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Atlantic Copper, S.A.

www.fcx.com

ATLANTIC COPPER, S.A.

Environmental Policy
One of Atlantic Copper’s goals is to make environmental protection compatible with its industrial activity and socioeconomic development in the Huelva, Spain, region, where the facilities are located. In an effort to attain this goal, Atlantic Copper has carefully designed an environmental policy based on a series of strategies, objectives and instruments that strive to improve the relationship between the productive processes and the environment.

In doing so, Atlantic Copper has made a commitment to establish a Comprehensive Environmental Management System that enables the implementation of the environmental objectives set in the environmental policy.

The Comprehensive Environmental Management System (SIGMA) is the tool that guarantees that the entire organization meets the stated objectives of the company’s environmental policy and serves as an internal management tool for environmental aspects.

The SIGMA documentation provides information on the organization, functions and responsibilities within Atlantic Copper. There is an Environmental Manual that offers an overview and description of the basic system requirements.

A set of procedures develop the requirements indicated in the manual, with specific instructions for all operations that require them. Finally, there are specifications for each one of the main environmental subsections including atmosphere, effluents, solid waste and soil.

Natural Resources
Atlantic Copper places special emphasis on the utilization of natural resources and classifies them as a significant aspect of their business.

In 2006, the company undertook a special project to recycle process water in order to decrease the consumption of industrial water. More than 250,000 euros have been invested in the project which call for the implementation of a reverse osmosis plant and effluent recovery system, among other things. This has made it possible to reuse the water exiting the effluent treatment plant. The project also envisages water recovery from several cooling circuit blow-down streams and condensate from the steam circuits. This will contribute to a more efficient use of a very valuable natural resource.

The Self-Generation Power Plant efficiently saves energy by using the residual heat from the fusion of copper concentrate to provide steam and electricity for internal consumption. In 2006, 183,915 tons of steam and 57.9 million kilowatts of electricity were produced. The Self-Generation Power Plant has helped to reduce the national Energy Intensity level with a net saving of 16,934 tons of oil equivalent (TOE) of primary energy. This helps to minimize the greenhouse effect by not producing that energy using fossil fuel combustion systems, thereby avoiding 63,605 metric tons of carbon dioxide emissions per year.

Atlantic Copper continues to search for ways to conserve energy. A feasibility study is underway to recover heat from the acid plants, slag granulation circuit and anode furnaces.

Environmental Investments
The investment in environmental improvements in 2006 totaled 10.3 million euros. Total operating costs were 104.8 million euros, 15.6 percent (16.4 million euros) of which was allocated to environmental costs that include the cost of all environmental installations as well as the costs relative to emission control, waste disposal, environmental studies and others.

2003 marked a new milestone when the Voluntary Agreement was signed with the Department of the Environment of the Junta de Andalucía. Since 1994, when the Environmental Expansion and Improvement Project began at the Metallurgy Complex, the company has invested 112.9 million euros in environmental improvements. .

Audits
To guarantee compliance with its environmental policy, Atlantic Copper conducts periodic audits to determine whether its installations and practices meet the legal requirements, the Company’s policies and procedures and generally accepted standards. These objective and systematic evaluations of the activities carried out over a period of time are intended to:

• Verify compliance with environmental regulations and the company’s internal policies and generally accepted practices.

• Evaluate the effectiveness of the Comprehensive Environmental Management System.

• Identify and establish the risks associated with the hazardous conditions that can be attributed or related to environmental factors and that could have unwanted effects.

Crescent Technology Inc. (CTI), has been conducting these audits annually since 1995. The audit conducted in 2006 confirmed that Atlantic Copper’s environmental programs at its Huelva plant have been implemented in such a way that they comply with both the legislation in force and the safety requirements established by the company to control atmospheric emissions, water pollution from discharges and waste management. CTI made a series of recommendations, all of which have been implemented in the company’s plans and commitments.

SIGMA undergoes an annual validation audit by AENOR as the certification entity accredited by The National Accreditation Board. In 2006, it passed the annual validation audit with good results in accordance with UNE-EN-ISO 14001:2004. The 2005 Environmental Report was audited and validated as stipulated in EC regulation 761/2001 (EMAS).