.9 billion in 2027, with roughly 50% related to the Kucing Liar development and the LNG project at Grasberg. The balance includes acceleration of tailings and other infrastructure to support the Bagdad expansion, upgraded mining equipment, and capitalized interest. The discretionary category reflects the capital investments we are making in new projects that, under our financial policy, are funded with the 50% of available cash that is not distributed. These projects are value-enhancing initiatives and are detailed on Slide 27 in our reference materials.

These estimates exclude projects that remain subject to completion of final studies and board approvals, including the Bagdad 2X expansion project. We continue to carefully manage capital expenditures and will continue to deploy capital strategically to projects with the best return and risk-reward profiles. Finally, on Slide 12, we reiterate the financial policy priorities centered on a strong balance sheet, cash return to shareholders, and investments in value-enhancing growth projects. Our balance sheet is solid with investment-grade ratings, robust credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities during 2026 and have substantial flexibility for funding the 2027 maturities. With our strong balance sheet and significant cash flow generation, we have substantial resources to invest in future growth projects in a prudent manner while returning cash to shareholders.

Since adopting our financial policy in 2021, we have distributed $6.3 billion to shareholders through dividends and share purchases and have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders. Our global team is focused on disciplined execution, profitable growth, and long-term value creation. Thank you for your attention. We'll now turn to questions.

Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, press star one on your touch-tone phone. If your question has been answered or you wish to remove yourself from the queue, please press star one again. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you please limit your questions to one. If you have additional questions, please return to the queue. One moment, please, for our first question. Our first question will come from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Thank you, operator, and good morning, Richard and Kathleen. Thanks for the call, and Maree as well. Very nice to hear from you all. Congratulations on a solid quarter and the progress at Grasberg. If I might start with Bagdad. Thank you for the additional color and the additional guidance. You described an upfront CapEx that's expected to be somewhat higher than the 2023 estimate, yet you're still looking at an incentive price of around $4 per pound. Are you seeing some offsetting operating level benefits that would offset that higher CapEx? Should we think about a decision on this project in 2026, or should we be thinking about that spending starting in 2027?

Thank you, Lawson, and thanks for your comments. We're doing a lot of work on the Bagdad project to be in a position to review it with our board and seek final approval in the second half of this year.

We've been doing a lot of work, as I mentioned, with our vendors and suppliers to really nail down the capital cost estimates. We're going and seeking firm bids. We've been working with the contract labor organizations who are going to supply the construction labor to define the rates and incentives to make sure that we get the best people to come to this operation. It's a very competitive construction labor market in this region right now with the activity from everything from semiconductors to data centers, et cetera, power generation. So we're doing a lot of work to make sure that we've got good estimates of what labor's going to cost and what all the various components are going to cost. We've taken some approaches to work on how we can be more efficient, doing offsite labor, doing some prefab work.

We've done a lot of extensive work on how to execute the project. In parallel with that, we've also been working on the operating plan and working hard to think about the future of Bagdad not being what a typical project would be in the past, but how we can look at the operating model and bring in new technologies. We've already put in the autonomous trucks there. This mine will be completely autonomous. We're looking at other areas of the operating model to be more efficient. So we've been working on that, working on our operating plans. We've also been looking at the throughput from this concentrator and how we may be able to get more out of the existing plans for expansion. So we've optimized the operating plans.

We use the long-term markets for all the input costs and still have a very attractive project when you think about at $4 copper, which is significantly below today, covering cost of capital and having exposure to this very large resource, that's going to make Bagdad a lot more resilient, a lot lower cost, and a modern facility that'll take us out for decades. As we bring down costs, that expands the resource, so we're not just bringing the resource forward, but we're having the opportunity to expand the resource as we go forward. There's a lot of attributes that as we've been working on this project, we're recognizing that the operating model can bring further efficiencies, and that's helping the economics and helping offset the higher capital costs.

Our next question will come from the line of Katja Jancic with BMO Capital Markets. Please go ahead.

Hi. Thank you for taking my question. When I look at the Grasberg mine plan, it shows that in 2028, there's a bit of a reduction to copper and gold production. Can you talk a bit about what is driving that?

Yeah. Over the five years, it's very similar to what we had presented in April. We did have some lower grades in 2028 compared to the prior estimate. In terms of the operating rates and the plans, they're all very similar, but there was some sequencing timing changes in the 2028 timeframe.

Our next question comes from the line of Carlos De Alba with Morgan Stanley. Please go ahead.

Yeah. Thank you. Good morning, Richard, Kathleen, and Maree. Just on Grasberg, congrats on submitting the formal application for the extension. Can you maybe, Catherine or Richard, give us an update as to what the timing and the next steps will be for hopefully reach a final agreement? Any color on potential terms that you have been discussing.

Well, the terms were agreed and negotiated as part of the memorandum of understanding. We signed a memorandum of understanding in February with the government of Indonesia, and it was witnessed by the president. Those were the terms that were negotiated and approved at the time. What we have filed in June is the formal application consistent with the terms that were agreed to in February. The mines, we submitted it to the Energy and Mines Ministry, and they have a process that they go through to review these extension applications. There is a regulation that was passed some time ago that allows for life of resource extensions for companies that are integrated. Of course now with the completion of our new smelter in Indonesia, PTFI is a fully integrated producer and supplies refined copper in Indonesia and abroad.

It's consistent with regulations and we expect that the MOU terms will be the terms that we ultimately have under the new license. In terms of the timing, we're working diligently to respond to any questions that the Energy and Mines Ministry has. We share the objective of getting this done on a timely basis. It's very important, and the government recognizes this, that we have sufficient time for planning the future, so that we get the license extension and can begin to look at opportunities that would allow us to continue beyond 2041 to provide large scale production with significant benefits that go to the government. The government owns 51% and will own more than that after 2041. We also pay significant taxes and benefits to the local community. We're all aligned of the advantages and importance of this.

We'll work through the regulatory process as quickly as we can. There's no prescribed timeframe to getting it done, we're working very hard to get it done this year.

Carlos, when we went to Indonesia and Jakarta and later the job site in June, there was one spectacular day of all the days that I've been going there. At the end of this day, I felt it was one of the best we ever had. Had the chance to have private meetings with the president, and with many of his very top advisors. The president, who I've known since the 1990s, was very positive and encouraging, and totally understood the need to get this done, the issues if it did not get done. He's also focused on international relations in a major way and felt that getting this done would be a very positive in building positive, good relationships between Indonesia and United States. All the signals are good.

As Kathleen says, we have to go through this process, everybody understands that this is something that's necessary and beneficial, for all the stakeholders, not just shareholders, but for the government, the workforce, the community, and Papua which relies so heavily on Freeport-McMoRan's operations for its economy. We feel very good about the meetings, now we just have to work through the process. In Indonesia, sometimes that takes time.

Fair enough. Thank you very much, Richard and Kathleen.

Our next question comes from the line of Timna Tanners with Wells Fargo. Please go ahead.

I'm looking for a bit more information, please, on the purchase of the stake in Cerro Verde. Is there opportunity to do a lot more of that? How do you think about those purchases, balancing them with shareholder returns going forward?

There's a relatively small float that's publicly traded for Cerro Verde. When those opportunities become available, it's something that we take a hard look at. Of course, the asset is spectacular. Freeport-McMoRan would be interested if there are opportunities that arise at reasonable values to continue to increase. There's a limit on what we can do, and there's not a lot that becomes available. We'll just have to continue to be opportunistic about it. This is investing in an operation we already own and manage, and the economics have been attractive to date on our share purchases. It doesn't really impact the share buybacks at the FCX level.

We're continuing that program, which is based on, as Maree was talking about, the performance space, where we look at the cash flows and in return, 50% of available cash to shareholders, both through dividends and share purchases. We're very pleased to own more of Cerro Verde and would be interested in owning more if the opportunities arise.

Okay. That's helpful. Thank you very much.

Our next question comes from the line of Nick Cash with Goldman Sachs. Please go ahead.

Hi, team. Thank you so much for taking my question. Just wondering on Freeport-McMoRan and the ramp of Grasberg here. The 1Q guidance, I think, estimated an average of 60 KT per day in second half of 2026, and you guys are exiting June at about 69 KT per day in June. Just wondering what's driving that. Is the ratio of wet to dry draw points improved, and could there be potential upside to that 60K average in the back half of this year?

Thank you, Nick. Mark Johnson is on the line as well, and he can supplement my comments. In terms of the second half of this year, it's in line with what we had guided to in April. We did exit June at an average of 69,000 tons a day from the Grasberg Block Cave, and our guidance is based on a 60 to 65± minus in the second half. What's going on in the second half is that right now we are completing the work that we were doing in one of the chute galleries associated with this desliminator work that we're doing, the chute regulator that we're putting in to allow us to have flexibility to deal with certain types of ore types. We will transition to another area in the second half to complete that maintenance work or those upgrades.

During the second half, we'll have some production coming on as we complete the current work and then some production going down to complete that work. We'll kind of be at a steady state from June forward as we complete these projects to upgrade the material handling system. As we get into 2027, that work is completed earlier in the year, and then we bring on Production Block One South, which will add production in 2027. In terms of the conditions, they are good at Grasberg. We talked about wet and dry in April, as we expected, but we have had some draw points that were wet in April convert to dry as we've had more activity and movement in the cave in terms of production.

Also we've had, you read a lot about the wet conditions in Chile, but we've had dry conditions in Indonesia. Our dry to wet ratio has improved throughout the quarter. These upgrades that we're making will give us a more robust plan longer term to be able to deal with any type of material. That's a long-term investment that we're making, but we will have some downtime associated with that in the second half, which is all reflected in our guidance and consistent with where we targeted in April. That work is going very well. While we're on the topic, Mark, maybe you can add to what I said, but also add about what we're doing in terms of the risk mitigation and how we're working towards being able to get back into Production Block One.

Sure. Nick, just to add to what Kathleen covered it really thoroughly. The areas in which we're currently working on these chute galleries to install the new technology that we proved up about three months ago. One of those is in CG-44, which has nine chutes. It's one of our bigger production areas for the next three years. When that comes up, which we expect it to be done by the end of the year, what we'll see an increase in production associated with that. There's about 25,000 tons-30,000 tons a day that come out of the CG-44 area. That'll be a step change once that is complete. Then in 2027, we have some ongoing construction on implementing these chutes that'll be taking place, in the future, 2027, 2028 as well. On the mitigation, we've made progress.

We've had a number of drill holes that we've been able to get into the old pit bottom. That along with the drier weather, the pit bottom is essentially dry. We know that the rain's going to come back at some point. It's like Kathleen said, the El Niño is dry for our part of Indonesia. We've got a new drill that I know we've talked about before. That's being commissioned right now. It's in place, and we should be drilling within the week on that. We'll have another drill of that same type coming in August. So we have plans with this new drill that where the current drill technology, we might get 5-10 meters a day with core drilling. This new drill, we expect to get well above 100 meters a day with a larger diameter.

That's going to be a key part of our ability to continue to address any collection of water in the pit bottom. That's going well. We've started a new drainage gallery that will be along the north side of the pit bottom, outside of the cave, but will give us additional access for drilling and other opportunities to remove any material that would gather in the pit bottom. Then we're advancing a couple other. We're looking at being able to drop in a surface slurry pump, that work's continuing to go on. That'll be something that would be more towards the end of 2027. All of these are going in parallel. We've made good advances on all those.

At the same time, we're working in the PB1 area, finishing the cleanup, reinstalling the chute gallery, reinstalling the desliminator chutes in CG-21, which services a big part of the PB1 south area. That's on track as well.

That's all very helpful. Thank you so much.

Our next question will come from the line of Richard Gartshore with Barclays. Please go ahead.

Great, thanks. Good morning, Kathleen, Richard, and Maree, and congrats on the great result in the Q2. It looks like there's some reorganization and sequencing, maybe at some of the mines, because you have sales down versus the prior expectations for the Q3, at $750 for the Q3, and it looks like it's made up in the Q4. Maybe just you could talk about timing on that front.

Right. Thank you, Rich. For the Q3, our production is expected to be significantly higher than sales. Most of that is in Indonesia, where we're starting to ship concentrate from the mine site. We have been shipping to one smelter. We'll start shipping in the Q3 to the new smelter, and it'll take some time to build up that inventory to be able to run consistently in the new smelter. As we've gone through the actual operating plans of the smelter and the timing of refined copper sales, we've got some timing adjustments between Q3 and Q4. We do expect to build some inventory in the Q3 and make up some of that in the Q4.

Okay. If I can ask a follow-up. In terms of cash cost, you did take the full year guidance down slightly, despite obviously gold prices coming in a little lower, I guess, resetting the expectation to $4,000. In terms of the impact from the energy, diesel, Strait of Hormuz issues, any changes to that versus what you talked about in the Q1? Thank you.

As Maree talked about earlier, the situation continues to be volatile with respect to diesel prices. We are assuming prices that are pretty similar to what we experienced in the Q2. We changed it modestly in terms of the assumption going forward, but it's pretty similar to what we had in the Q2. There's also some impacts of sulfur and acid that we're rolling through. In 2026, we don't have a lot of acid that we purchase on a spot basis. That impact is not significant. We will be subject to volatility in the oil markets. I know they're up today, and we'll continue to monitor that. The average is pretty similar to what the Q2, which was elevated compared to earlier this year.

Just to comment on acid, while you see the impact of sulfur and acid in our operating costs, we also benefit from Freeport-McMoRan's position as a fully integrated producer. In our revenues, we're getting the benefit of selling acid as well. That provides an offset, but you don't necessarily see it. That's an advantage that we have where we essentially have a hedge on sulfur and acid with our significant smelter operations.

Our next question will come from the line of Liam Fitzpatrick with Deutsche Bank. Please go ahead.

Good morning, Kathleen and team. I've got three hopefully quick questions on your U.S. business. Firstly, on Bagdad, is there any possibility that this could receive any kind of government grants or incentives to offset the CapEx budget? Second one, just on smelting and refining growth opportunities, just given the growing importance of in-country processing assets, are you looking at any options to expand your smelting and refining capacity beyond Bagdad and your leaching operations? Then the final third one, just on your leaching operations, what's the level of confidence in reaching this 300-million-pound run rate at the end of this year? Should we view this as incremental volumes, or will there be some offsets from lower productions elsewhere in the asset base? Thank you.

Thanks, Liam. In terms of incentives for Bagdad, you start with the fact that the fiscal regime in the U.S. is very attractive relative to other countries. That's part of the reason why when you look at a mine like Bagdad, we don't have royalties because we own the land and sea, and our tax position in the U.S. is attractive even after we go through the NOLs. The effective tax rate in the U.S. is substantially lower than it is in other countries. That really does help with the economics, having a less of a financial burden from royalties and taxes. In terms of incentives, one of the things that we're continuing to pursue is the opportunity for, because Freeport-McMoRan is an integrated producer, again, in the U.S., we have a smelter in Arizona, one of two smelters operating in the U.S.

We would qualify under certain incentives under Section 45X for a 10% production tax credit. The first step was getting copper designated as a critical mineral, which was done several months ago. We appreciate the administration's work on that. Now the next step would be to get it put into the treasury regulations that would allow for copper to conform to the critical minerals list, and be part of this Section 45X credit, which equates to about $500 million a year. That would go a long way in helping us with our investment plans in the U.S. to continue to reinvest things like these production tax credits into our U.S. business. We're continuing to work and speak with, because there's some proposed bills in Congress to do this.

We're continuing to work on it, that would be a really attractive way for us to make significant strategic long-term investments in the U.S. In terms of the question about smelter, today, we process either through the smelter or through our leach processing, all of the copper that we produce in the U.S. We have had exports from time to time of concentrate, but that's been small and essentially we're processing either through the smelter or leach processing everything that we produce. With a Bagdad expansion, we could potentially look at opportunities, and we have been looking at opportunities potentially to expand the Miami smelter, which is running extremely well, performing extremely well. We'll continue to look at whether that makes sense for us. There's some advantages of the smelter and logistics and having that additional acid. There's some synergies that come back to our operations.

We're taking a tough look, I mean, a hard look at that opportunity as well. The third question around the target on scaling the leach opportunity. We're just around 200± today. We are targeting getting to the run rate of 300 by the end of this year. Where we are today is a lot of the work that we've done on tactical execution and bringing in incremental pounds through the operational processes that we've been deploying. We've been installing additional irrigation lines. We've been using technologies to have targeted drilling to inject solutions. The next phase, and very exciting phase of opportunity comes from the innovation work that we've been doing. I mentioned the additive work, and the heap work.

Those two things are going to allow us to get more scale and then define the path to really a new copper mine the way it looks. Cory Stevens is on the line, and his team is working on this. It's one of the most exciting things that we're doing in the company. Maybe Cory, you can just maybe give a little more color on what we're doing to get scale in this really fun and attractive leach innovation opportunity.

Yeah. Thanks, Kathleen. The base tactics, we would call that leach everywhere, that's been more mature as we continue to leaching with putting drip line in with helicopters or refining our raffinate injection processes, with feedback loops, with improved sensoring and analytics. We're even recontouring certain piles that allow us to access to areas that were unreachable before, that allow us to leach before. That's giving us a strong foundation. You've got the additive work that comes behind that. Our gen one additives are in deployment. The early results are better than we had expected to see, and we're continuing to monitor that. We're not waiting.

We've got gen two additives that we believe are a multiple effectiveness than the gen one, and we've already got sourcing in place and four targeted demonstration piles across the portfolio, a couple at Morenci, one in New Mexico, and then at El Abra, an additional pile there. We're pretty excited about that. The early results from the gen one is giving us good confidence on that front. Additionally, we talked about some of the heat projects, like the pilot at Morenci is going. We've got in the final phases of construction, more of a demonstration commercial unit that's going to be starting in the second half of this year at El Abra. El Abra is particularly sensitive to temperature, so we're excited there. We're sure there's going to be learnings as we get into it.

The team's actively and dynamically thinking through all the different permutations of what could happen there and what adjustments we might make. That will actually set the foundation as we go forward on those fronts for the next wave of heat as we move into the next phase. We've got geothermal drilling going on at Morenci that could add a substantial amount of additional heat as we refine those recipes. There's other tactics that we're going through with the smaller sites. This is opening up options to consider additional, what we call rehandle or opportunities where we can move older piles to more convenient locations to apply heat and/or additives, and then below cut-off grade opportunities.

As we consider expansions or some of our major projects with Safford Lone Star District, how does these new learnings come into play and add incremental value or replace the capital that you would otherwise use for more traditional methods? All those are in flight.

Our next question will come from the line of Bill Peterson with JPMorgan. Please go ahead.

Yeah. Hi, good morning. Thanks for taking the question, and nice job on the quarter. I'm not sure if it's been asked, but I guess for expectations around any sort of changes in Section 232, copper rulings, I don't get the impression Freeport-McMoRan's really pushing one way or the other, given there's probably pros and cons. Can you talk about how this might benefit the U.S. footprint, including how much NOLs remain and then any impacts on the broader market?

Thank you, Bill. We and the rest of the market are continuing to monitor and wait for decisions on Section 232. As you know, Bill, the decision last year was to review it again in terms of copper cathodes, review it again for potential to add a tariff on cathodes under a phased approach, beginning in 2027. There's been no decision on that situation. You've seen the situation where a lot of copper has moved to the U.S. in anticipation that something might be coming, but there hasn't been a decision yet. As I mentioned before, when you look at inventories outside of the U.S., it's created a very tight market situation, particularly in the heavy-consuming regions in Asia. Everyone's watching the situation closely.

In terms of how it would impact Freeport-McMoRan, if there is a tariff and if there is a premium, all of our U.S. sales are priced on the COMEX. We could be in a position to get a higher price for copper on our U.S. sales than we do internationally, but we'll have to see. You can see the breakout of our U.S. sales, and that's an area that's growing, right? That's an area that's growing in terms of this work we're doing on mining rate improvements and also on this leach initiative. Freeport-McMoRan would be a big beneficiary of it for our U.S. business. In terms of the NOLs, we do have about just under $6 billion of net operating losses, which we can use against our U.S. income.

You can probably see in the results that we started to be subject to a minimum tax in the U.S. this year, it's relatively small. Effective rate is somewhere in the 6%, 7% range, and we'll pay that, you don't take NOLs against that tax. We do expect for the coming years for the NOLs to start to be used at current markets, but we'll have multiple years of being able to use those NOLs.

Our next question comes from the line of Bob Brackett with Bernstein Research. Please go ahead.

Good morning. I'm impressed by the Morenci mine rate being up 30% in the Q2. Can you talk to how you're defining mine rate there, and what might the implications be for, say, copper sales going forward or lessons learned there that you can apply more broadly?

Thank you, Bob. We have been working on this for a number of years. We went through the pandemic, and went through a lot of turnover in the workforce. Intentionally during the pandemic, because we did have a reduced workforce and did have constraints, we intentionally took down the mine rate. Rebuilding that mine rate has been a labor and a work in process for a number of years. There are a combination of factors that have come together to see this roughly 900,000 tons a day of material mined in the mine, and that is substantially higher than what we've achieved in the last five years.

A great accomplishment, but it's been a lot of work, a lot of focus, and using technologies, to allow us to be more efficient and get our equipment health and asset health, because it's all interconnected with shovels, and all of your equipment to get everything working to where it should be. Now we're at a point where the availabilities of the existing equipment are much higher than they have been. Our maintenance programs are performing much better. We're not having as much unplanned downtime, which is an area of focus for us. It's really exciting, but we have to sustain it. That's what we're emphasizing, that these are disciplines that need to be institutionalized, and we need to sustain it every single day. It's a constant.

Cory, you want to add anything to that in terms of the journey and what we see as we go forward?

Freeport-McMoRan (FCX) Q2 2026 Earnings Call Transcript

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