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Mine Closure

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Mine Closure

In December 2004, PT Freeport Indonesia completed an updated closure management plan, representing the Company's latest analyses and strategies on closure management. Current reserves are sufficient to support mining operations through to the end of the current Contract of Work in 2041. As the mine operator, PT Freeport Indonesia recognizes the need to re-establish stable ecosystems consistent with pre-mining conditions. The Company also supports the development of socioeconomic conditions in the stakeholder communities which reflect a net improvement over pre-mining conditions. These positions are consistent with our commitment to integrate sustainable development considerations within the corporate decision-making process.

Because of the long life of the mine based on currently proven and probable reserves - approximately 70 years in total and extending almost 40 years in the future - the scope of the closure management plan remains broad. The plan is consistent with existing Indonesian laws and regulations, current commitments (Contract of Work, AMDAL, and operational management plans), International mine closure principles and practices and the current allocation of financial provisions to fund mine closure costs. PT Freeport Indonesia's overall closure strategy is to identify, monitor and mitigate impacts, both environmental and social, through ongoing management programs during the operations phase. This will ensure that decommissioning, reclamation and environmental monitoring activities required at closure and during the post-closure phase can be managed effectively; the effects of mine closure on the local economy and communities can be managed and the transfer of any remaining assets and the responsibility for the mining area to the Government of Indonesia can be achieved smoothly and efficiently. Funds are being set aside to implement the closure plan as detailed in the Annual Report of Freeport-McMoRan Copper & Gold Inc. The closure management plan will be updated approximately every five years.

264 plant species have naturally recolonized in this portion of the Modified Deposition Area, where tailings sediment has been deposited in the lowlands portion of the PT Freeport Indonesia project area.