Freeport says Indonesia will honor contracts<\/p>\n
DENVER (Dow Jones): Freeport-McMoran Copper & Gold Inc. (FCX)
\nChief Executive James Moffett sought to dispel concerns about
\nIndonesian political uncertainty late Tuesday, hours before
\nIndonesia's presidential-election results were known.<\/p>\n
Indonesia \"will honor these contracts\" with Freeport-McMoran,
\nregardless of leadership outcomes, he said in a presentation at
\nthe Mining Investment Forum '99 in Denver, sponsored by the
\nDenver Gold Group.<\/p>\n
Wednesday, Moslem leader Abdurrahman Wahid was elected
\npresident by the parliament of Indonesia, where Freeport-
\nMcMoran's huge Grasberg gold and copper mine is located.<\/p>\n
Moffett cited U.S. law that provides for a cessation of U.S.
\naid in a country that expropriates property, and he said that a
\nmove toward expropriation in Indonesia would mean that assistance
\nfrom the U.S., the World Bank and the International Monetary Fund
\nwould disappear. The IMF is the best political-risk insurance in
\nIndonesia, he said.<\/p>\n
Moffett also said that Freeport-McMoran may eventually pay
\ndividends to shareholders if the company has the money and cash
\nflow to support it. \"I think you have to give people something
\nback,\" he said. He added that he believes in a balance of stock
\nbuyback, debt repayment and dividends.<\/p>\n
Moffett defended Freeport-McMoran's debt load of about $3
\nbillion as necessary to develop the potential at Grasberg.<\/p>\n
Tuesday, Freeport-McMoran reported third-quarter earnings of
\n16 cents a share on revenue of $473.7 million, compared with
\nearnings of 14 cents a share on $442.1 million a year ago.<\/p>\n
The New Orleans company's fortunes are closely tied to copper
\nand gold prices. For every $50-per-ounce change in the price of
\ngold, Freeport-McMoran's net income fluctuates by $50 million,
\nsaid Moffett. And for every 10-cent-per-pound change in the price
\nof copper, its net income fluctuates by $70 million.<\/p>",
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