Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer. Please go ahead, ma'am.

Thank you, and good morning, everyone. Welcome to the Freeport-McMoRan Second Quarter 2017 Earnings Conference Call. Our results were released earlier this morning and a copy of the press release and slides for today's call are available on our website at fcx.com. Our conference call today is being broadcast live on the Internet and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the call. In addition to analysts and investors, the financial press has been invited to listen to today's call and 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 this call will include forward-looking statements and actual results may differ materially. We'd like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our Form 10-K and subsequent SEC filings. On the call today are Richard Adkerson, Chief Executive Officer of FCX; Red Conger, President of our Americas business; Mark Johnson, President of our Indonesian Operations; and Mike Kendrick, President of Climax Molybdenum. I'll start by briefly summarizing our financial results and then will turn the call over to Richard, who'll review our performance and outlook using the prepared slide presentation. As usual, after our formal remarks, we'll open up the call for questions. Today, FCX reported net income attributable to common stock of $268 million, or $0.18 per share for the second quarter of 2017. The results from the second quarter include net gains of $27 million, or $0.01 a share associated with a number of special items which are detailed on VIII of our press release. After adjusting for these…

Good morning, everyone. Want to give you an update of where our company stands right now. I got to tell you, we've had a high degree of optimism about our business as we're here in the midst of 2017. As we do before every earnings call, we had our global operating team together last week. Red Conger's here, Mike Kendrick's here and Mark Johnson is on the call. And our team is really focused, continue to execute our plans, looking forward to the future and analyzing where our company is going to ultimately grow from this great set of assets that we have. But we've all focused on cost management and you can see the results of that, good achievement with that. We've got ongoing capital discipline. We've got a portfolio of growth projects that we're doing work to prepare ourselves for future investments, but we're not committing to projects now, which is common across the copper industry worldwide. There's still enough of an uncertainty in the global economy and that's keeping people from going in and investing heavily on growth projects, but we've got a good set of them that we're going to be prepared to invest in the future and we're convinced that the world is going to need that copper. We have some issues to continue to talk about in Indonesia, but we've made a lot of progress there. And we do have a degree of optimism about our work with the government, about operationally how we're dealing with our labor issues that's been issues for us during the first half of the year and making progress. Kathleen pointed out that we have reduced our debt since we set our targets in early – going into 2016. At that time, we said we were going to try…

13.

Slide 13, I'm sorry. And you can see this is now net of the sale of our Tenke mine that we sold in the Congo to China Molybdenum and the incremental interest in Morenci that we sold to our partner Sumitomo. So that's what our sales look like. EBITDA and cash flows for 2018 now at $1,250 gold, $7.50 molybdenum and copper prices varying from $2.50 to $3 are shown on slide 14. You can see that goes from just over $5.5 billion of EBITDA to about $7.5 billion over that range. And with cash flows going from $3.4 billion to $4.8 billion, we're highly leveraged to copper. Each $0.10 is $280 million and before this call, we were close to $0.10 up today. Capital expenditures show the termination of capital spending in the oil and gas business and we currently are continuing to invest in the Grasberg Block Cave which has for 2017, $700 million of investment and $750 million for 2018. With the agreement with Government of Indonesia, we'll proceed with that. If we are unexpectedly unable to reach an agreement with the government, then we would take the steps of stopping that spending, it would be a major adjustment to our activities at PT-FI and would have a deferral in the ramp-up, which in blockade mining, it takes a period of time to ramp up once you start the mining operations, which we can't do at the Grasberg Block Cave until we finish mining the open pit. So, our current plan is to do this. If we're not to be successful in our discussions with the government, those CapEx would be suspended for major adjustments in our operations and we would be moving on to a resolution through arbitration, which we don't want, the government doesn't want,…

Ladies and gentlemen, we will now begin the question-and-answer session. Our first question will come from the line of Chris Terry with Deutsche Bank. Please go ahead.

Hi, guys. Couple questions from me, mainly relating to Grasberg, as you would expect. The first one just on the underground development, you'd hinted that that was your plan of balancing act there during the year of keeping enough labor in place, so that you don't stop completely. When you say it's been slowed now, is there a different development compared to last quarter or is it more of the same? And then also, can you just speak a little bit more about the opportunity to mine from the open-pit part of what would have previously been in the underground?

Okay. So with your first question, I want to make sure that we're clear on this. There is the Block Cave underground development activities. And then there is the startup of the Deep MLZ mine, which is beginning – it's moving to its operating phase. The development activities now are focused in the underground Block Cave at the Grasberg mine underneath the pit. Okay. And that's a major development project that we've literally been working on for eight years or so and developing access to it and getting that mine prepared to start up when we complete mining in the pit. We did reduce some of our capital spending when we were facing the issues with the government that emerged in January of 2017. But we've made a decision so far to keep spending on that development activities and nothing has changed during the quarter on that.

We cut it by about 25% earlier this year, Chris, but nothing has changed in recent months on it. We're evaluating it on a month-by-month basis.

And moving to your second question, as we continue to develop this and as we're completing mining at the pit, as you would expect, there is ongoing efforts to try to optimize the mining at the final stages of operations at the pit. And Mark Johnson and his team are looking at ways of adjusting pit slopes – deepening pit slopes, looking at ways that we can take advantage of our existing fleet of open pit mining equipment, the shovels and trucks and so forth. Some of that's been delayed by this issue of the export ban. There was a period of time of where the smelter in Indonesia was down earlier this year. So that's given us opportunities and time to see how can you optimize the final stages of mining from the pit. And that's what we're talking about there. Then we move over to the Deep MLZ mine, of where we had completed the initial stages of development, in Block Cave mining there is ongoing development activities that occur once you start the caving operations. But we were in the startup of actually developing the draw points for the operations through a combination of undercut development and mining material from the draw points as they started out when we ran into this issue related to this mining and do seismic activity. And so, we stepped back from that for a period of time and we're sequentially approaching undercut development and mucking mining, which we were doing together before until we get to the point of where the caves are operating in a normal fashion. So that's a separate issue from the underground development at the Grasberg Block Cave.

Okay. Thanks, Richard, for the color. And then just in terms of the discussions with the government that you're still having, are you able to rank, I guess, from maybe the government side what they say is the most important, including the smelter, the final ownership status, timelines, taxes, royalties, et cetera? Like what's the key sticking point there?

Well, what we have is an effort that's designing a solution in one agreement to address all of these issues. We both have agreed that we're going to have a global solution to the issues as a package and the keys from the government standpoint are the ones that you mentioned. They want to see divestment. Their objective is to have, over time, a point where we reach a 51% ownership by Indonesian interest. Currently 9.36% is owned by the government. They've set a strong objective of seeing new smelter capacity developed in Indonesia and then preserving the fiscal revenues from taxes and royalties that the government has because that's important to us. From our standpoint, our objective is having the government approve our rights to an extension that we have under our existing contract. And that goes to 2041 and that – and to have that approval, have fiscal and legal terms that have assurances and a commitment by the government to those over time, so that they can't be changed by subsequent laws and regulations. And that any divestment that occurs – and we're talking at this final stages about we had originally agreed to 30%, the government wanted 51%, so that's a matter to be dealt with in the final negotiations. But whatever that comes up to that any divestment be done, so that we are paid a fair value for the divested shares. And that Freeport – there is an agreement that Freeport will continue as operator and we have to – to do that, we have to have the rights to operate the business as we determine it should be operated and that we also have control over the governance of the operations. And so, those are the issues. And we've agreed to deal with them as a package and that's what we are doing as we speak.

Okay. Thanks, Richard. One final one, is there any update on Kokkola in Finland? What value you could extract there versus the original thoughts?

No. We have a lot of interest as you can imagine both with that and with the Kisanfu exploration, a property that's near Tenke, which we had an agreement with China Moly that they would have a right to negotiate with us on it. We weren't able to reach an agreement with them on the valuation. There's been such a change in the cobalt market, of course, since we closed our transaction on Tenke. And we've had a lot of incoming interest. We're having discussions with people, but we haven't established a formal process for how to go forward.

Okay. That's it from me. Thanks, guys.

All right. Thanks, Chris.

Your next question comes from the line of Novid Rassouli with Cowen and Company. Please go ahead.

Hey, Richard and Kathleen. So, Richard, when you were discussing the Indonesia situation down at CESCO, you'd mentioned that you guys and the Indonesian government are not really starting from scratch and that the discussions are far along several years, you guys have been discussing this. And that you're hopeful that the six-month extension is all that's necessary given the background and history of the negotiations. I was just wondering that was quite a laundry list of topics that you just listed out on what needs to be decided on. So I just want to see if you can give us an update on how you're thinking about the situation now. Do you see an ability to have something done by October and if anything has changed in your thinking since you kind of presented that view to us down at CESCO?

Yes. Well, I guess, from our perspective, this is not a big laundry list of items. I mean, it is divestment, smelter, fiscal terms, extension and those – it's really four items. There has been a significant movement within the Indonesian government of where I think coming from the senior level of government there is a real objective of wanting to get this resolved now that we just haven't seen in the past. And so, we remain focused on getting an agreement done this year and that is consistent with what the government's objective is as well. So there's a lot of things going on within Indonesia and its economy, their geopolitical issues that we read about everything in the paper in Southeast Asia. There is political developments as always within the Indonesian government, and all those things are coming to bear. We are having a – we're seeing a much greater interest by officials in the U.S. government in this administration to be supportive of businesses generally, but particularly, our situation in Indonesia. We're working – it's our responsibility to negotiate with the government and that's what we're doing. But there is a lot of circumstances that are leading us to a point of where we're at the point we are now of working to get an agreement. And if it can be done, now is the time going to be to do it. I mean, we're clear this is the effort that we're going to pursue. It's not going to be any memorandums of understanding or assurance letters or any of the things we've had in the past, but we're running this to ground right now.

Okay. And the next step from that would be, I guess, arbitration?

If we're unsuccessful, then that's the recourse that each party has to resolve a dispute. We gave notice about – of the dispute earlier this year. There was a 120-day notice period that has now run its course. So at this point, either party is free to initiate arbitration proceedings. And as you can imagine, we're doing a lot of behind-the-scenes work to prepare for that if it's something we have to do. We feel very strong about our legal position in this, but we also recognize that it's not desirable for either party to go that route. And so we're in effect reserving our rights, the government has rights as well, but we're working together to get this resolved and that's – and we're approaching it – we're both approaching it I think for maybe the first real time before there is a consistent point of view about wanting to get it resolved.

Got it. And then just one follow-up, Richard. So, you guys had mentioned you're taking steps to increase the workforce or PT-FI is taking steps to increase the workforce. Curious if there is any significant lead time to kind of train the additional workers to restore normal operating rates and if future strikes – potential future strikes would have an immediate impact or if the new workforce would kind of have some sort of a buffer built in?

Well, what's going on as we're doing this is the activity in the pit is ramping down, whereas once we were mining 800,000 tons a day, there were some days we even had a million tons a day, metric tons of mining in the pit. Today, our plan calls for about 100,000 tons. So, there is less work being done in the pit and that's where this absenteeism was focused. And what we're doing is rather than hiring new employees is working through contractors to hire people, often people who are experienced in coal mining and other activities for our truck operations and so forth. So, it is taking some time, but we're close back to meeting our plans with activity as we speak now. And all this activity really has not had a significant impact in our underground development activities. That's a separate set of workers, they haven't been, in large part – they weren't involved in this absenteeism, while you read about a strike – there has not been a formal strike declared. The union tops have called for a strike, but in any event, it's not like the workforce went on strike, there were some workers that didn't come to work. And unfortunately after notification, some of them have lost their jobs and that's not good for anybody, but we've had to manage it that way to keep control of our operations.

Got it. Thanks, Richard.

Okay. Thank you.

Your next question comes from the line of Michael Gambardella with JPMorgan. Please go ahead.

Yes. Good morning, Richard and Kathleen.

Hey, Mike.

Hi, Mike.

You got controllable and uncontrollable issues always. You guys have done a pretty good job on the controllable issues, you get a little bit help from the uncontrollable with copper going up, but you still got to deal with this Indonesia issue, which is, in my mind, a big uncontrollable. And I think the main – one of the main things I hear Freeport say that they need is assurances that the contract of work terms which have gone on now to 2041 are upheld. But how do you really get assurances of that since my understanding of the original contract of work was that it superseded any changes in Indonesian government law when it was signed and that that included the extensions, which were basically up to you guys in 2021 and 2031 to bring up to 2041. So basically, what's really to stop the government from changing their mind a year or two from now even if they say, okay, we're going to uphold the 2041 term of the contract life? How do you get assurances that they don't break the contract again?

So, repeating some of the things you said, the contract was signed in 1991. It had a 30-year primary term and it contained provisions giving us the right to two 10-year extensions of that contract. It wasn't like a renegotiating contract. And that came about because that's what Indonesian law allowed at that time. Under the Indonesian law at 1991, they only had the right to issue a 30-year contract. So, what you have in Indonesia and any other country is a sovereign government which has the right to adopt whatever laws and regulations they decide they should adopt. And Indonesia passes new mining law in 2009, which triggered the current controversy between us. The protection that we have under our contract and the protection that we are insisting be preserved going forward is that if in fact the government does change its mine as you say and takes actions through laws, regulations or whatever to take value away from what we're entitled to under our agreement, then we have the right to go to international arbitration, a legal proceeding that is structured to be fair, not something that goes through the Indonesian court system and we would have the right to financial compensation for actions that the government has taken. We have that right now because the contract says very clearly, the government can't restrict exports, well, the government has restricted exports in the past. The government is obligated to give us this extension. They haven't approved the extension yet. And what we've tried to do Mike and some of these things are uncontrollable, some of them are under our control and what we try to do is find a way to preserve the values for our shareholders and be responsive to the aspirations and desires of the government and find a compromise. But as part of that compromise, we are insisting that we retain going forward the rights to international arbitration and the rights to financial claims if the government subsequently doesn't honor the contract.

Okay. Understand. Is there any way for you to estimate what your results for the quarter would have looked like if none of this would have happened in terms of the contract would have never been questioned from 2009 on and you are operating under the contract of work. How different would your results be today?

Well, let's see. We would have completed mining the open pit last year, in 2016. And if you go back and review what our plans were, then we would have had an extraordinary year in 2015 and 2016, over 3 million ounces of gold and large copper billings. But for 2017, we would have completed mining the pit and we would be ramping up the Deep MLZ. So, remember we used to talk about that falloff, the wedge and we were talking about how to offset that through stockpiles and things. So, we would have had extraordinary years in 2015-2016. You can go out and assume we didn't do the oil and gas deal. That would have made a difference. We wouldn't have been selling assets and doing all the selling stock and doing all the things we had to do to pay that debt off. So, I'll answer your question, but I don't allow myself to go back and say, would have, could have, should have deal. We're in the here and now. We have control over a lot of things including some of the issues with the government and we're working hard to deal with those issues.

But the would have, could have, should have, if you don't get a deal with the government and you do go to arbitration, I would assume some of the would have, could have, should have would go into your estimate of what you've lost in terms of value.

No question, no question. I mean we would – and so this arbitration claim, again, I want to emphasize because I know my friend in Indonesia are listening to this and I'm speaking clearly that we don't want to do that, we want to find a mutually agreeable solution. But if we don't, the claims are going to be very large.

Sure. Yes. I would imagine.

Because it's a big asset.

Yes. Huge asset. Huge difference in performance under the contract of work and what's happened. And how would that transpire assuming you don't get an agreement, you go to arbitration, you win the arbitration, what happens next in terms of how do you receive proceeds or value consideration?

Well, it gets to be an obligation of the Government of Indonesia. I mean, that's an obligation under their law. And then there's steps you can take internationally to enforce that as well. There has been some precedent for that, of where – other countries. Indonesia had a case several years ago as well, and so there's processes to follow. Indonesia, as a member of the G20, as a country that's done big picture well economically, they're going to have pressures of wanting to get this resolved in a way that helps them with their bigger picture economic goals, international goals and so forth. So, it's not only Freeport and representing our shareholders that has objectives of resolving this. There are also going to be pressures facing Indonesia and getting it resolved. And I think that's becoming more apparent to them.

Right, okay. Thanks a lot, Richard.

Thanks, Mike.

Your next question comes from the line of Chris Mancini with Gabelli. Please go ahead. Christopher Domenic Mancini - Gabelli & Company: Hi, everybody. I just, so I was just wondering in terms of your projects and potential projects that – the expansion projects that you showed in your presentation. If copper were at, say, $3 a pound, say it would go to $3.10 or something like that a pound and it was there for a couple months, do you feel like you currently have the balance sheet to start any of those projects or would you like your balance sheet to be in a better position in terms of your net debt position to start a, I guess, you guys haven't mentioned how big these projects would be, but say, a $1 billion expansion project?

All right. So – so Chris. Christopher Domenic Mancini - Gabelli & Company: Yes.

The short answer to your questions is, yes, the balance sheet is okay, we could do those. But these projects aren't $1 billion projects. I mean, the Cerro Verde project, which was a major expansion, was $4.5 billion – $5 billion project and it was as well situated a project to do this on that you're ever going to find anywhere in the world, but the El Abra project is a project that would be bigger than that, okay? The – we could get the start going on the Lone Star/Safford project in that range, okay?

Yeah, that's less than $1 billion, but it's spent over multiple years.

And yet, to develop the sulfide deposit there is another – so these are major type projects. And while I think we are on a path towards starting the Lone Star deal, it's not in our numbers now, but I think it will be fairly shortly. But to do one of these multi-billion dollar projects like we would be looking at, at Bagdad and expansion at Sierrita and the sulfide in Safford and so forth. You're going to need to get copper not just for a month or two. You're going to have to have a clear view that the world economy is developing that there are uncertainties that currently overhang the economy in significant ways are clear to go forward. And that's not just for us, but that's for the rest of the industry. So I think before that happens, you're going to see a period of time where there's going to be a shortage of copper and you're not going to see the price of these go to $3. We just need to look over our shoulders and we can see at times we had copper at $4. And we're heading for a world of where that is – that's I believe is in the cards, that it could even be more than that because the great thing about copper is that when you look at its uses, it's not the component that drives demand. Copper is an important necessary component of those. But so, anyway you've all heard me get on my copper soapbox. That soapbox is, at one point, I was kind of a lone prop in the wilderness. Now there is a choir singing this song. And so – and yet you don't see people jumping up to invest in new projects and new projects are very scarce. There is some projects that are being completed and so forth, but the wall of copper that was supposed to come about in 2016 didn't show up. And now to justify the coming wall of copper, some people are talking about you can develop these new mines at $2.50 or less and that just can't be done. It just can't be done. Christopher Domenic Mancini - Gabelli & Company: Right.

And when the – Kathleen is telling me to stop, so I'll get off and so forth. Okay. Christopher Domenic Mancini - Gabelli & Company: Okay. No, sounded good, the choirs singing sounded good. But the – but so, right, so what you're saying now Richard, is that you can essentially, at the – your current balance sheet, current copper price, you'll probably be able to approve the Loan Star oxides, which will essentially replace some of the assets that have been depleted at Safford from what I understand. But these big projects like El Abra, you think that you do have the balance sheet to complete those, but that you wouldn't embark on those unless you saw runway for copper being above $3 a pound and going higher. Is that kind of pretty accurate?

That is exactly accurate. And I'll just mention one other factor. With everything that we've had going on over the years, we've developed some incredible strong relationships in Asia, I mean in China, Japan, Korea. I mean and we have – I can't tell you the number of people who want to be our partners going forward. I mean Freeport's earned a lot of respect; by the way we are. You look, we're the operators of all of our projects and we've done kind of every kind of project that can be done. And the people in Asia are hungry for copper and they want to be our partner. So, financing is going to be one of evaluating alternatives as opposed to scramble and to find it. Christopher Domenic Mancini - Gabelli & Company: Okay. Okay. Great. And do you have a sense as to, at a given copper price, what kind of IRR on a project you'd be looking for to get it off the ground?

We don't – the one thing we've learned, at least I've learnt, is you just don't set a specific hurdle rate. Christopher Domenic Mancini - Gabelli & Company: Right.

They have a saying around here, figures don't lie, but liars figure. So, what we do is we look at scenarios for what would happen to us if we made an investment, how it fits in with the rest of our portfolio, what kind of exposure do we have for a gain if prices are higher, what kind of risk do we have to manage our portfolio if prices drop. So, you need to have good attractive rates of return because these projects have the risk. Christopher Domenic Mancini - Gabelli & Company: Yeah. Okay. Great. Thanks, Richard. Thanks, Kathleen.

Thanks, Chris.

Your next question comes from the line of Orest Wowkodaw with Scotiabank. Please go ahead.

Hi. Good morning. I still have a couple of follow-up questions on Grasberg. Specifically, I realized the major issues for both you and the government have kind of been known for a while. But what gives you confidence, for example, in terms of a divestment criteria that you can actually get fair value for selling any interest in Grasberg? Has something changed in the last three months to give you more confidence in that?

Well, what's changed is – that I've said over and over. I think there is a real objective of getting a deal done now from the government side, as it is from our side. And while the government says we have certain requirements to get a deal done and that it relates to smelter and divestment and financial issues, we said we have requirements to get a deal done. I'm real clear with the government that our shareholders will not accept us not getting fair value for any divestment. I mean, I hear that over-and-over again because they see our rights under arbitration. We know our legal case is strong. So it's a recognition that we recognize what their requirements are. They're recognizing what our requirements are.

And are you seeing – your comments suggest that you're actually seeing movement then in terms of sort of the bid/ask spread here in terms of negotiations. Is that fair?

Yes. That's fair.

Okay. And I mean your comments about working towards a resolution by the end of the year, that's passed, I think, the October temporary export permit. Would your expectation be that that would just be renewed to kind of keep negotiations going in October?

My expectation is that we will get it done within the six months period.

I see. But it might go beyond the current expiry of the – oh, are you saying you think you might get it done by October?

Yes. That's what I expect. Now, look, there are enough people in this call who have heard my expectations to be unfulfilled in the past. So, yeah, realistically, but there's a lot of things. Indonesia has got a 2019 election coming up, et cetera, et cetera and also all those things point to getting a resolution this year.

Okay. And then just finally, you mentioned with respect to Grasberg production that you're looking at accessing a portion of the Grasberg Block Cave through the open pit. Can you give us a sense of how much additional copper production that could give you in 2018-2019?

We'll know more as we mine through some sections. And Mark Johnson is on the line. He can add to this. But we'll know more as we conduct mining to see if we can, in fact, access ore that would have been mined underground over time. And the benefit of taking it from the open pit is you can get it now as opposed to getting it over several years in the future. But it's on the order and we'll know more as we get into it, but it's on the order of couple hundred million pounds of copper and 500,000 ounces of gold. Mark, I don't know if you want to add anything further to that. Mark Johnson - Freeport-McMoRan Copper & Gold Inc.: No. The one thing I would add is that we've had a very successful campaign on our perimeter blasting. We do a lot of presplitting for our final walls. And, over time, our geotechs, our engineers are gaining confidence that we can continue to leverage on that experience. And we're putting additional resources at that to ensure that the quality of those blasts are such that we maximize this opportunity. All that we're looking at there to is we don't have any expectation that it would cause any other concerns on the high wall. This is upside that would be purely generated on actual results in the field. We're not going to compromise the overall pit stability or any of the operating safety features or standards that we have. So, this will be something, as Kathleen mentioned, we'll know more month-by-month. We've changed some of our blasting practices now. We're mining into the area that we blasted. As we have opportunity to observe the results, we'll be able to add more clarity as to what the upside might be.

Okay. And what would be the expected timeline then to update, say, the mine plan moving forward? Mark Johnson - Freeport-McMoRan Copper & Gold Inc.: Yeah. The...

We'll do it every quarter.

Okay. Thank you very much.

Because we don't have an annual planning process here. We update our plans every quarter and so we'll talk to you in three months about where we stand with.

Thank you.

Your next question comes from the line of Alex Hacking with Citi. Please go ahead. Alex, you may be on mute.

Sorry about that. Good morning, Richard and Kathleen.

Good morning.

Hey, Alex.

I have two questions. The first question, at the Deep MLZ, the geotechnical issues there, you mentioned the impact on production profile. Would you expect any impact on future OpEx and CapEx there? And then second question is also like Grasberg. I think you've been very clear that Freeport needs to keep both operating and governance control. Do you believe – is there a structure that you could put in place where you could divest 51%, but still be comfortable that you have that governance and operating control or are those two things mutually incompatible, i.e., your maximum divestment should be less than 50%? Thank you.

Okay. So...

Take the last one and then we'll come back to the first one.

All right. So with respect to the last one, we are suggesting to the government that the optimal way for us to proceed with divestment would be to start with a listing on the Indonesian Stock Exchange. And that listing would probably be on the order of a 10% interest. The Indonesian Stock Exchange has gotten to be a fair market. International investors participate in it and so forth. There's lots of discussion within the government about how to proceed with this divestiture deal, but there are ways legally that we're advised that they are working with the government-owned as to how to achieve this objective of maintaining control over governance. And it basically comes down to being able to elect the majority of the Board of Commissioners. That happens internationally with a number of companies in different environments. It was not something unique to Indonesia. Now, the second question has to do with the OpEx and CapEx. It is more of a question of timing. We're going to do some things sequentially that we were doing concurrently initially in terms of developing undercuts and mucking ore. So it doesn't fundamentally change the cost structure at all, but there is the timing impact and so that has some consequence to it. What we believe will happen is that as we get the mine in position and caving starts in a normal fashion, then we'll go back to the same plan we've had all along.

And we have been following protocol with respect to ground support, et cetera. And this mine is requiring investment in significant ground support, more than what we've had in the DOZ, for instance. But the good news is that all of that is – with this significant event we had in June, all of that held up very well.

Yes. And there were no injuries, I want to be clear there, no people were hurt. There was some damage to the mine infrastructure, but no major loss of equipment or things like that. And so there's no real change in the fundamental plan that we're on, it's more of a delay.

Thank you, very clear.

Thank you.

Your next question comes from the line of Lucas Pipes with FBR & Company. Please go ahead. Lucas N. Pipes - FBR & Co.: Yes. Good morning and thank you for taking my question. Richard, you just mentioned how you would approach the question of obtaining fair value for 10% stake of PT-FI. What do you think is the bid/ask spread on that specific point, so how would the Government of Indonesia address that question? Thank you.

So, we have really not engaged in any negotiations on fair value. In early 2016, we voluntarily submitted a valuation of PT-FI at that time to the government, but there has been no formal response to that. You see some comments in the press that we see, but we really haven't gotten to the point of having a bid/ask. Lucas N. Pipes - FBR & Co.: When do you think this will come up in the negotiations?

As we complete the negotiations, that's – the process for divestment, the standards of divestment will be part of the ultimate agreement on the package that we have. It won't be an issue of agreeing on a valuation, but the process of how do you get to a fair value – valuation. And recently, I noted that the government put out a positive comment about having natural resource companies operating in Indonesia be listed on the Indonesian exchange. And again, that's, that in our view is the fairest way of seeing what the value of this business is, let us get an agreement that settles things down, pick an appropriate time, go out, have a fully marketed interest. I know from talking with investors, there would be investor interest in investing in this asset and in that way, you have a market-based determination of fair market value. Lucas N. Pipes - FBR & Co.: That's helpful. Thank you. And then a quick question on the CapEx side and you mentioned that you expect to spend about $700 million on the underground development and that it depends on a resolution of the PT-FI long-term rights. So if the status quo persists hypothetically through the end of the year, would you still expect to spend $700 million or does it depend on a – does the $700 million depend on a resolution at a given time before the end of the year? Thank you.

So, the $700 million is our current spend rate. So, I think you can anticipate that as we go through this year and engage in our discussions, unless they just were to fall apart which I don't expect, that you can anticipate that we'd be spending that $700 million, now we got $750 million booked for next year and that's dependent on getting the agreement. Lucas N. Pipes - FBR & Co.: Great. Thank you.

Thank you, Lucas.

Your next question comes from the line of John Tumazos with John Tumazos Very Independent Research. Please go ahead.

Thank you very much. Weather.com says the next 15-day temps in Safford vicinity average 96 degrees Fahrenheit highs and 74 degrees Fahrenheit lows, which I guess is a big cool wave. How did you manage to produce copper when it was 123 degrees Fahrenheit highs and 95 degrees Fahrenheit lows? Did the power grid fail on any days, how do you manage equipment utilization and human safety? And second separate question, when will you define a mineral resource for the Lone Star sulfides, where there is only oxide mined so far? And I guess engineering the project requires having a resource.

Yes. So, John, operating in the heat in Arizona is kind of like operating in the rain in Indonesia, I mean, that's been part of the business all along, and actually, Red, I'm right in saying, it's hotter in Phoenix than it is typically in Safford and Morenci because of the altitude. And actually when we have operational issues, it's generally when we have unexpected rainfall because a little bit of rain can cause that. Red, you got any... Harry M. “Red” Conger IV - Freeport-McMoRan, Inc.: Just one thing to add John, we do work with our people diligently on hydration and avoiding heat stroke, knowing the signs of overexposure, providing lots of gatorade and water and those kinds of things, air conditioning and equipment.

So, the regional utility didn't have any failures when it was 123 degrees Fahrenheit in Phoenix? Harry M. “Red” Conger IV - Freeport-McMoRan, Inc.: No, we did not.

You don't lose power, they don't call you up and ask you to turn off the electricity at your mines so that it can air condition people's houses? Harry M. “Red” Conger IV - Freeport-McMoRan, Inc.: No, didn't happen and to Richard's point, when we had the monsoon rainstorms that we have exposure to losing power then. And then just one quick comment on the sulfides there, we've got an active drilling campaign underway now to further define sulfides in that district.

When will you have a resource at the Lone Star sulfides?

We have a resource defined. It's an interesting to debate – to watch Red and his team debate with Kathleen about when are we going to give them enough money to drill that resource to the point of having reserves. But we feel confident, I mean the resource is so large that there is an opportunity for our development there, it is not resource-dependent.

John, on page 6 of the slide, you can see it's the biggest next to Cerro Verde, the biggest resource in the 266 billion pounds of copper.

Right.

But it's the possible, it's like not...

Yes, potential.

Right, right.

Right.

So, the Dos Pobres and San Juan are the sulfide resources that are in your annual report and not the Lone Star?

Yeah. That's correct.

So, you got to give Red the money to do what he's got to do.

Yes. We haven't added any reserves yet for Lone Star. All right. So you're on that side of the debate.

We just want you to talk with facts, not – geologic inference is a little bit like – we all have dreams.

Right. Right. No take-backs here. Okay. Thanks, John.

Thank you. I'm sorry to be direct.

No.

Our next question comes from the line of Fawzi Hanano with Berenberg. Please go ahead. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Good morning, Richard, and Kathleen. Just quick questions, not about the regulatory on Indonesia, but more on the operations side. In terms of milling grades, I've read some articles quoting whether it be correctly or wrongly that you got a targeting 200,000 tons per day run rates with about 140 from the open-pit, 60 from the DOZ. I would like to know what you guys really are targeting particularly at the open-pit before it starts the ramp-down process.

That's roughly what our plan calls for, what you just mentioned. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): And would it be towards end of Q3, later this year or in terms of timing, what are you guys planning?

Well, we've had some recent days of where we've been at 200,000 tons a day. And the reason what we weren't earlier had to do with this worker absenteeism because that was focused on the Grasberg open-pit operations and we weren't meeting our targets for extracting ore from the open-pit. But the mill is all aligned and the mill's capacity is on the order of right mark, 250,000 tons, 260,000 tons per day. There's three separate mill lines and then we're preparing that mill to operate at those higher levels as we achieve our Grasberg Block Cave underground ore in the Deep MLZ in the future. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Okay. Thanks, Richard. And a quick question on CapEx. Looking at the other mining CapEx to increase about $300 million to $1 billion in 2018, could you give a little bit more color around where that's being allocated? And is this the result of under-spending and sustaining CapEx in the last couple of years?

Yeah. That's – that's the point I was going to make. We have been, particularly as we went into 2016, but even before that, as the – when the copper price dropped and as we were facing the financial situation that we faced with the oil and gas investments and the big capital commitments that have been made there that we've now gotten behind us, we were real tough on spending – on maintenance capital and projects, our guys did a great job of sharing equipment, cannibalizing equipment and so forth, and now, we're at the point of having to go back and do some things that had been deferred in the past. So, that's all that is. It's just – we meet every quarter. The guys – Red's on it every day with his team looking at what needs to be done to maintain safe production. And so there's some catch-up type things that we're needing to spend money on. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Great...

And to the extent that we can defer it and maintain efficiencies, we continue to look at opportunities to do that. But as you see here, in 2017, we're spending very little on sustaining capital in the Americas and we've got some things as Richard said that we're planning to do for 2018. But teams all focused on, if there are things that we can do to push things out, we'll do it. But we want to maintain the integrity of our equipment. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): All right. Thanks. Mark Johnson - Freeport-McMoRan Copper & Gold Inc.: Richard, this is Mark. I just wanted to add what the ore qualities that we have right now. You're right that we have ran – at least we've ran over $300,000 through our mill. With the type of rock that we'll be running for the remainder of the year will be averaging nearly $200,000. There'll be days obviously it'll be $220,000, $230,000, other days with maintenance, it will be less than that. But fourth quarter, we'll be in the $195,000 range. Fawzi Hanano - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Thanks, Mark.

Our final question will come from the line of Michael Dudas with Vertical Research. Please, go ahead.

I'll make it quick. You guys have been very patient. Just – compared to March, Richard, you talked about you're seeing more typical disruptions in copper supply and mining versus less than typical in the past few years. Is there a chance we see more than just typical as we move forward given all the lack of investment and given the depletion issues that we're seeing in the industry? Thank you.

Yes. Michael, that's a good point. There is a correlation between labor issues and copper price. I mean, as the copper price rises, workers globally will be expected to ask for more and you can see what a labor situation can do to the global copper supply with what Escondida went through recently. Contractors will be an issue. Labor issues are particularly sensitive in Latin America, in Chile and Peru, which are the world's two largest copper producing countries, I guess China is in that mix somewhere. But I always say, labor strikes are a contagious disease, so that's – that can happen. Then as equipment ages and as copper prices rise, people press to give more out of it and that was pressure on mechanical issues, which many of these mines were developed years ago, at Grasberg, our big SAG mill was put in, in the mid-1990s. So as equipment ages, you get stresses mechanically on issues. Then governments start seeing companies making more money and around the world, start seeing other ways of getting more out of it. We went through an issue in the Congo, as some of you may remember, where we had to deal with that, but all those things add up that as copper prices rise, it's sort of a self-fulfilling prophesy that the opportunities for disruptions grow and that, coupled with whatever other dynamics other than rising copper prices, tend to super charge that kind of movement.

Richard, best of luck on the negotiations this quarter. Thank you.

All right. Thanks, Michael. We appreciate your support.

Well, everyone, thanks for participating. We will be transparent as we go forward and if you have any follow-up questions, check in with David Joint and he'll be responsive to it and look forward to talking about our progress next quarter. Thank you.

Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect.