Murfy Alexander, OPIC, (202) 336-8690

Friday, April 19, 1996

Garland Robinette, Freeport-McMoRan Copper & Gold, (504) 582-1627

Settlement Reached between Freeport-McMoRan Copper & Gold and Overseas Private Investment Corporation

WASHINGTON, D.C. -- Arbitration between Freeport-McMoRan Copper & Gold Inc. (FCX) of New Orleans and the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency, has ended in a settlement agreement today.

Ruth R. Harkin, President and CEO of OPIC, and Jim Bob Moffett, Chairman and CEO of FCX, made the announcement today in Washington, D.C. and New Orleans, Louisiana, respectively.

Under the agreement, FCX agreed to terminate arbitration proceedings with OPIC that stem from the agency's termination on October 31, 1995 of $100 million in political risk insurance for the company's Grasberg mine in Irian Jaya, Indonesia.

Speaking for OPIC, Ilarkin also announced today that it will reinstate the $100 million FCX political risk insurance until December 31, 1996. As part of the settlement, FCX has agreed to create a trust fund to finance significant environmental remediation initiatives. FCX will make annual contributions to the trust fund beginning immediately, accumulating to a total of $100 million at the end of the life of the mine. In addition, Dames & Moore, an environmental consulting firm, has just completed a new study on the impact of the mine. OPIC is encouraged by FCX's willingness to undertake the voluntary study and its continuing efforts to manage the environmental impact of the mine. OPIC will cooperate with FCX as it implements the recommendations of the study. Consistent with its statutory mandate, OPIC will monitor the implementation of the recommendations throughout the eight-month period of the reinstatement.

Speaking for FCX, Moffett said, "FCX is absolutely committed to conducting its projects according to the highest operating and environmental standards. FCX's Grasberg mine is located in an extremely challenging environment -- both from an operating and environmental view. To further demonstrate our commitment to responsible operation, we have agreed to a series of additional steps -- beyond those we were already implementing under the rigorous environmental standards of the Government of Indonesia."

Both Moffett and Harkin indicated that the settlement makes it possible for each organization to refocus its efforts toward a more productive and efficient use of resources.