The company's 2023 Annual Report titled “The Value of Copper” is now available online. In the following letter to shareholders, Richard C. Adkerson, Chairman and Chief Executive Officer, introduces the report and its highlights.
Dear Fellow Shareholders
We are pleased to present our 2023 Annual Report, “The Value of Copper.” As a leading responsible supplier of copper, Freeport is committed to providing our global customers with important metals necessary for the global economy. Our conviction in the favorable long-term fundamentals for copper underpins our strategy that is centered on being “Foremost in Copper.”
Our global team achieved success during 2023 on several important initiatives to enhance value, advance growth options and position our portfolio for the future. We achieved multiple operating records at the Grasberg minerals district in Indonesia and Cerro Verde in Peru, and we are building significant momentum in the Americas with our innovative and low-cost, high-value leach initiatives.
After growing our volumes in recent years, we sustained copper production in 2023 during a challenging environment for industry supply and reported another year of growth in gold production. We continue to actively manage costs and productivity initiatives to address inflation. In Indonesia, we successfully commissioned a new milling circuit to process additional volumes and made great strides toward completing our new worldclass smelter, which reached the 90 percent completion milestone at year-end.
Our future growth options are supported by our sizeable copper reserves and an even larger resource position. Within our portfolio, we look for opportunities to maximize value through innovation, operating efficiencies and investments in projects where we have large resource positions. We have a proven track record and plan to continue to leverage our existing infrastructure, people and capabilities to increase values from our resource base. In the United States (U.S.), we achieved our initial target from our innovative leach recovery project and advanced development options for a potential expansion of our Bagdad mine in northwest Arizona. We are developing additional resources in the Grasberg minerals district in Indonesia and advancing studies for a potential major expansion project in Chile.
We believe long-term copper market fundamentals will lead to higher copper prices in the future, supported by anticipated strong growth in demand associated with secular trends, the growing intensity of use of copper in electrification and the realities of the cost and timeframes required for new supply development.
During 2023, we returned cash to shareholders in line with our established financial policy. Since we implemented our performance-based payout framework in 2021, shareholder returns have totaled $3.8 billion. Our financial policy continues to be centered on maintaining a strong financial position, providing cash returns to shareholders and investing in value-enhancing growth projects.
As a leader in the industry, we were one of the first companies to achieve the Copper Mark and Molybdenum Mark at all of our operating sites, demonstrating our commitment to responsible operating practices. During 2023, we initiated several new programs to enhance our safety performance.
Despite our robust safety programs, we continue to mourn the loss of one of our contractors in Indonesia who was fatally injured in an industrial accident. Our commitment to providing a safe work environment remains our top priority.
In June 2024, at our annual meeting of shareholders, we will complete the previously announced leadership transition. Kathleen Quirk will become CEO and assume full responsibility for executive management of the company reporting to our Board. I will remain Chairman of the Board, supporting the leadership transition and continuing to support the company on global matters of strategic importance.
Serving as CEO of Freeport for over 20 years has been an honor. Our people are best in class, and together, we have made valuable, lasting positive impacts on our industry, our communities and society at large. I value my strong relationships with our stakeholders — including our employees, investors, industry executives, community partners and government officials — all of whom are critical to the success of our company and our industry.
Kathleen’s strong business and strategic acumen and increasing levels of responsibility over many years have demonstrated she has the skills to lead our company and continue Freeport’s tradition of excellence.
The future for Freeport is bright. We have a winning combination of great assets and talented people and serve markets with growing needs for our products. With long-lived reserves, organic growth opportunities, a solid balance sheet and a proven track record for successful project development, Freeport is well-positioned to build long-term value for the benefit of all stakeholders.
On behalf of our Board and management team, I would like to thank you for your investment in our company.