With regard to compensation for traditional land rights, Freeport-McMoRan Copper & Gold Inc. adheres to the laws of the host country and leading practices within the industry. In Indonesia, where a significant portion of our mining operations are located, we were a pioneer in providing compensation for traditional land rights. In Indonesia, all unimproved land and all minerals are owned by the Government of Indonesia, according to the Indonesian Constitution. PT Freeport Indonesia’s “January Agreement” of 1974 with the Amungme ethnolinguistic group residing near the operations area was the first recognition in Indonesia of hak ulayat, or the right of traditional people to land used for hunting and gathering. Subsequent to that agreement, the Government of Indonesia formally recognized the right to compensation for hak ulayat land rights. Compensation in the form of rekognisi, or recognition, is paid to communities for a release of hak ulayat rights, as hak ulayat is a communal property right (rather than a right due to individuals). Such payments are made in the form of mutually agreed projects or programs benefiting the community.

PT Freeport Indonesia currently funds two multi-year rekognisi programs in the highland and lowland areas of our operations. We work with traditional leaders and local government under a Memorandum of Understanding to administer the village development programs. These two programs are providing substantial amounts for infrastructure, social and economic development projects including: housing, school buildings, medical clinics, places of worship, community buildings, office buildings, roads, bridges, water tanks, electrical power, motorboats for transportation and fishing, sports facilities and feasibility studies for business opportunities. The rekognisi programs are separate from and in addition to the Freeport Partnership Fund for Community Development.

In addition, land rights trust funds for the Amungme and Kamoro ethnolinguistic groups were created in 2001 to provide voluntary special recognition for the holders of the hak ulayat in the mining area and for the expanded scope and continuing success of the mining operations. PT Freeport Indonesia has contributed approximately $26 million to these funds through 2007 and, in conformance with the applicable land rights agreement, will continue to make contributions of $1 million annually.

Beginning in late 2009, Tenke Fungurume Mining S.A.R.L (TFM) will begin mining the Kwatebala, Goma and Kavifwafwaulu (Fwaulu) ore bodies in the Katanga Province of the Democratic Republic of Congo (DRC). As the majority shareholder of TFM, Freeport-McMoRan Copper & Gold Inc. is closely involved in ensuring that project development is consistent with our social and environmental standards.

Three villages, with approximately 370 households (1,700 individuals) are included in the TFM resettlement program. Resettlement is a complex and difficult process, with significant impacts on individuals and families and the local economy. By managing this project in accordance with DRC law and International Finance Corporation guidelines, we are working to ensure that the people involved in the relocation are treated with respect and with full attention to their welfare.

In a community-based engagement process, villagers and local leaders were consulted to ensure that the new villages are located within traditional communal lands and that houses would be built to meet the community’s needs. TFM is providing the residents with replacement homes and farmland.

To fulfill our commitments to surrounding communities, social development programs involving education, health, anti-malaria, agriculture, micro enterprises and fresh water supply are also being implemented. Direct investment in the TFM project is currently estimated to total approximately $1.79 billion and includes the development of major local and regional infrastructure, such as electrical power and roads. By working closely with affected stakeholders to understand their needs and culture, our goal for the resettlement process is to establish benchmark practices for relocation projects in the region.

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