Freeport says Indonesia will honor contracts

Freeport says Indonesia will honor contracts

DENVER (Dow Jones): Freeport-McMoran Copper & Gold Inc. (FCX)
Chief Executive James Moffett sought to dispel concerns about
Indonesian political uncertainty late Tuesday, hours before
Indonesia's presidential-election results were known.

Indonesia "will honor these contracts" with Freeport-McMoran,
regardless of leadership outcomes, he said in a presentation at
the Mining Investment Forum '99 in Denver, sponsored by the
Denver Gold Group.

Wednesday, Moslem leader Abdurrahman Wahid was elected
president by the parliament of Indonesia, where Freeport-
McMoran's huge Grasberg gold and copper mine is located.

Moffett cited U.S. law that provides for a cessation of U.S.
aid in a country that expropriates property, and he said that a
move toward expropriation in Indonesia would mean that assistance
from the U.S., the World Bank and the International Monetary Fund
would disappear. The IMF is the best political-risk insurance in
Indonesia, he said.

Moffett also said that Freeport-McMoran may eventually pay
dividends to shareholders if the company has the money and cash
flow to support it. "I think you have to give people something
back," he said. He added that he believes in a balance of stock
buyback, debt repayment and dividends.

Moffett defended Freeport-McMoran's debt load of about $3
billion as necessary to develop the potential at Grasberg.

Tuesday, Freeport-McMoran reported third-quarter earnings of
16 cents a share on revenue of $473.7 million, compared with
earnings of 14 cents a share on $442.1 million a year ago.

The New Orleans company's fortunes are closely tied to copper
and gold prices. For every $50-per-ounce change in the price of
gold, Freeport-McMoran's net income fluctuates by $50 million,
said Moffett. And for every 10-cent-per-pound change in the price
of copper, its net income fluctuates by $70 million.