Freeport to establish trust for indigenous communities

Freeport to establish trust for indigenous communities

JAKARTA (JP): Freeport-McMorRan Copper & Gold Inc. (FCX) has
agreed to establish a trust to benefit the Amungme and Kamoro
communities, the original tribal inhabitants of the Grasberg mine
project area in Irian Jaya, the company said on Tuesday.

An agreement for the establishment of the trust was signed by
representatives of FCX, its mining affiliate PT Freeport
Indonesia (PT FI) and the indigenous communities in New Orleans,
U.S.A., on Sept. 3, Sidharta Moersjid, senior manager of PT FI's
corporate communications department, said.

"Under the agreement PT FI will pay US$500,000 per year into
the Trust and will initially inject $2.5 million, representing
funding for 1996 through 2000," he said.

Sidharta explained that the agreement, first outlined in 1996,
fulfills a commitment by PT FI for voluntary recognition of the
holders of the traditional land rights (hak ulayat) in the mining
area and for the expanded scope of the mining operations.

The Amungme and Kamoro tribal leaders expressed a desire for
an equity ownership in PT FI's operations in Irian Jaya and
intend to use a portion of the funds to buy shares of FCX in the
public markets to be owned and held by the Trust.

"This agreement is the result of several years of dialogue
between PT FI and the local community as we continue to work
together in a spirit of mutual respect and understanding," James
R. Moffett, chief commissioner of PT FI, said.

"We used to be on the outside, but now we stand together. We
have a stake in this mining operation and we will work hard so
that we can share in its success," said Thom Beanal, one of the
local community representatives.

Welly Mandowen, an Irian development advisor participating in
the process, said, "It's my hope that this agreement will serve
as a model for other companies operating in Irian Jaya and
throughout Indonesia to build a strong relationship with their
local stakeholders."

The agreement is additional to earlier agreements between PT
FI and the local communities, including the Freeport Fund for
Irian Jaya development and existing land use recognition programs
through which about $20 million in annual development funding is
provided to communities in the mining area. (hhr)