PT Freeport Indonesia (PTFI) commenced the startup of its new large-scale copper smelter in Eastern Java, Indonesia, slightly ahead of schedule, with the first copper anode and cathode produced in late July 2025. This marks a significant step towards PTFI becoming a fully integrated producer of refined copper and gold by year-end 2025.

FCX is targeting an annual run rate of 300 million pounds of incremental copper by the end of 2025 from new leaching applications, technologies, and data analytics. Large-scale testing of an internally developed additive product at Morenci operations further underscores efforts to enhance copper recovery and reduce unit net cash costs.

The company projects $4.9 billion in capital expenditures for 2025, with $2.7 billion allocated to major projects. These include underground mine development in the Grasberg minerals district and potential U.S. expansion projects like doubling concentrator capacity at Bagdad, indicating a strong commitment to future production growth.

Management successfully brought PTFI's new copper smelter online slightly ahead of schedule, despite an October 2024 fire incident. This demonstrates effective project management, resilience, and commitment to strategic objectives, ensuring progress towards integrated copper and gold production.

The company continues to focus on managing costs efficiently and advancing value-enhancing initiatives, including leveraging new technologies and data analytics in operational practices. These efforts are expected to improve operating efficiencies and reduce costs, as reflected in the lower unit net cash costs for copper in Q2 2025.

FCX's financial policy aims to maintain a strong balance sheet, provide cash returns to shareholders through a base and performance-based dividend, and fund future growth opportunities. The Board's annual review of the payout framework, alongside share repurchases, reflects a disciplined approach to capital allocation.

The U.S. President imposed a 50% tariff on semi-finished copper products and copper-intensive derivative products effective August 1, 2025, with potential for further tariffs on refined copper by 2027-2028. This action has already led to a decline in COMEX copper prices and could increase U.S. procurement costs by approximately 5%.

PTFI's copper concentrate export license expires in September 2025, requiring all concentrate to be processed domestically thereafter. Additionally, the extension of long-term mining rights beyond 2041 is contingent on an agreement for an additional 10% ownership transfer to MIND ID, introducing regulatory and ownership uncertainties.

Fluctuations in copper, gold, and molybdenum prices, driven by global market conditions, trade policies, and supply/demand dynamics, continue to be a significant risk factor. The recent divergence and subsequent alignment of COMEX and LME copper prices following tariff announcements highlight this inherent volatility.

FCX continues to be the leading copper supplier in the U.S., accounting for approximately 70% of total U.S. refined copper production through its integrated domestic mining and processing facilities. This strong domestic presence provides a significant competitive advantage in the U.S. market.

The company operates some of the world's largest and lowest-cost copper and gold deposits, notably the Grasberg minerals district in Indonesia, and significant operations in the U.S. and South America. This portfolio of large, long-lived assets underpins its position as one of the world's largest publicly traded copper producers.

The imposition of a 50% U.S. tariff on certain copper imports has caused COMEX copper prices to decline and align with LME prices, consistent with long-term historical trends. While FCX is a major domestic producer, these tariffs could alter competitive dynamics for imported copper products and potentially impact its pricing power in certain segments.

Consolidated unit net cash costs for copper mines decreased substantially to $1.13 per pound in Q2 2025 from $1.73 per pound in Q2 2024. This favorable change primarily reflects higher molybdenum by-product credits and increased copper volumes, indicating enhanced operational efficiency.

Consolidated production and delivery costs rose to $4.3 billion in Q2 2025 from $3.9 billion in Q2 2024. This increase was mainly due to the recognition of deferred costs in Indonesia associated with higher refined gold sales and maintenance turnaround costs at the Miami smelter, putting some pressure on overall cost structure.

Average unit net cash costs for Molybdenum mines improved significantly, falling to $14.20 per pound in Q2 2025 from $19.41 per pound in Q2 2024. This reduction is primarily attributable to higher production volumes and lower contract labor costs, demonstrating improved efficiency in this segment.

FCX is actively integrating new applications, technologies, and data analytics into its leaching processes across U.S. and South America operations. These initiatives have already contributed 52 million pounds of incremental copper production in Q2 2025, demonstrating a commitment to technological advancement for resource recovery.

The company commenced large-scale testing of an internally developed additive product at its Morenci operations, with the potential to significantly enhance copper recovery. This innovation is part of a broader strategy to achieve an annual run rate of 300 million pounds of incremental copper from such initiatives by year-end 2025.

Beyond leaching, FCX is pursuing opportunities to apply new technologies and analytic tools in automation and operating practices. The goal is to improve overall operating efficiencies, reduce costs, and lower the capital intensity of current operations and future development projects, particularly for lower-grade U.S. ore bodies.

FCX plans substantial capital expenditures of $4.9 billion for 2025, with $2.7 billion dedicated to major projects. These investments prioritize underground mine development in the Grasberg district and potential U.S. expansion projects, underscoring a long-term growth-oriented capital allocation strategy.

The Board declared a $0.15 per share cash dividend for Q2 2025, maintaining its base and variable dividend policy. Additionally, FCX acquired 2.9 million shares for $107 million in H1 2025, with $3.0 billion remaining under its share repurchase program, reflecting confidence in future cash flows and commitment to shareholder value.

At June 30, 2025, consolidated debt stood at $9.3 billion with $4.5 billion in cash and cash equivalents, resulting in a net debt of $1.5 billion (excluding PTFI downstream processing facilities debt). The company also has $3.0 billion available under its revolving credit facility, ensuring ample liquidity for operations and strategic investments.

FCX has achieved and is committed to maintaining the Copper Mark and Molybdenum Mark at all its operating sites globally. This comprehensive assurance framework demonstrates the company's adherence to stringent environmental, social, and governance criteria, reinforcing its responsible production performance.

PTFI plans to invest approximately $1 billion over the next three years to transition its energy source from coal to natural gas for its Grasberg minerals district. This initiative, involving a new gas-fired combined cycle facility, is expected to meaningfully reduce greenhouse gas emissions, aligning with environmental commitments.

FCX is actively addressing environmental obligations, including a proposal for alternative remediation standards for the former Carteret smelter site, which is expected to adjust related environmental obligations. The company also maintains a $452 million litigation reserve for asbestos and talc claims, demonstrating a commitment to resolving historical liabilities.

Management believes that copper fundamentals are strong, driven by its critical role in the global transition to renewable power, electric vehicles, and other carbon-reduction initiatives. Continued urbanization, growth in data centers, and artificial intelligence developments are also expected to sustain growing demand for copper.

London PM gold prices averaged $3,280 per ounce in Q2 2025, reaching an all-time high of $3,435 per ounce. This surge is attributed to the prospect of interest rate reductions, ongoing geopolitical tensions, and strong demand from central banks globally, creating a favorable pricing environment for gold.

The U.S. President's imposition of a 50% tariff on semi-finished copper products and copper-intensive derivative products effective August 1, 2025, has caused COMEX copper prices to decline and align with LME prices. This regulatory change introduces uncertainty and potential cost impacts for U.S. imports, requiring continuous monitoring of trade policies.