Upon completion of a proposed $1 billion transaction, the Morenci joint venture copper operation will be
owned 72% by Freeport, 15% by Sumitomo Metal Mining Arizona and 13% by an affiliate of Sumitomo
Metal Mining.

The companies expect the transaction to close in mid-2016. Following completion, the joint venture will be owned 72% by Freeport, 15% by Sumitomo Metal Mining Arizona and 13% by a fully owned affiliate of Sumitomo Metal Mining.

Freeport will record an approximate $550 million gain on the transaction. The company plans to use the proceeds to repay borrowings under its bank term loan and revolving credit facility.

A Morenci mill expansion project that started operations in May 2014 successfully achieved design production rates in the second-quarter of 2015. The project expanded mill throughput capacity from 50,000 mt/d to approximately 115,000 mt/d. Production is forecast to average approximately 900 million lb/y of copper in concentrate over the next five years.

In 2015, Freeport’s 85% share of Morenci revenues totaled $2.2 billion, while production and delivery costs totaled $1.5 billion.

Regarding the Sumitomo transaction, Freeport President and CEO Richard C. Adkerson said, “We are pleased to expand our partnership at Morenci with Sumitomo. This transaction represents an important initial step toward our objective to accelerate debt reduction and restore our balance sheet, while retaining a portfolio of high quality assets and resources.

“Our Morenci partnership with Sumitomo was first established 30 years ago, and both companies are confident of the operation’s long-term future. With its longlived reserves, substantial resource position, attractive cost structure, and best-inclass operating team, the Morenci joint venture is positioned to be a continuing strong contributor to the success of Freeport-McMoRan and Sumitomo.”