Risk must be rated through a good-faith effort by personnel with knowledge of the relevant tasks, processes, and exposures.

Risk with the potential for severe Revision - January 10, 2017
injury must be carefully monitored to ensure that controls for risk mitigation are used effectively and consistently. All risks with the potential for catastrophic
consequences require additional administrative oversight to ensure that the extremely low likelihood does not result in complacency regarding controls.

Stakeholders (Regional, National, Production

FCX 4x4 RISK ASSESSMENT MATRIX CONSEQUENCE Safety and Health Legal / Compliance Environmental**
International) Capacity
Financial

Multiple fatalities which may result Major and/or chronic Major onsite Loss of social license and/or community
from a physical event (slope failure, non-compliance issue or degradation or support or tangible expressions of
Catastrophic
4 8 12 16 (4)
personnel transport accident), Administrative irreparable offsite mistrust across the entire community, Shut down >$100M
chemical release event, or clusters of Order/class action environmental setting the agenda for decision makers
cancer or terminal disease lawsuits with merit damage and key stakeholders

3* 6* Significant non- Significant Organized opposition to operations or ~50% $100 - $50M

9 12 One or more fatalities, permanent compliance issue with degradation - onsite tangible expressions of mistrust amongst
Significant
disabilities, or isolated cancers or regulatory requirement impacts or local a majority of community members with
(3)
terminal/disabling disease NOV with fine potential offsite impacts or significant influence on public opinion and
3 6 >$100K reversible impacts decision makers

Moderate non- Organized group opposition or tangible

Short term onsite
Medical treatment or restricted duty compliance issue with expressions of mistrust amongst a
Moderate impact but
2 4 6 8 or lost time injury, or reversible regulatory requirements minority of community members with ~75% $50 - $25M
(2) correctable or
health effects, or hearing loss NOV/NOC with minimal moderate influence on public opinion and
repairable
fine decision makers

Minimal reaction from external parties or

Not a compliance issue
Minimal measurable tangible expressions of mistrust amongst
Minor with minor regulatory
1 2 3 4 Minimal injury or first aid onsite temporary a few community members with some ≥95% $25M - $0
(1) requirements or informal
impact influence on public opinion and decision
notice
makers

Unlikely Possible Likely Almost Certain

LIKELIHOOD OF OCCURRENCE
(1) (2) (3) (4)

Recurring event during

Highly unlikely to occur Event that may occur
Event that may occur the lifetime of the
during the lifetime of an during the lifetime of an
(<once per year). operation/ project or
operation / project. operation / project.
>once per year.
Rating Level Response required for risks identified on the SD Risk Assessment Form

Action Plan Summary Form required. Identify key actions/milestones to be accomplished.

Hierarchy of controls required to correct the risk (corrective and preventive actions needed).
Actionable
Determine if interim controls are needed to allow the activity to continue pending completion of
action plan.
*For H&S risks; risks with potentially fatal "significant" consequences and "unlikely" frequency, the Rating Level is "Medium" (yellow), requiring a monitoring effort
consistent with Freeport-McMoRan's Fatality Prevention Program. For H&S risks with "unlikely" likelihood and "catastrophic" consequences, or "possible" likelihood and
"significant" consequence, the Rating Level is "Monitor" (orange), requiring a formal, documented monitoring plan specific to the risk. Monitor Monitoring Plan Summary Form required.

**For risks identified under the biodiversity category on the SD Risk Assessment Form, please use the Biodiversity Consequence Descriptions form in addition to Monitoring required; proactive measures needed to prevent transition to Actionable. No Action
Medium
consequence categories on this matrix. or Monitoring Plan Summary Forms required.

Refer to the Supplemental Guidance tab for additional information on how to apply the concequence and frequency scores. Low Monitor for trends and patterns which may indicate increasing risk.
 Supplemental Guidance for Scoring H&S Consequence and Likelihood
Consequence Scores
Consequence scores are assigned with the assumption that the unintended event has occurred. The probability of the event is considered separately. For example, a haul truck collision is reasonably likely to result in a
fatality. If controls are put in place to reduce the likelihood of a collision, the likelihood score would change. However, if a collision is still possible, the consequence is still a fatality.
A single fatality is unacceptable. A Catastrophic consequence, with a rating of 4, is intended to cover outcomes with a large number of fatalities. These might include:
-a mass casualty event (slope failure with the potential to engulf multiple people, destruction of a personnel transport vehicle, underground fire, and similar)
-a gas release capable of engulfing multiple people (e.g. chlorine or H2S release near an occupied building)
-a widespread exposure to a substance that could later cause a cluster of cases of cancer or other debilitating disease (e.g. widespread overexposure to asbestos, silica, arsenic, or hexavalent chromium)
A significant consequence, with a rating of 3, is intended to cover incidents with the potential to cause one or more fatalities or permanently disabling injuries, or isolated cases of fatal or debilitating disease. These
incidents are unacceptable; the rating of 3 does not diminish this. These might include:
-A light vehicle incident
-Fall from height or entanglement in equipment
-A small number of people over-exposed to a carcinogen.
Moderate consequences, rated as 2, are generally significant but reversible. Reportable injuries (medical treatment, restricted duty, and lost time) and reversible health effects would be included here. Mild to
moderate hearing loss would may included here, but more significant hearing loss that leads to life-altering impacts should be a 3.
Incidents with the potential to cause only first aid or less would be 1.
If a health & safety event could involve people outside of our workforce (e.g. community members), review the "Stakeholders…" consequences to consider possible impacts to community relations and social license. In
some cases, this could result in a higher consequence score.
Financial and regulatory consequences are unreliable predictors of health & safety risk. Ratings of safety consequences are independent of consequences. If the safety consequence score is 4, but the financial
consequence related to the same risk is 3, the consequence score is still 4.

Legal / Compliance can be a significant consideration regarding health & safety. There may be cases where the health and safety consequences are relatively low, but the consequence of non-compliance is substantial.
-Major regulatory compliance—stoppage of work; maximum fines or penalties; repeated violations
-Significant regulatory compliance—mandatory corrective actions; moderate fines/penalties; repeated violations

Likelihood Scores
The likelihood scores are assigned based on the probability of the unintended event. The scores are not assigned based on the frequency of the task.
Probabilities are included to provide general guidance to clarify the terms unlikely, possible, etc. The intent is to highlight the differences between the various rankings, not to provide a defined probability of
occurrence.
Probability should be considered based on the global industry as the basis, not just an individual site's experience.
Consider the reliability and effectiveness of controls when assigning probabilities. Controls that are high in the hierarchy of controls are more reliable and effective.
Risks that are rated as Unlikely, 1, would be mitigated with reliable and effective controls. Considering the industry’s experience, it is highly unlikely to occur during the lifetime of the operation or project.
Assigning scores related to exposure to toxic substances requires input from health and safety professionals with an understanding of industrial hygiene. Consider the level of exposure, the occupational exposure limit,
the duration of exposure, and the possible health effects. Hydrogen sulfide and nitrogen dioxide can be lethal after a single substantial overexposure. Silica generally takes long-term overexposure to cause silicosis or
cancer.

Ratings and Responses

Actionable risks are unacceptable and must be addressed through the hierarchy of controls. Leadership must determine if it is safe to proceed with the work until action plans are implemented to reduce the risk.
Interim controls may be necessary, or it may be necessary to stop the activity until additional controls are put in place.

Risks with potentially catastrophic consequences, which are “highly unlikely to occur during the lifetime of an operation/project” (cell 1-4, rated as orange), and risks with significant safety consequences and the
possibility of occurrence "during the lifetime of an operation/project" (cell 2-3, also orange) warrant a formal monitoring process. Consider the process used by Sustainable Development as a guideline.
Fatalities are unacceptable. Freeport-McMoRan covers all fatal risk through our Fatality Prevention Program, which is continually evolving. The ratings in this matrix help in prioritizing this effort. Risks with the
potential for a single fatality are rated differently from risks with the potential for mass casualty. The intent is not to diminish the focus on the individual fatality. The intent is to increase the focus on potentially
catastrophic incidents.