Issue

Why it is material and what we are doing

Economic

Land Rights & Compensation

At our largest mine, Grasberg in Indonesia, we have negotiated agreements with the two local ethnolinguistic groups most affected by our mining operations to provide payments to the communities in recognition of land rights. At the new development in the Tenke and Fungurume areas of the Katanga Province, Democratic Republic of Congo, we worked with local residents to negotiate resettlement and compensation of affected households.

Philanthropic Donations

Our major mining operations provide jobs and economic stimulus for the communities where we operate. In Indonesia, for instance, PT Freeport Indonesia is responsible for nearly half the gross domestic product of the surrounding Papua province. We recognize that this can have a significant impact on the community when mining operations cease, but our closure plans include working with communities to support development of stable local economies and thus minimize adverse impacts at the end of mine life.

Environmental

Energy & Climate Change

Because energy is a large component of our operating costs, we are investing in technologies to improve energy efficiency in our mining and processing operations. Though we expect our total energy use to continue to expand as our operations grow, we are committed to improving energy efficiency. Energy efficiency is our primary means of reducing greenhouse gases and meeting our ICMM Climate Change commitments. We report our efforts annually to the Carbon Disclosure Project.

Water Use

Water is essential to human life, and it is also integral for mining and ore processing operations. Water rights in Arizona have been subject to litigation for decades. Water levels in our Chilean well fields are declining, mandating investments in new sources. Individual sites maintain continuous improvement programs, based on ISO 14001 environmental management systems, for managing water resources and water use conservation practices.

Tailings Management

The largest volume waste generated at our mine sites are the tailings – particles of rock remaining after the economically valuable minerals are removed from the ore. Tailings management areas can be visible to the public at our operations sites, including Papua, Indonesia; Climax, Colorado; Sierrita and Morenci, Arizona; and at our Chino mine in New Mexico. Some of these areas can generate dust during severe wind conditions. These solids are handled in accordance with site-specific management plans.

Legacy Liabilities & Environmental Expenditures

We are involved in remediation at many legacy sites for which we are responsible around the United States. These sites managed hazardous substances in the past, prior to today’s environmental laws and without the current understanding of the potential environmental impact of historical waste management practices. As of December 31, 2007, our environmental remediation liabilities were $1.3 billion on a present value basis. Management of these legacy liabilities will require significant human and financial resources.

Social

Safety Performance

Freeport-McMoRan Copper & Gold Inc. is committed to the goal of zero incidents and zero occupational illnesses. Regrettably, in 2007 we experienced five fatalities at our worldwide facilities. This is unacceptable and we are continuing to work to achieve our commitment of zero fatalities and injuries.

Artisanal Mining

We recognize that artisanal and/or unauthorized mining can be a substantial source of income for small rural communities. At those sites where such mining occurs, we are concerned about potential safety and public health impacts, and we work with governmental and non-governmental organizations to help address unsafe conditions.

Human Rights & Security

Freeport-McMoRan Copper & Gold Inc. has endorsed the Voluntary Principles on Security and Human Rights, which calls for full human rights compliance while protecting our employees and investments. As part of our ongoing post-merger integration efforts, we are currently updating our Social, Employment & Human Rights Policy, adding flexibility to address the more diverse set of social and cultural conditions associated with our new, larger geographic footprint.