Freeport-McMoRan Copper & Gold Inc., Mitsubishi Materials Corp. and Fluor Daniel Inc. announce agreements to build Indonesian smelter.

NEW ORLEANS--(BUSINESS WIRE)--Jan. 9, 1995--Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Mitsubishi Materials Corporation (Mitsubishi) and Fluor Daniel Inc. (Fluor Daniel), announced today agreements among the entities to form an Indonesian foreign investment company to jointly build, own and operate a copper smelter/refinery in Gresik, East Java, Indonesia, near the industrial port of Surabaya.

The FCX/Mitsubishi/Fluor Daniel group will take over the Gresik project previously announced by FCX on April 20, 1994, and already approved by the Badan Koordinasi Penanaman Modal (BKPM), the foreign investment coordinating board of Indonesia.

The agreements provide for equity ownership of the Gresik copper smelter/refinery to be Mitsubishi, 70 percent; FCX, 20 percent; and Fluor Daniel, 10 percent. The total project capital costs of approximately $550 million are expected to be financed by a combination of non-recourse project loans and equity contributions.

The Gresik copper smelter/refinery is planned to produce approximately 200,000 metric tons of copper cathodes using Mitsubishi's continuous copper smelting process. Engineering, procurement and construction, led by Fluor Daniel as overall project manager, will begin in 1995 with first production targeted for the second half of 1998. Mitsubishi will manage and operate the smelter/refinery and will market the copper cathodes and other products. P.T. Freeport Indonesia Company (PT-FI), the principal mining subsidiary of FCX, will provide 100 percent of the smelter's copper concentrate feed stock requirement, estimated to be approximately 600,000 metric tons annually.

The project remains subject to the execution of definitive agreements among the parties, the confirmation of the feasibility of the project, financing and certain Indonesian governmental approvals. Upon completion of the Gresik smelter/refinery and completion of the current expansion project at FCX's Rio Tinto Minera smelter/refinery in Huelva, Spain, to which PT-FI will annually provide approximately 500,000 metric tons of copper concentrate feed stock, a total of approximately 1,100,000 metric tons of copper concentrates (approximately 70 percent of PT-FI's anticipated production at its soon to be expanded mill throughput rate of 115,000 metric tons ore per day) will be sold annually to FCX's affiliate smelter/refineries, RTM and Gresik.

Mitsubishi, based in Tokyo, is one of Japan's leading diversified materials companies and is involved in base and precious metals, cement and fabricated metal products, as well as pioneering Japan's advanced materials and clean energy technologies. Mitsubishi's technology is the world's first continuous copper smelting process and will be the foundation of the new Indonesian smelting and refining operation. This smelter/refinery will be the fourth plant in the world to employ the Mitsubishi technology, accepted internationally as environmentally safe and operationally cost- efficient.

Fluor Daniel Inc., the principal subsidiary of Fluor Corporation (NYSE:FLR), is a global engineering, construction and diversified services company with more than 50 offices worldwide. The company is currently involved in several projects in Indonesia, including the current mine/mill expansion at PT-FI.

FCX, an affiliate of Freeport-McMoRan Inc. (NYSE:FTX), is engaged in the exploration, mining and milling of copper, gold and silver in Irian Jaya, Indonesia through P.T. Freeport Indonesia Company and the smelting and refining of copper concentrates in Huelva, Spain through Rio Tinto Minera.

CONTACT: Freeport-McMoRan Inc., New Orleans

Craig E. Saporito, 504/582-4476