Freeport to resume Grasberg output

Freeport to resume Grasberg output

Dow Jones
Vancouver

Freeport-McMoRan Copper & Gold Inc. hopes to resume production
at its giant Grasberg copper and gold mine in Indonesia by the
end of the first quarter, company chairman James R. Moffett said
on Thursday.

At an exploration conference, Moffett told reporters the mine
is getting cleaned up after a fatal slide in October, which
occurred in the south wall of the Grasberg pit, killing eight
workers and burying most of the mine's high-grade ore deposits.

In December, days after the company received approval to
resume full-scale operations, a second slide occurred in the same
section of the mine.

The company declared force majeure on copper conentrate sales
in December, but recently indicated it could resume full
operations by the end of the second quarter.

"We obviously are anxious to get back into production,"
Moffett said. "As soon as it's safe, we'll lift force majeure."

The loss of production from the Grasberg mine has tightened
the world supply of copper concentrate.

Moffett said he expected the average copper price in 2004 will
be more than US$1 a pound.

On Jan. 20, Freeport-McMoRan said lost equipment in the fatal
slippage at the Grasberg open pit cut fourth-quarter earnings by
$4.3 million, or 2 cents a share. Results for the quarter
reflected reduced mill throughput and lower-grade ores following
the accident at the site, the company said.

It expects to return to key ore areas of the Grasberg mine in
the second quarter of 2004, but said it will defer a portion of
the higher-grade ore mining to future periods.

As a result, the company lowered its forecast for 2004 copper
sales to 1 billion pounds from a previous estimate of 1.4
billion, and expects 2004 gold sales to drop to 1.5 million
ounces from an earlier estimate of 2.2 million ounces.

The Grasberg mine is the world's largest gold producer and the
second largest in copper production.