00:00Joining us now from that conference in Hollywood, Florida is Freeport
00:03McMoran, CEO Kathleen Quirk. Kathleen, thank you so much for joining us. And I feel like that
00:08conference probably got a whole lot more interesting after Friday and the weekend's
00:12events. Of course, when it comes to tariffs around copper, that's Section 232. So I just
00:18wonder, with the use of IEPA being ruled illegal, now 10% and 15% tariffs across the
00:25board, does it materially change Freeport's business at all?
00:30It doesn't really change our business that much. We're really focused on copper. And
00:36copper was part of the 232, as you mentioned, which wasn't affected by Friday's
00:42decision. But we're following it all and watching it unfold. But what we're really
00:48focused on as an industry and Freeport specifically as one of the world's leading
00:54copper producers is finding ways to grow our copper production, invest in things that
01:01allow us to improve our copper volumes at a lower cost, generating higher margins and
01:09returning cash to to our investors. How disruptive for that goal has the back and forth on trade
01:17policy been for things like capital planning?
01:21Well, it was it was it was a heightened levels last year at Liberation Day. And since that time,
01:29things have settled down a bit. I think more and more we're looking long term at our business,
01:38looking at the resilience of our business under different scenarios. And so we've really been able
01:43to make some decisions about long term investments. There was a period of time after last April where
01:50there was a lot of confusion. But things have settled down. And we're now in a mode where we're
01:57focused on growth and how we're going to build our copper portfolio. Because as we look at what's
02:03happening in the world that we're in today, copper is becoming so much more intensive in the global economy. And
02:12you've seen it in electrification. You've seen it in in in the data centers. You've seen it in what needs
02:19to be
02:19done in order to power those data centers in terms of the electrical grid. So we really need to get
02:25to work in the copper
02:26industry and make investments that are going to allow our copper volumes to to grow as we go forward. You've
02:33also seen
02:34that impact in the price of copper hits record in January. It's been hovering around those levels. What's your expectation
02:40as to where it goes from here. Well, the fundamentals of the copper industry are very strong. The demand drivers
02:47that we talked
02:48about dealing with electrification are solid and at the same time, the limitations on new supply development. So what we
02:59see
02:59over the next several years is a scenario where the fundamentals of the copper business are very supportive. Now, it's
03:09a commodity.
03:10It'll move up and down. Macro sentiment plays a role in it. But you look at it when you look
03:16at the underlying
03:16fundamentals of the copper industry, what it's used for in the global economy, the intensity of use that's increasing in
03:23the global
03:24economy. We think copper is one of the better positioned commodities of any of the commodities of that that that
03:31we follow. In order to
03:32grow, in order to capitalize on that, Kathleen, are you looking at more acquisitions? Should there be more consolidation?
03:40We always look at that as a as an alternative. We would love to do any any deal that would
03:47be value enhancing to our shareholders,
03:50especially deals that would allow synergies. But at Freeport, we have a portfolio of organic growth that we're pursuing as
04:01well. So the the acquisition
04:03opportunity would be more opportunistic. Our base case is to invest in profitable long term growth. And we have a
04:13significant opportunity
04:14to grow our business in the U.S. as America's copper champion. We have the potential to grow our U
04:20.S. copper production by 60 percent by 2030. We have a major project in Chile
04:28that we're pursuing that we're pursuing that will grow our production there. And we just signed an agreement in Indonesia
04:34to extend the life of our
04:37of our operating rights there, which will open up new horizons for us for investment in Indonesia. So we have
04:44a very attractive organic growth
04:46opportunity within Freeport. But we're always looking at opportunities that would enhance shareholder value and that we could do
04:55something more transformative and M&A, particularly in copper is where our focus would be. Kathleen, this is also a
05:03president who is
05:05planning to stockpile critical minerals like copper through his project vault initiative. Would Freeport is Freeport having any discussions with
05:13administration. Would you play a role in that project. Basically all the all the copper that we sell is sold
05:23to our customers. We supply 70 percent of the copper that is
05:29that is produced domestically in the U.S. Freeport supplies 70 percent of the refined copper in the U.S.
05:37and that's consumed by our customers who are using copper in their downstream markets and using copper to support the
05:45domestic
05:45economy. So we're not at the moment we're not involved in any sort of stockpiling of of of copper. We're
05:53selling it to consumers who are
05:55using it to go to work to make our economy stronger and and and and and more innovative when it
06:02comes to data centers and and
06:04they do you support them this idea of the U.S. stockpiling critical minerals like copper. I think the the
06:12industry that the governments
06:14around the world are concerned about security of supply particularly for critical minerals that are needed for economic growth in
06:21the future. So
06:23strategically over time historically there have been stockpiles of strategic reserves of various commodities that have taken place. So that's
06:33really gets into government
06:34policy. And what we do as an organization is try to produce the metal safely efficiently the most cost effective
06:42that we can and
06:43reliably to bring to the market.
Comments