That, combined with tax revenues, et cetera, that the government gets from having consistent operations at PT-FI is we’re both aligned in that to have exports continue. So the conversations have been constructive to date but we’ve got to continue to progress it. And have those — continuing to have the discussions with the government and we’re doing that on a regular basis.
Richard Adkerson: And Kathleen, just let me add. They’re not negotiations over this issue. The mine — I mean I’ve spoken in recent months on at least three occasions directly with the President about it. He understands it, the Mines Minister who has the business background clearly understands it. It’s just administrative procedurally they concluded not to grant that export rights beyond this date to see if we complete the smelter as we’ve committed to do it. But beyond that, it will be just be an administrative action to get it approved.
Kathleen Quirk: On the second question with respect to capital expenditures. We always go through a process of looking for opportunities to push out capital if it’s not required in the current year. And we went through a process between the last update on this one to really look hard at what we could efficiently spend this year and cut back on some things. Some of that’s showing up in 2025. We’ll do the same thing again because really what we want to do is deploy the capital as efficiently as we can and make sure we’re sustaining the reliability of our operations, but also looking at — we don’t want to be doing too many things at one time. And so we always take a hard look at it. So we’ll continue to do that as we go forward and manage the capital very carefully. But there wasn’t really one big thing, there was a number of things that we did in looking at the prior estimate for 2024.
Operator: Your next question comes from the line of Michael Dudas with Vertical Research.
Michael Dudas: With regard to your proposed investments in the US, maybe even looking in Latin America, maybe if you can remind us on an internal rate of return, risk-adjusted rate return basis, what Freeport is looking for? Certainly, you mentioned US investments, you get benefits from royalty and tax issues. But just on a general basis, even when you’re thinking about your assets in Indonesia. And then the follow-up on that, is the industry relative to a year ago today, is the industry ahead of the curve or behind the curve on meeting what the expected demand opportunities are in the market?
Kathleen Quirk: On the first part of the question, with respect to how we evaluate projects and returns, we don’t target one number. We look at what the specific project is, what the execution risk is, where it’s located. And we run a range of commodity price assumptions around it to look at. What we’re really focused on in deploying capital is investing and putting our infrastructure and investments in places where we can execute the plan and in places where we’ve got long term reserves, because anybody that tells you they can get the copper price right is wrong because it’s going to move up and down. And so what we want to have is a situation where we’ve got a very long life reserve where you can make that capital investment upfront and realize cash flows over a long period of time and not have to get the price forecast for copper perfect in the first year or two.
And so when we look at returns, we’re looking at those projects that have leverage to future copper. And we look at something outside of the US, we may apply higher risk factors and we look to get higher rates of return than what we would want to have in something like the US where for reasons that Richard talked about, have somewhat of a lower risk profile for us. But it is not one scientific number it’s a range of scenarios that we run around a project. And again, looking at the resource and the size of the investment and our ability to generate returns over a long period of time that would be consistent, not that it would go away — it would fall off, something that could be earned over a long period of time, has a long tail, which a lot of our projects do.
And Richard might have some perspectives on the second question. I think it’s obvious that there haven’t been new projects sanctioned in our industry for some time. And what’s happened recently in recent years with the copper prices rallying and then falling off has just caused more delays, more cautiousness by developers in developing the project. So I would say, in my opinion, the situation has become more significant because the projects are taking longer, not shorter. And we talked about when we started on Grasberg Underground, we started planning — started investing 20 years ago in it. I mean you really have — these are long lead time projects and we really need to have started investments. And that’s why we’re really focused on what can we do, continue to plan for these long term projects.
So what else can we do and what can we do to take advantage of technology that’s available to us and what can we do to get more out of the resources we already have, but not everybody has that ability. And Richard, I don’t know if you want to add any comments to that second part.
Richard Adkerson: Well, I’ll add a brief comment to the first part too, Kathleen. My early experience in my career was in the oil and gas industry. And early on, Dan [indiscernible] and I wrote a paper on oil price forecasting, which basically evidenced how wrong forecasts can be. And so we approach, as Kathleen described, all of our investment and business planning on a scenario basis, not trying to predict a particular price or range of price but to look at what impact investment decisions and operating decisions have on our overall portfolio. And we look to protect ourselves on a portfolio basis from downside risk and then structure investments to take advantage of what we have is confidence in the long term price. So it’s not any kind of formal rate of return kind of criteria that you see in a lot of industries, which work elsewhere, and have the saying that figures don’t lie but liars figure.
And so we just really base these things, as I said, on scenario planning and portfolio impacts. The basic thesis, I believe, for the demand for copper is unchanged and continues to be supported. From the very start my work with ICMM where I was Chairman, two occasions, but more recently when all the issues about aspirational goals for carbon reductions were being considered in such promise. I’ve always said that there are a lot of unanswered questions and the movement towards these aspirational goals will not be consistent, but they’ll have issues, complications and so forth and that’s certainly what we’re seeing. The future of copper is really influenced significantly by investments in carbon reduction and I think it’s something the world absolutely has to do.
And there are other factors related to global growth, connectivity, these data centers, some of that’s being driven by artificial intelligence. Just everywhere you turn, the world is getting more electrified. And that’s why I think the fundamental long term demand thesis for copper is just getting stronger and stronger.
