Freeport-McMoRan Inc.: 10-K Risk Factor Changes

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. In addition, we must obtain regulatory permits and approvals to start, continue and expand operations. As a mining company, compliance with environmental, health and safety laws and regulations is an integral and costly part of our business. We conduct our operations in a manner that aims to protect public health and the environment. We believe our operations follow applicable laws and regulations in all material respects, and we have internal company policies that in some instances go beyond compliance with such laws and regulations.

At December 31, 2025, we had $2.0 billion recorded in our consolidated balance sheet for environmental obligations and $3.8 billion recorded for asset retirement obligations. We incurred 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 totaling $0.5 billion in 2025, $0.6 billion in 2024 and $0.5 billion in 2023, and we expect to incur approximately $0.7 billion in 2026. 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.

For information about environmental laws and regulations at our global operations, including legal proceedings and related costs, and reclamation matters, see below as well as Item 1A. “Risk Factors,” Item 3 “Legal Proceedings” and Notes 1, 10 and 11.

United States. There are a number of federal and state environmental laws and regulations that apply to our properties and may affect our operations. Laws such as the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA) and similar state laws 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. Other federal and comparable state environmental laws have affected, or could in the future affect, us including, but not limited to, the Resource Conservation and Recovery Act, the Clean Air Act and the National Environmental Policy Act. We have substantial obligations for environmental remediation on mining properties previously owned or operated by FMC and certain of its affiliates.

Our operations are subject to state regulations governing mine closures and reclamation. Closure plans are required to be updated every six years in Arizona and every five years in New Mexico and Colorado. We are also 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. Most of our financial assurance obligations are imposed by state laws that vary significantly by jurisdiction, depending on how each state regulates land use and groundwater quality. The U.S. Environmental Protection Agency (EPA) and state agencies may also require financial assurance for investigation and remediation actions that are required under settlements of enforcement actions under CERCLA or similar state laws.

Regulations have been, and may in the future be, considered at various governmental levels to increase financial responsibility requirements both for mine closure and reclamation.

Our U.S. mining operations are also subject to regulations under the Endangered Species Act (ESA) that are intended to protect species listed by the U.S. Department of the Interior’s Fish & Wildlife Service (FWS) as endangered or threatened, along with critical habitat designated by FWS for these listed species. The ESA may affect the ability of landowners, including us, to obtain federal permits or authorizations needed for expansion of our operations, and may also affect our ability to obtain, retain or deliver water to some operations.

New or revised environmental regulatory requirements are frequently proposed, many of which may result in substantially increased costs for our business, including those discussed above and in Item 1A. “Risk Factors.” For example, in 2024, EPA amended its rule establishing standards for hazardous air pollutant emissions from primary copper smelters (Copper Smelter Rule). This final rule would impact our Miami, Arizona smelter operations, which process a significant portion of the copper concentrate produced by our U.S. copper mines. However, in March 2025, EPA announced that it will reconsider, among others, the Copper Smelter Rule, and in October 2025, a presidential proclamation exempted the Miami smelter from the compliance deadlines in the Copper Smelter Rule for two years. EPA’s reconsideration of the Copper Smelter Rule continues and upon its proposal, we will evaluate processes and equipment modifications and the costs involved, which could be significant. Our appeal of EPA’s Copper Smelter Rule to the Court of Appeals for the District of Columbia Circuit remains suspended pending resolution of several petitions for reconsideration to EPA filed by us and other parties.

EPA and state agencies continue to consider regulations for man-made organic compounds that could be present in soil, groundwater and surface water at our existing and former operations. These regulations may include drinking water standards, hazardous waste requirements, and hazardous substance designations for Perfluorooctanesulfonic acid (PFOS) and Perfluorooctanoic acid (PFOA). For example, in September 2025, EPA announced that it intends to retain the hazardous substance designation for PFOS and PFOA and will initiate future rulemaking to establish a uniform framework governing designation of hazardous substances under CERCLA. In addition, in January 2025, EPA published its final toxicological assessment for inorganic arsenic, which may be used by federal and state regulators to revise regulatory standards under various environmental programs, including water quality standards and cleanup levels at remediation sites, and in October 2025, EPA announced updated guidance and processes concerning the cleanup of lead in residential soils. We are working with federal and state agencies to understand possible ramifications to our projects from these developments and will monitor any additional regulatory guidance, rulemaking and other regulatory activities.

In November 2025, EPA and the U.S. Army Corps of Engineers proposed to revise the final rule amending the revised definition of the “waters of the United States” issued in 2023. Subject to future court decisions (including additional successful legal challenges) and additional administrative rulemaking and related guidance, which may further affect the scope of the final rule, we may need federal authorization under the Clean Water Act (CWA) to expand some of our operations. Further, even where federal authorization is not otherwise required, some states have adopted or are developing programs to require permits for discharges to waters that are no longer subject to the CWA including discharges of dredged or fill material.

Peru. The General Environmental Law (Law No. 28611) establishes the main environmental guidelines and principles applicable in Peru. Pursuant to the General Environmental Law, the Ministry of Energy and Mines (MINEM) issued national environmental regulations, which have gradually replaced prior guidelines governing governmental agencies’ environmental competencies. The Environmental Evaluation and Oversight Agency has the authority to inspect mining operations and fine companies that fail to comply with prescribed environmental regulations and their approved environmental assessments.

Cerro Verde is subject to regulation under the Mine Closure Law administered by MINEM. Under the closure regulations, mines must submit a closure plan every five years that includes the reclamation methods, closure cost estimates, methods of control and verification, closure and post-closure plans, and financial assurance. In compliance with the requirement for five-year updates, Cerro Verde submitted its updated closure plan and cost estimates and received approval from MINEM in December 2023.

The Cerro Verde mine has developed and continues to implement detailed, comprehensive mine waste and tailings management programs to meet the applicable Peru waste regulations and our internal environmental management practices. These programs incorporate commitments included in the Environmental and Social Impact Studies and the engineer of record designs for the specific cases of tailings storage facilities and certain leach pad stockpiles. For any future projects, including at existing facilities, Cerro Verde also may be required by MINEM or the National Environmental Certification Service for Sustainable Investments to incur additional costs to comply with the requirements of new regulations that provide for the adequacy of the transportation and final disposal of tailings.

Chile. El Abra is subject to regulation under the Mine Closure Law administered by the Chile Mining and Geology Agency. In compliance with the requirement for five-year updates, El Abra submitted an updated plan with closure cost estimates in August 2025. The El Abra mine has developed and continues to implement detailed, comprehensive mine waste programs to meet the applicable Chilean waste regulations and our internal environmental management practices. These programs incorporate commitments included in the Environmental and Social Impact Studies, and the engineer of record designs for the specific cases of certain leach pad stockpiles.

Indonesia. PTFI holds multiple permits from national, provincial, and regency regulatory agencies, including groundwater use permits, effluent and air discharge permits, solid and hazardous waste storage and management permits and protection of forest borrow-to-use permits. Where permits have specific terms, renewal applications are made to the relevant regulatory authority as required, prior to the end of the permit term.

In December 2018, Indonesia’s former Ministry of Environment and Forestry (MOEF) issued a revised environmental permit to PTFI to address certain operational activities that it alleged were inconsistent with earlier studies. PTFI and the MOEF also established a framework known as the Tailings Management Roadmap for continuous improvement in environmental practices and tailings management at PTFI’s Grasberg operations. PTFI completed the Tailings Management Roadmap commitments for the 2018 through 2024 period. The current phase of the Tailings Management Roadmap, approved by MOEF in 2024, extends from 2025 through 2030 and builds upon activities from the initial period. In 2025, PTFI continued to work with MOEF on the primary Tailings Management Roadmap objectives, including (1) the reduction of non-tailings sediment entering the tailings management area, (2) the increased retention, flow control and distribution of tailings within the tailings management area and (3) the pursuit of additional beneficial uses of tailings in infrastructure and other projects.

In 2020, PTFI initiated a new environmental impact analysis (called an Analisis Mengenai Dampak Lingkungan or AMDAL) in preparation for the proposed activities associated with the transition from Grasberg surface mine to underground operations, and PTFI completed the approval requirements of the AMDAL covering all support activities for the underground transition in 2023. In December 2023, PTFI received technical approval for its tailings management activities. In 2024, the MOEF approved an addendum to the AMDAL that covers activities associated with the conversion of PTFI’s power plant from coal-fired to liquefied natural gas (LNG). Permitting related to the conversion to LNG continues to progress.

In accordance with Indonesia law, in 2019, PTFI completed and Indonesia regulators approved an updated mine closure plan to reflect Grasberg minerals district production operations until 2041. In the future, additional approval will be required for the diversion of the Aghawagon/Otomona River out of the tailings management area at the end of the mine life. In 2022, PTFI received approval on its reclamation plan through 2026. PTFI has provided all required mine closure and reclamation guarantees in the form of time deposits and bank guarantees with state-owned banks in accordance with prevailing regulations.

Climate

In many of the jurisdictions in which we or our customers operate, governmental bodies and governmental officials have enacted or proposed legislation, regulations and policies in response to the potential impacts of climate change. For example, carbon tax legislation has been adopted in jurisdictions where we operate, including Indonesia, Chile and the European Union (EU). PTFI’s coal-fired power plant was not within the scope of Indonesia’s carbon emissions trading system in 2025. PTFI continues to monitor the regulation. Refer to “Operations – Indonesia” below for discussion of PTFI’s plans to transition its existing energy source from coal to natural gas.

Further, certain jurisdictions, including the EU and California, have introduced or passed regulations that may require corporate climate-related reporting as specified by the individual regulations.

While it is not possible to reasonably estimate the nature, extent, scope, timing and cost or other impacts of any current or future carbon pricing mechanisms, mandatory disclosures, other climate change regulatory programs or future legislative action that may be enacted, we anticipate that we will dedicate more resources and incur more costs to comply and remediate in response to legislative or regulatory changes.

For information about the risks posed by the potential impacts of climate change and related regulations, refer to Item 1A. “Risk Factors.”