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Economic Impacts

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Financial Benefits to Indonesia

	2004	1992-2004
Taxes, Royalties, Fees & Other Payments	US $ 260,000,000	US $ 2,600,000,000
Total Direct & Indirect Benefits *	US $3,000,000,000	US $33,000,000,000
* Institute For Economics and Social Research, Faculty of Economics, University of Indonesia, 2004 Study (multiplier effect of PT Freeport Indonesia contributions)
The financial benefits to the people and Government of Indonesia in the illustration above are shown for 2004 and cumulative amounts for the years 1992-2004.

PT Freeport Indonesia supports schools in Papua and has provided thousands of scholarships for Papuans.

Making the Commitment
PT Freeport Indonesia
I. Economic Impacts

PT Freeport Indonesia, our wholly owned smeltePT Freeport Indonesia, our Indonesian mining affiliate, provides substantial direct and indirect economic benefits for the central, provincial and local governments of Indonesia, and for the economies of Papua and the nation as a whole. Direct benefits are the traditional contribution of a Company to the Republic of Indonesia, and include taxes, royalties, dividends, fees and other direct support. We are the largest private employer in Papua and one of the largest taxpayers in Indonesia. In 2004, a year of unusually low metals sales for our Company, we paid $260 million in taxes, royalties, dividends and fees. Since 1992, these direct benefits to Indonesia have totaled $2.6 billion. PT Freeport Indonesia's indirect contributions to Indonesia are much larger and include the following since 1992:in S
pain and our 25-percent-owned smelter in Indonesia are

Investment of more than $4.6 billion to build Company infrastructure in Papua, including towns, electricity generation facilities, seaports and airports, roads, bridges, tunnels, waste disposal facilities, modern communications systems and other infrastructure, most of which will revert to the Indonesian government at the end of our contract term.

Investment of over $360 million in social infrastructure directly benefiting the local people, such as schools, hospitals, health clinics, offices, places of worship, recreational facilities and the development of small and medium-sized businesses.

Direct employment by PT Freeport Indonesia of approximately 7,900 people in 2004. Of these, nearly 2,000, or 25 percent, are Papuans. PT Freeport Indonesia's payroll for its own employees has totaled more than $950 million since 1992.

Employment of contract employees, privatized companies and others serving PT Freeport Indonesia, which totaled 10,800 workers in 2004, meaning that the total of those employed by or serving our operations in Indonesia at the end of 2004 was approximately 18,700 people.

Purchase of more than $3.3 billion of domestically sourced goods and services.

Direct and indirect contributions produce an economic "multiplier effect" in the Indonesian economy spurring additional employment, wages, purchases and economic activity. In 2003, we commissioned the Institute For Economics and Social Research, Faculty of Economics, University of Indonesia to conduct an economic impact analysis on the multiplier effect impact on Papua and Indonesia from PT Freeport Indonesia's operations since 1992. The University's economists found that PT Freeport Indonesia's total economic benefit to Indonesia and Papua was estimated to total $3 billion in 2004 alone and $33 billion from 1992-2004, accounting for almost 2 percent of the gross domestic product of Indonesia, and more than 55 percent of the gross domestic product of Papua.

In addition, since 1996, PT Freeport Indonesia's operations have committed a portion of revenues for the benefit of the local community through the Freeport Partnership Fund for Community Development. This fund has helped build schools, hospitals, places of worship, housing and community facilities in our area of operations in Papua. The fund also supports a comprehensive series of health and educational programs and training and small business development initiatives so that Papuans benefit from the economic development taking place in the area. Contributions to the partnership fund, including PT Rio Tinto Indonesia's share as our joint venture partner, totaled $19 million in 2004, and the total contributions to the fund are nearly $152 million since inception.

In 2003 and 2004, BusinessWeek magazine published the results of its surveys ranking America's most philanthropic companies and designated Freeport- McMoRan Copper & Gold Inc. as America's most philanthropic Company in terms of cash given as a percentage of revenues for both years. This is largely attributable to the Partnership Fund for Community Development.