Ladies and gentlemen, thank you for standing by. Welcome to the Freeport McMoran Second Quarter Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer.
Please go ahead, ma'am.
Thank you, and good morning, everyone. Welcome to our conference call. Earlier this morning, we reported our 2nd quarter 2020 operating and financial results and a copy of the press release and slides are available on our website at fcx.com. Our conference call today is being broadcast live on the Internet and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call and a replay of the webcast will be available on our website later today.
Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include forward looking statements and actual results may differ materially. I'd like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our 2019 Form 10 ks and our quarterly report on Form 10 Q, each filed with the SEC as updated by FCX's subsequent filings with the SEC. On the call today is Richard Atterson, Vice Chairman and Chief Executive Officer Red Conger is on the call as well as Mark Johnson, Steve Higgins, Rick Coleman and Mike Kendrick. I'll start by briefly summarizing the financial results and then turn the call over to Richard, who will be going through the presentation materials. As usual, after our prepared remarks, we'll open the call up for questions.
Today, FCX reported net income attributable to common stock of $53,000,000 or $0.03 per share in the Q2 of 2020. The results included net credits of 9,000,000 dollars or roughly $0.01 per share, primarily associated with favorable metals inventory adjustments and an income tax credit and those were mostly offset by COVID-nineteen related costs and employee separation programs. Adjusted net income after these special items totaled $44,000,000 or $0.03 per share in the 2nd quarter. Our adjusted earnings before interest, taxes and depreciation for the 2nd quarter totaled $754,000,000 That was above our July 6 estimate of approximately $650,000,000 primarily reflecting slightly higher sales volumes in the quarter and lower costs than our prior estimates. A reconciliation of our EBITDA is available on Slide 38 of our slide deck.
Hopper sales during the Q2 were £759,000,000 that was about 10% higher than our April 2020 estimate and that reflected better than anticipated production rates in Indonesia and North America and the timing of shipments from Cerro Verde. Our 2nd quarter gold sales of 184,000 ounces were 12% higher than our April 2020 estimate, reflecting the strong performance in Indonesia. The average realized copper price during the quarter for copper was $2.55 per pound that was below the year ago quarterly average of $2.75 per pound and gold realized prices averaged $17.49 per ounce during the 2nd quarter above last year's Q2 of $13.51 per ounce. Consolidated average unit net cash costs of average $1.47 per pound in the Q2 of 2020 that was lower than the year ago quarter and also lower than our April 2020 estimate of $1.63 per pound, reflecting the higher copper and gold sales volumes and strong execution of our cost reduction initiatives. We generated strong cash flows during the quarter totaling $491,000,000 in cash flows from operations and funded capital expenditures totaling $527,000,000 during the period.
We ended the quarter with consolidated debt totaling $9,900,000,000 and consolidated cash totaled $1,500,000,000 with strong liquidity and no borrowings under our $3,500,000,000 revolving credit facility. Now I'd like to turn the call over to Richard who will be referring to our slide presentation materials. Richard, please go ahead.
Okay. Thank you, Kathleen, and good morning to each of you and we appreciate you participating in our call today. Hope you and your families are staying well and safe. This has been a very trying time over the past 4 months. Work has been intense.
Life is challenging. I'm pleased that our team has shown the discipline to persevere. We face lots of problems, but I want to say that this quarterly report as we previewed earlier is really a good news for our Freeport team and the great work we've been doing. We'll refer to the slides and go into Slide 3. At Freeport, we are of course continuing to prioritize the health and safety of our workers and we're also working hard to support communities where we operate as we serve our customers with their ongoing requirements for copper.
In late April, we laid out a comprehensive plan to share with our stakeholders at that time to describe how we were going to manage the COVID-nineteen health and economic issues, keep our people safe and how we were going to safeguard our business to protect the value of our assets for what we are convinced will be a really positive long term future. Since that time over the past 3 months, I've been extremely proud of our Freeport team for the way they responded to this plan and this crisis in a very short period, making tough decisions during the height of this unprecedented crisis And more importantly, how our team is executing on these plans safely with a spirit of commitment and cooperation. We have had a real sense of urgency in implementing these plans. We moved very quickly to reduce costs and capital spending And you can see this in our 2nd quarter results in our annual guidance that we're providing today. Our management of healthcare worker healthcare to date has been effective.
Pleased that in addition to manage these health issues, our team has also achieved strong safety performance during the quarter and that's particularly gratifying because of our concerns as people might be distracted, but that's not been the case. We have been able to produce safely our products using strict operating protocols, distancing, enhancing protective equipment for our workers, sanitation and particularly significant investments in testing and tracing isolated infected people and treating those that are sick. We've actually had only a handful of people to be seriously sick and the vast majority of the people that have encountered the disease today have recovered. Many have not had no symptoms, but that's not deterred us from going forward with this program to protect their safety. Our workforce is adhering to global health standards.
We're making sure everyone focuses on their own personal safety and the well-being of people around them. We are continuing and enhancing and responding to these protocols as we go forward. Our global team of workers is of course critical to our company's success and we recognize that and I personally appreciate the dedication, commitment and their cooperation during this challenging time. Other than government imposed restrictions in Cerro Verde, there have only been very limited impacts from the pandemic at our operating at our operating sites. But knowing just how fast this virus can spread, we remain diligent and steadfast in protecting people.
As I said in April, we laid out our plans to address our business and boost liquidity in what was then a very weak and volatile market environment. As a reminder, we laid out our plan to reduce costs in capital spending in 2020 by over $2,000,000,000 to the reduction of about 15% of our planned copper production totaling about £400,000,000 and aggressive management of all costs including G and A and exploration. Our execution of these plan has been very effective. You see that in our 2nd quarter results, which are better than the revised forecast. Our sales volume exceeded our April guidance by 10% or copper 12% by gold, all achieved very safely in the face of this global crisis.
Our team maintained focus, drive and came together to meet the challenges as we've done in the past at Freeport. Copper prices have improved dramatically during the quarter. Our plan was based in April on a $2.30 per pound copper price and we had contingencies for much lower prices. Even though prices are higher, we are staying the course, remain disciplined in executing our cost containment plans. We're convinced this is prudent in light of the uncertainties and dynamic nature of the ongoing pandemic.
We're not letting down our guard at all or taking any victory laps. We are more focused than ever as an organization to drive long term values that we see in our assets. In a few seconds, I'll be reporting more in detail on the progress our team has made at Grasberg. The team there continues to shine in its operations and it's really key to our long term strategy. We are on schedule in ramping up to deliver large low cost sustainable production volume of copper and gold for years to come.
The team has consistently been meeting or beating forecasts. That's been our situation for several quarters now and I'm pleased to report that we're on track with our ramp up plan. And I also want to especially acknowledge the Cerro Verde team for their Peruvian government and local authorities. We Peruvian government and the local authorities. We developed a safe plan for return to operations at Cerro Verde.
By June, we were operating at 80% of our 2019 rates. We're continuing to increase productivity with protocols that protect workers in the communities surrounding Arequipa. The Lone Star project in Eastern Arizona advanced during the quarter on schedule and that is now being commissioned. We also continue to build flexibility in our balance sheet through extending maturities at attractive rates. We're working with our bank group to provide enhanced downside protection to maintain liquidity through our bank credit facility.
All of this has effectively safeguarded our business, allowed us to navigate this period of uncertainty and retain the massive upside we see in our asset that is now increasingly close to being in front of us. Our company benefits from a major way from having an extraordinary long life and durable reserve base and resource base, premier position in copper, which has a compelling long term outlook and significant exposure to gold markets. I'm confident that continued strong execution will make these assets even more valuable to our shareholders in the future. Now turning to Slide 4, we talk about our commitment to our communities. This has been longstanding unwavering.
Communities are home for our workers and their families. They're essential to our long term success. Across the goal, we've supported communities during this time with much needed medical supplies, food, monetary support. In many respects, dealing with COVID is bringing us closer to communities bringing us closer to communities where we operate to fight a common foe. Our people are stepping up to help communities to meet this growing needs.
And as a company, we're continuing to find ways to find to make a difference. On Slide 5, we talk about our commitment to all stakeholders. Our focus is on our shareholders of course, but equally on our workers' communities and environment that and this has been embedded in Freeport's culture for many years. We cannot be successful in generating long term value for shareholders unless we address sustainability issues appropriately effective. We learned that many years ago.
While this commitment is being highlighted through our actions in response to the COVID pandemic, In our recent support, published annual report of sustainability, which you can find on our website, summarizes all of our programs in this important area. I'm pleased to note we've recently published our first climate report, which details our efforts to date and our plans to address climate related risk and opportunities to go forward. And of course, copper is going to play a key role broadly in dealing with carbon reduction as the world focuses more on climate issues. As I mentioned and as shown on Slide 6, copper prices have recovered sharply from the lows in March. We are now back to the point where they were earlier in the year at the height of the crisis.
Speaking candidly, this recovery came sooner and stronger than we and others anticipated. Similarly to what we saw in 2,009, 2010. China's economy is recovering strongly and steadily from the Q1 low, being led by its industrial sector, infrastructure spending and the government's actions to stimulate the Chinese economy. Around the world, ongoing monetary and physical stimulus is helping offset the negative economic downturn from COVID. We're beginning to see a restart in the global economies.
We're also seeing some positive signs as businesses reopen in the Western world, particularly with automobile production beginning to improve. Supplies of copper during this COVID pandemic have been affected. Both mine supply and scrap availability are lower. Notably, inventories have remained low and have actually moved even lower in recent months. Now this is very notable because it's not typical of past commodity downturns.
Typically in downturns inventories rise and then have to be worked over worked off when recovery occurs. Currently low inventories are a good omen for copper as it positions the metal for material gains as economic activity rebounds. Now having said this, WIF report are cognizant of the risk of current uncertainties. We will continue to operate our business prudently until there is clarity. As economies around the world recover and improve, copper will be a major benefit and prices are still well below what is needed to incentivize investments in new projects, which results in a tight market as we go forward.
Slide 11, we talk we show how to become clearly and more widely acknowledged that copper's importance in the global economy will be key to achieving decarbonization initiatives that will require greater intensity for the use of copper. Copper is strongly supported by fundamentals as an essential metal the overall global economy. And as the economy recovers and the world grows, more copper will be needed. But momentum is growing in efforts to reduce carbon around the world. I'm personally convinced this is going to be a mandate for all companies and governments, mandated by people as we go forward.
From electric vehicles and charging stations to 5 gs and other technical applications, all of this is driven by electronics and electronics require copper. Copper is essentially not only in times when the economy is growing, but also times like these when healthcare, water and food supply, communication and technology critically important. Telecommunications, digital technologies, cloud applications have never been more important than in today's world. The current pandemic is bringing to light what copper can achieve improving and go what copper can achieve in improving global health. Studies have demonstrated that copper can destroy viruses like COVID-nineteen, use in healthcare equipment, facilities, public places will undoubtedly grow significantly.
Our company Freeport is foremost in copper. Copper is widely considered the best positioned major commodity from a supply demand standpoint and Freeport will be a major beneficiary of these trends. Now beginning on Slide 8, I'll give you a brief update on our operations and projects. At Cerro Verde, its production was impacted during the quarter by the government order which restricted operating rates for Cerro Verde and other mines in Peru. Our Cerro Verde team is doing terrific work in working with the government and our workforce and implementing protocols to demonstrate to the government and our workers that we can operate safely.
During the quarter, we managed to increase rates from about a third of capacity to about 80% of 2019 levels. Our current plans assume we operate at about 350,000 tons per day through the mill for the balance of the year. We will continuously monitor conditions in the region and work to increase rates over time. We have demonstrated in the past that the modern concentrator complex at Cerro Verde, the largest in the world copper industry can produce at rates over 400,000 metric tons per day. Cerro Verde has been a large contributor to the local economy, one of the largest employers in the region has a bright long term future.
Cerro Verde is simply a great long term asset for Freeport. Now for the good stuff. At Grasberg, I'm very pleased to report of the positive progress on our underground ramp up. For several quarters now, our team has consistently been meeting or beating expectation. And this quarter's progress is particularly noteworthy in light of doing this with having to manage the impact of the pandemic.
Combined production from our 2 major mines, the Grasberg Block Cave Deep MLZ mine averaged nearly 55,000 tons of ore per day. This is ahead of our forecast and almost 50% above the Q1 of this year. By the end of the quarter, we were producing 70,000 tons ore per day containing high grades of copper and gold and we expect to exit 2020 at 95,000 tons per day. We added 46 new drawbells during the quarter. These are for the rock funnels that are used to collect ore simultaneously, which adds scale.
We now have 260 drawbell locations and growing these infrastructures in place. What we're doing now is basic block cave mining, advancing the cave fronts, building drawbells and commencing production. On Slide 9, we show a new chart this quarter to illustrate the pace of our underground production ramp up. The annualized run rate in the Q2, this is really notable, is now at about close to 50% of the ultimate goal of producing an average of £1,550,000,000 of copper and 1,600,000 ounces of gold from the underground ore bodies. This is triple what we achieved a year ago.
As indicated in the graph, we expect to average about 70% of the annual targeted run rate by the Q4 of this year and by the end of 2021 be it 90% of the targeted run rates. We expect to continue to add new drawbells to allow us to increase production. Basically, we'll now continue to do what we now have been doing over the last several quarters. Pulling this all down, it's straightforward that all of this is achievable because of the more than 15 years we've been investing in this program. Making the decision to continue this investment during our negotiations with the Indonesian government contract.
The investments we made in development infrastructure, the technical expertise of our team in managing Block Cave and a social license we have earned in Grasberg position us over the many years we've been there. We are now positioned for achieving the success that we've been pointing to for such a long period of time. Look, we know better than anybody in the world the risk inherent in block cave mining and their issues that we will face. But the progress to date demonstrates validity and our confidence, we've gone a long way in de risking the long term plan. We recently achieved a major milestone, which was expected.
The Grasberg Block Cave has now intersected the massive Grasberg Oban Pit. This is a milestone. It was also a situation that we had to be prepared to manage because it involves certain unknowns. I'm gratified to say that Mark Johnson and his team are dealing with this and we don't foresee this as being a problem. And now the massive Grasberg open pit will literally crumble into the block cave mine we're developing.
The value creation from this transformation is truly massive. Notably, the gold benefit of Grasberg production has been and will be a major benefit with combined rates combined with rates of high grades of copper. At full production, Grasberg mine is the largest gold mine even though the gold is a byproduct of the copper operations. The high grades of copper combined with this gold component make Grasberg one of the mining industry's truly most fabulous aspect in its history. As gold prices approximate $1800 an ounce, revenues from gold are projected to completely offset the total cost of production at Grasberg.
EBITDA from this operation would average $4,500,000,000 to $5,000,000,000 a year at copper and gold prices. Really want to say and emphasize that our partnership with the of Indonesia remains strong and I would say grow stronger every day. We're now fully aligned in our mutual objectives of creating values for all stakeholders. And what a great much improved situation it is for all of us to be focused on developing and operating this asset and not to be sidetracked by dealing with contract issues as we were for so long. Can't say enough about how pleased I am with the agreement we reached in December 2018 and how it's being operating.
I want to say as indicated in our April report, we continue to experience delays with the development of the proposed new smelter in the Grusik area of Eastern Java. We're continuing to do front end planning and site work to certain degree, but COVID is a real serious problem in the Gresick area and it is delaying progress with this project, with workers and with contractors. We are continuing our discussions with the government regarding our request for a year's delay in completing the project. We are also engaged in discussing with partners and representatives of the government alternative scenarios that would be mutually beneficial to the government and to PTFI. These matters are currently under consideration and we'll keep you informed of what happens with this.
There's nothing easy about this project we're doing. It takes a world class team in terms of competency with years of experience, strong track record of success. This is a unique asset in a unique physical setting. We're meeting this challenge. We met the challenge of dealing with the unexpected seismic events at the Deep MLZ mine with a hydraulic fracking solution that is now working and is proving to be very effective.
We are confident about our team's ability to meet these challenges and confidence going forward that the biggest risks we face are behind us. Slide 9 shows illustrates what I've been talking about in terms of the progress that we're making towards getting to our long term goal, which we will subsequently reach by the end of just next year, 18 months from now. Recall, many of you recall how we were talking about dealing with this 15 years ago and now we're 18 months away. As I said, in terms of targeted production, we're at about 50% way there in terms of throughput from our 2 major mines. We're a third of the way there and moving forward.
Slide 10 covered the smelter, which I've talked about. Slide 11, we talk about our Lone Star Mine in Eastern Arizona. This is the mine that is most of you know that's directly adjacent to the Safford mine where we're using available production facilities as the sapro mine ages and has availability for capacity. It's just across the mountain ridge from Morenci in an area of the world that we're very well familiar with and very well accepted. Our progress at Lone Star was excellent in the quarter.
Commissioning work has begun. We are ramping up placement of ore a newly constructed leach pad at Safford. The pre stripping we undertook to explore the ore is substantially behind us now and we're setting up further production phase to begin this quarter in Q3. Project capital of 8 $25,000,000 is largely behind us, expected to be a bit lower than the original budget. Initial project forecasted at £200,000,000 of copper annually.
We're evaluating exciting opportunities to increase production over time with low capital. This is a tremendous resource with great expansion opportunities. But for now, we're focused on optimizing the initial project. We'll turn to major expansions of Lone Star when market conditions warrant. Over the long term, this asset will be a significant future cornerstone asset for Freeport in the United States in our outlook.
I want to point out the United States has major advantages for mining investment compared with other countries around the world in general. For our company, there are no taxes in the for our U. S. Investments for many, many years to come. We pay no royalties because we own lands and feet.
Energy costs are lower. We have a flexible workforce with no unions. We have now have an improved regulatory framework. Freeport has achieved through hard work, community and government support for our businesses and in the United States benefits from a strong rule of law. Slide 12, we summarize the work we've been talking about over the past year that our company has been doing with automation.
We continue to leverage the technology tools we've developed to unlock bottlenecks, use machine learning, drive to have our best operating performance every hour of every day. We have reduced the budget for this initiative, the spending budget for this initiative, but our teams continue to progress the work we started in 2018 2019 using internal resources with minimal capital investment. We continue to be encouraged by the power of these 2 and the results to generate results we've generated to date. And I can say the enthusiasm of our team for this initiative is very high. Now pulling this all together on Slide 13, you will see that we're on a path to double our EBITDA from 2020 levels as we go forward.
Execution of these plans now well underway will allow us to grow copper volumes by over 20% in 2021, gold volumes by 75%, reduce our net unit cost by over 20% and significantly expand our margins and cash flows. Assuming an average of $2.70 copper for 2020, this takes into account the 1st year actual average and $2.85 copper for the balance of the year, EBITDA would approximate $3,400,000,000 This expands to $6,000,000,000 to $7,000,000,000 per year at $2.75 to $3 copper. Our gold revenues are expected to approximate 2,700,000,000 dollars per year at $1800,000,000 gold. So you can see the very positive exposure we have to gold prices. Through our decisive actions announced in April for 2020, we have protected the downside while we retain the growth in cash flows for 2021 and beyond.
That was the objective of the whole exercise. This combination of growing volumes with the potential has the potential to coincide with the rising copper prices to enable us to strengthen our balance sheet and then return to the day when we can provide significant cash returns to our shareholders. We at Freeport have all worked so hard to position our company for this opportunity and is particularly gratifying now to see this firmly within our line of sight. Slide 14, I'm so proud of our organization and what we refer to internally as the Freeport Edge. Our management team has extensive experience in managing tough market environments.
Leadership teams across our company are seasoned and battle hardened. They have been effective and successful in past downturns. Each crisis is different, but in each of our past experiences, Freeport as a company has come out stronger. We have a management structure and a team that is collaborative, experienced and decisive. We never cut corners on important issues involving worker safety, environmental obligations, responsibilities to our communities and commitments to governments.
We keep a long term focus on our license to operate around the world that we have worked so hard to earn. We've shown that we can adjust to market conditions quickly. We've done this on multiple occasions and we're doing it now. We develop contingency plans for further actions required to take this on a site by site basis. Value orientation is real hallmark of this Freeport organization.
Freeport is foam, moist and copper in the industry and copper is a great place to be. Freeport's portfolio of assets are large and high quality. We are an established industry leader by developing and operating mines that are among the largest in the world. Our assets are long live and durable with embedded options for reserve and resource growth. We have strong franchises in the USA, South America and Indonesia.
We have industry leading technical capabilities through a strong track record of project execution demonstrated over many years. We've earned the trust and respect of our partners, our customers, our suppliers, financial markets, most importantly, our workers, communities and host companies where we operate. Really important that our block caving experience in our company is one of the most extensive and longstanding in the history of the global mining industry. We've been successfully operating block cave mines in Indonesia since early 1980s and we have an important molybdenum block caving operation in Colorado at our Henderson mine. This experience and capabilities and competency is critically important as we tradition Grasberg with the largest block cabling operation in the world and I can tell you it's highly valued by our Indonesian partners.
Our experience in battle tested management has demonstrated the capabilities to perform in good times and in bads. We are confident in our ability to deliver these plans safely and efficiently. Before turning the presentation back to Kathleen, I want to close by sincerely thanking all of our Freeport people. They inspire me every day. I want to recognize them for their strength and resiliency, their dedication and performance.
I'm personally proud to be part of this team over all these years. I can tell you we're all motivated and committed to persevering and achieving success for all of our stakeholders. Kathleen?
Great. Thanks, Richard. And I'll just briefly review our financial outlook beginning on Slide 17 and then we'll take your questions. On Slide 17, we're summarizing our sales outlook for 2020 through 2022. As Richard indicated, our global team is performing at a high level.
We've increased our 2020 sales outlook by about £60,000,000 of copper and 50,000 ounces of gold, reflecting the strong second quarter performance. As reflected in the charts, our sales volumes estimates are expected to grow by over 20% in 2021 and 30% in 2022 compared to 2020 levels. Notably, volumes in 2022 are expected to increase by nearly £1,000,000,000 of copper from 2020 levels. This reflects the projected addition of volumes from Grasberg as we move toward design capacity and the increased Cerro Verde volumes as we continue to restore levels. Our gold volumes, as I said, in 2020 are slightly above our prior estimates and are similar to the guidance that we provided for 2021 2022.
For Moly, we've adjusted the sales outlook slightly to better match our supply with current market conditions. We show on the next slide, Slide 18, our volumes by quarter. And as you'll see, we're expecting a strong second half with sales increasing throughout the year. And you'll note by the Q4, we're very close to our 2021 run rate for annual volumes. Our teams remain very focused on executing the plan safely and finishing the year strong.
Turning to cost on the next slide, Slide 19. You can see we moved very quickly in March April to adjust our cost structure. We modified our mine plans to reduce mining rates and to reduce higher cost production and we successfully implemented a series of cost savings initiatives to drive long term benefits. As Richard mentioned, in addition to the operating cost reductions, we also took steps to reduce overhead and exploration costs and those initiatives were also successfully implemented during the Q2. We reduced our North American mining rates in the second quarter by about 25% compared to the year ago quarter.
We also reduced our contract labor significantly and our team stepped up internal team stepped up to fill in the gaps. We continue to effectively implement the cost containment programs that have been underway in Indonesia. And as a result of these combined initiatives, our unit cash costs declined from $1.90 per pound on a net unit cost basis in the first quarter to $1.47 per pound in the second quarter. This was over 10% better than our April forecast. We're continuing to manage all costs very carefully and expect our net unit cash costs to trend lower in the second half of the year and into 2021 as we increase volumes at a very low incremental cost.
Our current forecast incorporates current market conditions for energy prices, currency rates and other input costs. These input costs have increased somewhat from our April forecast, but this has been offset by improved gold prices. So we're continuing to expect our net unit cash cost for the year to be roughly $1.53 that's similar to the average cost we estimate of $1.55 in April. And in 2021, the average is expected to decline to below $1.20 per pound. With the rising volumes and declining cash costs, we expect our margins and cash flows to expand in the second half of the year.
As you look at Slide 20, this provides the EBITDA and cash flow sensitivities and shows the significant cash flow generation that we expect from the business, bringing in the additional volumes into 2021 and 2022 and beyond. As you'll see, if we assume gold prices flat at $1800 per ounce and molybdenum flat at $7 per pound, we would generate between $6,000,000,000 $8,000,000,000 of annual EBITDA at copper prices ranging between $2.75 per pound $3.25 per pound. Operating cash flows, which are reflected at the bottom of the chart, would range between $4,000,000,000 $5,000,000,000 at these price levels. This provides significant amount of cash flow to fund our capital expenditures and provides excess cash flows for further balance sheet improvement and returns to shareholders. We're all very focused on this.
We're very close to getting there as you'll see from the results we expect in the Q4 of this year. And much of the capital that was required to generate this result has already been spent to achieve this and we'll continue to maintain our focus on delivering these results. On Slide 21, we present the capital spending plans. We'll continue to manage the capital plans in line with the revised estimates we laid out in April. As a reminder, we reduced our 2020 capital spending by about $800,000,000 and we're tracking very well against those plans.
The bulk of the $2,000,000,000 capital budget for 2020 is relates to the Grasberg underground development, which will pay back quickly as we reach capacity rates. As Richard indicated, the spending for Lone Star in 2020 is largely behind us and we'll begin to generate cash flow from that operation. We have adjusted slightly the 2021 capital budget down from $2,300,000,000 to 2,200,000,000 dollars That was originally estimated at the beginning of the year to total $2,400,000,000 And we're presenting our 2022 estimates. And as you'll see, the spending at Grasberg will begin to decline and decline after 2022 as well. We're going to continue to manage our capital spending levels very carefully.
We'll remain very disciplined in carrying out our revised operating plans. Turning to our financial and liquidity position. You'll see we had strong liquidity at the end of June, totaling $5,000,000,000 and our financial position is strong. We've taken steps to protect the balance sheet and liquidity and we undertook a series of capital markets transactions over the last 12 months to extend out our debt maturity profile and provide flexibility. We also worked with our banks and achieved an amendment to our credit facility during the second quarter, which provides substantial flexibility and gives us access to the liquidity under the bank credit facility.
We show our net debt at the end of June of $8,400,000,000 That's debt of just under $10,000,000,000 net of our cash position of $1,500,000,000 And that equates to about 2.5 times of the estimated 2020 EBITDA. Notably, that relates if you look at 2021 EBITDA, the leverage is 1.4 times. If we were to apply the 2021 projected excess cash flow to net debt reduction, we'd have $5,300,000,000 of net debt at the end of 2021 or less than one time the 2021 EBITDA. Our uses of excess cash will be considered by the Board. There's a strong commitment to maintaining a strong balance sheet to drive shareholder returns over the long term and our Board will consider financial policy as we go forward.
But we show at the bottom of the chart the average duration of our debt, which is currently just under 11 years. And as you can see, we've built significant flexibility with a maturity schedule that is very attractive profile over the next few years. Regarding financial policy, as we've covered throughout this call, we remain focused on safeguarding our people and our business maintaining strong liquidity and balance sheet strength as we manage through uncertainty during the pandemic. As previously reported, our Board has indicated that it does not expect to declare dividends in 2020, but this will be evaluated on a regular basis. And as we successfully execute these plans and enter 2021, we expect to be in a much stronger position with increased cash flows, enhanced flexibility to consider shareholder returns.
So that's just a summary of our quarter and outlook. And now operator, we'd like to take questions.
Ladies and gentlemen, we will now begin the question and answer session. Our first question will come from the line of David Gagliano with BMO Capital Markets.
Thanks for taking my questions. Covered a lot of it in the prepared remarks, but I did just want to try and probe a little bit more on the capital return policy. Obviously, strong free cash flow generation expected over the 6 quarters, net debt metrics below 1x. Is there a target of average leverage metrics over the cycle? And from a timing perspective when should investors start thinking about getting some of that cash back?
So Dave, we've always approached those questions, not from the standpoint of developing any particular financial metrics, but assessing commodity markets cash flows and where we stand. We will want to reduce our debt from the current levels. We were doing that on a track to do that before COVID hit. And so as these cash flows recover and Kathleen talks about capital spending going down, we will have much higher volumes and the prospects for higher copper prices will have opportunities in the relative near term beginning in 'twenty by the end of 2021 to achieve that goal of reducing debt and going forward. Now I want to compliment Kathleen and her team for the actions that have been taken over the past 10 months or so.
We've had 3 bond offerings now that have been very successful at rates that are really attractive considering the fact that we're just beyond being investment grade still. We expect someday to get back to investment grade, but now we spread out our maturities. We've worked with flexibility with the bank group, so we can achieve all that. So I can't give you anything other than if this world unfolds like we hope it will and expect it to the very near future we're going to be able to return to paying dividends. And looking at the possibility of buying stock back depending on how the equity market reacts to our improved situation.
I quite frankly expect the equity market to react positively in a significant way.
Okay. Thanks for that. And somewhat related on the Indonesian smelter, first of all, I'm assuming that the cash flow numbers that are those projected net debt numbers do not include anything for the smelter, any CapEx
for the
smelter. Okay.
That's correct.
Okay. And then in the press release
But let me just say, I know you understand this Dave, because you followed us so closely over the years. But to be clear to everyone else, the smelter, if we go forward with the current plan, and as I said, that's under discussion, we'll be financed by PTFI, where we have a 49% equity interest. But because of our shareholders agreement with the government of Indonesia and the state owned company Mind ID, we consolidate. So we have a 49% interest. We financed by that entity, and but it will show up as consolidated debt because we consolidate PTFI, which is really good for the way we present our financial statements.
Okay, that's helpful. Then just really quickly the related question there on the Indonesian smelter. The press release does like other alternatives in terms of deferring schedule for the projects as well as other alternatives. Can you touch a little bit more on what those other alternatives might be?
One of the positive things about this is these considerations within the Indonesian government are being led by the minister and the Ministry of State Owned Enterprises, whereas in the past we had to deal with that on our own. We have aligned interest with the state owned enterprises and a number of alternatives are being considered, which would be alternatives to building the smelter as presently contemplated. It's a complicated political situation, it goes without saying, but the economic benefits to the government are really strong if we were to pursue other alternatives that would require significantly less capital from PT FI.
Okay, that's helpful. Thanks very much.
Thanks, Dave.
Your next question comes from the line of Carlos De Alba with Morgan
the the ramp up in Indonesian on the ground operations. I appreciate and congratulations on achieving the targets and being on the right track to deliver results there. I just have a question on Exhibit on Slide 35. The open drawbells on a cumulative blasted basis were declined a little bit from the last quarter presentation. So it's a little bit less in 2020, 2021 2022 in the DMLC.
And for the GVC, it is lower in 20202021, slightly higher in 2022. So I appreciate that this may be too specific of a question, but given that this is probably the most important aspect of repo going forward. I just wanted to get some clarifications as to what drove that device in the forecast. Thank you.
Yes. This is Kathleen. There were just minor revisions to the Deep MLZ and GBC drawbells. And you can see it was at the end of 2021, we had 213 for Deep MLZ and 322 and those have been reduced by 3 each. It's not been anything significant and just slight timing differences by the end of 2022 in deep MLZ, we're just slightly below.
But it doesn't change the ore extraction levels and it's pretty much the same plan that we've been on.
Understood. Thank you very much for the time. Good luck.
I'll just say, this is a as I mentioned earlier, this is a complicated operation. Mark Johnson is on the call and nobody knows that better than him. So they're going to be ups and downs and adjustments and so forth. That's part of our everyday life out there. But just step back and look at the big picture of what we set out to do and what we're doing and we have confidence that over time we'll do it.
But having said that, there will be things that we'll have to deal with as we had in the past. So you'll see adjustments like this occur from time to time.
All right. Understood, Richard. Thank you very much for the color.
Okay.
Your next question will come from the line of Alex Hacking with Citi.
Yes, good morning. Thanks, Richard and Kathleen. I just wanted to ask around the production guidance. In the last quarter, in the teeth of the COVID crisis and copper prices extremely low, you cut your production guidance for this year and in particular next year where you took a couple of £100,000,000 out of South America. Is that something that gets revisited if copper prices are sustained at these levels?
Or are those kind of revised mine plans locked in now? Thank you.
Well, they are revised mine plans that we're following and we are not we're tweaking, but we're not making any major adjustments to those until we have clarity in this market situation. But as clarity occurs, the plans will be adjusted. The resources are there. Some of this the cut production was lower margin production and as prices increased, it becomes profitable again. So there will be timing impacts as to how it ramps up and so forth.
So it'll be part of our future. But Alex, as you know all too well, this is not a turn on a spigot, turn off a spigot thing. You ratchet back, it has impacts to ramp it back up, take some time. Thank you.
Our next question will come from the line of Chris Lefebena with Jefferies.
Hey, good morning, Richard, Kathleen. Thank you for taking my question. For me, the most impressive data point in this earnings release was the unit cost performance in the Americas, especially on a site production delivery cost basis where you had very substantial reductions from the Q1 to Q2. I suppose that's a function of the changes to your operating plans. My question relates to the guidance.
So if you look at your unit cost guidance for 2020, in particular for South America, it implies that say production delivery costs will rise in the second half of the year and I'm wondering why that might be. And I suppose related to that is Cerro Verde production. I think in last quarter, you had guided to second half twenty twenty mill rate of 400,000 tons per day. And in the press release today or in the presentation today, you're guiding to 350,000 tons per day. So I'm wondering if there is some kind of cost increase that we should expect for Cerro Verde in the second half of the year.
I would have thought that with the mill rate going up from the run rate in the second quarter to the second half of the year, unit cost might actually fall further, but it does not appear to be the case. So just if you can give us some clarity as to what exactly is going on with that cost outlook for the second half of the year in South America in particular?
Yes. The main change in the second half compared to the Q2 in South America relates to increasing the Cerro Verde mining rate. And during the Q2, the mining rate was lower than what we expect. In order to get the mill rate up on a sustained basis, we'll have to begin increasing the mining rate. So that's what that reflects in the second half.
But to your point about the cost reductions, the team has just done incredible work in bringing down costs. I mentioned the use of reduction in contract costs, contract labor costs. We've had some headwinds on some of the currency exchange rates and energy costs from the low levels that we had in the second quarter. Those have reversed a little bit. But the disciplines of driving the cost performance and balancing that with production is something that our team is very focused on.
So that's to the prior question about increasing copper volumes, we're being very careful to make sure that we have sustainable cost savings in the cost structure before starting to ramp up. But specifically on South America, the increase relates to an increase in mining rate at Cerro Verde from the 2nd quarter levels.
Okay. Thanks for that. And so one other question related to yes, sorry, what you're getting?
Chris, yes, let me come in here because I really appreciate the comments you made about the performance in
the Americas.
And this goes back to the rationale when we put Phelps Dodge and Freeport together, but the Americas operations are characterized as these very large lower grade ore deposits, which is kind of the world forward in the copper industry. And Red, Conger and Josh Olmstead have just had such experience with this, but are doing such a great job. And it's the operations in the field, the way they're managing the team, we operate all the mines that we have interest in. So we're able to achieve synergies across the board. Our global supply chain group has done just a great job in working with our suppliers in coming in with cost.
We've had a playbook for this. I mean, we've done this before and we're doing it again very effectively, but these guys really need to be recognized for dealing with this entirely different set of management challenges than you have with this high grade mine we have in Grasberg. And I want to also recognize Kathleen and Steve Higgins, our Chief Administration Officer, of what we've done with G and A. This is really significant. Our company changed dramatically at the end of 2016 when we exited the oil and gas business, restructured our management team.
But at that year, we really had $700,000,000 of G and A. Now, we are current expectations are that we go down to $355,000,000 That's been in steps over these years, but that's almost a 50% reduction in G and A over the past now 4 years. And this has been done as a process. We made some major steps. We had to furlough some people.
Unfortunately, we had to incentivize early retirement severance plan. We reduced our headcount in our centralized groups by something over 30%. But this is all part of the things that have come out from this COVID initiative and they all have long lasting benefits. As a company, we'll never work in the same way that we did before this COVID thing came. There's going to be less office space, less meetings, less travel.
We proved to ourselves that we can work effectively. We did not go back to work in Phoenix when the governor opened the state up. The halls are empty in our headquarters. And yet you can see the results from this quarter about how effectively we can operate in this kind of environment. And we're learning lessons from that, that will carry forward to the way we do business in the future.
Thank you.
Your next question comes from the line of Jitendra Goll with Exane BNP Paribas.
Good morning. Just a quick question, thinking more long term. Richard, you alluded that when market conditions allow, you can look at loans are expansion and you also indicated about 5,000,000 in GAAP emerging in the market by 2,030. To me, the real constraints for you appear to be balance sheet and potentially management capacity till Grasberg is delivered. So from a long term perspective, you've got three things probably on your plate, Lone Star, Alabra and Kuching Leeyar, which you can look after Grasberg is delivered and balance sheet is at a more normal capacity.
How quickly you can move to develop either or all of those projects and what would be the order of priority. So just trying to get some sense on your earliest possible timeline and order of priority. Thank you.
The timelines are long. One of the issues that's so supportive of copper supply is simply how long it takes from identifying a resource to doing the feasibility studies for how it's to be developed, how it's to be permitted and processing and so forth. So all of these things will take long term. And that is a key reason of why the outlook for copper as a commodity is so strong. The current projects that are being pursued today are not in the aggregate significant to the market, but are significant companies, but they are being delayed.
So you ask about our situation. The Cooching Leer fits into our long term mine plan for Grasberg and that's something that we're assessing and we'll consider and look at going forward. Lonestar has the opportunity for oxide expansion, which is growing. That could be done with a limited amount of investment in new facilities. But longer term, there's a large sulfide resource and this will be long term, but it's very, very large and that would require very, very large concentrator expansion.
We have great opportunities at Alabra with our partner Codelco in Chile. We have great opportunities in the U. S. At other properties, including Baghdad, Morenci, Surita, our properties in New Mexico. And so all of these things are being studied.
We are going to be very disciplined about it. First steps for cash flow will be using debt, increasing shareholder returns to shareholders. And then we will we have restrained spending in the project evaluation area as we have across the board in our country for the current time. As the situation improves, we will return to investing in the evaluation process and from that will come the timing schedule that you have. We don't have one right now, but we will keep you informed as this unfolds and we start spending again and getting in the process for evaluation.
But key positive feature about Freeport is this opportunity to grow our business internally to develop resources which we get no value for currently today in our stock price. If we develop those ourselves, all that value goes to our shareholders as opposed to making an acquisition where substantial value goes to the owners of the asset being acquired. No, that's not a clear answer to your question, but it's a truthful answer to where we are.
That's very helpful. Thank you so much for the clarification.
Your next question will come from the line of Lucas Pipes with B. Riley FBR.
Hey, good morning, everyone, and congrats on another very strong quarter. Richard, in light of current gold prices, I wondered if you have considered changing your slogan to foremost in copper, second in gold or something along those lines?
Lucas, years ago, gold like copper has its ups and downs and often goes up when copper is down, copper is up when gold is down. I remember years ago when coal was really high, I started to change the name to Freeport Gold and Copper. That was before Phelps Dodge.
And you already touched on my question that is gold equities tend to trade at substantially lower discount rates. And I wondered how you're thinking about that besides changing names or changing slogans? Thank you very much, Richard.
Well, we have over the years looked at a number of strategic alternatives involving our gold asset. Back in the days before Phelps Dodge, Freeport was a company that was 2 thirds copper, 1 third gold. We really struggled to attract investors because of the different objectives of gold investors and copper objectives. And really, we found the only way we could track investors was paying an extraordinarily high dividend. And for those of you, you're all too young to remember that, but that was where we were.
We made the commitment to the copper business. The gold component of Grasberg is, as I talked about earlier, a key reason why that asset is so fabulously attractive. And so we're a price taker with gold. We continually review options about dealing with it. But to date, we concluded that its greatest value to us is funding the cost at Grasberg.
Just think about this having £1,500,000 of copper with no costs or negative costs. And so that's the role we see it playing in our company.
That's very good to hear. Richard, Kathleen, really appreciate it and continued best of luck.
Thanks Lucas.
Your next question comes from the line of John Tumazos with John Tumazos Very Independent Research.
Thank you very much. Congratulations on the great production and thank you for the update on next smelter. Some of the other companies have cut back on exploration, waste stripping, underground development or maintenance and the struggle to keep up production. Are there any of those functions that have been delayed at some of your sites such that 2022, 2003, 23, 24 output targets might be a little uphill or tougher to meet?
John, it's Kathleen.
Kathleen, let me start. Okay. So, John, that's a great point. And I mean, you can look back in our history and with the in 2,008 when the price of copper just cratered from $4 a pound at midyear to approaching $2 a pound by midway in the 3rd Q4. We did have to make some of those changes.
I mean, we parked 100 trucks at Morenci, right, Red? It was something on that order, cut production in half and that resulted in a multi year ramp up. So breaking our business apart, from exploration, we have essentially terminated all greenfield exploration, which is pretty limited for us anyway considering our brownfield opportunities. We continue to do work at key operations. That's not going to be a constraint for us going forward.
Grasberg, we really have looked at cost hard, made some reductions, but done nothing to slow down the ramp up of our future. So we did defer a mill improvement, but which could have some impact, but it was only a short term and now with prices being where they are, that's not going to be an issue. With the Americas, as I said, we've been very experienced as this. So we're doing this in a way that preserves as much as the future as we can. But as Kathleen illustrated with Cerro Verde, when you cut back the mill and you cut back mine rates, there is a timing issues in getting the mine rates back up to rates to feed the mill.
So there will be some impact, but we are so mindful of that, that I think we've been very effective in minimizing that impact. In any event, we're going to update this every quarter. And so we give a lot of details. So you'll be able to see that as we go forward.
Yes. I was just going to say the mining rate reduction that we took in the U. S. Was deliberate in terms of getting the cost structure as low as possible. And so the metal production rates that we show in our forecast are consistent with the level of mining rates that we are deliberately working towards.
It's not like a situation where, we haven't updated the metal forecast to coincide with the mining rate. So our mining rate and metal forecasts are aligned. In the second quarter, we did have some lower mining rates at Cerro Verde because of the pandemic. That was the only one where we mined less and kept the mill as full as possible and we'll have to ramp up mining in the second half. But the rest of the mining operations in the U.
S. Really were cut back deliberately and we've reflected that in our metal forecast. If we were to ramp back up, which our current plans assume that we'll start ramping back mining rates in 2022 timeframe, you would start to see metal improve over time. But we haven't shortcutted anything. And so all of our mining rates and metal forecasts are in line.
If I could ask one more and thank you for the two replies. You have the footnote on the Lone Star slide that the potential mineralization is over £50,000,000,000 that I guess would be at least 3,000,000,000 tons of mineralized material. In your gut, do you think that the Lone Star is more like 3,000,000,000 tons or 5 or 10 or even bigger?
Hey, Red, you're on the call, right?
Yes, John. It's a huge district. We're very excited about it as we've reported in the past. Lots of drilling to be conducted where I think we're going to find that the whole district has mineralization in it where if you look at the maps, Lone Star is miles away from Dos Pobres where we first started mining. So lots of drilling yet to do, but the Lone Star deposit is what we know about it is a mineralized material that you just cited and we'll continue to drill and explore there and update those as we get more information.
Yes. And I think John, as you know, the oxide project that we're doing plus potential expansion of oxides is really not only economic in terms of the initial investments, but it exposes the sulfide ores and makes that opportunity. It's a long term opportunity, but makes that opportunity more economic as we continue to mine the oxide. So we're very excited about the district and it's a long term play, but one that we feel will be a big part of Freeport's future going forward.
Thank you.
Your next question will come from the line of Chris Terry with Deutsche Bank.
Hi, Richard and Kathleen. Hope you're both well. Just a quick one for me. I noticed the 2021, 2022 volumes were just down a touch versus the last quarter, just comparing the 2 presentations. I think it's £100,000,000 or so.
Is that just a bring forward effect where you've done better in 2020? Or is there something else to that? It's very minor, but just sort of I'd share.
Yes. No, the main difference was the mining and milling in South America. We have some we've assumed a lower rate in Cerro Verde. We were previously at 400 sooner than what's in our current plans and we've made some minor adjustments also to Alavra. So, they were minor revisions, but did end up impacting 2021 2022.
Glassburg is unchanged.
Okay. Actually one follow-up just to complete one of the questions from a bit early just on the cost side. I mean, you commented on sort of some of the ups and downs. You had the tailwind from, I think, in Indonesia on the currency last quarter and then oil down drastically. And then there's ups and downs on mining rates.
But from a macro sense, just given that we've now seen copper start to rebound, are we entering an environment where you start to get inflation in general on some of the costs for the business as well, just more from the macro variables?
The main thing that we've seen really is on the currency rates. We've had the energy prices from our prior forecasts are up about 18% from the April forecast. But we've also had and some of this has been offset with gold, but the way that the dollar has traded against some of these currencies has had an impact on our costs in Indonesia with the repeat rate and to a lesser extent in Chile and Peru. But that's really the only thing we have seen is really these macro currency exchange rates and the energy prices. We haven't seen and we continue to work with our suppliers.
We haven't seen inflation in other areas. And of course, with the level of unemployment, etcetera, the labor rate pressure is not what it is sometimes when you see capital prices rallying. So, we're going to continue to focus on driving out as much cost as we can using this time period to execute the plans, the revised plans and drive costs as low as we can. And in the U. S.
And in South America, the costs really have a big impact on value, because the lower the cost, the bigger the resource. And so we're focused on that as we go through 2020.
Great. Thanks, Kathleen, and congrats on a great turnaround in the quarter.
Thanks. Thanks a lot.
Your next question will come from the line of Brian MacArthur with Raymond James.
Hi, Brian.
Can you hear me?
Yes. Yes. Sorry. Sorry,
sorry. Just two quick questions. First of all, I just want to confirm the forecast through 20 22 and all your production, your cash flows. Is Chino in there or is it not?
It is not. It's currently remained idled and we're still evaluating next steps with respect to restart.
Perfect. Thank you. My second question and I know maybe getting a little ahead of myself here, but obviously you're going to generate an awful lot of cash flow going forward. And as Richard said, you've been working for 15 years to get everything underground set up at Grasberg, which is a lot of work. And you've sort of had ongoing major project costs of $1,000,000,000 a year and you get down to $900,000,000 in 2022.
And I understand too in 2022, the ownership changes in a little bit. But what does the ongoing capital look at look like sort of post 2022 once we get GBC developed, everything's up and running. How long can you do it like just keep generating without major capital go into KL or something? Because I would think post that period, you've had like substantial capital to build this thing 15 years, some of that on a run rate should come off or is that right?
Yes. And we've got in terms of our current plans, we project that capital will decline in 2022 from 2021 as we mentioned, but even further beginning in 2023. We're looking at KL and relooking at the project and running scenarios and trade off analysis to look at the capital involved in developing KL, which involves potentially having some additional processing equipment to handle pyrite ores. We're looking at if there is a higher NPV option that involves lower capital that would mine, the areas that are that have less pyrite. And so actually from a value standpoint, it could be something that's more valuable than just full out development of the whole resource.
So we're currently in those in progress with those analyses. But for the foreseeable future, as we get Grasberg ramped up, the capital will decline and we don't have a major decision to make in the next few years. We will want to settle on what the KL plan is. But in terms of capital outlays, we don't have major increases in capital forecast in our plans for Cuchuliar. We want to deliver the Grasberg and Deep MLZ first.
Which makes great sense, but would capital go down like a lot at Grasberg in 2020? Like when I say go down a lot, I mean, you've been spending about $1,000,000,000 in development a year plus sustaining give or take, but will that go down like $200,000,000 or $300,000,000 for a few years or I think that's I guess all dependent on whether you're
going to K L Yes, aside from KL, you could see CapEx at Grasberg going down to $300,000,000 or $400,000,000 level. And ultimately, we'll have to make decision on what the plan is for KL, but it will go down significantly beginning in 2023 and beyond. So just the cash flow from GB from Glassdoor Block Cave and Deep MLZ are going to be massive. And we'll look at reinvesting that into KL over time.
And Kathleen, you did say $200,000,000 $300,000,000 to $400,000,000 right?
Right. 2 it will go down $200,000,000 $300,000,000 to $400,000,000 right, from over $1,000,000,000 Yes.
Right.
Great. Thank you very much. And again, congratulations on the great progress that has been made.
Our final question will come from the line of Michael Dudas with VRP.
Thanks, Richard and Kathleen. What a difference a quarter makes,
We were just saying the same thing.
My question
is, Richard, do you think how your company and the industry has evolved and managed through COVID the past 4 months and what will happen in the future, do you think that the industry or maybe Freeport particularly in general will be looked upon as a perceived as a better partner from a labor and a government standpoint. So as we move forward in the next several years of higher prices and development and maybe some issues with regard to royalties and such. Do you think that it's come out that will be helpful to the industry and that could also maybe be helpful on a ESG or any other type of company? Thank you.
Yes, I do. In fact, early this morning, I added to my notes that I was going to say that earlier, actually what we've done with COVID in many respects closer to communities and governments. I recall going into February, going into March, when we started working remotely, Catalina and I were looking at each other and say, okay, now what are we going to do? And by April, we had a plan. Well, that's the situation for all these communities and all these governments and people are still struggling with that.
And so by our being aggressive in investing in healthcare protocols, testing equipment and doing things to help these communities. In Indonesia, I mean, we have 2 PCR labs. Here in the United States, what does it take often, a week to 2 weeks to get PCR results. We have 2 PCR labs, 1 in lowlands, 1 in the Highlands, which we're working with community to use and that's much appreciated. We have built an oxygen facility for Arequipa.
So by showing that we are competent in managing these, by showing we have sensitivities to workers' families and the communities by working with governments to do that. We're showing both competencies, sensitivities and the fact that we are committed to being good partners. So I think all of that's going to be beneficial. We've achieved that in steps. We moved our headquarters to Arizona several years ago.
We made a big commitment to show the people of Arizona that we could be good partners. And now we are widely regarded as being great partners. So that's an excellent point. And ESG matters are growing importance and significance to investors. We know that.
We believe that's a good trend and we will measure up well by that because that's just what our commitment is.
That's quite encouraging. Thank you, Richard.
Well, thank
you all.
Now I'll turn the call over to management.
All right. Thank you, Regina. Thanks all of you for joining us. We appreciate your interest. Appreciate the good questions.
It is a quarter has made a heck of a difference, but it is so great now to be focused totally on what we're doing operationally with our business. We look forward to reporting continued progress. As always, if any of you have questions or needs for more information, contact David Joynt and we'll be responsive. Good luck to everybody. Take care.
This thing is not controlled yet. So all of you be careful and watch out for your families and your friends.
Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect.