Today, FCX reported second quarter 2021 net income attributable to common stock of $1.08 billion or $0.73 per share.
Adjusted net income attributable to common stock totaled $1.14 billion or $0.77 per share.
Our adjusted EBITDA for the second quarter of 2021 totaled $2.7 billion.
And you can find a reconciliation of our EBITDA calculations on Page 35 of our slide deck materials.
Our copper sales of 929 million pounds and gold sales of 305,000 ounces were significantly above the year ago quarter, but our sales were approximately 5% lower for copper and 8% lower for gold relative to our recent estimates, primarily reflecting the timing of shipments from Indonesia.
Our second quarter average realized copper price of $4.34 a pound was 70% higher than the year ago quarterly average.
Our net unit cash cost of $1.48 per pound of copper on average in the second quarter was slightly above our estimate going into the quarter of $1.42 per pound, but that primarily related to nonrecurring charges associated with a new four-year labor agreement at Cerro Verde.
Operating cash flow generation was extremely strong, totaling $2.4 billion during the quarter.
That included $0.5 billion of working capital sources.
And our operating cash flow significantly exceeded our capital expenditures of $433 million during the quarter.
Our consolidated debt totaled $9.7 billion at the end of June.
And our consolidated cash and cash equivalents totaled $6.3 billion at the end of June.
Net debt was $3.4 billion at the end of the quarter, and we achieved our targeted net debt level several months ahead of our schedule.
Really important, our Grasberg underground ramp-up is proceeding on schedule.
This quarter alone, we had $2 billion of cash flow after capital spending.
We ended the quarter with $3.4 billion of net debt, and that's within the targeted range we set at $3 billion to $4 billion.
We've reduced our debt by like 60% over the past year.
For the year 2021, copper value -- copper volumes are projected to increase 20%; gold volume, 55% over 2020.
Then looking forward to 2022, we'll see a further growth of 15% to 20% over 2021 levels.
Our volumes will -- with low incremental costs, we yield expanding margins at prices ranging from $4 to $5 per pound for copper.
We've generated annual EBITDA for '22 and '23 of $12 billion to $17 billion of copper with capital expenditures in the range of $2.5 billion a year.
In the second quarter, we achieved just under 80% of our target annualized run rate for metal sales.
I've been working in Freeport for 30 years -- over 30 years.
And I'm personally proud and gratified by our team's accomplishments since we began investing in the underground over 20 years ago, transition from the open pit that began 18 months ago and dealing with COVID, it's just remarkable what we've been able to do.
It would be a block cave with about 90,000 tonnes per day.
Original plan was 75,000 tonnes a day, 200 million pounds of copper.
We now exceeded this, reaching the targeted rate of 95,000 tonnes a day.
On a sustained basis, we have takeouts capacity to do this to yield 285 million pounds of copper.
Looking at a further increment that would involve a relatively small investment in tank houses, mining equipment to produce 300-or-more pounds of copper, 50% more our than original design.
Potential resource is 10 times more than our current reserve.
Our estimate now is for 38 billion pounds of copper in these stockpiles.
And if we can recover just 10% to 20% of this material, it would be like having a major new mine with variable capital and operating costs.
We're very focused now on sustaining the rates to keep our tankhouse full there, which has a capacity of 285 million pounds per year of copper and looking at potential increments beyond that with relatively small and attractive investments.
At Morenci, we've started to increase our mining rates, which had been curtailed in the last 12 months.
We averaged about 725,000 tonnes per day of mining material in the second quarter and are ramping up to reach 800,000 tonnes per day by the end of this year, going to 900,000 tonnes a day in 2023.
And we've been running at about 95% of the mill capacity in recent months.
This allows El Abra to increase production on a sustained basis to about 200 million to 250 million pounds per annum for the next several years as we assess opportunities for a major expansion there.
We successfully commissioned at Grasberg the second crusher at our Grasberg Block Cave during the quarter, and that will provide sufficient capacity for a ramp-up to 130,000 tonnes per day.
We recently entered into an EPC contract with Chiyoda to construct a 1.7 million tonne facility there.
FCX is responsible for 49% of these expenditures.
We recently completed a new $1 billion bank credit facility for PT-FI to advance these projects and are planning additional debt financing, which can be attained at attractive rates to fund these activities.
As indicated, the long-term cost of the financing expected for the smelter would be offset by a phaseout of the 5% export duty.
And the price is ranging from $4 to $5 copper and holding gold and molybdenum flat at $1,800 per ounce of gold and $16 per pound of molybdenum.
What you see here on these graphs, we would generate EBITDA in the range of over $12.5 billion per annum for '22 and '23 on average at $4 copper to $17 billion per annum at $5 copper.
And at operating cash flows, net of taxes and interest would be $9 billion to $12 billion using these price assumptions.
On slide 19, we include our projected capital of $2.2 billion this year and $2.5 billion in 2022.
As you'll note, we shifted about $100 million in expenditures from 2021 to 2022, which was timing related.
You'll see on slide 20, and this is backward looking, but over the last 12 months, we've reduced our net debt by $5 billion, and that included $2 billion in the second quarter alone.
You'll see our credit metrics are strong and less than 0.5 times EBITDA on a trailing 12-month basis.
The slide on 21 just reiterates our financial policy.
We have performance-based payout policy, which was established by our Board earlier this year, providing up to 50% of free cash flow, would be used for shareholder returns with the balance available for growth and further balance sheet improvements.

Summary:
Today, FCX reported second quarter 2021 net income attributable to common stock of $1.08 billion or $0.73 per share.
Adjusted net income attributable to common stock totaled $1.14 billion or $0.77 per share.
Our copper sales of 929 million pounds and gold sales of 305,000 ounces were significantly above the year ago quarter, but our sales were approximately 5% lower for copper and 8% lower for gold relative to our recent estimates, primarily reflecting the timing of shipments from Indonesia.
Our second quarter average realized copper price of $4.34 a pound was 70% higher than the year ago quarterly average.
Really important, our Grasberg underground ramp-up is proceeding on schedule.
The slide on 21 just reiterates our financial policy.