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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.14pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.14pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-
Not scored
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
incident+20
adversely+4
suspended+4
damage+3
incidents+3
Positive rising
effective+3
enhanced+3
favorable+2
advancements+2
able+1
Risk Factors (Item 1A)
19,314 words
Item 1A. Risk Factors.
This report contains forward-looking statements in which we discuss our potential future performance, operations and projects. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections or expectations relating to business outlook, strategy, goals or targets; repair and remediation efforts, and phased restart and ramp-up of production and downstream processing following the September 2025 mud rush incident at PT Freeport Indonesia’s (PTFI) Grasberg Block Cave underground mine and the anticipated impact on
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our business, production, sales, results of operations and operating plans, and recoveries under insurance policies; global market conditions, including trade policies; ore grades and milling rates; production and sales volumes; higher variability between PTFI production and sales; unit net cash costs (credits) and operating costs; capital expenditures; operating plans, including mine sequencing; cash flows; liquidity; potential extension of PTFI’s special mining business license (IUPK) beyond 2041; timing of shipments of inventoried production; our sustainability-related commitments and targets; our overarching commitment to deliver responsibly produced copper and molybdenum, including plans to implement, validate and maintain validation of our operating sites under specific frameworks; achievement of our 2030 climate targets and our 2050 net zero aspiration; improvements in operating procedures and technology and applications; exploration efforts and results; development and production activities, rates and costs; future organic growth ; tax rates; the impact of copper, gold and molybdenum price changes; the impact of deferred intercompany profits on earnings; mineral reserve and mineral resource estimates; final resolution of settlements associated with ongoing legal and environmental proceedings; debt repurchases; and the ongoing implementation of our financial policy and future returns to shareholders, including dividend payments (base or variable) and share repurchases.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
We undertake no obligation to update any forward-looking statements, which speak only as of the date made. We caution readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, expected, projected or assumed in the forward-looking statements. Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements are included below.
Risk Factor Summary
Investing in our securities involves a high degree of risk and uncertainties. You should carefully consider the risks described below and the information included in other sections of this annual report on Form 10-K, including, but not limited to, Items 1. and 2. “Business and Properties,” Item 1C. “Cybersecurity,” Items 7. and 7A. “Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk” (MD&A) and Item 3. “Legal Proceedings” prior to investing in our securities. If any of the following risks occur, they may have a material adverse impact on our business, financial performance, stock price, results of operations, operating flexibility, reputation, costs or liabilities and you could lose part or all of your investment. The summary and risks that follow are organized under headings as determined to be most applicable, but such risks also may be relevant to other headings. Moreover, the risk factors described herein are not all of the risks we may face and there may be other risks not presently known to us or that we currently believe are immaterial or general risks that apply to all companies operating in the United States (U.S.) and globally, which may emerge or become material.
Financial risks
• Fluctuations or extended material declines in the market prices of the commodities we produce;
• Fluctuations in price and availability of consumables and components we purchase as well as constraints on supply and logistics, and transportation services;
• Less flexibility because of our debt and other financial commitments;
• Changes in or failure to comply with financial assurance requirements relating to our mine closure reclamation obligations;
• Unanticipated legal proceedings or negative developments in pending legal proceedings or other contingencies; and
• Changes in and interpretations of tax laws and regulations.
International risks
• Geopolitical, economic, regulatory and social risks for our operations; and
• PTFI’s failure to meet its commitments to achieve the extension of its IUPK.
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Operational risks
• Failure to achieve remediation activities, and the phased restart and ramp-up of the Grasberg Block Cave underground mine;
• Operational risks inherent in our operations, including underground mining and the ability to smelt and refine;
• Environmental, safety and engineering challenges and risks associated with management of waste rock and tailings;
• Environmental challenges associated with our Indonesia operations;
• Violence, civil and religious strife, and activism;
• Availability of secure water supplies for our operations, including future expansions or development projects;
• Disruptions, damage, failure and implementation and integration risks associated with information and operational technology systems;
• Failure to successfully implement, advance or develop and risks associated with new technologies; and
• Any major public health crisis.
Human capital risks
• Failure to maintain good relations with our workforce and labor disputes or labor unrest; and
• Ability to recruit, retain, develop and advance qualified personnel.
Risks related to development projects and mineral reserves
• Inherent risks associated with development projects and unique risks associated with development of underground mining;
• Ability to maintain or grow our mineral reserves; and
• Inherent uncertainty associated with estimates of mineral reserves and mineral resources.
Regulatory, environmental and social risks
• Compliance with applicable environmental, health and safety laws and regulations;
• Remediation of properties no longer in operation in the U.S.;
• Ability to meet our energy requirements while complying with climate-related regulations and expectations and other energy transition policy changes;
• The physical impacts of changing climate conditions on our operations, workforce, communities, biodiversity and ecosystems, supply chains and customers;
• Scrutiny, action and evolving expectations from stakeholders and other third parties with respect to our sustainability-related practices, performance, commitments and disclosures; and
• Failure or perceived failure to manage relationships with the communities and/or Indigenous Peoples where we operate or that are near our operations.
Risks related to our common stock
• Impact of our holding company structure on our ability to service debt, declare dividends, or repurchase shares and debt; and
• Impact of anti-takeover provisions in our charter documents and under Delaware law.
Financial risks
Fluctuations in the market prices of the commodities we produce have caused and may continue to cause significant volatility in our financial performance and in the trading prices of our common stock. Extended material declines in the market prices of such commodities could adversely affect our financial condition and operating plans.
Our financial results are significantly influenced by and vary with fluctuations in the market prices of the commodities we produce, primarily copper and gold, and to a lesser extent molybdenum. Extended material declines in market prices of such commodities could have a material adverse effect on our financial results and the
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value of our assets, may depress the price of our common stock, and may have a material adverse effect on our ability to comply with financial and other covenants in our debt agreements, service our debt and meet our other obligations. For further discussion regarding recent macroeconomic and geopolitical factors, see the risk factor below regarding the price and availability of consumables and components we purchase and constraints on supply and logistics, and transportation services.
There has been a history of significant volatility in the commodities markets, including the copper market. Fluctuations in commodities prices are caused by varied and complex factors beyond our control, including global supply and demand impacted by industry production and inventory levels; global economic and political conditions (such as election results, level of economic growth, or recession and political or geopolitical tensions and conflicts); national and international regulatory, trade and/or tax policies, including tariffs and other controls or restrictions on imports and exports; commodities investment activity and speculation; interest rates; current inflation rates and expectations regarding future inflation rates; the strength of the U.S. dollar compared to foreign currencies; the price and availability of substitute products; and changes in technology. Volatility in global economic growth, particularly in developing economies, has the potential to affect adversely future demand and prices for commodities. Geopolitical uncertainty and protectionism can inhibit international trade and negatively impact business confidence, which creates the risk of constraints on our ability to deal in certain markets and has the potential to increase price volatility. For further discussion regarding the historical fluctuations of the prices of copper, gold and molybdenum, refer to “Markets” in MD&A.
In addition to the factors discussed above, copper prices may be affected by demand from China, which is currently the largest consumer of refined copper in the world, including as a result of geopolitical uncertainty and tension between the U.S. and China as well as uncertainties about China’s economy. Copper demand and prices also may be affected by industry production, substitution and thrifting. The adoption and expansion of trade restrictions, or other governmental action related to tariffs and other controls on imports and exports or trade agreements or policies are difficult to predict and could adversely affect copper prices, demand for our products, our costs, our customers, our suppliers and the global economy, which in turn could have a material adverse effect on our business, results of operations or financial condition. For further discussion, refer to “Markets” and “U.S. Tariffs” in MD&A. We believe long-term fundamentals for copper are favorable with growing demand supported by copper’s critical role in the global transition to renewable power, electric vehicles and other carbon-reduction initiatives, continued urbanization in developing countries, data centers and artificial intelligence (AI) developments and growing connectivity globally; however if these markets, industries and transitions do not develop as we expect, or develop more slowly than we expect, future demand and prices for copper may be negatively affected, impacting our business. Copper demand and prices also may be affected by inadequate investment in and limited production from existing copper mining operations (including due to limited or suspended operations), and copper demand globally, including the U.S., Europe and Asian countries other than China.
Additional factors affecting gold prices may include purchases and sales of gold by governments and central banks, demand from China and India (two of the world’s largest consumers of gold), and global demand for jewelry containing gold.
If market prices for the primary commodities we produce were to decline and remain low for a sustained period of time, we may have to revise our operating plans, including curtailing or modifying our mining and processing operations, as we have done in the past, and our cash flows, ability to return capital to shareholders and capital expenditure plans could be negatively affected. We may be unable to decrease our costs in an amount sufficient to offset reductions in revenues, in which case we may incur losses, and those losses may be material.
Declines in prices of commodities we sell could also result in metals inventory adjustments and impairment charges for our long-lived assets.
Fluctuations in the price and availability of consumables and components for key machines and equipment we purchase, and constraints on supply and logistics could affect our profitability and operating plans. Further, significant delays or increases in costs affecting transportation services may affect our business.
Consumables and components for key machines and equipment we purchase are subject to price volatility caused by global economic factors that are beyond our control, including, but not limited to, supply chain disruptions, labor shortages, wage pressures, inflation and economic slowdown or recession, as well as fuel and energy costs (for example, the price of diesel), the impact of interruption by fire, energy supply shortages, industrial accidents, hostile acts, cybersecurity attacks, natural disasters or extreme weather events, major public health crises, geopolitical
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tensions or conflicts (including trade policies such as tariffs and other controls on exports and imports), and foreign currency exchange rate fluctuations.
Prices of consumables used in our operations (such as natural gas, diesel, coal, other sources of energy, ammonium nitrate, chemical reagents, including sulfuric acid, and steel-related products), certain components, equipment, parts and other operating supplies and services can fluctuate in price, impacting the costs of production at our operations and the costs of development projects. We have experienced price volatility for certain consumables, which has impacted our operating results, and we may experience volatility in the price and availability of other consumables in the future. Significant volatility or further increases could have a material adverse effect on our results of operations and could result in material changes to our operating plans or development projects.
Ensuring continuity of supply of such consumables to our operations is critical to our business. We also rely on the availability of components from suppliers for key machines and equipment, which may be impacted by competition demands as well as the availability of input materials in the creation of such equipment. A supplier’s failure to supply consumables or components in a timely or cost-effective manner or to meet our specifications, or our inability to obtain alternative sources on a timely basis or on terms acceptable to us, could adversely affect our operations. Delays and logistical constraints may occur as a result of weather-related impacts, geopolitical tensions or conflicts (including trade policies such as tariffs and other controls on exports and imports), or violence, civil and religious strife, and activism at or near our operations or those of our suppliers, as described in the related risk factor below.
Following any interruption to our business, we can require substantial recovery time, experience significant expenditures to resume operations, and lose significant revenues, which could have a material adverse effect on our results of operations. Because we may rely on limited sources and long-lead times for consumables and components for key machines and equipment, a business interruption affecting or requiring such sources would exacerbate any negative consequences to us.
Our business depends on timely inbound transportation of consumables and components we use and outbound transportation of the commodities we produce such as by truck, rail and ocean freight. Any significant increase in the cost of or significant delays in the transportation of consumables or components used in our operations or the commodities we produce, as a result of increases in fuel or labor costs, higher demand for logistics services, weather-related impacts (such as low water levels along shipping routes) or otherwise, could adversely affect our results of operations. Additionally, if transportation service providers fail to deliver consumables or components used in our operations to us or the commodities we produce to our customers in a timely manner or at all, such failure could adversely impact our ability to meet our production schedules, delay our projects and capital initiatives, negatively affect our customer relationships and have a material adverse effect on our financial position and results of operations.
Our debt and other financial commitments may limit our financial and operating flexibility.
At December 31, 2025, our total consolidated debt was $9.4 billion, with $1.3 billion coming due in 2027 (see Note 6) and our total consolidated cash and cash equivalents was $3.8 billion. We also have various other financial commitments, including reclamation and environmental obligations, take-or-pay contracts and leases. Although we have been successful in servicing debt in the past, refinancing our bank facilities and issuing new debt securities in capital markets transactions at the parent and subsidiary levels, there can be no assurance that we can continue to do so, including on favorable terms. In addition, we may incur additional debt in future periods or reduce our holdings of cash and cash equivalents in connection with funding existing operations, capital expenditures, dividends, share or debt repurchases, or in pursuing other business opportunities. For further discussion, see the risk factors below relating to mine closure and reclamation regulations and the scrutiny and evolving expectations from stakeholders and other third parties, including creditors, with respect to our sustainability-related practices, performance and disclosures.
Our level of indebtedness, restricted cash and other financial commitments could have important consequences to our business, including the following:
• Limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;
• Increasing our vulnerability to general adverse economic, financial, industry and regulatory conditions;
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• Limiting our ability to fund future working capital, capital expenditures, general corporate requirements and/or material contingencies, to engage in future development activities or other business opportunities, or to otherwise realize the value of our assets and opportunities fully because of the need to dedicate a substantial portion of our cash flows from operations to payments on our debt;
• Requiring us to sell assets to reduce debt; or
• Placing us at a competitive disadvantage compared to our competitors that have less debt and/or fewer financial commitments.
Any failure to comply with the financial and/or other covenants in our debt agreements may result in an event of default that would allow the creditors to accelerate maturities of the related debt, which in turn may trigger cross-acceleration or cross-default provisions in other debt agreements. Our available cash and liquidity may not be sufficient to fully repay borrowings under our debt instruments that may be accelerated upon an event of default.
As of January 31, 2026, our senior unsecured debt was rated “Baa2” with a stable outlook by Moody’s Investors Service, “BBB” with a stable outlook by Fitch Ratings, and “BBB-” with a stable outlook by Standard & Poor’s. If we are unable to maintain our indebtedness and financial ratios at levels acceptable to these credit rating agencies, or should our business prospects deteriorate, our current credit ratings could be downgraded, which could adversely affect the value of our outstanding securities and existing debt, our ability to obtain new financing on favorable terms and could increase our borrowing costs.
Changes in or the failure to comply with the requirements of mine closure and reclamation regulations could have a material adverse effect on our business.
We are required by U.S. federal and state laws and regulations to provide financial assurance sufficient to allow a third party to implement approved closure and reclamation plans for our mining properties if we are unable to do so. As of December 31, 2025, our financial assurance obligations totaled $2.2 billion for closure and reclamation costs of U.S. mining sites. We are also subject to financial assurance requirements in connection with our remaining oil and gas properties and certain of our previously sold oil and gas properties under both state and federal laws. Refer to Note 10 for further discussion regarding our financial assurance obligations and Items 1. and 2. “Business and Properties” for a discussion of certain of such U.S. federal and state laws and regulations applicable to us. Approximately half of our financial assurance obligations are satisfied by guarantees by us and certain of our subsidiaries. Our ability to continue to provide guarantees depends on state and other regulatory requirements, our financial performance and our financial condition. Other forms of assurance, such as letters of credit and surety bonds, are costly to provide and, depending on our financial condition and market conditions, may be difficult or impossible to obtain. Failure to provide or maintain the required financial assurance could result in the closure of the affected properties.
Plans and provisions for mine closure, reclamation and remediation and oil and gas properties plugging and abandonment obligations may change over time as a result of changes in stakeholder and other third-party expectations, legislation, standards, and technical understanding and techniques, which may cause our actual costs of closure, reclamation and remediation and plugging and abandonment obligations to be higher than estimated for asset retirement obligations (AROs) and environmental obligations and could materially affect our financial position or results of operations. For example, our implementation of the Global Industry Standard for Tailings Management (the Tailings Standard) (refer to Items 1. and 2. “Business and Properties” for further discussion) has required changes to our closure and reclamation plans or modifications to previously completed reclamation actions. In addition, changes in precipitation patterns and other physical conditions could result in changes in our closure and reclamation plans to address such conditions, as well as associated financial assurance obligations, and may materially increase the actual costs associated with implementing such plans at any or all of our active or inactive mine sites or smelter sites. Refer to Notes 1 and 10 for further discussion of our environmental obligations and AROs.
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Unanticipated legal proceedings or negative developments in pending legal proceedings or other contingencies could have a material adverse effect on our financial condition.
We are, and may in the future become, involved in various legal proceedings and subject to other contingencies that have arisen or may arise in the ordinary course of our business or are associated with environmental matters, including those described in Note 10, Items 1. and 2. “Business and Properties” and in Item 3. “Legal Proceedings.” For example, we are currently subject to a securities class action and a shareholder derivative lawsuit following the September 2025 mud rush incident. We are also involved periodically in other reviews, inquiries, investigations and proceedings initiated by or involving government agencies, some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. For example, we have been cooperating with and responding to a subpoena from the U.S. Securities and Exchange Commission (SEC) and an information request from the U.S. Department of Justice (DOJ) related to our public disclosures about the engineering design and construction of PTFI’s smelter in Indonesia, which is also the subject matter in a separate whistleblower complaint from a former contractor that we are defending before the U.S. Department of Labor. We cannot predict the outcome of these investigations, and the outcome of any legal proceeding is inherently uncertain and adverse developments or outcomes could result in significant monetary damages, penalties, other sanctions or injunctive relief against us, limitations on our property rights, or regulatory interpretations that increase our operating costs, some of which may not be covered by insurance. Further, to the extent that societal pressures or political or other factors are involved, it is possible that liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors. Management does not believe, based on currently available information, that the outcome of any individual legal proceeding currently pending will have a material adverse effect on our financial condition, although individual or cumulative outcomes could be material to our operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period.
Regardless of the merit of particular claims, defendingagainst legal proceedings or responding to investigations can be expensive, time-consuming, disruptive to our operations and distracting to management. In recognition of these considerations, we may enter into agreements or other arrangements to settle legal proceedings and resolve such challenges. There can be no assurance such agreements can be obtained on acceptable terms or that legal proceedings will not occur.
From time to time, we are involved in disputes over the allocation of environmental response costs and obligations at “Superfund” and other sites. We may be held responsible for the costs of addressing contamination at the site of current or former activities or at third-party sites or be held liable to third parties for exposure to hazardous substances should those be identified in the future. For further discussion of our environmental obligations, see the regulatory, environmental and social risks below.
Further, we are a global business with operations in various jurisdictions. In the event of a dispute arising at our foreign operations, we may be subject to the exclusive jurisdiction of foreign courts or arbitral panels, or may not be successful in subjecting foreign persons to the jurisdiction of courts or arbitral panels in the U.S. or in enforcing the judgment of a foreign court or arbitral panel against a sovereign nation. Our inability to enforce our rights and the enforcement of rights on a prejudicial basis by foreign courts or arbitral panels, including against a sovereign nation, could have an adverse effect on our results of operations and financial position.
Changes in and interpretations of tax laws and regulations could have a material adverse effect on our financial condition.
As a global business, we are subject to income, royalty, transaction and other taxes in the U.S. and various foreign jurisdictions. Uncertainties exist with respect to our tax liabilities, including those arising from changes in laws and regulations and interpretations of such laws and regulations in the jurisdictions in which we do business. Further, we have significant net operating losses (NOLs) in the U.S. generated in prior years, which we believe are available to offset future regular taxable income. However, changes in tax laws and regulations or interpretations of such laws and regulations may result in new limitations on our ability to benefit from our significant U.S. NOLs. We also are subject to regular review and audit by both domestic and foreign tax authorities. Although we believe our tax estimates are reasonable, including with respect to our use of NOLs, the ultimate tax outcome may differ from the tax amounts recorded in our financial statements and may materially affect our income tax provision, net income, or cash flows in the period or periods for which such determination and settlement occurs.
The provisions of the U.S. Inflation Reduction Act of 2022 (the Act), which became applicable to us on January 1, 2023, include, among other provisions, a new Corporate Alternative Minimum Tax (CAMT) of 15% on the adjusted
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financial statement income of certain corporations. As discussed in Note 9, based on current guidance, we have determined that the provisions of the Act did not impact our financial results for the three years ended December 31, 2025, but the proposed and interim guidance released by the Internal Revenue Service relating to the calculation of the CAMT is not final and is subject to change.
Additionally, on July 4, 2025, the President signed into law H.R.1 (also referred to as the One Big Beautiful Bill Act), which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain provisions of the Tax Cuts & Jobs Act of 2017. H.R.1 did not have a material impact on our consolidated financial results for the year 2025. The aggregate impact of H.R.1, including how it will be interpreted and applied to us, remains uncertain.
In December 2021, the Organisation for Economic Co-operation and Development (OECD) published a framework for Pillar Two of the Global Anti-Base Erosion Rules, which was designed to coordinate participating jurisdictions in updating the international tax system to ensure that large multinational companies pay a 15% minimum level of income tax. In January 2026, the OECD published additional guidance on the framework, including safe harbor provisions that would minimize or eliminate application of the 15% global minimum income tax on domestic operations of U.S.-parent multinational companies. Recommendations from the OECD regarding the 15% global minimum income tax, the safe harbor provisions and other changes are being considered and/or implemented in jurisdictions where we operate. The adoption and effective dates for such tax changes may vary by jurisdiction, could increase tax complexity and uncertainty, and may adversely affect our provision for income taxes. At current metals market prices, we do not expect enactment of the recommended framework in jurisdictions where we operate to materially impact our financial results for 2026. However, additional changes to these tax laws and regulations, including as a result of new guidance and interpretations, may occur and such changes could adversely affect our tax liability.
International risks
Our operations are subject to evolving geopolitical, economic, regulatory and social risks.
We are a U.S.-based metals company with substantial assets located outside of the U.S. Risks of conducting business in the countries where we operate or do business can include:
• Delays in obtaining or renewing, or the inability to obtain, maintain or renew, or the renegotiation, cancellation, revocation or forced modification (including the inherent risk of these actions being taken unilaterally by a foreign government or government owned entity) of contracts, leases, licenses, permits, easements, rights-of-way, stability agreements or other agreements and/or approvals;
• Expropriation or nationalization of property, protectionism, or restrictions on repatriation of earnings or capital;
• Changes in and differing interpretations of the host country’s laws, regulations and policies (which may be applied retroactively), including, but not limited to, those relating to labor, taxation, royalties, duties, tariffs, licenses, divestment, imports, exports (including restrictions on the export of copper concentrates and anode slimes, copper and/or gold), trade laws and regulations, immigration, currency, human rights and environmental matters (including land use and water use and, in some cases, consent), additional requirements on foreign operations and investment, and/or fines, fees and sanctions, criminal liability and other penalties imposed for failure to comply with the laws and regulations of the jurisdictions in which we operate, the risk of any of which may increase with rising “resource nationalism” in countries around the world;
• Geopolitical tensions, conflicts and events, social and economic instability, bribery, extortion, corruption, civil unrest, blockades, acts of war or other military conflicts, guerrilla activities, insurrection and terrorism, certain of which may result in, among other things, an inability to access our property or transport our commodities;
• Risk of loss associated with illegal activity, including trespass, illegal mining, theft (including piracy), sabotage (including of critical infrastructure) and vandalism;
• Changes in U.S. trade, tariff and other controls on imports and exports, tax, immigration or other policies that may impact relations with foreign countries or result in retaliatory policies;
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• Increases in training and other costs and challenges relating to requirements to employ nationals of a country in which a particular operation is located;
• Foreign exchange controls and fluctuations in foreign currency exchange rates; and
• Reduced protection for intellectual property rights.
Accordingly, our activities in and outside of the U.S. may be substantially affected by many external factors beyond our control, any of which could have a material adverse effect on our cash flows, results of operations, financial condition and trading price of our common stock.
We are required to comply with a wide range of laws and regulations in the countries where we operate or do business. For example, our international operations must comply with the U.S. Foreign Corrupt Practices Act (FCPA) and similar anti-corruption and anti-bribery laws of the other jurisdictions in which we operate. We are investigating whether activities of PT Smelting may have violated aspects of the FCPA or other laws, including laws of non-U.S. jurisdictions. PT Smelting is an Indonesian joint venture between PTFI and Mitsubishi Materials Corporation (MMC), and an affiliate of MMC serves as operator of PT Smelting (see Note 2). As previously reported, we voluntarily notified the SEC and DOJ that we engaged outside counsel to conduct the investigation of PT Smelting’s activities. Any determination that operations or activities are not in compliance with existing laws, including the FCPA, could result in the imposition of fines, penalties and equitable remedies. We cannot currently predict the outcome of our investigation.
We operate in jurisdictions that have experienced public and private sector corruption and where significant anti-corruption enforcement activities, prosecutions and settlements have occurred. We have a large number of contracts with local and foreign business partners, including suppliers and contractors, who may take action contrary to or fail to adopt standards, controls and procedures, including health, safety, environmental, human rights and community standards that are equivalent to our standards, controls and procedures. There can be no assurance that our policies, procedures and internal controls will protect us from misinterpretation of or noncompliance with applicable laws and internal policies, recklessness, fraudulent behavior, dishonesty or other inappropriate acts committed by our affiliates, employees, contractors or other business partners. As such, our policies, procedures and internal controls may not prevent or detect all potential breaches of law or governance practices. Any breaches could result in safety events that may result in injuries or fatalities; significant criminal or civil fines, penalties, litigation or regulatory action or inquiries or other enforcement actions; shareholder or other stakeholder activism (such as to stop using a certain business partner); civil unrest or other adverse impacts on human rights; termination of contracts; loss of operating licenses or permits; and damage to our reputation, any of which could have a material adverse effect on our cash flows, results of operations and financial condition.
In addition, our insurance does not cover most losses caused by the risks described above. For example, we do not maintain political risk insurance.
We conduct international operations and exploration activities in Indonesia, Peru and Chile as well as other foreign jurisdictions. Accordingly, in addition to the usual risks associated with conducting business in countries outside the U.S., our business may be adversely affected by political, economic, social and regional uncertainties in each of these countries. Other risks specific to certain countries in which we operate are discussed in more detail below.
Because our operations in Indonesia are material to our business, our business may be adversely affected by political, economic, regulatory and social uncertainties in Indonesia.
Maintaining a good working relationship with the Indonesia government, PT Mineral Industri Indonesia (MIND ID), an Indonesia state-owned enterprise and shareholder in PTFI, and the local population, is important because of the significance of our Indonesia operations to our business, and because our operations there are among Indonesia’s most significant business enterprises. Partially because of the Grasberg minerals district’s significance to Indonesia’s economy (including the downstream operations), the environmentally sensitive area where it is located, and the number of local people employed, our Indonesia operations have been the subject of political debates and criticism in the Indonesia press and have been the target of protests and occasional violence. Improper management of our working relationship with the Indonesia government, MIND ID or the local population could lead to a disruption of operations and/or impact our reputation in Indonesia and in the region where we operate, which could adversely affect our business.
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The mining industry is subject to extensive regulation within Indonesia, and there have been major developments in laws and regulations applicable to mining concession holders, some of which have conflicted with PTFI’s contractual rights and may conflict with PTFI’s contractual rights in the future. For example, in 2009, the Indonesia government enacted a mining law that sought to modify PTFI’s former contract of work, certain provisions of which were not required under or conflicted with PTFI’s former contract of work. In December 2018, PTFI was granted an IUPK to replace its former contract of work, enabling PTFI to conduct operations in the Grasberg minerals district through 2041, subject to certain requirements. Refer to Note 11 for a summary of the IUPK’s key fiscal terms and requirement to develop additional smelting and refining capacity. Pursuant to regulations issued during 2024, PTFI is eligible to apply for an extension of its mining rights beyond 2041, provided certain conditions are met. Refer to Note 10 for a summary of such conditions and the risk factor below relating to potential extension.
Since 2019, the Indonesia government has enacted various laws and regulations related to downstream processing of various products. Refer to “Operations – Indonesia” in MD&A and Notes 10 and 11 for a discussion of Indonesia regulatory matters, including those related to export licenses, export duties, export proceeds, smelter assurance bonds and PTFI’s new smelter and precious metals refinery (PMR) (collectively, PTFI’s downstream processing facilities) in Eastern Java, Indonesia.
With the completion of its downstream processing facilities, PTFI is a fully integrated producer of refined copper and gold. Following the September 2025 mud rush incident, smelting operations in Indonesia at both PTFI’s smelter and PT Smelting were temporarily suspended during fourth-quarter 2025 as a result of limited copper concentrate availability. PT Smelting restarted operations in late December 2025 and is expected to operate at reduced rates pending the anticipated second-quarter 2026 restart of mining at the Grasberg Block Cave underground mine. Shipments to PTFI’s smelter are expected to recommence in the second half of 2026, pending the successful ramp up of mining operations. We expect higher variability between PTFI’s production and sales until its downstream processing facilities achieve normalized operating rates.
Following the expiration of its export license on September 16, 2025, PTFI expects all of its concentrate to be processed by its downstream processing facilities and does not have export licenses for copper concentrate or anode slimes. As such, if the downstream processing facilities are not operational when copper concentrate is available, PTFI could be required to reduce production levels or be subject to increased costs, which could adversely impact our revenues and operations.
Political considerations and administrative changes resulting from elections, including Indonesia’s most recent national legislative and presidential elections held in 2024 and future elections, could affect, among other things, national and local policies pertaining to foreign investment, permitting and export restrictions, which could adversely affect our Indonesia operations.
In 2023, the Indonesia government issued a regulation that required 30% of PTFI’s gross export proceeds to be temporarily deposited into Indonesia banks for a period of 90 days before withdrawal. Effective March 1, 2025, the Indonesia government implemented a new regulation (March 2025 Regulation) for export proceeds that requires 100% of PTFI’s export proceeds to be deposited into Indonesia banks for 12 months. The March 2025 Regulation allows the use of funds for ongoing business requirements, including dividends to shareholders, payment of taxes and other obligations to the Indonesia government, payment for materials or capital expenditures that are not available domestically and repayment of loans. The Indonesia government is considering additional changes to the March 2025 Regulation; however, the details of the modifications have not been finalized.
Refer to Note 10 for further discussion of the March 2025 Regulation.
There can be no assurance that future regulatory changes affecting the mining industry in Indonesia will not be introduced or unexpectedly repealed, or that new interpretations of existing laws and regulations will not be issued, any of which may conflict with PTFI’s contractual rights, which could adversely affect our business, financial condition and results of operations.
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PTFI will not mine all of the mineral reserves in the Grasberg minerals district before the initial term of its IUPK expires in 2031. PTFI’s IUPK may not be extended through 2041 if it fails to abide by its terms and conditions and applicable laws and regulations.
Under the terms of its IUPK, PTFI has been granted mining rights through 2031, with rights to extend its mining rights through 2041, subject to certain terms and conditions. Refer to Note 11 for a summary of the IUPK’s key fiscal terms.
Our proven and probable mineral reserves in Indonesia reflect estimates of minerals that can be recovered through the end of 2041, and PTFI’s current long-term mine plan and planned operations are based on the assumption that PTFI will abide by the terms and conditions of the IUPK and will be granted the 10-year extension from 2031 through 2041. As a result, PTFI will not mine all of these mineral reserves during the initial term of the IUPK. Prior to the end of 2031, we expect to mine 34% of aggregate proven and probable recoverable mineral reserves at December 31, 2025, representing 38% of FCX’s net equity share of recoverable copper reserves in Indonesia and 36% of FCX’s net equity share of recoverable gold reserves in Indonesia.
If PTFI does not fulfill its defined fiscal and other obligations to the Indonesia government as set forth in the IUPK, the IUPK may not be extended from 2031 through 2041, and PTFI would be unable to mine all of its proven and probable mineral reserves in the Grasberg minerals district, which could adversely affect our business, results of operations and financial position.
With the completion of PTFI’s downstream processing facilities during 2025, FCX and PTFI have advanced discussions with the Indonesia government for a long-term extension of PTFI’s operating rights beyond the current expiration in 2041. PTFI is preparing its application for a long-term extension expected to cover the life of the resource, which is expected to be submitted during 2026. In connection with the extension, PTFI would pursue additional exploration, conduct studies for future additional development and expand its social programs. FCX expects to maintain its ownership interest in PTFI of approximately 49% through 2041 and hold approximately 37% beginning in 2042, following the transfer of an additional interest in PTFI to an Indonesia state-owned enterprise. FCX expects the existing governance agreements would continue over the life of the resource. We cannot guarantee that PTFI will receive an extension of mining rights beyond 2041 or that such extension will be on the terms expected.
Operational risks
The mud removal and other remediation activities, and the phased restart and ramp-up of the Grasberg Block Cave underground mine following the September 2025 mud rush incident may not be achieved as planned which could adversely impact our results of operations and financial condition.
On September 8, 2025, PTFI experienced an unprecedented mud rush incident, during which approximately 800,000 metric tons of wet material entered the Grasberg Block Cave underground mine from the former Grasberg open pit and traveled rapidly to multiple levels of the mine, including a service level where seven team members were later found deceased.
Mining operations were temporarily suspended to prioritize the recovery of the seven team members fatallyinjured during the incident and to conduct investigations. Following the September 2025 mud rush incident, PTFI has been engaged in activities to address the incident and advance preparation for a safe and sustainable restart of operations. In late October 2025, PTFI restarted operations at the unaffected Deep Mill Level Zone (DMLZ) and Big Gossan underground mines. Investigations and remedial plans were completed in fourth-quarter 2025 and a phased restart and ramp-up of the Grasberg Block Cave underground mine is anticipated to begin in second-quarter 2026. The incident impacted our results for the second half of 2025, and we expect the incident to have a significant impact on our 2026 operating and financial results.
We plan to implement enhanced operating procedures to address the conditions that led to the incident and use information from this unprecedented incident to further enhance risk management processes, including ongoing management and stabilization of conditions in the open pit. Material changes to our operating plans could affect our mineral reserves. In addition, there can be no assurance that other unforeseeableincidents will not occur in the future.
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Mud removal is in process and other steps necessary for restart and ramp-up of operations, including implementation of enhanced operating procedures to address the conditions that led to the incident, development of updated cave management plans and draw protocols, and design, construction, repair and replacement of damaged infrastructure and equipment, are expected to begin in the near term. The timing of the phased restart and ramp-up of certain areas of the Grasberg Block Cave underground mine could be impacted by any delay in the removal and remediation activities. Further, new or additional operational challenges could arise as we progress mud removal and other remediation activities and the phased restart and ramp-up of the Grasberg Block Cave underground mine.
Refer to MD&A and Note 10 for discussion of asset impairment charges recorded as a result of damage assessments and evaluation of the affected infrastructure. We do not believe there has been a broader impairment of PTFI’s long-lived mining assets based on PTFI’s reserve life, favorable market outlook for metal prices and the expected resumption of operations at the Grasberg Block Cave underground mine; however, changes to our estimates of recoverable proven and probable mineral reserves or declines in the prices of commodities PTFI sells could have an impact on the future recoverability assessments of PTFI’s long-lived mining assets.
PTFI has recorded charges and expects to incur additional costs related to the incident in the future. Any future costs, liabilities, fines, penalties and financial impacts resulting from the incident and any related investigations or claims may exceed our current expectations and any insurance recoveries. PTFI has submitted a claim to seek recovery of damages under its property and business interruption insurance policies. PTFI’s ability to recover damages under its insurance coverage with respect to the incident is subject to certain conditions, and the scope of insured losses and timing of recovery is undetermined. In addition, there can be no assurance that such insurance will continue to be available at economically feasible premiums for certain related risks. To the extent insurance proceeds are delayed or disputed, we may be required to fund repairs and related costs from available cash flows or borrowings. Further, government agencies may impose changes to applicable laws, regulations or environmental requirements or new standards as a result of the incident. In addition, we may experience adverse indirect effects on our business, including negative publicity, damage to our reputation, increased scrutiny by regulators and investors, and reduced confidence from our workforce, local communities, customers and other stakeholders.
As a result of the incident and impact on operations, PTFI notified certain commercial counterparties of a force majeure under its contracts, which may negatively impact PTFI’s relationships with such counterparties. Although the declaration of force majeure for certain PTFI contracts has not materially impacted PTFI’s contractual obligations to date, such obligations could be negatively impacted by the incident or any similar future incidents.
Any of the above could adversely affect our cash flows, access to capital, development projects, capital expenditures, results of operations and financial condition.
Our operations are subject to significant operational risks that could adversely affect our business, including the ability to smelt and refine, and our underground mining operations have higher risks than a surface mine.
We have assets in a variety of geographic locations, all of which exist in and around broader communities and environments. Maintaining the operational integrity and performance of our assets is crucial to protect our people, the environment and communities in which we operate. Our operations are very large in scale and, by their nature are subject to significant operational risks, some of which are outside of our control, and many of which are not covered fully, or in some cases even partially, by insurance. These operational risks, which could materially adversely affect our business, operating results and cash flows, include earthquakes, rainstorms, floods, landslides, wildfires and other natural disasters and extreme weather events; environmental hazards, including discharge of metals, concentrates, pollutants or hazardous chemicals; surface or underground fires; equipment failures; accidents, including in connection with mining equipment, milling equipment or conveyor systems, transportation of chemicals, explosives or other materials and in the transportation of employees and other individuals to and from sites (including where these services are provided by third parties such as vehicle and aircraft transport); wall failures and rock slides in our open-pit mines, and structural collapses of our underground mines or tailings impoundments; underground water and ore management; lower than expected ore grades or recovery rates; and seismic activity resulting from unexpected or difficult geological formations or conditions (whether in mineral or gaseous form).
For a discussion of risks specific to our tailings management, see the risk factors below relating to our management of waste rock and tailings, including our river transport system for tailings management in Indonesia.
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We are facing continued geotechnical challenges because of the older age of some of our mines and a trend toward mining deeper pits and more complex deposits. There can be no assurance that unanticipated geotechnical and hydrological conditions may not occur, nor whether these conditions may lead to events such as landslides and pit wall failures, or that such events will be detected in advance. Geotechnical instabilities can be difficult to predict and are often affected by risks and hazards outside of our control, such as seismic activity or extreme weather, which have in the past and may in the future lead to floods, mudslides, pit-wall instability and possibly even slippage of material, which has and may in the future require suspension of operations and impact operating results.
We also experience mining induced seismic activity, including landslides, from time to time in the Grasberg minerals district in addition to extreme weather. The mine site is in an active seismic area and has experienced earth tremors from time to time. In addition to the usual risks encountered in the mining industry, our Indonesia mining operations involve additional risks given their location in steep mountainous terrain in a remote area of Indonesia. These conditions have required us to overcome special engineering difficulties and develop extensive infrastructure facilities. The area also receives extreme rainfall, which has led to periodic floods and mudslides. We cannot predict whether weather-related or seismic events will occur in the future or the extent to which any such event would affect our operations.
Underground mining operations have unique risks that can be particularly dangerous, such as those associated with supporting the underground openings, a cave not propagating as anticipated, unplanned ground movement occurring from changes in stresses released in the surrounding rock, excessive water ingress and the presence of fine materials may also give rise to unplanned releases of material of varying properties and of water through drawbells or other openings. In September 2025, an unprecedented and unforeseeable mud rush incident occurred at the Grasberg Block Cave underground mine, which resulted in seven fatalities. Refer to the risk factor above and MD&A for further discussion of the September 2025 mud rush incident. In May 2013, the rock structure above the ceiling of an underground training facility at the Big Gossan in the Grasberg minerals district collapsed, which resulted in 28 fatalities and 10 injuries. While we have implemented and will continue to implement preventative measures and enhanced operating procedures, we cannot guarantee that any incidents will not occur in the future.
The occurrence of one or more of these operational risks in connection with our operations may result in the death of, or personal injury or illness to, our employees, other personnel or third parties, the loss of mining equipment, damage to or destruction of mineral properties or production facilities, significant repair costs, monetary losses, deferral or unanticipated fluctuations in production, extensive community disruption (including short- and long-term health and safety risks), loss of licenses, permits or necessary approvals to operate, loss of workforce confidence, loss of infrastructure and services, disruption to essential supplies or delivery of our products, environmental damage and potential legal liabilities, any of which may adversely affect our reputation, business, prospects, results of operations and financial position. Further, the impacts of any seriousincidents that occur may also be amplified if we fail to respond timely or in an appropriate manner.
In addition, we could also be subject to additional operational risks at our smelters and refineries, including those specific to PTFI. Any delay, suspension, loss of access, shutdown of affected facilities or limited availability and capacity related to these smelting and refinery facilities, including equipment or mechanical failures, fires, explosions, unanticipated or extended shutdowns, inability to sell certain by-products, lack of capacity to store certain by-products, extreme weather or natural disasters, social or political unrest or any major public health crisis, any of which may not be recognized as a force majeure event, may significantly impact our ability to export and sell our products, particularly in Indonesia even if alternative refineries or smelters outside of Indonesia are available, and could adversely impact our costs, revenues and results of operations or require us to revise our operating plans, including curtailing or modifying our mining and milling operations. As discussed above and in Note 10, smelting operations in Indonesia were temporarily suspended during fourth-quarter 2025 as a result of limited copper concentrate availability following the September 2025 mud rush incident.
We maintain insurance at amounts we believe to be reasonable to cover some of these risks and hazards; however, our insurance may not sufficiently cover losses from certain of these risks and hazards. There can be no assurance that such insurance will continue to be maintained or available at economically feasible premiums, that the proceeds of such insurance will be paid in a timely manner or that we will be adequately compensated for losses actually incurred, if at all. We may elect not to purchase insurance for certain risks because of the high premium costs associated with insuring such risk or for various other reasons. For example, we do not have coverage for certain environmental losses, including the legal liabilities associated with these risks. The lack of, or insufficiency of, insurance coverage could adversely affect our cash flows and overall profitability.
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Our management of waste rock and tailings are subject to significant environmental, safety and engineering challenges and risks that could adversely affect our business.
The waste rock (including overburden) and tailings produced in our mining operations represent our largest volume of mine waste material. Managing the volume of waste rock and tailings presents significant environmental, safety and engineering challenges and risks primarily relating to structural stability, geochemistry, water quality and dust generation. Management of this waste is regulated in the jurisdictions where we operate and our programs are designed to comply with applicable national, state and local laws, permits and approved environmental impact studies.
We maintain large stockpiles and tailings impoundments. Our leaching innovation initiatives include measures that are intended to enhance solution flow through our leach stockpiles, which may increase risks for solution spills or physical instability of such stockpiles. Tailings impoundments include large embankments that must be engineered, constructed and monitored to ensure structural stability and avoid structural collapse. Our tailings impoundments in arid areas must have effective programs to suppress fugitive dust emissions to meet regulatory requirements, which vary depending on location, and to limit potential impacts of dust emissions from our operations on surrounding communities and the environment. Additionally, we must effectively monitor, prevent and treat acid rock drainage at all of our operations. In Indonesia, we use a controlled riverine tailings management system, which presents other risks discussed in more detail in the risk factor below relating to the environmental challenges at our Indonesia mining operations.
As of December 31, 2025, we operated 15 active tailings storage facilities (13 in the U.S. and 2 in Peru), of which 10 have an upstream design and 5 have a centerline design. Additionally, we have one centerline tailing storage facility in development. We also manage 9 tailings storage facilities in the U.S. that are inactive or closed (8 with an upstream design, and 1 with a centerline design) and another 45 that are deemed “safely closed” according to the definition in the Tailings Standard. In 2025, we produced approximately 326 million metric tons of tailings globally. The failure of tailings storage facilities, other embankments or stockpiles at any of our mining operations could cause severe, and in some cases catastrophic, property and environmental damage and loss of life, as well as adverse effects on our business and reputation. Some of our tailings storage facilities are located in areas where a failure has the potential to impact individual dwellings, and at least one of our impoundments is in an area where a failure has the potential to impact nearby communities or mining infrastructure. There can be no assurance that a severe or catastrophicfailure of any of our facilities will not occur in the future. For further discussion regarding the company’s tailings management and stewardship program, including our implementation of the requirements of the Tailings Standard, refer to Items 1. and 2. “Business and Properties.”
Based on observations from tailings failures at unaffiliated mines and our risk assessment process, which assesses a range of potential risks to our tailings storage facilities, in addition to fatalities and severe personal, property and environmental damages, these events could result in limited or restricted access to mine sites, physical failures at sites (such as overtopping of an impoundment), suspension of operations, decrease in mineral reserves, legal liability, government investigations, additional regulations and restrictions on mining operations in response to any such failure, increased monitoring costs and production costs, increased insurance costs or costs associated with insufficiency of or inability to obtain insurance, increased costs and/or limited access to capital, remediation costs, inability to comply with any additional safety requirements or obtain necessary certifications, evacuation or relocation of communities or other emergency action, impacts on occupational health and safety, social risks, and other impacts, which could have a material adverse effect on our operations and financial position.
Our Indonesia mining operations are susceptible to difficult and costly environmental challenges, and future changes in Indonesia environmental laws could increase our costs.
Mining operations on the scale of our Indonesia operations involve significant environmental risks and challenges. Given the unique site-specific topographical, hydrological and geotechnical conditions of the project area, a major challenge is to dispose of the large volume of tailings we produce. In 2025, PTFI produced approximately 48 million metric tons of tailings. Our tailings management plan, which has been approved by the Indonesia government, uses an unnavigable part of a river in the highlands to transport the tailings and natural sediments from the mill in the highlands to an engineered tailings management area in the lowlands. Levees have been constructed along both sides of the lowlands tailings management area to act as containment structures to laterally contain the depositional footprint of the tailings and natural sediment within the approved tailings management area.
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Another major environmental challenge at PTFI is managing overburden stockpiles and other waste rock and conditions in the open pit. Overburden is rock that was previously moved aside in the Grasberg open pit mining process to reach the ore. In the presence of air, water and naturally occurring bacteria, some of this material can generate acid rock drainage (acidic water containing dissolved metals) that, if not properly managed, can adversely affect the environment or be costly to manage. There is no guarantee our actions to prevent and manage the quality of any discharge of impacted water will be successful. PTFI may modify its re-sloping, erosion control and water management plans in the future, which could lead to material increases in costs.
In addition, in the past, certain Grasberg overburden stockpiles experienced erosion over time that caused mineralized overburden material to enter into the lowlands tailings management area. This erosion affected the volume as well as the physical and chemical characteristics of the sediment material deposited in the lowlands tailings management area, which, if not properly managed, could result in environmental impacts. The underlying overburdenerosion and run-off are being managed and controlled through an extensive re-sloping and water management project which is ongoing, and PTFI has not experienced similar erosion issues since 2018.
PTFI maintains a tailings deposition management plan and environmental monitoring program which consider the presence of this potentially acid-forming overburden in the lowlands tailings management area. PTFI has expanded the scope of its environmental monitoring program which assesses potential environmental and human health impacts from overburden and tailings. As part of the expanded scope, in 2022 and 2023, PTFI assisted the Mimika local health authority (LHA) with broad-based community health surveys, which provided further data on an extensive range of community health issues. There were no impacts attributable to PTFI’s operations (inclusive of tailings and overburden) that were determined to be a priority focus of the LHA following the results of these assessments. During 2025, PTFI continued its routine assessments of surface waters, groundwaters, sediments and soils, dust and terrestrial and aquatic tissues.
In the past, the Indonesia government, stakeholders and other third parties have raised questions with respect to PTFI’s tailings management systems and plans. We continue to revisit studies for alternative tailings management options. Our Indonesia mining operations are remotely located in steep mountainous terrain and in an active seismic area, which also experiences extreme weather events. Independent environmental management expert audits have reaffirmed conclusions from previous studies that PTFI’s controlled riverine tailings management system represents the best alternative for tailings management given the volume of tailings produced and the site-specific conditions of the area.
Overtopping or failure of any of the PTFI tailings containment structures (levees or protection structures) induced by extreme weather events such as floods, a major seismic event or naturally occurring weak ground under the structures, are potential risks. The potential impacts from any such occurrence could vary significantly depending upon the specific location of the failure. Unanticipated structural failure of these structures in certain areas in the future could result in flooding of the nearby communities and related loss of lives and/or severe personal, property and environmental damages. Under certain conditions, a failure may necessitate evacuation or relocation of communities or other emergency action, financial assistance to the communities impacted, and remediation costs to repair and compensate for the social, cultural and economic impacts associated with such failure.
In addition, in the southern (estuary) portion of the approved tailings management area, modeling of sediment transport scenarios indicates that tailings have the potential to be deposited outside of the approved lateral levees in adjacent mangroves. PTFI has proposed additional extensions to the existing levees to the Indonesia regulators and is further evaluating the potential benefits and impacts. Indonesia regulators have further proposed a different strategy involving efforts to increase sediment retention through various methods as well as increase beneficial use of tailings. If the additional retention efforts are not successful, or if the permitting for these proposed protection structures is not reconsidered, any such depositional impacts outside of our existing approved footprint could impact the environment and communities. Refer to Items 1. and 2. “Business and Properties” for further discussion of our environmental obligations in Indonesia.
Managing these environmental challenges at our Indonesia operations could result in reputational harm, social unrest and increased costs that could be significant.
There can be no assurance that future changes in environmental laws or regulations affecting the mining industry in Indonesia will not be introduced or unexpectedly altered or repealed, or that new interpretations of existing Indonesia environmental laws and regulations will not be issued, which could have a significant impact on PTFI.
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Violence, civil and religious strife, and activism could result in loss of life and disrupt our operations.
Indonesia.
Indonesia has long faced separatist movements and civil and religious strife in a number of provinces. Several separatist groups have sought increased political independence for the western half of the island of New Guinea, which includes the province of Central Papua, where our Grasberg minerals district is located. In Central Papua, there have been attacks on civilians by separatists and conflicts between separatists and the Indonesia military and police. In addition, illegal miners have clashed with police who have attempted to move them away from our facilities. Social, economic and political instability in Central Papua could materially adversely affect us if it results in damage to our property or interruption of our Indonesia operations.
Shootings and other violentincidents have occurred within the PTFI project area and support areas, including along the road leading to our mining and milling operations, which in some instances have involved fatalities or injuries to our employees, contractors, government security personnel and civilians. The most recent incidents associated with the PTFI operations occurred in early 2026, and prior to that in 2021. In the most recent incident, a PTFI contractor was injured, along with two accompanying Indonesian military personnel, one of whom was fatallyinjured. In 2025, based on publicly available reports, we believe that there were more than 55 incidents of separatist violence, resulting in approximately 79 fatalities outside of the PTFI project area and support areas at the Grasberg minerals district unrelated to PTFI’s operations but within the province of Central Papua. Separatist security incidents, including shootings, attacks on civil infrastructure and arson, continue to occur in Central Papua and other areas near the PTFI project area. PTFI actively monitors security conditions and the occurrence of incidents both regionally and within the project and support areas.
The safety of our workforce is a criticalconcern, and PTFI continues to work with the Indonesia government to enhance security and address security-related issues within the PTFI project area and in support areas, as well as at PTFI’s downstream processing facilities. Although we have implemented measures and safeguards consistent with both international standards and our own internal standards relating to the use of force and respect for human rights, the implementation of these measures and safeguards does not guarantee that personnel, national police or other security forces will uphold these standards in every instance.
We are exposed to security risks relating to loss and theft of refined precious metals at the PMR. Any such loss or theft could lead to financial loss or a failure to satisfy our customer commitments, which could have an adverse impact on our reputation and business.
We cannot predict whether additional incidents will occur that could result in loss of life, or disruption or suspension of PTFI’s operations. If other disruptiveincidents occur, they could adversely affect our results of operations and financial condition.
South America.
South America countries have historically experienced periods of economic growth, as well as recession, periods of high inflation and general socio-economic and political instability.
In Peru, political uncertainty has created instability in the regulatory environment. Beginning in December 2022 and continuing in 2023, heightened tensions, protests and social unrest emerged in Peru following a change in the country’s political leadership, which temporarily resulted in delays in the transport of supplies, products and people at our Cerro Verde mine. During first-quarter 2023, Cerro Verde also operated at reduced rates from time to time until it resumed normal operations in March 2023. Other mining operations in the region temporarily halted mining activities as a result of the civil unrest. While demonstrations and road blockages subsided in 2023, the political situation in Peru remains complex, with its president being impeached in October 2025. In addition, the potential for civil unrest, including in relation to mining operations, and disruption of commerce and supply chains continues. Other operations in the region have encountered significant issues with trespassers, illegal miners and civil demonstrations that impact their operations, expansion projects, logistical supply and product transport. Such protests have occasionally been accompanied by acts of violence and property damage and continue intermittently in the region.
In Chile, despite the overwhelming electoral approval of a proposal to rewrite the constitution in a 2020 referendum, the product of the constitutional assembly was rejected by a majority of voters in 2022 and 2023. The political
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environment remains polarized following the national legislative elections, including the presidential election, held in Chile during 2025.
We cannot predict whether similar or more significant incidents of civil unrest or political instability will occur in the future in Peru or Chile. Although such civil unrest has not significantly impacted our results, similar events in the future could cause our South America operations to be materially impacted, in which case, we may not be able to meet our production and sales targets.
The occurrence of one or more unexpected events in the U.S., including civil unrest, domestic or foreign terrorism, and other acts of violence, could adversely affect our U.S. operations and financial performance.
Our operations, including future expansions or developments, depend on the availability of secure water supplies.
Our operations require physical availability and secure legal rights to water, and the increasing pressure on water sources requires us to consider both current and future conditions in our approach. We aim to balance our operational water requirements with those of the local communities, environment and ecosystems. We recognize that access to clean, safe and reliable water supply is vital to the health and livelihood of our host communities. Most of our U.S. and South America operations are in areas where competition for water supplies is significant. Continuous production at our operations and any future expansions or developments are dependent on many factors, including our ability to maintain our water rights and claims, and the continuing physical availability of the water supplies. Current and long-term water risks include those that arise from our operations and events that we do not control (such as extreme weather).
As discussed in Item 3. “Legal Proceedings,” in Arizona, where our operations use both surface water and groundwater, we are a participant in an active adjudication in which Arizona courts have been attempting, for 50 years, to quantify and prioritize surface water claims for the Gila River watershed, one of the state’s largest river systems. If we are not able to satisfactorilyresolve the issues being addressed in the adjudications, our water uses could be diminished or curtailed, and our operations and any future expansions at Morenci, Safford (including Lone Star) and Sierrita could be adversely affected unless we are able to acquire alternative water sources.
Water for our Cerro Verde operation in Peru comes from renewable sources through a series of storage reservoirs on the Rio Chili watershed that collects water primarily from seasonal precipitation and from wastewater collected from the city of Arequipa and treated at a wastewater treatment plant constructed by us. As a result of certain weather patterns, water shortages at our Cerro Verde operation are possible, which could impact our operations.
Water for our El Abra operation in Chile currently comes from the continued pumping of groundwater from the Salar de Ascotán aquifer. The agreement to pump from this aquifer is subject to continued monitoring through 2029 of the aquifer water levels and select flora species to ensure that environmentally sensitive areas are not impacted by our pumping, which if impacted could cause reductions in pumping to restore water levels and could have an adverse effect on production from El Abra. Our permit for pumping of groundwater will expire in 2029, and we anticipate filing applications to request an extension of the use of water from the Salar de Ascotán during 2026. Any renewal or provisional extension may be challenging. We are evaluating water infrastructure alternatives to provide options to extend existing operations and support a future expansion, while continuing to monitor Chile’s regulatory and fiscal matters, as well as trends in capital costs for similar projects. There can be no assurance that we will be able to execute such water infrastructure plans or obtain a new permit or provisional extension, which could have an adverse impact on our operations. For further discussion, see the risk factor above relating to the geopolitical, economic and social risks associated with our operations.
Although our operations currently have access to sufficient water sources to support current operational demands, as discussed above, the availability of additional supplies for potential future expansions or development will require additional investments and will take time to develop, if available. While we are taking actions to acquire additional back-up water supplies for current and future mining operations, such supplies may not be available at acceptable cost, or at all. As such, the loss of a water right or currently available water supply could force us to curtail operations or forceprematureclosures, and the inability to obtain future water supplies could prevent future expansions or developments, thereby increasing and/or accelerating costs or foregoing profitable operations.
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We typically have sufficient water for our Indonesia operations, but at times and for reasons out of our control, we may have too much or not enough. The PTFI project area receives considerable rainfall that makes it susceptible to periodic floods and mudslides, the nature and magnitude of which cannot be predicted. Conversely, the area has experienced, and may in the future experience, certain extended periods without rainfall, which can impact water availability at the milling operations.
Our information and operational technology systems have been and in the future may be adversely affected by cybersecurity events, disruptions, damage, failure and risks associated with implementation and integration.
Our industry has become increasingly supported by and dependent on digital technologies. Our strategy of operating large, long-lived, geographically diverse assets has been increasingly dependent on our ability to become fully integrated and highly automated. Many of our business and operational processes utilize traditional and emerging technology systems, including AI, to conduct day-to-day operations, improve safety and efficiency, and lower costs.
As our dependence on information systems, including those of our third-party service providers and vendors, grows, we have become more vulnerable to an increasing threat of continually evolving cybersecurity risks. In recent years, cybersecurity events have increased in frequency and magnitude and the methods used to gainunauthorized access change frequently, making it increasingly difficult for us to prevent cybersecurity incidents or detect and remediate incidents in a timely and effective manner. Attacks have included and may include, but are not limited to, installation of malicious software, phishing, ransomware, social engineering tactics and credential attacks, insider threats, denial of service attacks, unauthorized access to data and other advanced and sophisticated cybersecurity breaches and threats, including those that increasingly target critical operational technologies and process control networks and those that are increasingly using AI and machine learning and quantum computing. Such attacks may be perpetrated by a variety of bad actors, some of which may reside in jurisdictions where law enforcement measures to address such attacks are ineffective.
We have experienced targeted and non-targeted cybersecurity events in the past and may experience events of a similar nature, with potentially greater exposure, in the future.
Cybersecurity threats could subject us to manipulation or improper use of our systems and networks, production downtimes, loss of sales, communication interruption or other disruptions and delays to our operations or to the transportation of products or infrastructure utilized by our operations, unauthorized release of proprietary, commercially sensitive, confidential or otherwise protected information, a misappropriation or loss of funds, the corruption of data, significant health and safety consequences, physical destruction of assets, environmental damage, loss or theft of intellectual property, fines, penalties, litigation, regulatory or governmental investigation, liability under or termination of our contracts with third parties, damage to our reputation or financial losses from remedial actions, any of which could have a material adverse effect on our cash flows, results of operations and financial condition, and which in addition could adversely impact the effectiveness of our internal control over financial reporting. We do not maintain cyber risk insurance, and the lack of insurance coverage could adversely affect our cash flows and overall profitability in the event of a cybersecurity incident that has a material adverse effect on our business.
While cybersecurity events have not had a material impact on us, we can provide no assurance that we will not experience any such impact or additional interruptions to our operations in the future. Given the unpredictability of the timing and the evolving nature and scope of information and operational technology system disruptions, the various procedures and controls we use to monitor and protect against cybersecurity threats and to mitigate potential risks arising from such threats have not been effective in some instances and may not be sufficient in preventing future cybersecurity incidents. Further, as cybersecurity threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate vulnerabilities to cybersecurity threats.
We could also be adversely affected by system or network disruptions if new or upgraded information or operational technology systems are defective, not installed properly or not properly integrated into our operations. System modification failures could have a material adverse effect on our business, financial position and results of operations and could, if not successfully implemented, adversely impact the effectiveness of our internal control over financial reporting.
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Further, we increasingly depend on our information technology infrastructure for electronic communications among our operations, personnel, customers and suppliers around the world, including as a result of remote working and flexible working arrangements. These information technology systems, some of which are managed by third parties that we do not control, may be susceptible to damage, disruptions or shutdowns because of failures during the process of upgrading or replacing software, databases or components thereof, cutover activities in our restructuring and simplification initiatives, power outages, hardware failures, telecommunication failures, human errors, catastrophic events or other problems. Refer to Item 1C. “Cybersecurity” for further discussion on our cybersecurity governance, risk management and strategy.
Failure to successfully implement, advance or develop new technology systems and increased exposure to risks associated with the use of these systems may adversely affect our business.
Information and operational technology systems continue to evolve and, in order to remain competitive, we must implement, advance and develop new technologies in a timely, cost-effective and efficient manner. For example, we may develop and apply AI in decision support systems, material characterization, equipment reliability enhancement, mineral extraction optimization and remote/autonomous operation. We may also pursue strategic alliances, investments, partnerships or licensing arrangements with other companies in areas where we believe collaboration can produce technological and industry advancements, which involve special risks that may negatively impact us or our reputation. Such advancements may not achieve their intended objectives and may not perform as contemplated. We are continuing to incorporate new applications, technologies and data analytics into our leaching processes, and are pursuing opportunities to leverage new technologies and analytic tools in automation and operating practices. For further discussion regarding our leaching and technology innovation initiatives, see MD&A. Our failure to successfully implement, advance or develop new technologies, including our leaching and technology innovation initiatives, or meet our leaching targets may adversely affect our competitive position and results of operations. In addition, we utilize AI and other new technologies in our software, applications and technology platforms to enhance our capabilities in producing copper, improve business processes and respond to threats to our technology platforms. The use of AI may increase our exposure to cybersecurity risks and additional risks relating to the protection of data, including increased exposure of confidential or otherwise protected information to unauthorized recipients, which could result in liability under or termination of our contracts with third parties, misuse of our intellectual property or other unintended consequences, as discussed in more detail in the risk factor above.
Major public health crises may have an adverse impact on our business.
Pandemics, epidemics, widespread illness or other major public health crises could negatively impact the global economy and adversely affect our operations and business, including our ability to conduct business, demand for the commodities we produce and our profit margins. Actions taken by governmental authorities and third parties to contain and mitigate the risk of spread of any major public health crisis may negatively impact our business, including a disruption of or change to our operating plans. For example, in March 2020, we had to temporarily transition our Cerro Verde mine to care and maintenance status and adjust operations to prioritize critical activities in response to a decree issued by the Peru government relating to COVID-19.
Our business and results of operations could be adversely affected if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions or other restrictions, or if workplace entry and travel are restricted resulting in the delay of key personnel or external consultants accessing our sites. A major health crisis at any of our operating sites, and particularly at PTFI’s remote operating site, could disrupt or change our operating plans, which may have a material adverse effect on our business and results of operations.
Human capital risks
Labor disputes or labor unrest could disrupt our operations.
Our business is dependent on maintaining good relations with our workforce. A significant portion of our global employee population is covered by collective labor agreements with varying durations and expiration dates. Refer to Items 1. and 2. “Business and Properties” for further discussion regarding labor matters, and expiration dates of such agreements. As of December 31, 2025, approximately 28% of our global employee population was covered by collective labor agreements, and 11% of our global employee population was covered by agreements that are scheduled to expire during 2026 and continue to be negotiated.
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Labor agreements are negotiated on a periodic basis and may not be renewed on reasonably satisfactory terms to us or at all. If we do not successfully negotiate new collective labor agreements with our union employees, we may incur prolonged strikes and other work stoppages at our mining operations, which could adversely affect our financial condition and results of operations. Additionally, if we enter into a new labor agreement with any union that significantly increases our labor costs relative to our competitors, our ability to compete may be materially adversely affected.
We have in the past and could in the future experience labor disruptions such as work stoppages, work slowdowns, union organizing campaigns, strikes or lockouts that could adversely affect our operations. In December 2025, a group of employees who are members of one of the unions at our Cerro Verde operations, participated in a three-day strike action that was declared unfounded by the Peruvian Labor Ministry. Our Cerro Verde operations continued without significant disruption during the strike.
We cannot predict whether additional labor disruptions will occur. Significant reductions in productivity or protracted work stoppages at one or more of our operations could significantly reduce our production and sales volumes or disrupt operations, which could adversely affect our cash flows, results of operations and financial condition.
Our success depends on our ability to recruit, retain, develop and advance qualified personnel.
Our success is dependent on the contributions of our highly skilled and experienced workforce. Our business depends on our ability to recruit, retain, develop and advance a qualified workforce at all levels, including sufficient personnel to develop, implement and operate new technologies. Our ability to recruit qualified personnel is affected by the available pool of candidates with the training and skills necessary to fill the vacant positions, the impact on the labor supply because of general economic conditions and our ability to offer competitive compensation and benefit packages. We continued to face challenges in 2025 with a competitive and tight labor market, particularly with some technical trades in the U.S. If we fail to recruit, retain, develop and advance qualified personnel necessary for the efficient operation of our business globally or fail to maintain a safe environment, we could face labor challenges, which may result in, but not limited to, decreased profitability, decreases in productivity and efficiency, safety performance challenges, and the delay of current and potential development projects, any of which may have a material adverse effect on our performance. Refer to Items 1. and 2. “Business and Properties” for further discussion of our human capital management, including health and safety, and employee engagement, training and development.
Risks related to development projects and mineral reserves
Development projects are inherently risky and may require more capital and have lower economic returns than anticipated, and the development of our underground mines are also subject to other unique risks.
Mine development projects typically require a number of years and significant expenditures during the development phase before production is possible. There are many risks and uncertainties inherent in all development projects including, but not limited to, unexpected or difficult geological formations or conditions and environmental challenges, potential delays (including the ability and timeframe to obtain permits, or because of weather events, social or political unrest or any major public health crisis), cost overruns, availability of economic sources and reliable access to water, power and infrastructure, lower levels of production during ramp-up periods, shortages of materials or labor, construction defects, equipment breakdowns and injuries to persons and property, social acceptance and, in some cases, Indigenous and community consent for potential impacts, partner alignment and efficient and profitable operation of mature properties. Creating and maintaining an inventory of projects depends on many factors and although we devote significant time and resources to our project planning, approval and review processes, many of our development projects are highly complex and rely on factors that are outside of our control, which may cause the actual time and capital required to complete a development project and operating costs after completion to exceed our estimates, especially in periods of high inflation, or may result in changes or cancellations.
All of our copper and gold production in Indonesia comes from underground mining in the Grasberg minerals district. The development of our underground mines is subject to other unique risks including, but not limited to, underground fires or floods, ventilating harmful gases, fall-of-ground accidents, and seismic activity resulting from unexpected or difficult geological formations or conditions, which we experience from time to time in the Grasberg minerals district. While we anticipate taking all measures that we deem reasonable and prudent in connection with the development of our underground mines to safely manage production, there can be no assurance that these risks will not cause schedule delays, revised mine plans, injuries or death to persons, damage to property, or
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increased capital costs, any of which may have a material adverse impact on our cash flows, results of operations and financial condition. Refer to Items 1. and 2. “Business and Properties” and MD&A for further discussion of PTFI’s development of the Kucing Liar deposit in the Grasberg minerals district and our other development projects.
We may not be able to maintain or grow our mineral reserves.
Our existing mineral reserves will be depleted over time by production from our operations. Because our profits are primarily derived from our mining operations, our ability to replenish our mineral reserves is essential to our long-term success. Depleted mineral reserves can be replaced in several ways, including expanding known ore bodies, reducing operating costs that could extend the life of a mine by allowing us to cost-effectively process ore types that were previously considered uneconomic, investing in and advancing new technologies (such as our leaching innovation initiatives), locating new deposits or acquiring interests in mineral reserves from third parties.
Exploration is highly speculative in nature, involves many risks and uncertainties, requires substantial capital expenditures (which may differ significantly from those estimated) and, in some instances, advances in processing technology, and is frequently unsuccessful in discovering significant mineral resources since new, large, long-life deposits are increasingly scarce. Accordingly, our current or future exploration programs may not result in the discovery of additional deposits that can be produced profitably. Even if significant mineral resources are discovered, it will likely take many years from the initial phases of exploration until commencement of production, during which time the economic feasibility of production may change.
We may not be able to discover, enhance, develop or acquire mineral reserves in sufficient quantities to maintain or grow our current reserve levels, which could negatively affect our cash flows, results of operations and financial condition.
Estimates of mineral reserves and mineral resources are uncertain and the volume and grade of ore actually recovered may vary from our estimates.
Our estimates of mineral reserves and mineral resources have been prepared in accordance with the disclosure requirements of Subpart 1300 of SEC Regulation S-K. There are numerous uncertainties inherent in mineral estimates. Such estimates are, to a large extent, based on assumed long-term prices for the commodities we produce, primarily copper, gold and molybdenum, and interpretations of geologic data obtained from drill holes and other exploration techniques, which may not necessarily be indicative of future results. Our mineral estimates are based on the latest available geological and geotechnical studies. We conduct ongoing studies of our ore bodies to evaluate economic values and to manage risk. We revise our mine plans and estimates of recoverable proven and probable mineral reserves as required in accordance with the latest available studies. Geological assumptions about our mineral resources that are valid at the time of estimation may change significantly when new information becomes available.
Estimates of mineral reserves, or the cost at which we anticipate the mineral reserves will be recovered, are based on assumptions, such as metal prices and other economic inputs. Changes to such assumptions may require revisions to mineral reserve estimates which could affect our asset carrying values and may also negatively impact our future financial condition and results. Until mineral reserves are actually mined and processed, the quantity of ore and grades must be considered as an estimate only.
In addition, if the market prices for the commodities we produce decline from assumed levels, if production costs increase or recovery rates decrease, or if applicable laws and regulations are adversely changed, there can be no assurance that the indicated level of recovery will be realized or that mineral reserves can be mined or processed profitably. If we determine that certain of our estimated recoverable proven and probable mineral reserves have become uneconomic, this may ultimately lead to a reduction in our aggregate reported mineral reserves, which could have a material adverse effect on our business, financial condition and results of operations.
Additionally, the term “mineral resources” does not indicate recoverable proven and probable mineral reserves as defined by the SEC. Estimates of mineral resources are subject to further exploration and evaluation of development and operating costs, grades, recoveries and other material factors, and, therefore, are subject to considerable uncertainty. Mineral resources do not meet the threshold for mineral reserve modifying factors, such as engineering, legal and/or economic feasibility, that would allow for the conversion to mineral reserves. Accordingly, there can be no assurance that the estimated mineral resources not included in mineral reserves will become recoverable proven and probable mineral reserves.
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Regulatory, environmental and social risks
The costs of compliance with environmental, health and safety laws and regulations applicable to our operations may constrain existing operations or expansion opportunities. Related permit and other approval requirements may delay or result in a suspension of our operations.
Our operations are subject to extensive and complex environmental laws and regulations governing the generation, storage, treatment, transportation and disposal of hazardous substances; solid waste disposal; air emissions; wastewater discharges; remediation, restoration and reclamation of environmental contamination, including mine closures and reclamation; protection of endangered and threatened species and designation of critical habitats; and other related matters. These laws and regulations are subject to change and to changing interpretation by governmental agencies and other bodies vested with broad supervisory authority. As a mining company, compliance with environmental, health and safety laws and regulations is an integral and costly part of our business. In addition, we must obtain regulatory permits and other approvals to start, continue and expand operations, which could be challenged causing delays or possible denial of necessary permits and other approvals.
Certain laws and regulations may expose us to joint and several liability for environmental damages caused by our operations, or by previous owners or operators of properties we acquired or are currently operating or at sites where we previously sent materials for processing, recycling or disposal. As discussed in more detail in the risk factor below relating to costs incurred for remediating environmental conditions on our properties that are no longer in operation, we have substantial obligations for environmental remediation on properties previously owned or operated by Freeport Minerals Corporation (FMC) and certain of its affiliates. Noncompliance with these laws and regulations could result in material penalties or other liabilities. In addition, compliance with these laws may from time to time result in delays in or changes to our development or expansion plans. Compliance with these laws and regulations imposes substantial costs, which could increase over time because of evolving regulatory oversight, adoption of stringent environmental standards, and other factors.
New or revised environmental regulatory requirements are frequently proposed, many of which have resulted and may in the future result in substantially increased costs for our business, including those regarding financial obligations. Regulations have been considered at various governmental levels to increase financial responsibility requirements for mine closure and reclamation. Adoption of such environmental regulations or more stringent application of existing regulations may materially increase our costs, threaten certain operating activities and constrain our expansion opportunities. In addition, there can be no assurance that restrictions relating to conservation will not have an adverse impact on expansion of our operations or not result in delays in project development, or constraints on exploration or operations in impacted areas.
We have incurred and expect to incur environmental capital expenditures and other environmental costs (including our joint venture partners’ shares) to comply with applicable environmental laws and regulations that affect our operations. The timing and amounts of estimated payments could change as a result of changes in regulatory requirements, changes in scope and costs of reclamation activities, the settlement of environmental matters and the rate at which actual spending occurs on continuing matters.
We are also subject to extensive regulation of worker health and safety. Our mines are inspected on a regular basis by government regulators who may issue citations and orders when they believe a violation has occurred under applicable mining regulations. If inspections result in an allegedviolation, we may be subject to fines and penalties and, in instances of alleged significant violations, our mining operations or industrial facilities could be subject to temporary or extended closures.
Many other governmental bodies regulate other aspects of our operations, and our failure to comply with these legal requirements can result in substantial penalties. In addition, new laws, regulations, orders and directives, including executive orders, or changes to or new interpretations of existing laws and regulations by courts or regulatory authorities occur regularly, but are difficult to predict. Changes arising from shifts in political administrations or regimes are also difficult to predict. Any such variations could negatively impact the mining sector, including our business, substantially increase costs to achieve compliance or otherwise have a material adverse effect on our cash flows, results of operations and financial condition.
For further discussion regarding the various regulations affecting us, see Items 1. and 2. “Business and Properties.”
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We incur significant costs for remediating environmental conditions on or related to properties in the U.S. that have not been operated in many years.
FMC and its subsidiaries, and many of their affiliates and predecessor companies, have been involved in exploration, mining, milling, smelting and manufacturing in the U.S. for more than a century. Activities that occurred in the late 19th century and the 20th century prior to the advent of modern environmental laws generally were not subject to environmental regulation and were conducted before U.S. industrial companies fully understood the long-term effects of their operations on the surrounding environment.
Companies like FMC are legally responsible for remediating hazardous substances released into the environment on or from properties owned or operated by them as well as properties where they arranged for disposal of such substances, irrespective of when the release into the environment occurred or who caused it. That liability is often asserted on a joint and several basis with other prior and subsequent owners, operators and arrangers, meaning that each owner or operator of the property is, and each arranger may be, held fully responsible for the remediation, although in many cases some or all of the other responsible parties no longer exist, do not have the financial ability to respond or cannot be found. As a result, because of our acquisition of FMC, many of the subsidiary companies we now own are potentially responsible for a wide variety of environmental remediation projects throughout the U.S., and we expect to spend substantial sums annually for many years to address those remediation issues. We are also subject to claims where the release of hazardous substances is alleged to have resulted in injury, destruction or loss of natural resources.
At December 31, 2025, we had more than 80 active remediation projects in 23 U.S. states. In addition, FMC and certain affiliates and predecessor companies were parties to agreements relating to the transfer of businesses or properties that contained indemnification provisions relating to environmental matters, and from time to time these provisions become the source of claimsagainst us.
Our environmental obligation estimates are primarily based upon our current knowledge and understanding of:
• Complex scientific and historical facts and circumstances that in many cases occurred many decades ago;
• Assumptions regarding the nature, extent and duration of remediation activities that we will be required to undertake and the estimated costs of those remediation activities, which are subject to varying interpretations; and
• Interpretation of the requirements that are imposed on us by existing laws and regulations and, in some cases, the clarification of uncertain regulatory requirements that could materially affect our environmental obligation estimates.
Significant adjustments to these estimates are likely to occur in the future as additional information becomes available. The actual environmental costs may exceed our current and future accruals for these costs, and any such changes could be material.
In addition, remediation standards imposed by EPA and state environmental agencies have generally become more stringent over time and may become even more stringent in the future. Imposition of more stringent remediation standards, particularly for arsenic and lead in soils, poses a risk that additional remediation work could be required at our active remediation sites and at sites that we have already remediated to the satisfaction of the responsible governmental agencies, and may increase the risk of toxic tort litigation.
Refer to Items 1. and 2. “Business and Properties” and Note 10 for further discussion of our environmental obligations.
We face complex and changing regulatory and stakeholder and other third-party expectations relating to our climate and energy transition plans, which may adversely affect our business. Further, we may not be able to timely or successfully transition from fossil fuel sources for our significant energy needs, which may result in reputational damage.
Our operations require significant energy, much of which is currently from fossil fuel sources and is obtained from third parties under long-term contracts. Energy represented 15% of our copper mine site operating costs in 2025, and based on currently available information and projected operations, is expected to approximate 17% in 2026. The principal sources of energy consumption at our mining operations are: diesel fuel, which powers mine trucks
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and other transportation equipment; purchased electricity, which powers core facilities and certain on-site metal processing operations; and coal and natural gas, which provide electricity at certain operations.
Existing, proposed and future governmental conventions, laws, rules, regulations, policies and standards as well as existing, proposed and future voluntary disclosure standards and frameworks (both in the U.S. and internationally), including those related to changing climate conditions, carbon taxes, carbon markets or greenhouse gas (GHG) emissions, may in the future add significantly to our operating costs, limit or modify our operations, impact the competitiveness of the commodities we produce, and require more resources to comply and remediate in response. For additional information refer to Items 1. and 2. “Business and Properties.”
In response to changing climate conditions and societal or stakeholder demands for action, we are advancing 2030 GHG emissions reduction targets and a 2050 net zero aspiration, each of which will result in additional costs to us, the totality of which we cannot currently estimate with accuracy. In addition, there can be no assurance that we will be able to achieve any current or future GHG emissions targets or aspirations or that such targets or aspirations will not be adjusted in the future.
While we strive to include more renewable power among the energy sources for our mining operations, as a commercial consumer of power, our ability to reduce our GHG emissions associated with our power consumption demand is largely dependent upon the mix of our suppliers and locally available renewable energy resources at our various sites, including our ability to successfully develop renewable energy projects and negotiate power purchase agreements. The transition to renewable and other energy sources could, among other things, increase our capital expenditures, and operating and energy costs, depending on the scope, magnitude and timing of increased regulation of fossil-fuel based energy production, including GHG emissions, as well as the availability of alternative energy sources.
In certain aspects of our operations, our ability to reduce our GHG emissions is directly dependent on the actions of third parties and technological solutions and innovation, and our ability to make significant, rapid changes in our GHG emissions in response to potential future regulations may be limited. For example, our diesel-fueled haul trucks are a significant contributor to GHG emissions at our U.S. and South America operations. We are evaluating options for transitioning to more energy efficient haul trucks, including electrification, but reduction of emissions from such haul trucks will depend upon the development and availability of commercially viable alternative-fueled mining equipment by our third-party suppliers. At our remote mining operations in Indonesia, PTFI owns and operates a coal-fired power plant and expects to advance plans to transition its existing energy source from coal to natural gas following a deferral of certain projects after the September 2025 mud rush incident. Our ability to transition to commercially viable alternative sources of energy across our operations globally will depend on, among other things, additional studies, technological considerations, or permit or other approvals. Even if we do implement new technologies, our stakeholders and other third parties may not be satisfied with our approach to reducing our GHG emissions. For further discussion, see the risk factor below relating to the scrutiny and evolving expectations from stakeholders and other third parties, including creditors, with respect to our sustainability-related practices, performance and disclosures.
The physical impacts of changing climate conditions may adversely affect our mining operations, workforce, communities, biodiversity and ecosystems, supply chains and customers, which may result in increased costs.
We recognize that our operations, workforce, communities, biodiversity and ecosystems, supply chains and customers may be exposed to changes in the frequency, intensity and/or duration of intense storms, drought, flooding (including from sea level rise at our coastal operations), wildfire and other extreme weather events and patterns (such as extreme heat). The physical impacts associated with changing climate conditions could amplify existing operational and environmental risks at our operating sites, such as water availability, tailings management, flooding and stormwater management, and infrastructure disruptions. Periodically, we have experienced disruptions to our remote mining operations in Indonesia as a result of flooding and debris flow from heavy rain and landslides.
The potential physical impacts of changing climate conditions vary by operation based on particular geographic circumstances. For example, at many of our mine sites, anticipated changes in local precipitation regimes could result in shorter-duration, higher-intensity storm events, and the potential for less precipitation overall. We could face increased operational costs associated with managing additional volumes of storm water during more intense future events, including supply disruption, delays, damage to or inaccessibility of our facilities and increased pricing of consumables and components we purchase. In addition, the potential for overall decreases in precipitation could
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affect the availability of water needed for our operations, leading to increased operating costs, or in extreme cases, disruptions to our mining operations. For further discussion regarding risks relating to availability of water and operational risks inherent in mining, see related risk factors above.
Scrutiny, action and evolving expectations from stakeholders and other third parties with respect to our sustainability-related practices, performance, commitments and disclosures may impact our reputation, increase our costs and impact our access to capital or business strategy.
Stakeholder and other third-party scrutiny related to our sustainability-related practices, commitments, performance and disclosures continues to evolve. While we have adopted various sustainability-related policies and programs, it is possible that stakeholders and other third parties might not be satisfied or even disagree with our practices, goals, initiatives, commitments, performance and/or disclosures, or the speed of their adoption, implementation and measurable success. If we do not meet our stakeholders’ and other third parties’ evolving expectations, including any failure or perceived failure to achieve our stated goals and targets or industry standards or any allegations that our stated goals or targets should be altered, our reputation, competitiveness, access to and cost of capital, business strategy and stock price could be negatively impacted, and legal or regulatory proceedings could be brought against us.
Our ability to attract capital could be adversely impacted if institutional investors, investment funds, creditors and other influential investors or investor advocacy groups incorporate more stringent sustainability-related considerations, or are critical of or opposed to such considerations, as a part of their investments and lending decisions and recommendations. In addition, organizations that provide information to investors and financial institutions on sustainability-related performance and related matters have developed data collection and ratings processes for evaluating companies, which are used by some investors to inform their investment and voting decisions. Many investors also have created their own proprietary ratings that inform their investment and voting decisions. Unfavorable ratings or assessment of our sustainability-related practices, including our compliance with certain voluntary disclosure standards and frameworks, may lead to negative investor sentiment toward us, which could have a negative impact on our stock price and our access to and cost of capital. Similarly, many financial institutions have incorporated sustainability-related ratings or assessments into their credit risk assessments, screening companies on such practices and performance when making lending decisions. If we are unable to meet the lending criteria set by our creditors or are required to take certain remediation steps to satisfy such criteria, our access to capital on terms we find favorable may be limited and our costs may increase.
Our public disclosures may reflect goals, aspirations, commitments, cost estimates and other expectations and assumptions, including over long timeframes, which are necessarily uncertain and may not be realized. Further, the voluntary disclosure standards or frameworks we choose to align with are evolving and may change over time and our interpretation of such disclosure standards and frameworks may differ from those of others, either of which may result in a lack of consistent or meaningful comparative data from period to period and/or significant revisions to our goals and aspirations or reported progress in achieving such goals and aspirations.
Maintaining adequate systems and processes in place to comply with the various tracking and disclosure obligations, or to respond to business partners or other affiliates in our value chain that have requested, or may in the future request, sustainability-related data or information from us to meet their disclosure obligations, will require management’s time and expense. If we do not adapt to or comply with stakeholder or other third parties’ expectations, including with respect to evolving sustainability-related disclosure standards and frameworks, or if we are perceived to have not responded appropriately, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and our business, financial condition, cost of capital and/or stock price could be materially adversely affected.
In addition, our customers, commodity markets, end users and other third parties may require that we implement certain additional procedures or standards before they will start or continue to do business with us, which could lead to preferential buying of our competitors’ products based on perceived sustainability-related practices. Further, being associated with activities by business partners or other affiliates that have or are perceived to have individual or cumulative adverse environmental or social impacts could negatively affect our reputation and impose additional costs.
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Failure or the perceived failure to manage our relationships with the communities and/or Indigenous Peoples where we operate or that are near our operations could harm our reputation and social license to operate.
Our relationships with the communities and/or Indigenous Peoples where we operate or that are adjacent to or near our operations are critical to the long-term success of our existing operations and the development of any future projects. There is ongoing and increasing stakeholder and other third-party concern relating to a company’s social license to operate and the actual, potential and perceived effects of mining activities on the environment and on communities impacted by such activities. We may engage in activities, such as exploration, production, construction or expansion of our operations that have or are perceived to have adverse impacts on the local communities and their relevant stakeholders, society as a whole, Indigenous Peoples, cultural heritage, human rights and the environment, including land management and associated biodiversity, among other things. For example, our operations may take place on or adjacent to Indigenous Peoples’ ancestral lands, and such Indigenous Peoples may assert rights to such lands. Further, we may be required or expected by our stakeholders and other third parties to consult with and/or obtain consent from Indigenous Peoples for potential significant impacts. We also may be required to demonstrate our capacity to protect ecosystems through improved practices and technological solutions to maintain our social license to operate, or to obtain such social license to operate for future development projects or expansions.
In addition, our assets are generally long-lived, and stakeholders’ perceptions and expectations can change over the life of the mine. Changes in the aspirations and expectations of local communities and/or Indigenous Peoples where we operate, with respect to our employee health and safety performance and our contributions to infrastructure, community development, environmental management, including land management and associated biodiversity, and other factors could affect our social license to operate and reputation, and could lead to delays and/or increased costs if expansions or new projects are blocked either temporarily or for extended periods. To the extent local governments, including Tribal authorities, lack resources, preparedness or technical capability, they may be less able to address infrastructure and environmental risks. This could increase stakeholder expectations that we provide additional support in surrounding communities, which could increase our costs, potential liabilities and reputational risks. Failure to effectively engage with communities on an ongoing basis, including the withdrawal of consent or support of Indigenous Peoples, other stakeholders or other third parties, could adversely impact our business, damage our reputation and/or result in loss of rights to explore, operate or develop our projects.
Risks related to our common stock
Our holding company structure may impact our ability to service our debt, declare dividends, and repurchase shares and debt.
We are a holding company with no material assets other than the capital stock and intercompany receivables of our subsidiaries. As a result, our ability to service our indebtedness, pay dividends, and repurchase shares and debt is dependent on the generation of cash flows by our subsidiaries and their ability to make such cash available to us, by dividend, loan, debt repayment or otherwise. Our subsidiaries do not have any obligation to make funds available to us to service our indebtedness, pay dividends, or repurchase shares and debt. Dividends from subsidiaries that are not wholly owned are shared with other equity owners. Cash at our international operations is also typically subject to foreign withholding taxes upon repatriation into the U.S.
In addition, our subsidiaries may not be able to, or be permitted to, make distributions to us or repay loans to us, to enable us to service our indebtedness, pay dividends, or repurchase shares and debt. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal restrictions, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. Certain of our subsidiaries are parties to credit agreements that restrict their ability to make distributions or loan repayments to us if such subsidiary is in default under such agreements, or to transfer substantially all of the assets of such subsidiary without the consent of the lenders. Our rights to participate in any distribution of our subsidiaries’ assets upon their liquidation, reorganization or insolvency would generally be subject to the prior claims of the subsidiaries’ creditors, including any trade creditors.
As more fully described in Note 8, during 2021, our Board of Directors (Board) adopted a performance-based payout framework, which currently includes base and variable dividends and a share repurchase program. Our ability to continue to pay dividends (base or variable) and the timing and amount of any share repurchases is at the discretion of our Board and management, respectively, and is subject to a number of factors, including not
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exceeding our net debt target, capital availability, our financial results, cash requirements, global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by our Board or management, as applicable. Repurchases of our common stock under our repurchase program are discretionary up to the Board-approved limit, and our share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion. Our dividend payments and share repurchases may change, and there can be no assurance that we will continue to declare dividends or repurchase shares at all or in any particular amounts. A reduction or suspension in our dividend payments or share repurchases could have a negative effect on the price of our common stock.
Anti-takeover provisions in our charter documents and Delaware law may make an acquisition of us more difficult.
Anti-takeover provisions in our charter documents and Delaware law may make an acquisition of us more difficult. These provisions may discourage potential takeover attempts, discourage bids for our common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, our common stock. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board. Refer to Exhibit 4.1 for further discussion of our anti-takeover provisions.
Further, our By-Laws provide to the fullest extent permitted by law that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, the U.S. District Court for the District of Delaware) will be the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim that is based upon a violation of a duty by any of our current or former directors, officers, employees or stockholders in such capacity, (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (DGCL) or to which the DGCL confers jurisdiction upon the Court of Chancery of the State of Delaware, (iv) action asserting a claim governed by the internal affairs doctrine, or (v) action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. The exclusive forum provision may increase costs to bring a claim, discourageclaims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us or our directors, officers and other employees. Alternatively, if a court were to find the exclusive forum provision contained in our By-Laws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. The exclusive forum provision in our By-Laws will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws including the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or the respective rules and regulations promulgated thereunder.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which may prohibit large stockholders from consummating a merger with, or acquisition of, us.
These provisions may deter an acquisition of us that might otherwise be attractive to our stockholders.
