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Contingencies and Commitments | 9 Months Ended
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Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract] |
Contingencies and Commitments | CONTINGENCIES AND COMMITMENTS Environmental Refer to Note 12 of FCX’s 2023 Form 10-K for further discussion of FCX’s environmental obligations. FCX recorded net charges for adjustments to environmental obligations totaling $82 million for the first nine months of 2024, primarily associated with changes in cost estimates for former processing facilities and historical smelter sites. Asset Retirement Obligations Refer to Note 12 of FCX’s 2023 Form 10-K for further discussion of FCX’s asset retirement obligations (AROs). Mining Operations. FCX recorded net ARO additions at mining operations totaling $275 million for the first nine months of 2024, primarily associated with revised closure plans and cost estimates to reflect FCX’s commitment to the Global Industry Standard on Tailings Management (Tailings Standard). FCX may record additional ARO adjustments as it continues to update estimates to conform with the Tailings Standard. Oil and Gas Properties. Freeport-McMoRan Oil & Gas (FM O&G) recorded net ARO additions totaling $115 million for the first nine months of 2024, of which $99 million was associated with assumed oil and gas abandonment obligations resulting from bankruptcies of other companies that was charged to production and delivery costs. FM O&G, as a predecessor-in-interest in oil and natural gas leases, is in the chain of title with unrelated third parties either directly or by virtue of divestiture of certain oil and natural gas assets previously owned and assigned by its subsidiaries. Certain counterparties in these divestiture transactions or third parties in existing leases have filed for bankruptcy protection or undergone associated reorganizations and have not performed the required abandonment obligations. Accordingly, regulations or federal laws require that other working interest owners, including FM O&G, assume such obligations. Litigation There were no significant updates to previously reported legal proceedings included in Note 12 of FCX’s 2023 Form 10-K, other than the matter discussed below. Louisiana Parishes Coastal Erosion Cases. Certain FCX affiliates were named as defendants, along with numerous co-defendants, in 13 cases out of a total of 42 cases filed in Louisiana state courts by 6 south Louisiana parishes (Cameron, Jefferson, Plaquemines, St. Bernard, St. John the Baptist and Vermilion), alleging that certain oil and gas exploration and production operations and sulfur mining and production operations in coastal Louisiana contaminated and damaged coastal wetlands and caused significant land loss along the Louisiana coast. The settlement agreement to resolve these cases was fully executed in fourth-quarter 2022 but there was a delay in finalizing it as a result of a lawsuit challenging the settlement brought in first-quarter 2023 by a non-plaintiff coastal parish included in the settlement (Terrebonne Parish) titled Terrebonne Parish Consolidated Government v. Louisiana Department of Natural Resources et al., Docket No. 185576, 32nd Judicial District Court, Terrebonne Parish, State of Louisiana. During first-quarter 2024, Terrebonne Parish agreed to dismiss its lawsuit and FCX made the $15 million settlement payment in trust (which was accrued for in 2019) in accordance with the terms of the settlement agreement. Indonesia Regulatory Matters Refer to Notes 12, 13 and 14 of FCX’s 2023 Form 10-K for further discussion of Indonesia regulatory matters. Export Licenses. On July 2, 2024, PT-FI was granted copper concentrate and anode slimes export licenses, which are valid through December 2024. Pursuant to the Indonesia regulations, PT-FI is continuing to pay a 7.5% export duty on copper concentrates. See below for further discussion of the recent fire event at PT-FI's new smelter facility. Special Mining Business License (IUPK). Pursuant to regulations issued during 2024, PT-FI is eligible to apply for an extension of its mining rights beyond 2041, provided certain conditions are met, including ownership of integrated downstream facilities that have entered the operational stage; domestic ownership of at least 51% and agreement with a state-owned enterprise for an additional 10% ownership; and commitments for additional exploration and increases in refining capacity, each as approved by the Ministry of Energy and Minerals. Application for extension may be submitted at any time up to one year prior to the expiration of its current IUPK. PT-FI is currently preparing its application submittal. In connection with PT-FI’s application for extension, FCX is working to reach terms with MIND ID on a purchase and sale agreement for the transfer in 2041 of an additional 10% interest in PT-FI. PT-FI’s New Downstream Processing Facilities Fire Incident On October 14, 2024, a fire occurred during commissioning of PT-FI’s new smelter in Gresik, Indonesia, following an equipment malfunction in the smelter furnace. The fire resulted in damage to a gas cleaning facility (electrostatic precipitator plant) and infrastructure for the production of sulfuric acid. There were no injuries. Smelter start-up operations have been temporarily suspended pending remediation activities. Mining operations in Central Papua and the completion and ramp-up of the PMR project have not been impacted. PT-FI has substantially completed initial damage assessments and currently estimates repair costs to approximate $100 million, which are expected to be offset through recovery under construction insurance programs. Remediation plans are in progress, including the procurement of long-lead items. Based on current delivery timelines, which continue to be evaluated, PT-FI currently expects to recommence start-up operations by mid-2025. Efforts are under way to expedite equipment orders to potentially improve the schedule. PT-FI is working with the Indonesia government to allow continued exports of copper concentrates until full ramp-up is achieved, including seeking an increase to the permitted quota for 2024. Tax Matters Cerro Verde Royalty Dispute. As disclosed in Note 12 of FCX’s 2023 Form 10-K, in 2020, FCX filed on its own behalf and on behalf of Cerro Verde, international arbitration proceedings against the Peruvian government under the United States-Peru Trade Promotion Agreement relating to the assessment of mining royalties on ore processed by the Cerro Verde concentrator for the period from December 2006 to December 2013. In May 2024, the arbitration tribunal rejected FCX and Cerro Verde's claims on the merits. The decision by the arbitration tribunal had no impact on FCX’s consolidated financial statements. Refer to Note 3 for discussion of the reduction in unrecognized tax benefits related to Cerro Verde tax matters.

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