Freeport sets up environmental fund

Freeport sets up environmental fund

NEW ORLEANS, United States (Reuter): Freeport-McMoRan Copper & Gold said Friday it will create a US$100 million trust fund to clean up environmental damage from an Indonesian mine as part of a settlement with a U.S. government agency.

The Overseas Private Investment Corp (OPIC), the government agency, has agreed to reinstate the $100 million political risk insurance for Freeport Copper until the end of the year as part of the settlement.

In November, OPIC canceled coverage for the company's PT-FI Indonesian mining operations, one of the largest copper and gold projects in the world, because of environmental concerns.

OPIC told the company in a letter that the project was creating more mining waste than it had expected and said the project had "degraded a large area of lowland rainforest."

The dispute was submitted to arbitration.

Freeport said Dames & Moore, an environmental impact firm, has just completed a new study on the impact of the mine. The company said it will implement recommendations of the study.