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FREEPORT-McMoRan RESOURCE PARTNERS ANNOUNCES TERMINATION OF BOTH FERTIBERIA MANAGEMENT SERVICES AGREEMENT AND EFFORTS TO ACQUIRE FERTIBERIA.

NEW ORLEANS--(BUSINESS WIRE)--April 4, 1995--Freeport-McMoRan Resource Partners, Limited Partnership (NYSE: FRP) announced today that FESA Fertilizantes Espanoles, S.A. (FESA), the owner of Fertiberia, S.L., elected not to extend a management services contract entered into with an affiliate of FRP in September 1993. The contract expired on March 31, 1995. FESA is a subsidiary of Ercros, S.A., a Spanish conglomerate. Fertiberia is the only major fertilizer producer in Spain.

Under the management contract, FRP has managed the affairs of Fertiberia on a cost-reimbursable basis on behalf of and in cooperation with FESA and the Spanish Government, which is a major creditor of Ercros, FESA and Fertiberia. Under an investment agreement entered into in September 1993 with FESA, FRP had certain rights to acquire the majority of the outstanding capital stock of Fertiberia. The Spanish Administration has provided substantial support to FRP's efforts to establish Fertiberia as a viable entity. FRP's understanding of the situation is that FESA and Ercros have now decided to pursue an offer from Spanish private interests to acquire the majority of FESA, which includes Fertiberia and certain other assets and substantial liabilities, in lieu of the agreement with FRP regarding only the acquisition of Fertiberia. FRP is unwilling to improve the terms for its acquisition of Fertiberia and is not interested in acquiring FESA.

Rene' L. Latiolais, President and CEO of FRP, said: "We have been in Spain managing Fertiberia by invitation of FESA and the Spanish Ministry of Industry & Energy to help salvage the fertilizer industry of the country and create a viable competitive business for the future. We have worked diligently with all parties associated with the industry to achieve that goal. We are obviously disappointed that FESA and Ercros have suddenly withdrawn their support from such a long process with which these entities were intimately involved. These developments, however, will have no effect on FRP's distributable cash capabilities since any cash flow which may have been generated by Fertiberia was to have been reinvested over the intermediate term."

Mr. Latiolais added, "FRP's involvement with Fertiberia over the past several years has greatly improved our knowledge of the Spanish, European and Mediterranean regional fertilizer markets and industries. This new knowledge gives us a better understanding of the potentially profitable growth areas that we may pursue. The group that has submitted a bid to purchase FESA, in competition with our bid for Fertiberia, has made an offer which is unattractive from our standpoint. FRP will continue to pursue other international growth objectives to augment our already strong mix of agricultural minerals assets."

The decision by FRP not to pursue the acquisition of Fertiberia does not alter Freeport-McMoRan Copper and Gold Inc.'s investment in Rio Tinto Minera S.A., nor its ongoing expansion program at the Huelva smelter.

FRP is engaged in the production of phosphate fertilizers and the mining of phosphate rock through IMC-Agrico Company; the mining and transportation of sulphur; and the development and production of related oil reserves.

CONTACT: Freeport-McMoRan Resource Partners, New Orleans

Craig E. Saporito, 504/582-4476
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Publication:Business Wire
Date:Apr 4, 1995
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