Amungme, Kamoro and Freeport Indonesia Announce Agreement; Initial Cooperative Projects Launched.

Business Editors

NEW ORLEANS--(BUSINESS WIRE)--Aug. 18, 2000

Agreement Covers Socioeconomic Resources, Human Rights, Land

Rights, Environment

The signing of a Memorandum of Understanding (MOU) concerning socioeconomic resources, human rights, land rights and environmental rights was announced today by leaders of LEMASA, the Amungme people's organization; LEMASKO, the Kamoro people's organization; and PT Freeport Indonesia (PT-FI), the Indonesian mining affiliate of Freeport-McMoRan Copper & Gold Inc. (FCX).

The historic agreement was signed by Mr. Thom Beanal, in his capacity as representative of "Hak Ulayat" (traditional land-right) owners of the mining area as well as Chairman of LEMASA, and acting on behalf of the Amungme people; Mr. Yakobus Owamena, Director of LEMASKO, acting on behalf of the Kamoro people as witness; and Mr. James R. Moffett, President Commissioner of PT-FI . The agreement details the aspirations of PT-FI and the leaders of the two Papuan communities who are the original traditional residents of PT-FI's operations area to seek harmonious and mutually beneficial relationships "based on the principles of equality, honesty and justice."

At the same time, LEMASA, LEMASKO and PT-FI announced the launching of several mutually beneficial projects as initial steps under the terms of the MOU:

-- The establishment of P.T. Kelabuma Permai, a limited liability company owned
by LEMASA and employing local Papuans which will undertake levee maintenance
and related earthmoving projects in PT-FI's tailings deposition area.

-- An integrated agriculture, aquaculture and animal husbandry project to be
located in and around PT-FI's tailings deposition area, sponsored by PT-FI with
a substantial share ownership by LEMASA and LEMASKO. Ground has already been
broken on the project, which will provide a much-needed agricultural base for
the Timika area as well as development of agricultural skills for the local
people.

-- Groundbreaking for the construction of an office building for

LEMASA, and houses for the tribal elders.

Other projects are under discussion and many more concrete, positive programs are expected to flow from the MOU.

The MOU was mandated by the "Musyawarah Adat" or Traditional Council Meeting held on December 7-12, 1998 for LEMASA and April 20-24, 1999 for LEMASKO, and is the culmination of five years of meetings between the parties - initially facilitated by Komnas HAM, the Indonesian Human Rights Commission. The MOU's term extends to the end of the life of PT-FI's mining operations. The parties to the MOU see this agreement as the foundation for a series of subsequent contractual agreements implementing the terms of the MOU in detail.

The purpose of the MOU is to improve the quality of life of the Amungme and Kamoro communities and to ensure that they fairly benefit from PT-FI's operations; to improve the appreciation of human rights and respect for the dignity and understanding of the culture of the Amungme and Kamoro communities and others in PT-FI's operations area; and to improve the quality of the environment in PT-FI's operations area.

PT-FI's responsibilities under the MOU include striving to uphold and improve human rights; providing expanded funding, technical assistance and other materials necessary to implement programs to be agreed upon in the future; and working to finalize an agreement for voluntary additional recognition for the Amungme and Kamoro peoples' land rights which takes into account both the greater value and the longer duration of the company's activities on land that was originally occupied by the indigenous Amungme and Kamoro tribes.

LEMASA's and LEMASKO's responsibilities include working to ensure that programs implemented pursuant to the MOU achieve its aims; staying in open communications with PT-FI and seeking to mediate any disagreements between PT-FI and the local community.

Mr. Thom Beanal, leader of LEMASA, said, "All we have ever asked for is to be treated fairly and with dignity. That has not always been the case, but this agreement has been carefully and honestly negotiated and ensures that we will treat each other fairly and as equals from now on. We have built this agreement like a good house, we have laid all of the planks carefully and straight so that we can all live in it in peace and prosperity for a long time to come. I would like this MOU to be seen as a model for future Papua economic and welfare empowerment."

Mr. Yakobus Owamena, director of LEMASKO, said, "Our fathers and grandfathers used to fish and gather sago on this land that Freeport is now using. Through this agreement and the projects we launched today, we, our children and grandchildren can learn new skills and will share in the economic benefits of Freeport's presence on this land."

Mr. James R. Moffett, President-Commissioner of PT-FI and Chairman and CEO of FCX, said, "Freeport has for many years demonstrated its commitment to ensure the social and economic well being of the local people around our operation by investing significant human and financial resources in our social programs. This MOU, the result of years of patient dialogue, is further evidence of our commitment, and now means we will continue this effort hand in hand with the local people."

FCX is engaged in mineral exploration and development, mining and milling of copper, gold, and silver in Indonesia, and the smelting and refining of copper concentrates in Spain and Indonesia.

This press release, the text of the MOU and additional information about FCX is available from our Internet web site ("fcx.com").