Freeport acquires Nusamba's interest

Freeport acquires Nusamba's interest

Dow Jones, Washington

Freeport-McMoRan Copper & Gold Inc. on Feb. 27 repaid a
US$253.4 million loan that it guaranteed on behalf of a minority
partner, according to the company's annual report released late
Friday by the Securities and Exchange Commission.

The partner, Indonesian company PT Nusamba Mineral Industri,
informed Freeport-McMoRan that it didn't expect to be able to
repay the loan when it came due in March, the filing said.

As a result of its payment, Freeport-McMoRan acquired
Nusamba's interest in PT Indocopper Investama, which is a
minority-owner of Freeport's principal operating subsidiary, PT
Freeport Indonesia.

Freeport-McMoRan said it recorded an additional liability of
$253.4 million to reflect the payment of the Nusamba bank loan on
its end-of-year balance sheet.

For 2002, Freeport's earnings will reflect an increased
ownership interest in PT Freeport Indonesia, increased interest
costs related to the loan under its bank credit lines, and
additional depreciation and amortization expense for the increase
in property, plant and equipment.

Had the company been obligated to perform under the guarantee
on Jan. 1, 2001, its 2001 earnings would have been reduced by
about $6 million, or 4 cents a share, the filing said.

Other changes made to Freeport's balance sheet as a result of
the action include a reduction of "other assets" by $61.6 million
to reflect the nonpayment of a loan to Nusamba and an increase in
deferred income taxes of $4.2 million to reflect tax liabilities
relating to Freeport's increased equity ownership in PT Freeport
Indonesia.

Also, Freeport reduced minority interests by $52 million to
reflect its increased equity ownership in PT Freeport Indonesia,
and increased property, plant and equipment by $267.3 million to
reflect the cost of the acquisition in excess of the book value.

Following repayment of the loan, Freeport owns 90.6 percent of
PT Freeport Indonesia.