10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from	To
Commission File Number: 001-11307-01
Freeport-McMoRan Copper & Gold Inc.
(Exact name of registrant as specified in its charter)

Delaware	74-2480931
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
333 North Central Avenue
Phoenix, AZ	85004-2189
(Address of principal executive offices)	(Zip Code)
(602) 366-8100
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

R Yes  o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       R Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer R        Accelerated filer o                                                      Non-accelerated filer o              Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ÿo Yes R No

On April 29, 2011, there were issued and outstanding 947,315,321 shares of the registrant’s common stock, par value $0.10 per share.

FREEPORT-McMoRan COPPER & GOLD INC.

TABLE OF CONTENTS

	Page
Part I. Financial Information	3
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Income (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Consolidated Statement of Equity (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7
Report of Independent Registered Public Accounting Firm	17
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	52
Part II. Other Information	53
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 4. Mine Safety Disclosure	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6. Exhibits	53
Signature	54
Exhibit Index	E-1

2

FREEPORT-McMoRan COPPER & GOLD INC.

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements.

FREEPORT-McMoRan COPPER & GOLD INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	March 31,			December 31,
	2011			2010
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	4,090		$	3,738
Restricted cash for early extinguishment of debt		1,168			-
Trade accounts receivable		1,588			2,132
Other accounts receivable		311			293
Inventories:
Product		1,450			1,409
Materials and supplies, net		1,199			1,169
Mill and leach stockpiles		1,060			856
Other current assets		280			254
Total current assets		11,146			9,851
Property, plant, equipment and development costs, net		17,076			16,785
Long-term mill and leach stockpiles		1,402			1,425
Intangible assets, net		325			328
Other assets		1,059			997
Total assets	$	31,008		$	29,386
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,318		$	2,441
Current portion of debt		1,170			95
Accrued income taxes		806			648
Dividends payable		239			240
Current portion of reclamation and environmental obligations		201			207
Rio Tinto share of joint venture cash flows		17			132
Total current liabilities		4,751			3,763
Long-term debt, less current portion		3,582			4,660
Deferred income taxes		3,056			2,873
Reclamation and environmental obligations, less current portion		2,065			2,071
Other liabilities		1,463			1,459
Total liabilities		14,917			14,826
Equity:
FCX stockholders’ equity:
Common stock		107			107
Capital in excess of par value		18,893			18,751
Accumulated deficit		(1,328	)		(2,590	)
Accumulated other comprehensive loss		(318	)		(323	)
Common stock held in treasury		(3,553	)		(3,441	)
Total FCX stockholders’ equity		13,801			12,504
Noncontrolling interests		2,290			2,056
Total equity		16,091			14,560
Total liabilities and equity	$	31,008		$	29,386

The accompanying notes are an integral part of these consolidated financial statements.

3

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended
	March 31,
	2011			2010
	(In millions, except
	per share amounts)
Revenues	$	5,709		$	4,363
Cost of sales:
Production and delivery		2,377			1,918
Depreciation, depletion and amortization		232			271
Total cost of sales		2,609			2,189
Selling, general and administrative expenses		114			95
Exploration and research expenses		50			31
Total costs and expenses		2,773			2,315
Operating income		2,936			2,048
Interest expense, net		(98	)		(145	)
Losses on early extinguishment of debt		(7	)		(27	)
Other income, net		10			12
Income before income taxes and equity in
affiliated companies’ net earnings		2,841			1,888
Provision for income taxes		(984	)		(678	)
Equity in affiliated companies’ net earnings		4			5
Net income		1,861			1,215
Net income attributable to noncontrolling interests		(362	)		(270	)
Preferred dividends		-			(48	)
Net income attributable to FCX common
stockholders	$	1,499		$	897
Net income per share attributable to
FCX common stockholders:
Basic	$	1.58		$	1.04
Diluted	$	1.57		$	1.00
Weighted-average common shares outstanding:
Basic		946			861
Diluted		955			947
Dividends declared per share of common stock	$	0.25		$	0.075

The accompanying notes are an integral part of these consolidated financial statements.

4

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended
	March 31,
	2011			2010
	(In millions)
Cash flow from operating activities:
Net income	$	1,861		$	1,215
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, depletion and amortization		232			271
Stock-based compensation		43			47
Charges for reclamation and environmental obligations, including accretion		38			39
Payments of reclamation and environmental obligations		(52	)		(68	)
Losses on early extinguishment of debt		7			27
Deferred income taxes		127			7
Other, net		(11	)		-
(Increases) decreases in working capital:
Accounts receivable		511			33
Inventories		(253	)		(113	)
Other current assets		(18	)		(2	)
Accounts payable and accrued liabilities		(264	)		(17	)
Accrued income and other taxes		138			379
Net cash provided by operating activities		2,359			1,818
Cash flow from investing activities:
Capital expenditures:
North America copper mines		(119	)		(19	)
South America		(140	)		(48	)
Indonesia		(125	)		(98	)
Africa		(11	)		(39	)
Molybdenum		(71	)		(7	)
Other		(39	)		(20	)
Other, net		-			2
Net cash used in investing activities		(505	)		(229	)
Cash flow from financing activities:
Proceeds from debt		9			21
Repayments of debt		(13	)		(326	)
Restricted cash for early extinguishment of debt		(1,124	)		-
Cash dividends and distributions paid:
Common stock		(238	)		(66	)
Preferred stock		-			(49	)
Noncontrolling interests		(133	)		(75	)
Contributions from noncontrolling interests		5			8
Net payments for stock-based awards		(20	)		(10	)
Excess tax benefit from stock-based awards		21			4
Other, net		(9	)		-
Net cash used in financing activities		(1,502	)		(493	)
Net increase in cash and cash equivalents		352			1,096
Cash and cash equivalents at beginning of year		3,738			2,656
Cash and cash equivalents at end of period	$	4,090		$	3,752

The accompanying notes are an integral part of these consolidated financial statements.

5

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENT OF EQUITY (Unaudited)

	FCX Stockholders’ Equity
										Accumu-
										lated			Common Stock
	Common Stock									Other			Held in Treasury					Total FCX
	Number				Capital in		Accumu-			Compre-			Number					Stock-			Non-
	of		At Par		Excess of		lated			hensive			of		At			holders’			controlling			Total
	Shares		Value		Par Value		Deficit			Loss			Shares		Cost			Equity			Interests			Equity
	(In millions)
Balance at December 31, 2010		1,067	$	107	$	18,751	$	(2,590	)	$	(323	)		122	$	(3,441	)	$	12,504		$	2,056		$	14,560
Exercised and issued stock-based
awards		3		-		24		-			-			-		-			24			-			24
Stock-based compensation		-		-		45		-			-			-		-			45			-			45
Tax benefit for stock-based awards		-		-		6		-			-			-		-			6			-			6
Tender of shares for stock-based
awards		-		-		67		-			-			1		(112	)		(45	)		-			(45	)
Dividends on common stock		-		-		-		(237	)		-			-		-			(237	)		-			(237	)
Dividends and distributions to
noncontrolling interests		-		-		-		-			-			-		-			-			(133	)		(133	)
Contributions from noncontrolling
interests		-		-		-		-			-			-		-			-			5			5
Comprehensive income:
Net income		-		-		-		1,499			-			-		-			1,499			362			1,861
Other comprehensive income,
net of taxes:
Unrealized gains on securities		-		-		-		-			1			-		-			1			-			1
Translation adjustment		-		-		-		-			1			-		-			1			-			1
Defined benefit plans:
Amortization of unrecognized
amounts		-		-		-		-			3			-		-			3			-			3
Other comprehensive income		-		-		-		-			5			-		-			5			-			5
Total comprehensive income		-		-		-		-			-			-		-			1,504			362			1,866
Balance at March 31, 2011		1,070	$	107	$	18,893	$	(1,328	)	$	(318	)		123	$	(3,553	)	$	13,801		$	2,290		$	16,091

The accompanying notes are an integral part of these consolidated financial statements

6

FREEPORT-McMoRan COPPER & GOLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.   GENERAL INFORMATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles (GAAP) in the United States (U.S.). Therefore, this information should be read in conjunction with Freeport-McMoRan Copper & Gold Inc.’s (FCX) consolidated financial statements and notes contained in its 2010 Annual Report on Form 10-K. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. Operating results for the three-month period ended March 31, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

In December 2010, FCX’s Board of Directors declared a two-for-one split of its common stock in the form of a stock dividend on issued and outstanding shares, with the additional shares issued on February 1, 2011, to common shareholders of record at the close of business on January 15, 2011. All references to shares of common stock and per share amounts have been retroactively adjusted to reflect the two-for-one stock split.

2.   EARNINGS PER SHARE

FCX’s basic net income per share of common stock was calculated by dividing net income attributable to common stock by the weighted-average shares of common stock outstanding during the period. Following is a reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share (in millions, except per share amounts):

	Three Months Ended
	March 31,
	2011			2010
Net income	$	1,861		$	1,215
Net income attributable to noncontrolling interests		(362	)		(270	)
Preferred dividends		-			(48	)
Net income attributable to FCX common stockholders		1,499			897
Plus income impact of assumed conversion of
6¾% Mandatory Convertible Preferred Stocka		-			48
Diluted net income attributable to FCX common
stockholders	$	1,499		$	945
Weighted-average shares of common stock outstanding		946			861
Add stock issuable upon conversion, exercise or
vesting of:
6¾% Mandatory Convertible Preferred Stocka		-			78
Dilutive stock options		8	b		6	b
Restricted stock		1			2
Weighted-average shares of common stock outstanding
for purposes of calculating diluted net income per share		955			947
Diluted net income per share attributable to
FCX common stockholders	$	1.57		$	1.00

a.   All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock.

b.   Potential additional shares of common stock that were anti-dilutive totaled approximately two million for first-quarter 2011 and approximately five million for first-quarter 2010.

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the period are excluded from the computation of diluted net income per share of common stock. Excluded amounts were less than 1 million stock options with a weighted-average exercise price of $57.86 per option for first-quarter 2011 and approximately 3 million stock options with a weighted-average exercise price of $44.10 per option for first-quarter 2010.

7

3.   PENSION AND POSTRETIREMENT BENEFITS

The components of net periodic benefit costs for pension and postretirement benefits follow (in millions):

	Three Months Ended
	March 31,
	2011			2010
Service cost	$	10		$	10
Interest cost		27			27
Expected return on plan assets		(24	)		(23	)
Amortization of net actuarial loss		6			5
Net periodic benefit costs	$	19		$	19

4.   INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow (in millions):

	March 31,		December 31,
	2011		2010
Mining Operations:
Raw materials	$	1	$	1
Work-in-process		71		93
Finished goodsa		778		704
Atlantic Copper, S.A. (Atlantic Copper):
Raw materials (concentrates)		258		336
Work-in-process		324		266
Finished goods		18		9
Total product inventories		1,450		1,409
Total materials and supplies, netb		1,199		1,169
Total inventories, less current portion of mill and leach stockpiles	$	2,649	$	2,578

a.   Primarily includes molybdenum concentrates, and copper concentrates, anodes, cathodes and rod.

b.   Materials and supplies inventory is net of obsolescence reserves totaling $25 million at March 31, 2011, and $26 million at December 31, 2010.

A summary of mill and leach stockpiles follows (in millions):

	March 31,		December 31,
	2011		2010
Current:
Mill stockpiles	$	29	$	35
Leach stockpiles		1,031		821
Total current mill and leach stockpiles	$	1,060	$	856
Long-term:a
Mill stockpiles	$	482	$	470
Leach stockpiles		920		955
Total long-term mill and leach stockpiles	$	1,402	$	1,425

a.   Metals in stockpiles not expected to be recovered within the next 12 months.

8

5.   INCOME TAXES

FCX’s first-quarter 2011 income tax provision resulted from taxes on international operations ($846 million) and U.S. operations ($138 million). FCX’s first-quarter 2010 income tax provision resulted from taxes on international operations ($597 million) and U.S. operations ($81 million). FCX’s consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which it operates and totaled 35 percent for first-quarter 2011 and 36 percent for first-quarter 2010. Variations in the relative proportions of jurisdictional income result in fluctuations to FCX’s consolidated effective income tax rate.

6.   DEBT AND EQUITY TRANSACTIONS

FCX entered into a new senior unsecured revolving credit facility on March 30, 2011, which replaced the existing revolving credit facilities that were scheduled to mature on March 19, 2012. During the first quarter of 2011, FCX recognized a loss on early extinguishment of debt totaling $7 million ($6 million to net income attributable to FCX common shareholders or $0.01 per diluted share) associated with the revolving credit facilities that were replaced by the new senior unsecured revolving credit facility. This revolving credit facility is available until March 30, 2016, in an aggregate principal amount of $1.5 billion, with $500 million available to PT Freeport Indonesia. At March 31, 2011, FCX had no borrowings and $43 million of letters of credit issued under the revolving credit facility, resulting in availability of approximately $1.5 billion, of which $957 million could be used for additional letters of credit.

Interest on the revolving credit facility is generally based on the London Interbank Offered Rate (LIBOR) plus 2.00 percent, subject to an increase or decrease in the interest rate margin based on the credit ratings assigned by Standard & Poor’s Rating Services and Moody’s Investors Service to FCX’s senior unsecured debt.

The obligations of FCX and PT Freeport Indonesia under the revolving credit facility are not guaranteed by any subsidiaries and are unsecured; however, FCX may at any time designate any subsidiary (other than PT Freeport Indonesia) as a subsidiary guarantor. The revolving credit facility and FCX’s senior notes contain certain restrictive covenants that vary among the instruments, but include limitations on the incurrence of debt, liens and certain asset sales.

On February 24, 2011, FCX announced its intent to redeem the remaining $1.1 billion of its outstanding 8.25% Senior Notes due 2015. On March 30, 2011, FCX transferred funds totaling $1.2 billion to a restricted cash account to pay the holders of the 8.25% Senior Notes (principal and premium amounts together with accrued and unpaid interest). On April 1, 2011, holders of these senior notes received 104.125 percent of the principal amount together with accrued and unpaid interest. As a result of this redemption, FCX expects to record a loss on early extinguishment of debt totaling $56 million ($49 million to net income attributable to FCX common stockholders) in the second quarter of 2011.

Consolidated interest expense (before capitalization) totaled $123 million in first-quarter 2011 and $151 million in first-quarter 2010. Capitalized interest totaled $25 million in first-quarter 2011 and $6 million in first-quarter 2010.

On March 31, 2011, FCX declared a quarterly dividend of $0.25 per share, which was paid on May 1, 2011, to common shareholders of record at the close of business on April 15, 2011.

During the first quarter of 2010, FCX purchased in the open market $133 million of its 8.25% Senior Notes for $145 million and $136 million of its 8.375% Senior Notes for $148 million. These open-market purchases resulted in losses on early extinguishment of debt totaling $27 million ($23 million to net income attributable to FCX common shareholders or $0.02 per diluted share).

On May 1, 2010, the outstanding shares of FCX’s 6¾% Mandatory Convertible Preferred Stock were automatically converted into shares of FCX common stock (refer to Note 11 in FCX’s 2010 Annual Report on Form 10-K for further discussion).

Total comprehensive income attributable to FCX common stockholders totaled $1,504 million in first-quarter 2011 and $948 million in first-quarter 2010.

9

7.FINANCIAL INSTRUMENTS

FCX does not purchase, hold or sell derivative financial instruments unless there are risks associated with an existing asset or obligation or if it anticipates a future activity that is likely to occur and will result in exposure to market risks and FCX intends to offset or mitigate such risks. FCX does not enter into any derivative financial instruments for speculative purposes, but has entered into derivative financial instruments in limited instances to achieve specific objectives. These objectives principally relate to managing risks associated with commodity price, foreign currency and interest rate risks. The fair values of FCX’s derivative financial instruments are based on widely published market prices.

Commodity Contracts.  From time to time, FCX has entered into forward, futures and swap contracts to hedge the market risk associated with fluctuations in the prices of commodities it purchases and sells. Derivative financial instruments used by FCX to manage its risks do not contain credit risk-related contingent provisions. As of March 31, 2011, FCX had no price protection contracts relating to its mine production. A discussion of FCX’s derivative commodity contracts and programs follows.

Derivatives Designated as Hedging Instruments – Fair Value Hedges

Copper Futures and Swap Contracts. Some of FCX’s U.S. copper rod customers request a fixed market price instead of the New York Mercantile Exchange (COMEX) average copper price in the month of shipment. FCX hedges this price exposure in a manner that allows it to receive the COMEX average price in the month of shipment while the customers pay the fixed price they requested. FCX accomplishes this by entering into copper futures and swap contracts and then liquidating the copper futures contracts and settling the copper swap contracts during the month of shipment, which generally results in FCX receiving the COMEX average copper price in the month of shipment. Hedge gains or losses from these copper futures and swap contracts are recorded in revenues. FCX did not have any significant gains or losses during the three-month periods ended March 31, 2011 and 2010, resulting from hedge ineffectiveness. At March 31, 2011, FCX held copper futures and swap contracts that qualified for hedge accounting for 55 million pounds at an average price of $4.26 per pound, with maturities through December 2012.

A summary of gains (losses) recognized in revenues for derivative financial instruments related to commodity contracts that are designated and qualify as fair value hedge transactions, along with the unrealized gains (losses) on the related hedged item (firm sales commitments) follows (in millions):

	Three Months Ended March 31,
	2011			2010
Copper futures and swap contracts:
Unrealized gains (losses):
Derivative financial instruments	$	(15	)	$	2
Hedged Item		15			(2	)
Realized gains:
Matured derivative financial instruments		12			10

Derivatives Not Designated as Hedging Instruments

Embedded Derivatives. As described in Note 1 to FCX’s 2010 Annual Report on Form 10-K under “Revenue Recognition,” certain FCX copper concentrate, copper cathode and gold sales contracts provide for provisional pricing primarily based on London Metal Exchange (LME) or COMEX prices at the time of shipment as specified in the contract. Similarly, FCX purchases copper and molybdenum under contracts that provide for provisional pricing (molybdenum purchases are based on an average Metals Week Molybdenum Dealer Oxide price). FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host sales agreements since the contracts do not allow for net settlement and always result in physical delivery. Sales and purchases with a provisional sales price contain an embedded derivative (i.e., the price settlement mechanism that is settled after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale or purchase of the metals contained in the concentrates or cathodes at the then-current LME or COMEX price (copper), London Bullion Market Association price (gold) or the average Metals Week Molybdenum Dealer Oxide price (molybdenum) as defined in the contract. Mark-to-market price fluctuations recorded through the settlement date are reflected in revenues for sales contracts and in cost of sales as production and delivery costs for purchase contracts.

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A summary of FCX’s embedded derivatives at March 31, 2011, follows:

		Average Price
	Open	Per Unit				Maturities
	Positions	Contract		Market		Through
Embedded derivatives in provisional
sales contracts:
Copper (millions of pounds)	653	$	4.28	$	4.27	September 2011
Gold (thousands of ounces)	194		1,402		1,436	June 2011
Embedded derivatives in provisional
purchase contracts:
Copper (millions of pounds)	115		4.33		4.27	May 2011
Molybdenum (thousands of pounds)	24		15.04		14.69	April 2011

Copper Forward Contracts. Atlantic Copper, FCX’s wholly owned smelting and refining unit in Spain, enters into forward copper contracts designed to hedge its copper price risk whenever its physical purchases and sales pricing periods do not match. These economic hedge transactions are intended to hedge against changes in copper prices, with the mark-to-market hedging gains or losses recorded in cost of sales. At March 31, 2011, Atlantic Copper held net forward copper sales contracts for 7 million pounds at an average price of $4.35 per pound, with maturities through May 2011.

A summary of the realized and unrealized gains (losses) recognized in income before income taxes and equity in affiliated companies’ net earnings for commodity contracts that do not qualify as hedge transactions, including embedded derivatives, follows (in millions):

	Three Months Ended March 31,
	2011			2010
Embedded derivatives in provisional sales contractsa	$	(44	)	$	131
Embedded derivatives in provisional purchase contractsb		-			(2	)
Copper forward contractsb		-			1

a.   Amounts recorded in revenues.

b.   Amounts recorded in cost of sales as production and delivery costs.

Foreign Currency Exchange Contracts.  As a global company, FCX transacts business in many countries and in many currencies. Foreign currency transactions at FCX’s international subsidiaries increase its risks because exchange rates can change between the time agreements are made and the time foreign currency transactions are settled. FCX may hedge or protect its international subsidiaries’ foreign currency transactions from time to time by entering into forward exchange contracts to lock in or minimize the effects of fluctuations in exchange rates. FCX had no outstanding foreign currency exchange contracts at March 31, 2011.

Interest Rate Swap Contracts.  From time to time, FCX or its subsidiaries may enter into interest rate swaps to manage its exposure to interest rate changes and to achieve a desired proportion of fixed-rate versus floating-rate debt based on current and projected market conditions. FCX may enter into interest rate swap contracts to lock in an interest rate considered to be favorable in order to protect against its exposure to variability in future interest payments attributable to increases in interest rates of the designated floating-rate debt. In some situations, FCX may enter into fixed-to-floating interest rate swap contracts to protect against changes in the fair value of the underlying fixed-rate debt that result from market interest rate changes and to take advantage of lower interest rates. FCX had no outstanding interest rate swap contracts at March 31, 2011.

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Unsettled Derivative Financial Instruments

A summary of the fair values of unsettled derivative financial instruments recorded on the consolidated balance sheets follows (in millions):

	March 31,			December 31,
	2011			2010
Derivatives designated as hedging instruments
Commodity contracts:
Copper futures and swap contracts:a
Asset positionb	$	6		$	18
Liability positionc		(3	)		-
Derivatives not designated as hedging instruments
Commodity contracts:
Embedded derivatives in provisional sales/purchases contracts:d
Asset position	$	58		$	357
Liability position		(52	)		(115	)
Copper forward contracts:
Asset positionb		1			-
Liability positionc		-			(10	)

a.   FCX had paid $7 million at March 31, 2011, and $3 million at December 31, 2010, for margin requirements (recorded in other current assets). In addition, FCX had received $8 million from a broker associated with margin requirements (recorded in accounts payable and accrued liabilities) at December 31, 2010.

b.   Amounts recorded in other current assets.

c.   Amounts recorded in accounts payable and accrued liabilities.

d.   Amounts recorded either as a net accounts receivable or a net accounts payable.

Credit Risk.  FCX is exposed to credit loss when financial institutions with which FCX has entered into derivative transactions (commodity, foreign exchange and interest rate swaps) are unable to pay. To minimize the risk of such losses, FCX uses highly rated financial institutions that meet certain requirements. FCX also periodically reviews the creditworthiness of these institutions to ensure that they are maintaining their credit ratings. FCX does not anticipate that any of the financial institutions it deals with will default on their obligations. As of March 31, 2011, FCX did not have any significant credit exposure associated with derivative transactions.

Other Financial Instruments.  Other financial instruments include cash and cash equivalents, restricted cash for early extinguishment of debt, accounts receivable, trust assets, available-for-sale securities, accounts payable and accrued liabilities, dividends payable, Rio Tinto share of joint venture cash flows and long-term debt. Refer to Note 8 for the fair values of these financial instruments.

Cash and Cash Equivalents, Restricted Cash for Early Extinguishment of Debt, Accounts Receivable, Accounts Payable and Accrued Liabilities, Dividends Payable and Rio Tinto Share of Joint Venture Cash Flows. The financial statement amount is a reasonable estimate of the fair value because of the short maturity of these instruments and generally negligible credit losses.

Trust Assets and Available-for-Sale Securities. The financial statement amount represents the fair value of trust assets and available-for-sale securities.

Long-Term Debt. The financial statement amount represents cost except for long-term debt acquired in the Phelps Dodge Corporation (Phelps Dodge) acquisition, which was recorded at fair value at the acquisition date.

8.   FAIR VALUE MEASUREMENT

Fair value accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). FCX did not have any significant transfers in or out of Levels 1, 2, or 3 for first-quarter 2011.

12

A summary of FCX’s financial assets and liabilities measured at fair value on a recurring basis follows (in millions):

	Fair Value at March 31, 2011
	Total			Level 1			Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	3,793		$	3,793		$	-	$	-
Time deposits		208			208			-		-
Total cash equivalents		4,001			4,001			-		-
Restricted cash for early extinguishment of debt:
U.S. government treasury funds		1,168			1,168			-		-
Trust assets (current and long-term):
U.S. core fixed income funds		43			-			43		-
Government mortgage-backed securities		40			-			40		-
Corporate bonds		22			-			22		-
Asset-backed securities		19			-			19		-
Money market funds		12			12			-		-
Government bonds and notes		11			-			11		-
Municipal bonds		1			-			1		-
Total trust assets		148			12			136		-
Available-for-sale securities:
Time deposits		23			23			-		-
Equity securities		10			10			-		-
Money market funds		4			4			-		-
Total available-for-sale securities		37			37			-		-
Derivatives:
Embedded derivatives in provisional sales/purchases		58			58			-		-
Copper futures and swap contracts		6			6			-		-
Copper forward contracts		1			1			-		-
Total derivatives		65			65			-		-
Total assets	$	5,419		$	5,283		$	136	$	-
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases	$	(52	)	$	(52	)	$	-	$	-
Copper futures and swap contracts		(3	)		(3	)		-		-
Total derivative liabilities	$	(55	)	$	(55	)	$	-	$	-

Valuation Techniques

Money market funds, time deposits and U.S. government treasury funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

Fixed income securities (government and agency securities, corporate bonds, asset-backed securities and U.S. core fixed income funds) are valued using a bid evaluation or a mid evaluation. A bid evaluation is an estimated price at which a dealer would pay for a security. A mid evaluation is the average of the estimated price at which a dealer would sell a security and the estimated price at which a dealer would pay for a security. These evaluations are based on quoted prices, if available, or models that use observable inputs and, as such, are classified within Level 2 of the fair value hierarchy.

Equity securities are valued at the closing price reported on the active market on which the individual securities are traded and as such are classified within Level 1 of the fair value hierarchy.

FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales are valued using quoted market prices based on the forward LME or COMEX prices (copper) and the London Bullion Market Association price (gold) and, as such, are classified within Level 1 of the fair value hierarchy. FCX’s embedded derivatives on provisional molybdenum purchases are valued based on the latest average weekly

13

Metals Week Molybdenum Dealer Oxide prices and, as such, are classified within Level 1 of the fair value hierarchy.

FCX’s derivative financial instruments for copper futures and swap contracts and forward contracts are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets (refer to Note 7 for further discussion).

The techniques described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with other market participants, the use of different techniques or assumptions to determine fair value of certain financial instruments could result in a different fair value measured at the reporting date. There have been no changes in the techniques used at March 31, 2011.

The carrying value for certain FCX financial instruments (i.e., accounts receivable, accounts payable and accrued liabilities, dividends payable, and Rio Tinto’s share of joint venture cash flows) approximate fair value and, therefore, have been excluded from the table below. A summary of the carrying amount and fair value of FCX’s other financial instruments follows (in millions):

	At March 31, 2011						At December 31, 2010
	Carrying			Fair			Carrying			Fair
	Amount			Value			Amount			Value
Cash and cash equivalentsa	$	4,090		$	4,090		$	3,738		$	3,738
Restricted cash for early extinguishment of debta		1,168			1,168			-			-
McMoRan Exploration Co. investmentb		496			658			500			623
Net embedded derivatives included in accounts
receivable or payablea		6			6			242			242
Trust assets (current and long-term)a, c		148			148			148			148
Available-for-sale securities (current and
long-term)a, c		37			37			34			34
Derivative assetsa, d		7			7			18			18
Derivatives included in accounts payable and
accrued liabilitiesa		(3	)		(3	)		(10	)		(10	)
Long-term debt (including amounts due
within one year)e		(4,752	)		(5,114	)		(4,755	)		(5,146	)

a.   Recorded at fair value.

b.   Recorded at cost and included in other assets. Fair value is based on a bid evaluation, which is an estimated price at which a dealer would pay for a security.

c.   Current portion included in other current assets and long-term portion included in other assets.

d.   Included in other current assets.

e.   Recorded at cost except for long-term debt acquired in the Phelps Dodge acquisition, which was recorded at fair value at the acquisition date. Fair value of substantially all of FCX’s long-term debt is estimated based on quoted market prices.

9.   NEW ACCOUNTING STANDARD

Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements. In January 2010, the Financial Accounting Standards Board issued accounting guidance intended to improve disclosures related to fair value measurements. This guidance requires significant transfers in and out of Level 1 and Level 2 fair value measurements to be disclosed separately along with the reasons for the transfers. Additionally, in the reconciliation for the fair value measurements using significant unobservable inputs (Level 3), separate information about purchases, sales, issuances and settlements must be presented (cannot net as one number). This guidance also provides clarification for existing disclosures on (i) level of disaggregation and (ii) inputs and valuation techniques. In addition, this guidance includes conforming amendments for employers’ disclosure of postretirement benefit plan assets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the rollforward of activity in Level 3 fair value measurements. Those disclosures are required for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

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10.    SUBSEQUENT EVENTS

In October 2010, the government of the DRC announced the conclusion of the review of Tenke Fungurume Mining S.A.R.L.’s (TFM) contracts, and confirmed that TFM’s existing mining contracts are in good standing and acknowledged the rights and benefits granted under those contracts. In connection with the review, TFM made several commitments that have been reflected in amendments to its mining contracts, which were signed by the parties in December 2010. In March 2011, the amendments were approved by a ministerial council, and a Presidential Decree signed by the President and Prime Minister of the DRC was issued in April 2011. After giving effect to the modifications that will be made to TFM’s bylaws to reflect the agreement of the parties, FCX’s effective ownership percentage in the project will be 56.0 percent prospectively, compared to its current ownership interest of 57.75 percent.

On April 20, 2011, FCX’s Board of Directors declared a supplemental common stock dividend of $0.50 per share to be paid on June 1, 2011, to common shareholders of record at the close of business on May 15, 2011.

FCX evaluated events after March 31, 2011, and through the date the consolidated financial statements were issued, and determined any events or transactions occurring during this period that would require recognition or disclosure are appropriately addressed in these consolidated financial statements.

11.   BUSINESS SEGMENTS

FCX has organized its operations into five primary divisions – North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum operations. Notwithstanding this structure, FCX internally reports information on a mine-by-mine basis. Therefore, FCX concluded that its operating segments include individual mines. Operating segments that meet certain thresholds are reportable segments.

Intersegment Sales. Intersegment sales between FCX’s operations are based on similar arms-length transactions with third parties at the time of the sale. Intersegment sales may not be reflective of the actual prices ultimately realized because of a variety of factors, including additional processing, timing of sales to unaffiliated customers and transportation premiums.

Allocations. FCX allocates certain operating costs, expenses and capital expenditures to the operating divisions and individual segments. However, not all costs and expenses applicable to a mine or operation are allocated. All U.S. federal and state income taxes are recorded and managed at the corporate level, whereas foreign income taxes are recorded and managed at the applicable country. In addition, most exploration and research activities are managed at the corporate level, and those costs along with some selling, general and administrative costs are not allocated to the operating divisions or segments. Accordingly, the following segment information reflects management determinations that may not be indicative of what the actual financial performance of each operating division or segment would be if it was an independent entity.

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Business Segments

(In Millions)		North America Copper Mines						South America						Indonesia			Africa
																							Atlantic			Corporate,
																							Copper			Other &
				Other				Cerro		Other									Molyb-		Rod &		Smelting			Elimi-			FCX
		Morenci		Mines		Total		Verde		Mines		Total		Grasberg			Tenke		denum		Refining		& Refining			nations			Total
Three Months Ended March 31, 2011
Revenues:
Unaffiliated customers		$	136	$	16	$	152	$	668	$	595	$	1,263	$	1,372	a	$	309	$	374	$	1,481	$	756		$	2		$	5,709
Intersegment			386		810		1,196		60		79		139		358			-		-		6		6			(1,705	)		-
Production and delivery			210		365		575		175		236		411		526			124		240		1,481		763			(1,743	)		2,377
Depreciation, depletion and amortization			28		30		58		34		23		57		57			28		14		2		10			6			232
Selling, general and administrative expenses			-		1		1		1		1		2		43			2		4		-		8			54			114
Exploration and research expenses			-		-		-		-		-		-		-			-		1		-		-			49			50
Operating income (loss)			284		430		714		518		414		932		1,104			155		115		4		(19	)		(69	)		2,936
Interest expense, net			1		1		2		-		-		-		1			2		-		-		4			89			98
Provision for income taxes			-		-		-		163		143		306		507			40		-		-		-			131			984
Total assets at March 31, 2011			1,991		4,623		6,614		4,573		3,427		8,000		5,440			3,630		2,068		384		1,437			3,435			31,008
Capital expenditures			29		90		119		24		116		140		125			11		71		3		8			28			505
Three Months Ended March 31, 2010
Revenues:
Unaffiliated customers		$	9	$	15	$	24	$	458	$	497	$	955	$	1,161	a	$	249	$	275	$	1,066	$	633		$	-		$	4,363
Intersegment			356		674		1,030		83		31		114		298			-		-		7		-			(1,449	)		-
Production and delivery			146		318		464		171		205		376		475			110		185		1,067		628			(1,387	)		1,918
Depreciation, depletion and amortization			42		40		82		34		27		61		63			30		13		2		10			10			271
Selling, general and administrative expenses			-		-		-		-		-		-		29			-		3		-		6			57			95
Exploration and research expenses			-		-		-		-		-		-		-			-		1		-		-			30			31
Operating income (loss)			177		331		508		336		296		632		892			109		73		4		(11	)		(159	)		2,048
Interest expense, net			2		3		5		-		-		-		-			2		-		-		2			136			145
Provision for income taxes			-		-		-		105		92		197		393			25		-		-		-			63			678
Total assets at March 31, 2010			1,897		4,194		6,091		4,294		2,803		7,097		4,896			3,431		1,745		347		1,207			2,299			27,113
Capital expenditures			3		16		19		12		36		48		98			39		7		1		9			10			231
a.	Includes PT Freeport Indonesia’s sales to PT Smelting totaling $680 million in the first three months of 2011 and $486 million in the first three months of 2010.

16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF

FREEPORT-McMoRan COPPER & GOLD INC.

We have reviewed the condensed consolidated balance sheet of Freeport-McMoRan Copper & Gold Inc. as of March 31, 2011, and the related consolidated statements of income and cash flows for the three-month periods ended March 31, 2011 and 2010, and the consolidated statement of equity for the three-month period ended March 31, 2011. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Freeport-McMoRan Copper & Gold Inc. as of December 31, 2010, and the related consolidated statements of operations, cash flows, and equity for the year then ended (not presented herein), and in our report dated February 25, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2010, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

ERNST & YOUNG LLP

Phoenix, Arizona

May 6, 2011

17

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW

In Management’s Discussion and Analysis of Financial Condition and Results of Operations, “we,” “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries. You should read this discussion in conjunction with our financial statements, the related Management’s Discussion and Analysis of Financial Condition and Results of Operations and the discussion of our Business and Properties in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the United States (U.S.) Securities and Exchange Commission (SEC). The results of operations reported and summarized below are not necessarily indicative of future operating results. References to “Notes” are Notes included in our Notes to Consolidated Financial Statements. Throughout Management's Discussion and Analysis of Financial Condition and Results of Operations all references to earnings or losses per share are on a diluted basis, unless otherwise noted, and have been retroactively adjusted to reflect the February 1, 2011, two-for-one stock split.

We are one of the world’s largest copper, gold and molybdenum mining companies in terms of reserves and production. Our portfolio of assets includes the Grasberg minerals district in Indonesia, significant mining operations in North and South America, and the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC). The Grasberg minerals district contains the largest single recoverable copper reserve and the largest single gold reserve of any mine in the world based on the latest available reserve data provided by third-party industry consultants. We also operate Atlantic Copper, our wholly owned copper smelting and refining unit in Spain.

Our results for first-quarter 2011, compared with first-quarter 2010, primarily reflected higher realized copper and gold prices, partly offset by lower copper sales volumes. Refer to “Consolidated Results” for further discussion of our consolidated financial results for the first quarters of 2011 and 2010.

At March 31, 2011, we had $4.1 billion in consolidated cash and cash equivalents and $4.8 billion in total debt. On April 1, 2011, we redeemed the remaining $1.1 billion of the outstanding 8.25% Senior Notes (refer to Note 6 for further discussion). After taking into account the April 1, 2011, redemption, which was funded with restricted cash, total debt approximated $3.7 billion.We have no significant debt maturities in the near term; however, we may consider additional opportunities to prepay debt in advance of scheduled maturities. Refer to “Capital Resources and Liquidity – Financing Activities” for further discussion.

In December 2010, our Board of Directors (the Board) authorized a two-for-one common stock split effected on February 1, 2011 (refer to Note 1 for further discussion). All references to our common stock, per share amounts and dividends on common stock herein have been retroactively adjusted to reflect the two-for-one stock split. Refer to “Capital Resources and Liquidity – Financing Activities” for further discussion of common stock dividends.

In December 2010, the Board declared a $0.50 per share supplemental common stock dividend that was paid on December 30, 2010. In April 2011, the Board declared an additional $0.50 per share supplemental common stock dividend to be paid on June 1, 2011, to shareholders of record on May 15, 2011.

In October 2010, the government of the DRC announced the conclusion of the review of Tenke Fungurume Mining S.A.R.L.’s (TFM) contracts, and confirmed that TFM’s existing mining contracts are in good standing and acknowledged the rights and benefits granted under those contracts. In connection with the review, TFM made several commitments that have been reflected in amendments to its mining contracts, which were signed by the parties in December 2010 (refer to Note 14 in our Annual Report on Form 10-K for the year ended December 31, 2010, for further discussion). In March 2011, the amendments were approved by a ministerial council, and a Presidential Decree signed by the President and Prime Minister of the DRC was issued in April 2011. After giving effect to the modifications that will be made to TFM’s bylaws to reflect the agreement of the parties, our effective ownership interest in the project will be 56.0 percent prospectively, compared to our current ownership interest of 57.75 percent.

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OUTLOOK

We view the long-term outlook for our business positively, supported by limitations on supplies of copper and by the requirements for copper in the world’s economy.

Our financial results can vary significantly as a result of fluctuations in the market prices of copper and, to a lesser extent, gold and molybdenum. World market prices for these commodities have fluctuated historically and are affected by numerous factors beyond our control. Because we cannot control the price of our products, the key measures that management focuses on in operating our business are sales volumes, unit net cash costs and operating cash flow. Discussion of the outlook for each of these measures follows.

Sales Volumes. Our projected sales volumes depend on the achievement of targeted mining rates, the successful operation of production facilities, the impact of weather conditions and other factors. Consolidated sales from mines for the year 2011 are expected to approximate 3.9 billion pounds of copper, 1.6 million ounces of gold and 73 million pounds of molybdenum, including 965 million pounds of copper, 365 thousand ounces of gold and 17 million pounds of molybdenum for second-quarter 2011.

Unit Net Cash Costs. Quarterly unit net cash costs vary with fluctuations in sales volumes. Quarterly unit net cash costs for the remainder of 2011 are expected to be higher than first-quarter 2011 consolidated unit net cash costs of $0.79 per pound. Assuming average prices of $1,400 per ounce of gold and $15 per pound of molybdenum for the remainder of 2011, and achievement of current 2011 sales volumes and cost estimates, we estimate our consolidated unit net cash costs (net of by-product credits) for our copper mining operations would average approximately $1.04 per pound of copper for the year 2011. The impact of price changes on consolidated unit net cash costs would approximate $0.02 per pound for each $50 per ounce change in the average price of gold for the remainder of 2011, and $0.02 per pound for each $2 per pound change in the average price of molybdenum for the remainder of 2011. Refer to “Consolidated Results – Production and Delivery Costs” for further discussion of consolidated production and delivery costs.

Operating Cash Flows. Our operating cash flows vary with prices realized from copper, gold and molybdenum sales, our sales volumes, production costs, income taxes and other working capital changes and other factors. Based on projected consolidated sales volumes and unit net cash costs for 2011, and assuming average prices of $4.25 per pound of copper, $1,400 per ounce of gold and $15 per pound of molybdenum for the remainder of 2011, we estimate consolidated operating cash flows will approximate $8.3 billion for the year 2011, net of an estimated $60 million for working capital requirements. Our estimate of operating cash flows for the year 2011 also reflect estimated taxes of $3.9 billion (refer to “Consolidated Results – Provision for Income Taxes” for further discussion of our projected annual consolidated effective annual tax rate for 2011). The impact of price changes for the remainder of 2011 on operating cash flows would approximate $125 million for each $0.05 per pound change in the average price of copper, $50 million for each $50 per ounce change in the average price of gold and $60 million for each $2 per pound change in the average price of molybdenum.

19

COPPER, GOLD AND MOLYBDENUM MARKETS

World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 2001 through April 2011, the London Metal Exchange (LME) spot copper price varied from a low of $0.60 per pound in 2001 to a record high of $4.60 per pound in February 2011, the London gold price fluctuated from a low of $256 per ounce in 2001 to a record high of $1,536 per ounce in April 2011, and the Metals Week Molybdenum Dealer Oxide weekly average price ranged from a low of $2.19 per pound in 2001 to a high of $39.25 per pound in 2005. Copper, gold and molybdenum prices are affected by numerous factors beyond our control as described further in our “Risk Factors” contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010.

*  Excludes Shanghai stocks, producer, consumer and merchant stocks.

This graph presents LME spot copper prices and reported stocks of copper at the LME and the New York Mercantile Exchange (COMEX) from January 2001 through April 2011. From 2006 through most of 2008, limited supplies, combined with growing demand from China and other emerging economies resulted in high copper prices and low levels of inventories. In late 2008, slowing consumption, turmoil in the U.S. financial markets and concerns about the global economy led to a sharp decline in copper prices, which reached a four-year low of $1.26 per pound in December 2008. Copper prices have since improved significantly, attributable to a combination of an improved global economic outlook, strong demand from emerging markets, recovering demand in the western world and limitations of available supply. During first-quarter 2011, LME spot copper prices ranged from $4.07 per pound to a record high of $4.60 per pound and averaged $4.38 per pound. Combined LME and COMEX inventories have risen somewhat in 2011, compared to year-end 2010 levels, as a result of reduced Chinese imports.

We believe the underlying fundamentals of the copper business remain positive, supported by limited supplies from existing mines and the absence of significant new development projects. Future copper prices are expected to be volatile and are likely to be influenced by demand from China, economic activity in the U.S. and other industrialized countries, the timing of the development of new supplies of copper and production levels of mines and copper smelters. The LME spot copper price closed at $4.25 per pound on April 28, 2011.

20

This graph presents London gold prices from January 2001 through April 2011. Gold prices reached a record high of $1,536 per ounce in April 2011, supported by investment demand and weakness in the U.S. dollar. During first-quarter 2011, gold prices ranged from approximately $1,319 per ounce to $1,447 per ounce and averaged $1,386 per ounce. London gold prices closed at approximately $1,536 per ounce on April 28, 2011.

21

This graph presents the Metals Week Molybdenum Dealer Oxide weekly average prices from January 2001 through April 2011. In late 2008, molybdenum prices declined significantly as a result of the financial market turmoil and a decline in demand; however, molybdenum prices have since increased, which we believe is supported by improved economic conditions and increased demand in the chemical and metallurgical sectors. During first-quarter 2011, the weekly average price of molybdenum ranged from $16.40 per pound to $17.88 per pound and averaged $17.24 per pound. The weekly average Metals Week Molybdenum Dealer Oxide weekly average price was $17.03 per pound on April 28, 2011.

22

CONSOLIDATED RESULTS

	Three Months Ended March 31,
	2011			2010
Financial Data (in millions, except per share amounts)
Revenuesa,b	$	5,709		$	4,363
Operating incomeb	$	2,936		$	2,048
Net income attributable to FCX common stockholders	$	1,499	c	$	897	d
Diluted net income per share attributable to FCX common stockholders	$	1.57	c	$	1.00	d,e
Diluted weighted-average common shares outstanding		955			947	e
Mining Operating Data
Copper (recoverable)
Production (millions of pounds)		950			929
Sales, excluding purchases (millions of pounds)		926			960
Average realized price per pound	$	4.31		$	3.42
Site production and delivery costs per poundf	$	1.61		$	1.35
Unit net cash costs per poundf	$	0.79		$	0.82
Gold (recoverable)
Production (thousands of ounces)		466			449
Sales, excluding purchases (thousands of ounces)		480			478
Average realized price per ounce	$	1,399		$	1,110
Molybdenum (recoverable)
Production (millions of pounds)		20			17
Sales, excluding purchases (millions of pounds)		20			17
Average realized price per pound	$	18.10		$	15.09

a.   Includes the impact of adjustments to provisionally priced concentrate and cathode sales recognized in the prior years (refer to “Revenues” for further discussion).

b.   Following is a summary of revenues and operating income (loss) by division (in millions):

	Three Months Ended March 31, 2011						Three Months Ended March 31, 2010
					Operating						Operating
					Income						Income
		Revenues			(Loss)			Revenues			(Loss)
North America copper mines	$	1,348		$	714		$	1,054		$	508
South America mining		1,402			932			1,069			632
Indonesia mining		1,730			1,104			1,459			892
Africa mining		309			155			249			109
Molybdenum		374			115			275			73
Rod & Refining		1,487			4			1,073			4
Atlantic Copper Smelting & Refining		762			(19	)		633			(11	)
Corporate, other & eliminations		(1,703	)		(69	)		(1,449	)		(159	)
Total FCX	$	5,709		$	2,936		$	4,363		$	2,048

Refer to Note 11 for further discussion of our operating divisions and business segments.

c.   Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) associated with the revolving credit facilities that were replaced in March 2011 (refer to Note 6 for further discussion).

d.   Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) associated with open-market purchases of our 8.25% and 8.375% Senior Notes (refer to Note 6 for further discussion).

e.   Amounts have been adjusted to reflect the February 1, 2011, two-for-one stock split.

f.   Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs. For reconciliations of the per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to “Operations – Unit Net Cash Costs” and to “Product Revenues and Production Costs.”

23

Revenues

Consolidated revenues, which totaled $5.7 billion in first-quarter 2011 and $4.4 billion in first-quarter 2010, include the sale of copper concentrates, copper cathodes, copper rod, gold, molybdenum and other metals by our North and South America mines, the sale of copper concentrates (which also contain significant quantities of gold and silver) by our Indonesia mining operations, the sale of copper cathodes and cobalt hydroxide by our Africa mining operations, the sale of molybdenum in various forms by our Molybdenum operations, and the sale of copper cathodes, copper anodes, and gold in anodes and slimes by Atlantic Copper.

Following is a summary of changes in our consolidated revenues between periods (in millions):

First-quarter 2010 consolidated revenues	$	4,363
Higher price realizations from mining operations:
Copper		824
Gold		139
Molybdenum		59
(Lower) higher sales volumes from mining operations:
Copper		(117	)
Gold		2
Molybdenum		44
Cobalt		28
Lower net adjustments primarily for prior year provisionally priced sales		(22	)
Higher purchased copper		273
Higher Atlantic Copper revenues		129
Other, including intercompany eliminations		(13	)
First-quarter 2011 consolidated revenues	$	5,709

Price Realizations

Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper and, to a lesser extent, gold and molybdenum. Consolidated revenues in first-quarter 2011 reflected higher price realizations, compared with first-quarter 2010. Realized copper prices averaged $4.31 per pound in first-quarter 2011, compared with $3.42 per pound in first-quarter 2010; realized gold prices averaged $1,399 per ounce in first-quarter 2011, compared with $1,110 per ounce in first-quarter 2010; and realized molybdenum prices averaged $18.10 per pound in first-quarter 2011, compared with $15.09 per pound in first-quarter 2010.

Sales Volumes

Consolidated sales volumes totaled 926 million pounds of copper, 480 thousand ounces of gold and 20 million pounds of molybdenum in first-quarter 2011, compared with 960 million pounds of copper, 478 thousand ounces of gold and 17 million pounds of molybdenum in first-quarter 2010. Lower copper sales volumes in first-quarter 2011 primarily related to timing of shipments in North America and Indonesia. Higher consolidated molybdenum sales volumes in first-quarter 2011 reflected improved demand in the chemical and metallurgical sectors. Refer to “Operations” for further discussion of sales volumes at our operating divisions.

Provisionally Priced Sales

During first-quarter 2011, 57 percent of our mined copper was sold in concentrate, 22 percent as rod (from our North America operations) and 21 percent as cathodes. Substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future period (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot prices. We receive market prices based on prices in the specified future period, which results in price fluctuations recorded through revenues until the date of settlement. We record revenues and invoice customers at the time of shipment based on then-current LME prices, which results in an embedded derivative on our provisional priced concentrate and cathode sales that is adjusted to fair value through earnings each period, using the period-end forward prices, until the date of final pricing. To the extent final prices are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period until the date of final pricing. Accordingly, in times of rising copper prices, our revenues benefit from higher prices received for contracts priced at current market rates and also from an increase related to the final pricing of provisionally priced sales pursuant to contracts entered into in prior periods; in times of falling copper prices, the opposite occurs.

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At December 31, 2010, we had provisionally priced copper sales totaling 417 million pounds of copper at our copper mining operations (net of intercompany sales and noncontrolling interests) recorded at an average of $4.36 per pound. Adjustments to the December 31, 2010, provisionally priced copper sales resulted in a net decrease to consolidated revenues of $10 million ($4 million to net income attributable to FCX common stockholders or less than $0.01 per share) in first-quarter 2011. Adjustments to the December 31, 2009, provisionally priced copper sales resulted in a net decrease of $4 million ($2 million to net income attributable to FCX common stockholders or less than $0.01 per share) in first-quarter 2010.

At March 31, 2011, we had provisionally priced copper sales at our copper mining operations totaling 464 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average of $4.27 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the March 31, 2011, provisional price recorded would have a net impact on our 2011 consolidated revenues of approximately $31 million ($15 million to net income attributable to FCX common stockholders). The LME spot copper price closed at $4.25 per pound on April 28, 2011.

Purchased Copper

From time to time we purchase copper cathode to be processed by our Rod & Refining operations when production from our North America copper mines does not meet customer demand. Accordingly, the increase in purchased copper in first-quarter 2011, compared with first-quarter 2010, resulted from higher customer demand and prices.

Atlantic Copper Revenues

The increase in Atlantic Copper’s revenues in first-quarter 2011, compared with first-quarter 2010, primarily reflected higher copper revenues associated with higher prices. Refer to “Operations” for further discussion of Atlantic Copper Smelting & Refining.

Production and Delivery Costs

Consolidated production and delivery costs totaled $2.4 billion in first-quarter 2011, compared with $1.9 billion in first-quarter 2010. Higher production and delivery costs for first-quarter 2011 primarily reflected higher input costs at our mining operations and higher costs of concentrate purchases at Atlantic Copper associated with higher copper prices.

Consolidated unit site production and delivery costs for our copper mining operations averaged $1.61 per pound of copper in first-quarter 2011, compared with $1.35 per pound of copper in first-quarter 2010. Higher site production and delivery costs in first-quarter 2011 primarily reflected increased input costs, including materials, labor and energy. Refer to “Operations – Unit Net Cash Costs” for further discussion of unit net cash costs associated with our operating divisions, and to “Product Revenues and Production Costs” for reconciliations of per pound costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements.

Our copper mining operations require significant energy, principally diesel, electricity, coal and natural gas. For the year 2011, we expect energy costs to approximate 22 percent of our consolidated copper production costs, which reflects purchases of approximately 250 million gallons of diesel fuel; 6,660 gigawatt hours of electricity at our North America, South America and Africa copper mining operations (we generate all of our power at our Indonesia mining operation); 735 thousand metric tons of coal for our coal power plant in Indonesia; and 1 million MMBTU (million british thermal units) of natural gas at certain of our North America mines. Energy costs for 2010 approximated 20 percent of our consolidated copper production costs.

Depreciation, Depletion and Amortization

Consolidated depreciation, depletion and amortization expense totaled $232 million in first-quarter 2011, compared with $271 million in first-quarter 2010. Lower depreciation, depletion and amortization expense in first-quarter 2011 primarily reflected lower expense under the units-of-production method as a result of lower copper sales volumes.

Selling, General and Administrative Expenses

Consolidated selling, general and administrative expenses increased to $114 million in first-quarter 2011, compared with $95 million in first-quarter 2010, primarily reflecting higher incentive compensation costs associated with improved operating results.

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Exploration and Research Expenses

Consolidated exploration and research expenses totaled $50 million in first-quarter 2011, compared with $31 million in first-quarter 2010. We are conducting exploration activities near our existing mines with a focus on opportunities to expand reserves that will support additional future production capacity in the large mineral districts where we currently operate. Favorable exploration results indicate opportunities for significant future potential reserve additions in North and South America and in the Tenke minerals district. The drilling data in North America continues to indicate the potential for expanded sulfide production.

For the year 2011, exploration and research expenditures are expected to total $285 million, including approximately $225 million for exploration. Exploration activities will continue to focus primarily on the potential for future reserve additions in our existing mineral districts.

Interest Expense, Net

Consolidated interest expense (before capitalization) totaled $123 million in first-quarter 2011 and $151 million in first-quarter 2010. Lower interest expense in first-quarter 2011 primarily reflected the impact of debt repayments during 2010.

Capitalized interest is primarily related to our development projects and totaled $25 million in first-quarter 2011 and $6 million in first-quarter 2010. Refer to “Operations” for further discussion of current development projects.

Losses on Early Extinguishment of Debt

During first-quarter 2011, we recorded losses on early extinguishment of debt totaling $7 million ($6 million to net income attributable to FCX common stockholders or $0.01 per share) related to the revolving credit facilities that were replaced in March 2011 by a new senior unsecured revolving credit facility.

During first-quarter 2010, we recorded losses on early extinguishment of debt totaling $27 million ($23 million to net income attributable to FCX common stockholders or $0.02 per share) associated with open-market purchases of our 8.25% and 8.375% Senior Notes.

On April 1, 2011, we redeemed the remaining $1.1 billion of our outstanding 8.25% Senior Notes due 2015. In second-quarter 2011, we expect to record a loss on early extinguishment of debt of $56 million ($49 million to net income attributable to FCX common stockholders) in connection with this redemption.

Refer to Note 6 for further discussion of these transactions.

Provision for Income Taxes

Our first-quarter 2011 income tax provision resulted from taxes on international operations ($846 million) and U.S. operations ($138 million).  Our first-quarter 2010 income tax provision resulted from taxes on international operations ($597 million) and U.S. operations ($81 million). A summary of the approximate amounts in the calculation of our consolidated provision for income taxes for the first quarters of 2011 and 2010 follow (in millions, except percentages):

	Three Months Ended March 31, 2011						Three Months Ended March 31, 2010
				Income Tax							Income Tax
			Effective	(Provision)			Income			Effective	(Provision)
	Incomea		Tax Rate	Benefit			(Loss)a			Tax Rate	Benefit
U.S.	$	647	21%	$	(138	)	$	329		25%	$	(81	)
South America		914	33%		(306	)		623		32%		(197	)
Indonesia		1,161	44%		(507	)		909		43%		(393	)
Africa		104	38%		(40	)		85		30%		(25	)
Eliminations and other		15	N/A		7			(58	)	N/A		18
Consolidated FCX	$	2,841	35%b	$	(984	)	$	1,888		36%b	$	(678	)

a.   Represents income (loss) by geographic location before income taxes and equity in affiliated companies’ net earnings.

b.   Our consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Accordingly, variations in the relative proportions of jurisdictional income result in fluctuations to our consolidated effective income tax rate. Assuming average prices of $4.25 per pound for copper, $1,400 per ounce for gold and $15 per

26

pound for molybdenum for the remainder of 2011 and current sales estimates, we estimate our annual consolidated effective tax rate will approximate 35 percent.

OPERATIONS

North America Copper Mines

We currently operate seven copper mines in North America – Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. All of these mining operations are wholly owned, except for Morenci, an unincorporated joint venture, in which we own an 85 percent undivided interest.

The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. Molybdenum is also produced by Morenci, Bagdad and Sierrita. A majority of the copper produced at our North America copper mines is cast into copper rod by our Rod & Refining operations. The remainder of our North America copper sales is primarily in the form of copper cathode or copper concentrate.

Operating and Development Activities.

Morenci Mine Ramp-up and Mill Restart. In March 2011, we reached our targeted mining rate of 635,000 metric tons per day after commencing a staged ramp-up at the Morenci mine from the 2009 rate of 450,000 metric tons per day. In addition, in March 2010, we restarted the Morenci mill to process available sulfide material currently being mined. Mill throughput averaged 48,300 metric tons of ore per day in first-quarter 2011 and is expected to increase to approximately 50,000 metric tons per day by the second half of 2011. These activities are expected to enable copper production to increase by approximately 125 million pounds per year beginning in 2011.

During first-quarter 2011, we also commenced a feasibility study to add additional mining and milling capacity at Morenci to process additional sulfide ore identified through positive exploratory drilling over the last few years. This project, which would require significant investment, would increase milling rates to approximately 115,000 metric tons per day and target incremental annual copper production of 150 to 200 million pounds within a two to three year time frame. The study is expected to be completed in the second half of 2011.

Miami Restart. We initiated limited mining activities at the Miami mine to improve efficiencies of ongoing reclamation projects associated with historical mining operations at the site. During an approximate five-year mine life, we expect to ramp up production at Miami to approximately 100 million pounds of copper per year by 2012.

Chino Restart. We are restarting mining and milling activities at the Chino mine, which were suspended in late 2008. The ramp up of mining and milling activities will significantly increase copper production at Chino, which is currently producing small amounts of copper from existing leach stockpiles. The start-up is on schedule, with planned mining and milling rates expected to be achieved by the end of 2013. Incremental annual copper production is expected to be 100 million pounds in 2012 and 2013 and 200 million pounds in 2014. Costs for the project associated with equipment and mill refurbishment are expected to approximate $150 million.

Safford Sulphur Burner. We have completed construction of the $150 million sulphur burner project at the Safford mine, which will provide a more cost-effective source of sulphuric acid used in SX/EW operations and lower transportation costs.

Twin Buttes. In December 2009, we purchased the Twin Buttes copper mine, which ceased operations in 1994 and is adjacent to our Sierrita mine. The purchase provides significant synergies in the Sierrita minerals district, including the potential for expanded mining activities and access to material that can be used for Sierrita tailings and stockpile reclamation purposes. We are conducting drilling on the property and metallurgical studies to support a feasibility study expected to commence in late 2011.

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Operating Data. Following is summary operating data for the North America copper mines for the first quarters of 2011 and 2010:

	Three Months Ended March 31,
	2011		2010
Operating Data, Net of Joint Venture Interest
Copper (millions of recoverable pounds)
Production		282		264
Sales, excluding purchases		276		291
Average realized price per pound	$	4.40	$	3.32
Molybdenum (millions of recoverable pounds)
Productiona		7		6
100% Operating Data
SX/EW operations
Leach ore placed in stockpiles (metric tons per day)		811,700		601,900
Average copper ore grade (percent)		0.24		0.24
Copper production (millions of recoverable pounds)		182		202
Mill operations
Ore milled (metric tons per day)		213,400		162,900
Average ore grade (percent):
Copper		0.36		0.30
Molybdenum		0.03		0.02
Copper recovery rate (percent)		81.8		85.7
Production (millions of recoverable pounds):
Copper		122		80
Molybdenum		7		6

a.   Reflects molybdenum production from certain of our North America copper mines. Sales of molybdenum are reflected in the Molybdenum division.

Copper production from our North America copper mines was higher in first-quarter 2011, compared with first-quarter 2010, primarily reflecting increased mining and milling activities at Morenci. However, copper sales volumes from our North America copper mines decreased to 276 million pounds in first-quarter 2011, compared with 291 million pounds in first-quarter 2010, primarily because of timing of shipments.

For the year 2011, copper sales volumes from our North America copper mines are expected to approximate 1.2 billion pounds, compared with 1.1 billion pounds of copper in 2010. The restart of the Miami and Chino mines and potential expansion of the Morenci mine are expected to further increase production in future periods. Molybdenum production from our North America copper mines is expected to approximate 34 million pounds for the year 2011.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with generally accepted accounting principles (GAAP) in the U.S. and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

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Gross Profit per Pound of Copper and Molybdenum

The following table summarizes unit net cash costs and gross profit per pound at the North America copper mines for the first quarters of 2011 and 2010. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	Three Months Ended March 31, 2011									Three Months Ended March 31, 2010
	By-			Co-Product Method						By-			Co-Product Method
	Product						Molyb-			Product						Molyb-
	Method			Copper			denuma			Method			Copper			denuma
Revenues, excluding adjustments	$	4.40		$	4.40		$	16.87		$	3.32		$	3.32		$	13.93
Site production and delivery, before net noncash
and other costs shown below		1.75			1.57			7.08			1.31			1.20			7.40
By-product creditsa		(0.49	)		-			-			(0.26	)		-			-
Treatment charges		0.11			0.10			-			0.08			0.08			-
Unit net cash costs		1.37			1.67			7.08			1.13			1.28			7.40
Depreciation, depletion and amortization		0.20			0.19			0.43			0.27			0.25			0.63
Noncash and other costs, net		0.15			0.15			0.12			0.08			0.08			0.05
Total unit costs		1.72			2.01			7.63			1.48			1.61			8.08
Revenue adjustments		-			-			-			-			-			-
Idle facility and other non-inventoriable costs		(0.03	)		(0.03	)		(0.02	)		(0.06	)		(0.06	)		-
Gross profit per pound	$	2.65		$	2.36		$	9.22		$	1.78		$	1.65		$	5.85
Copper sales (millions of recoverable pounds)		275			275						291			291
Molybdenum sales (millions of recoverable pounds)b								7									6

a.   Molybdenum by-product credits and revenues reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Reflects molybdenum produced by the North America copper mines.

Unit net cash costs (net of by-product credits) for our North America copper mines increased to $1.37 per pound of copper in first-quarter 2011, compared with $1.13 per pound of copper in first-quarter 2010, primarily reflecting higher site production and delivery costs ($0.44 per pound) resulting from increased mining and milling activities and higher input costs, partly offset by higher molybdenum credits ($0.23 per pound) resulting from higher molybdenum volumes and prices.

The decrease in depreciation, depletion and amortization in first-quarter 2011 primarily reflects lower straight-line expense, and the increase in net noncash and nonrecurring costs for first-quarter 2011 primarily reflects the restart of mining and milling activities at the Chino mine.

Our operating North America copper mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-products and other factors. Based on current operating plans, and assuming achievement of current 2011 sales volume and cost estimates and an average price of $15 per pound of molybdenum for the remainder of 2011, we estimate that average unit net cash costs (net of by-product credits) for our North America copper mines would approximate $1.47 per pound of copper for the year 2011, compared with $1.24 per pound in 2010. Each $2 per pound change in the average price of molybdenum during the remainder of 2011 would have an approximate $0.04 per pound impact on the North America copper mines’ 2011 average unit net cash costs.

South America Mining

We operate four copper mines in South America – Cerro Verde in Peru, and El Abra, Candelaria and Ojos del Salado in Chile. We own a 53.56 percent interest in Cerro Verde, a 51 percent interest in El Abra, and an 80 percent interest in both Candelaria and Ojos del Salado.

South America mining includes open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. In addition to copper, the Cerro Verde mine produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines produce gold and silver. Production from our South America mines is sold as copper concentrate or copper cathode under long-term contracts. Our South America mines sell a portion of their copper concentrate and cathode inventories to Atlantic Copper, an affiliated smelter.

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Operating and Development Activities.

El Abra Sulfide. During first-quarter 2011, we commenced production from El Abra’s newly commissioned stacking and leaching facilities to transition from oxide to sulfide ores. Production from the sulfide ore, which is projected to reach design levels in the second half of 2011, would approximate 300 million pounds of copper per year and substantially replaces the currently depleting oxide copper production. The aggregate capital investment for this project is expected to total $725 million through 2015, of which approximately $565 million is for the initial phase of the project expected to be complete in 2011. Project costs of $422 million have been incurred as of March 31, 2011 ($61 million during first-quarter 2011).

We are also engaged in pre-feasibility studies for a potential large-scale milling operation at El Abra to process additional sulfide material and to achieve higher recoveries.

Cerro Verde Expansion. During fourth-quarter 2010, we completed the $50 million project to increase throughput at the Cerro Verde concentrator. This project increased mill throughput from 108,000 metric tons of ore per day to 120,000 metric tons of ore per day resulting in incremental annual copper production of approximately 30 million pounds of copper.

We are progressing our evaluation of a large-scale concentrator expansion at Cerro Verde. Significant reserve additions in recent years have provided opportunities to significantly expand the existing facility’s capacity. A range of expansion options have been considered and we are targeting a project to increase mill throughput from 120,000 metric tons per day to 360,000 metric tons per day. Following the completion of the feasibility study in second-quarter 2011, we expect to file an environmental impact assessment during the second half of 2011.

Candelaria Water Plant. As part of our overall strategy to supply water to the Candelaria mine, we recently completed construction of a pipeline to bring water from a nearby water treatment facility. In addition, we have started engineering for a desalination plant that will supply all of Candelaria’s longer term water needs. The plant is expected to be completed by the end of 2012 at a capital investment of $280 million. Project costs of $30 million have been incurred as of March 31, 2011 ($24 million during first-quarter 2011).

Other Matters. As reported in Note 13 of our Annual Report on Form 10-K for the year ended December 31, 2010, Cerro Verde has received assessments from SUNAT, the Peruvian national tax authority, in connection with its alleged obligations for mining royalties related to the minerals processed by its concentrator, which was added to Cerro Verde’s processing facilities in late 2006. These assessments relate to the period from October 2006 through December 2007, and for the year 2008. SUNAT has issued rulings denying Cerro Verde’s protest of the assessments, and Cerro Verde has appealed these decisions to the Peruvian Tax Court. Cerro Verde is challenging these royalties because its stability agreement with the Peruvian government exempts from royalties all minerals extracted from its mining concession, irrespective of the method used for processing those minerals. If Cerro Verde is ultimately found responsible for these royalties, it will also be liable for interest, which accrues at rates that range from 7 to 18 percent based on the year accrued and the currency in which the amounts would be payable. At March 31, 2011, the aggregate amount of the assessments, including interest approximated $122 million. This amount will continue to increase at varying interest rates. Cerro Verde has also received a request for information for mining royalties covering the year 2009. SUNAT may continue to assess mining royalties annually until this matter is resolved by the Tax Court.

As reported in Note 14 of our Annual Report on Form 10-K for the year ended December 31, 2010, during 2006, the Peruvian government announced that all mining companies operating in Peru would be required to make annual contributions to local development funds for a five-year period (covering the years 2006 through 2010) when copper prices exceeded certain levels that were adjusted annually. The contribution was equal to 3.75 percent of after-tax profits, and totaled $41 million for the year 2010. It is not certain whether the contribution will be extended, abandoned, or replaced by a tax or different mechanism. We will continue to monitor the activity associated with this matter.

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Operating Data. Following is summary operating data for our South America mining operations for the first quarters of 2011 and 2010:

	Three Months Ended March 31,
	2011		2010
Copper (millions of recoverable pounds)
Production		317		322
Sales		312		307
Average realized price per pound	$	4.31	$	3.46
Gold (thousands of recoverable ounces)
Production		24		19
Sales		24		19
Average realized price per ounce	$	1,394	$	1,113
Molybdenum (millions of recoverable pounds)
Productiona		3		2
SX/EW operations
Leach ore placed in stockpiles (metric tons per day)		262,200		255,800
Average copper ore grade (percent)		0.43		0.44
Copper production (millions of recoverable pounds)		90		133
Mill operations
Ore milled (metric tons per day)		191,800		180,100
Average ore grade (percent):b
Copper		0.68		0.62
Molybdenum		0.02		0.02
Copper recovery rate (percent)		91.4		89.2
Production (recoverable):
Copper (millions of pounds)		227		189
Gold (thousands of ounces)		24		19
Molybdenum (millions of pounds)		3		2

a.   Reflects molybdenum production from our Cerro Verde copper mine. Sales of molybdenum are reflected in the Molybdenum division.

b.   Average ore grades of gold produced at our South America mining operations rounds to less than 0.001 grams per metric ton.

Copper sales from our South America mining operations increased to 312 million pounds in first-quarter 2011, compared with 307 million pounds in first-quarter 2010, primarily reflecting higher ore grades at Candelaria and increased mill throughput at Cerro Verde, partly offset by anticipated lower mining rates at El Abra as it transitions from oxide to sulfide ores.

Consolidated sales volumes from South America mining are expected to approximate 1.3 billion pounds of copper and 100 thousand ounces of gold in 2011, compared with 1.3 billion pounds of copper and 93 thousand ounces of gold in 2010. Molybdenum production from South America mining is expected to approximate 11 million pounds for the year 2011.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

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Gross Profit per Pound of Copper

The following table summarizes unit net cash costs and gross profit per pound at the South America mining operations for the first quarters of 2011 and 2010. Unit net cash costs per pound of copper are reflected under the by-product and co-product methods as the South America mining operations also had small amounts of molybdenum, gold and silver sales. Refer to “Product Revenues and Production Costs” for an explanation of the “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	Three Months Ended March 31, 2011						Three Months Ended March 31, 2010
	By-Product			Co-Product			By-Product			Co-Product
	Method			Method			Method			Method
Revenues, excluding adjustments	$	4.31		$	4.31		$	3.46		$	3.46
Site production and delivery, before net noncash
and other costs shown below		1.30			1.20			1.20			1.14
By-product credits		(0.36	)		-			(0.17	)		-
Treatment charges		0.19			0.19			0.15			0.15
Unit net cash costs		1.13			1.39			1.18			1.29
Depreciation, depletion and amortization		0.18			0.17			0.19			0.19
Noncash and other costs, net		0.01			0.01			0.01			0.01
Total unit costs		1.32			1.57			1.38			1.49
Revenue adjustments, primarily for pricing on
prior period open sales		0.03			(0.03	)		(0.01	)		(0.01	)
Other non-inventoriable costs		(0.05	)		(0.04	)		(0.03	)		(0.02	)
Gross profit per pound	$	2.97		$	2.67		$	2.04		$	1.94
Copper sales (millions of recoverable pounds)		312			312			307			307

Unit net cash costs (net of by-product credits) for our South America mining operations decreased to $1.13 per pound of copper in first-quarter 2011, compared with $1.18 per pound in first-quarter 2010, primarily reflecting higher by-product credits ($0.19 per pound) associated with higher gold and molybdenum prices and volumes, partly offset by higher site production and delivery costs ($0.10 per pound) associated with higher input costs, including materials, energy and currency exchange rates, partly offset by higher volumes.

Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-products and other factors. Assuming achievement of current sales volume and cost estimates and an average price of $1,400 per ounce of gold for the remainder of 2011 and an average price of $15 per pound of molybdenum for the remainder of 2011, we estimate that average unit net cash costs (net of by-product credits) for our South America mining operations would approximate $1.19 per pound of copper for the year 2011, compared with $1.15 per pound in 2010.

Indonesia Mining

Indonesia mining includes PT Freeport Indonesia’s Grasberg minerals district. We own 90.64 percent of PT Freeport Indonesia, including 9.36 percent owned through our wholly owned subsidiary, PT Indocopper Investama.

PT Freeport Indonesia produces copper concentrates, which contain significant quantities of gold and silver. Substantially all of PT Freeport Indonesia’s copper concentrates are sold under long-term contracts, of which approximately one-half is sold to affiliated smelters, Atlantic Copper and PT Smelting (PT Freeport Indonesia’s 25-percent owned copper smelter and refinery in Indonesia) and the remainder to other customers.

We have established certain unincorporated joint ventures with Rio Tinto plc (Rio Tinto), under which Rio Tinto has a 40 percent interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver.

Development Activities. We have several projects in progress in the Grasberg minerals district, including development of the large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open pit. Over the next five years, aggregate capital spending on these projects is expected to average $600 million per year ($470 million per year net to PT Freeport Indonesia). Considering the long-term nature and large size of these projects, actual costs could differ materially from these estimates.

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The following provides additional information on these projects, including the continued development of the Common Infrastructure project, the Grasberg Block Cave and Big Gossan underground mines and development of the Deep Mill Level Zone (DMLZ) ore body, that lies below the Deep Ore Zone (DOZ) underground mine, which completed an expansion to 80,000 metric tons of ore per day in first-quarter 2010.

Common Infrastructure and Grasberg Block Cave. In 2004, PT Freeport Indonesia commenced its Common Infrastructure project to provide access to its large undeveloped underground ore bodies located in the Grasberg minerals district through a tunnel system located approximately 400 meters deeper than its existing underground tunnel system. In addition to providing access to our underground ore bodies, the tunnel system will enable PT Freeport Indonesia to conduct future exploration in prospective areas associated with currently identified ore bodies. The tunnel system has reached the Big Gossan terminal and development of the lower Big Gossan infrastructure is ongoing. We have also advanced development of the Grasberg spur and have completed the tunneling required to reach the Grasberg underground ore body. Development continues on the Grasberg Block Cave terminal infrastructure and mine access.

The Grasberg Block Cave underground mine accounts for over one-third of our reserves in Indonesia. Production at the Grasberg Block Cave mine is currently scheduled to commence at the end of mining the Grasberg open pit, which is currently expected to continue until mid-2016. The timing of the transition to underground Grasberg Block Cave mine development will continue to be assessed.

Aggregate mine development capital for the Grasberg Block Cave mine and associated Common Infrastructure is expected to approximate $3.7 billion (incurred between 2008 and 2021), with PT Freeport Indonesia’s share totaling approximately $3.4 billion. Aggregate project costs totaling $320 million have been incurred through March 31, 2011 ($60 million during first-quarter 2011). Targeted production rates once the Grasberg Block Cave mining operation reaches full capacity are expected to approximate 160,000 metric tons of ore per day.

Big Gossan. The Big Gossan underground mine is a high-grade deposit located near PT Freeport Indonesia’s existing milling complex. The Big Gossan mine is being developed as an open-stope mine with backfill consisting of mill tailings and cement, an established mining methodology. Production, which began in fourth-quarter 2010, is designed to ramp up to 7,000 metric tons of ore per day by the end of 2012 (equal to average annual aggregate incremental production of 125 million pounds of copper and 65,000 ounces of gold, with PT Freeport Indonesia receiving 60 percent of these amounts). The aggregate capital investment for this project is currently estimated at approximately $535 million, with PT Freeport Indonesia’s share totaling approximately $500 million. Aggregate project costs of $458 million have been incurred through March 31, 2011 ($14 million during first-quarter 2011).

DMLZ. The DMLZ ore body lies below the DOZ mine at the 2,590-meter elevation and represents the downward continuation of mineralization in the Ertsberg East Skarn system and neighboring Ertsberg porphyry. We plan to mine the ore body using a block-cave method with production beginning in 2015, near completion of mining at the DOZ. Drilling efforts continue to determine the extent of this ore body. We continue to develop the Common Infrastructure project and tunnels from mill level. In 2009, we completed a portion of the spur to the DMLZ mine and reached the edge of the DMLZ terminal and development continued on terminal infrastructure and mine access in 2010. Aggregate mine development capital costs for the DMLZ are expected to approximate $2.0 billion (incurred from 2009 to 2020), with PT Freeport Indonesia’s share totaling approximately $1.2 billion. Aggregate project costs totaling $139 million have been incurred through March 31, 2011 ($36 million during first-quarter 2011). Targeted production rates once the DMLZ mining operation reaches full capacity are expected to approximate 80,000 metric tons of ore per day.

Other Matters. As reported in Note 13 of our Annual Report on Form 10-K for the year ended December 31, 2010, in October 2010, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes approximating $106 million and interest approximating $52 million related to various audit exceptions for 2005. PT Freeport Indonesia has filed objections to these assessments because it believes that it has properly paid taxes for the year 2005 and is working with the Indonesian tax authorities to resolve this matter.

As reported in Note 13 of our Annual Report on Form 10-K for the year ended December 31, 2010, in December 2009, PT Freeport Indonesia was notified by the Large Taxpayer’s Office of the Government of Indonesia of its view that PT Freeport Indonesia is obligated to pay value added taxes on certain goods imported after the year 2000. The amount of taxes and penalties would be significant. PT Freeport Indonesia believes that, pursuant to the terms of its Contract of Work, it is only required to pay value added taxes on these types of goods imported

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after December 30, 2009. PT Freeport Indonesia has not received an assessment and is working with the applicable government authorities to resolve this matter.

As reported in “Risk Factors” contained in Part I, Item 1A of our report on Form 10-K for the year ended December 31, 2010, between July 2009 and January 2010 there were a series of shooting incidents along the road leading to our mining and milling operations at the Grasberg mining complex which resulted in three fatalities and several injuries. In early April 2011, there were two additional shooting incidents that resulted in two fatalities and two injuries to PT Freeport Indonesia employees. The Indonesian government has responded with additional security forces and expressed a strong commitment to protect the safety of the community and our operations. The investigation of these matters is continuing, and we have taken precautionary measures, including limiting use of the road to secured convoys. Our mining and milling activities have continued uninterrupted; however, prolonged limitations on access to the road could adversely affect operations at the mine.

Operating Data. Following is summary operating data for our Indonesia mining operations for the first quarters of 2011 and 2010:

	Three Months Ended March 31,
	2011		2010
Operating Data, Net of Joint Venture Interest
Copper (millions of recoverable pounds)
Production		284		279
Sales		278		296
Average realized price per pound	$	4.26	$	3.51
Gold (thousands of recoverable ounces)
Production		441		429
Sales		454		458
Average realized price per ounce	$	1,400	$	1,110
100% Operating Data
Ore milled (metric tons per day):a
Grasberg open pit		140,300		155,100
DOZ underground mine		80,100		78,900
Big Gossan underground mine		1,800		-
Total		222,200		234,000
Average ore grade:
Copper (percent)		0.77		0.78
Gold (grams per metric ton)		0.89		0.87
Recovery rates (percent):
Copper		87.3		88.2
Gold		82.0		79.0
Production (recoverable):
Copper (millions of pounds)		284		308
Gold (thousands of ounces)		459		466

a.   Amounts represent the approximate average daily throughput processed at PT Freeport Indonesia’s mill facilities from each producing mine.

Copper sales from our Indonesia mining operations decreased to 278 million pounds of copper in first-quarter 2011, compared with 296 million pounds of copper in first-quarter 2010, primarily because of timing of shipments. Gold sales volumes from our Indonesia mining operations in first-quarter 2011 of 454 thousand ounces approximated first-quarter 2010 volumes of 458 thousand ounces.

At the Grasberg mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production resulting in varying quarterly and annual sales of copper and gold. Because of recent revisions to Grasberg’s mine plans,  projected sales from our Indonesia mining operations for 2011 are expected to approximate 1.1 billion pounds of copper and 1.5 million ounces of gold, compared with 1.2 billion pounds of copper and 1.8 million ounces of gold in 2010.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for

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monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper and per Ounce of Gold

The following table summarizes the unit net cash costs (credits) and gross profit per pound of copper and per ounce of gold at our Indonesia mining operations for the first quarters of 2011 and 2010. Refer to “Production Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	Three Months Ended March 31, 2011									Three Months Ended March 31, 2010
	By-Product			Co-Product Method						By-Product			Co-Product Method
	Method			Copper			Gold			Method			Copper			Gold
Revenues, excluding adjustments	$	4.26		$	4.26		$	1,400		$	3.51		$	3.51		$	1,110
Site production and delivery, before net noncash
and other costs shown below		1.84			1.18			386			1.54			1.02			323
Gold and silver credits		(2.34	)		-			-			(1.79	)		-			-
Treatment charges		0.18			0.11			37			0.23			0.15			47
Royalty on metals		0.16			0.10			34			0.12			0.08			26
Unit net cash (credits) costs		(0.16	)		1.39			457			0.10			1.25			396
Depreciation and amortization		0.21			0.13			43			0.21			0.14			45
Noncash and other costs, net		0.05			0.04			12			0.06			0.04			13
Total unit costs		0.10			1.56			512			0.37			1.43			454
Revenue adjustments, primarily for pricing on
prior period open sales		(0.03	)		(0.03	)		(38	)		(0.03	)		(0.03	)		2
PT Smelting intercompany profit		0.17			0.11			36			0.04			0.03			8
Gross profit per pound/ounce	$	4.30		$	2.78		$	886		$	3.15		$	2.08		$	666
Copper sales (millions of recoverable pounds)		278			278						296			296
Gold sales (thousands of recoverable ounces)								454									458

Because of the fixed nature of a large portion of PT Freeport Indonesia’s costs, unit costs vary significantly from period to period depending on volumes of copper and gold sold during the period. Unit net cash costs (net of gold and silver credits) for PT Freeport Indonesia decreased to a net credit of $0.16 per pound of copper in first-quarter 2011, compared with a net cost of $0.10 per pound in first-quarter 2010, primarily reflecting higher gold and silver credits ($0.55 per pound) mostly related to higher gold prices, partly offset by higher site production and delivery costs ($0.30 per pound) reflecting higher maintenance and other input costs.

Treatment charges vary with the volume of metals sold and the price of copper, and royalties vary with the volume of metals sold and the prices of copper and gold.

Assuming achievement of current sales volume and cost estimates, and an average gold price of $1,400 per ounce for the remainder of 2011, we estimate that average unit net cash costs for PT Freeport Indonesia (net of gold and silver credits) would approximate $0.38 per pound of copper for the year 2011, compared with a net credit of $0.04 per pound in 2010. Each $50 per ounce change in the average price of gold during the remainder of 2011 would have an approximate $0.06 per pound impact on PT Freeport Indonesia’s 2011 average unit net cash costs.

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Africa Mining

Africa mining includes the Tenke copper and cobalt mining concessions in the Katanga province of the DRC. The Tenke mine includes surface mining, leaching and SX/EW operations. Copper production from the Tenke mine is sold as copper cathode. In addition to copper, the Tenke mine produces cobalt hydroxide.

In October 2010, the government of the DRC announced the conclusion of the review of TFM’s contracts, and confirmed that TFM’s existing mining contracts are in good standing and acknowledged the rights and benefits granted under those contracts. In connection with the review, TFM made several commitments that have been reflected in amendments to its mining contracts, which were signed by the parties in December 2010 (refer to Note 14 in our Annual Report on Form 10-K for the year ended December 31, 2010, for further discussion). In March 2011, the amendments were approved by a ministerial council, and a Presidential Decree signed by the President and Prime Minister of the DRC was issued in April 2011. After giving effect to the modifications that will be made to TFM’s bylaws to reflect the agreement of the parties, our effective ownership interest in the project will be 56.0 percent prospectively, compared to our current ownership interest of 57.75 percent.

Operating and Development Activities. Pursuant to our agreement with Lundin Mining Corporation, we were responsible for funding 70 percent of the project development costs and 100 percent of certain cost overruns on the initial project. Of the approximate $2 billion we invested in the initial project, we have been repaid approximately $500 million as of March 31, 2011.

The milling facilities at Tenke, which were designed to produce at a capacity rate of 8,000 metric tons of ore per day, continue to perform above capacity, with first-quarter 2011 throughput averaging 10,800 metric tons of ore per day. Tenke has also procured additional equipment, which is enabling additional high-grade material to be mined and processed in 2011. As a result of these enhancements to the mine plan and an expected mill throughput rate of 10,000 metric tons of ore per day, we estimate the average annual copper production at Tenke will approximate 290 million pounds of copper.

We continue to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective minerals district at Tenke. These analyses are being incorporated in future plans to evaluate opportunities for expansion. We are planning a second phase of the project, which would include optimizing the current plant and increasing capacity. As part of the second phase, we are completing studies to expand the mill rate to 14,000 metric tons per day and to construct related processing facilities that would target the addition of approximately 150 million pounds of copper per year in an approximate two-year timeframe. We expect production volumes from the project to expand significantly over time. Future expansions are subject to a number of factors, including economic and market conditions and the business and investment climate in the DRC.

Operating Data. Following is summary operating data for our Africa mining operations for the first quarters of 2011 and 2010:

	Three Months Ended March 31,
	2011		2010
Copper (millions of recoverable pounds)
Production		67		64
Sales		60		66
Average realized price per pounda	$	4.19	$	3.26
Cobalt (millions of contained pounds)
Production		6		5
Sales		6		3
Average realized price per pound	$	10.99	$	10.94
Ore milled (metric tons per day)		10,800		9,700
Average ore grade (percent):
Copper		3.42		3.70
Cobalt		0.38		0.46
Copper recovery rate (percent)		91.7		91.7

a.   Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.

Copper sales volumes from the Tenke mine decreased to 60 million pounds of copper in first-quarter 2011, compared with 66 million pounds of copper in first-quarter 2010, primarily because of timing of shipments.

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Consolidated sales volumes from Tenke are expected to approximate 285 million pounds of copper and over 20 million pounds of cobalt for the year 2011, compared with 262 million pounds of copper and 20 million pounds of cobalt in 2010.

Unit Net Cash Costs. Unit net cash costs per pound of copper is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper and Cobalt

The following table summarizes the unit net cash costs and gross profit per pound of copper and cobalt at our Africa mining operations for first quarters of 2011 and 2010. Refer to “Production Revenues and Production Costs” for an explanation of “by-product” and “co-product” methods and a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	Three Months Ended March 31, 2011									Three Months Ended March 31, 2010
	By-Product			Co-Product Method						By-Product			Co-Product Method
	Method			Copper			Cobalt			Method			Copper			Cobalt
Revenues, excluding adjustmentsa	$	4.19		$	4.19		$	10.99		$	3.26		$	3.26		$	10.94
Site production and delivery, before net noncash
and other costs shown below		1.51			1.35			5.45			1.37			1.33			4.69
Cobalt creditsb		(0.75	)		-			-			(0.40	)		-			-
Royalty on metals		0.10			0.07			0.19			0.07			0.06			0.21
Unit net cash costs		0.86			1.42			5.64			1.04			1.39			4.90
Depreciation and amortization		0.47			0.40			0.78			0.46			0.36			2.00
Noncash and other costs, net		0.16			0.13			0.26			0.01			0.02			0.10
Total unit costs		1.49			1.95			6.68			1.51			1.77			7.00
Revenue adjustments, primarily for pricing on
prior period open sales		(0.01	)		(0.01	)		0.39			-			-			1.13
Other non-inventoriable costs		(0.05	)		(0.04	)		(0.08	)		(0.09	)		(0.07	)		(0.40	)
Gross profit per pound	$	2.64		$	2.19		$	4.62		$	1.66		$	1.42		$	4.67
Copper sales (millions of recoverable pounds)		60			60						66			66
Cobalt sales (millions of contained pounds)								6									3

a.   Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.

b.   Net of cobalt downstream processing and freight costs.

Unit net cash costs (net of cobalt credits) for Tenke averaged $0.86 per pound of copper for first-quarter 2011, compared with $1.04 per pound of copper in first-quarter 2010, primarily reflecting higher cobalt credits ($0.35 per pound) because of higher cobalt volumes, partly offset by higher site production and delivery costs ($0.14 per pound) mostly associated with increased mining and milling activity and higher input costs.

Assuming achievement of current sales volumes and cost estimates and an average cobalt price of $14 per pound for the remainder of 2011, we estimate that average unit net cash costs for Tenke (net of cobalt credits) would approximate $0.93 per pound of copper for the year 2011, compared with $0.90 per pound in 2010. Each $2 per pound change in the average price of cobalt during the remainder of 2011 would have an approximate $0.06 per pound impact on Tenke’s 2011 average unit net cash costs.

Molybdenum

Our Molybdenum operations are an integrated producer of molybdenum, with mining, sulfide ore concentrating, roasting and processing facilities that produce high-purity, molybdenum-based chemicals, molybdenum metal powder and metallurgical products, which are sold to customers around the world, and include the wholly owned Henderson molybdenum mine in Colorado and related conversion facilities. The Henderson underground mine produces high-purity, chemical-grade molybdenum concentrates, which are typically further processed into value-

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added molybdenum chemical products. The Molybdenum operations also include the wholly owned Climax molybdenum mine in Colorado, for which construction activities in preparation to restart mining activities are ongoing; a sales company that purchases and sells molybdenum from our Henderson mine and from certain of our North and South America mines that produce molybdenum; and related conversion facilities that, at times, roast and/or process material on a toll basis for third-parties. Toll arrangements require the tolling customer to deliver appropriate molybdenum-bearing material to our facilities for processing into a product that is returned to the customer, who pays us for processing their material into the specified products.

Development Activities. Construction activities at the Climax molybdenum mine are approximately 60 percent complete. Recent activities include continuation of mill equipment assembly, commencement of flotation cell placement and refurbishment of the primary crusher. We plan to continue advancing construction and conduct mine preparation activities during 2011, with construction expected to be complete in early 2012. The timing for start up of mining and milling activities will be dependent on market conditions. The Climax mine would have an initial design capacity of 30 million pounds of molybdenum annually, with significant expansion options. Total estimated costs for the project approximate $700 million, of which approximately $334 million has been incurred through March 31, 2011 ($80 million during first-quarter 2011).

Other Matters. We are negotiating the renewal of the labor agreement covering certain employees at Rotterdam, our molybdenum conversion facility in the Netherlands, which expired in March 2011.

Operating Data. Following is summary operating data for the Molybdenum operations for the first quarters of 2011 and 2010:

	First Quarter
	2011		2010
Molybdenum (millions of recoverable pounds)
Productiona		10		9
Sales, excluding purchasesb		20		17
Average realized price per pound	$	18.10	$	15.09
Henderson molybdenum mine
Ore milled (metric tons per day)		23,400		23,200
Average molybdenum ore grade (percent)		0.24		0.23
Molybdenum production (millions of recoverable pounds)		10		9

a.   Reflects production at the Henderson molybdenum mine.

b.   Includes sales of molybdenum produced at our North and South America mines.

Molybdenum sales volumes increased to 20 million pounds in first-quarter 2011, compared with 17 million pounds in first-quarter 2010, primarily reflecting improved demand in the chemical and metallurgical sectors.

Molybdenum sales volumes are expected to approximate 73 million pounds for the year 2011 (of which approximately 45 million pounds represents molybdenum production from our North and South America mines) compared with 67 million pounds in 2010 (of which 32 million pounds represented molybdenum production from our North and South America mines).

Unit Net Cash Costs. Unit net cash costs per pound of molybdenum is a measure intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for our respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

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Gross Profit per Pound of Molybdenum

The following table summarizes the unit net cash costs and gross profit per pound of molybdenum at our Henderson molybdenum mine for the first quarters of 2011 and 2010. Refer to “Product Revenues and Production Costs” for a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	Three Months Ended March 31,
	2011		2010
Revenues, excluding adjustments	$	17.37	$	14.66
Site production and delivery, before net noncash
and other costs shown below		5.25		4.48
Treatment charges and other		0.88		1.08
Unit net cash costs		6.13		5.56
Depreciation, depletion and amortization		0.88		0.84
Noncash and other costs, net		0.03		0.04
Total unit costs		7.04		6.44
Gross profita	$	10.33	$	8.22
Molybdenum sales (millions of recoverable pounds)b		10		9

a.   Gross profit reflects sales of Henderson products based on volumes produced at market-based pricing. On a consolidated basis, the Molybdenum division includes profits on sales as they are made to third parties and realizations based on actual contract terms. As a result, the actual gross profit realized will differ from the amounts reported in this table.

b.   Reflects molybdenum produced by the Henderson molybdenum mine.

Henderson’s unit net cash costs were $6.13 per pound of molybdenum in first-quarter 2011, compared with $5.56 per pound of molybdenum in first-quarter 2010, primarily reflecting increased input costs, including labor and materials.

Assuming achievement of current sales volume and cost estimates, we estimate that the 2011 average unit net cash costs for Henderson would approximate $7.25 per pound of molybdenum, compared with $5.90 per pound in 2010.

Atlantic Copper Smelting & Refining

Atlantic Copper, our wholly owned subsidiary located in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. Our Indonesia mining operation sells copper concentrate and our South America mining operations sell copper concentrate and copper cathode to Atlantic Copper. Through downstream integration, we are assured placement of a significant portion of our concentrate production. During first-quarter 2011, Atlantic Copper purchased approximately 54 percent of its concentrate requirements from our Indonesia mining operations and approximately 18 percent from our South America mining operations.

Smelting and refining charges consist of a base rate and, in certain contracts, price participation based on copper prices. Treatment charges for smelting and refining copper concentrates represent a cost to our Indonesia and our South America mining operations, and income to Atlantic Copper and PT Smelting, our 25 percent owned smelter and refinery in Gresik, Indonesia. Thus, higher treatment and refining charges benefit our smelter operations and adversely affect our mining operations in Indonesia and South America. Our North America copper mines are not significantly affected by changes in treatment and refining charges because these operations are fully integrated with our Miami smelter located in Arizona.

In April 2011, Atlantic Copper began a 26-day scheduled maintenance shutdown; Atlantic Copper’s last major shutdown was in 2007.

Atlantic Copper had operating losses of $19 million in first-quarter 2011 and $11 million in first-quarter 2010. The decline in Atlantic Copper’s operating results in first-quarter 2011 primarily reflects higher operating costs mainly associated with an acceleration of certain costs related to the April 2011 scheduled shutdown and higher general and administrative expense, partly offset by higher copper recoveries.

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We defer recognizing profits on sales from our Indonesia and South America mining operations to Atlantic Copper and on 25 percent of our Indonesia mining sales to PT Smelting until final sales to third parties occur. Our net deferred profits on our Indonesia and South America mining operations’ inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income after taxes and noncontrolling interests totaled $249 million at March 31, 2011. Changes in these net deferrals attributable to variability in intercompany volumes resulted in net reductions to net income attributable to FCX common stockholders totaling $15 million ($0.02 per share) in first-quarter 2011, compared with net reductions of $48 million ($0.05 per share) in first-quarter 2010. Quarterly variations in ore grades, the timing of intercompany shipments and changes in prices will result in variability in our net deferred profits and quarterly earnings.

CAPITAL RESOURCES AND LIQUIDITY

Our operating cash flows vary with prices realized from copper, gold and molybdenum sales, our sales volumes, production costs, income taxes and other working capital changes and other factors. Strong operating performance and copper prices have enabled us to enhance our financial and liquidity position, reduce debt and reinstate cash dividends to shareholders, while maintaining our future growth opportunities. We view the long-term outlook for our business positively, supported by limitations on supplies of copper and by the requirements for copper in the world’s economy, and will continue to adjust our operating strategy as market conditions change.

Based on current mine plans and subject to future copper, gold and molybdenum prices, we expect estimated  operating cash flows for the year 2011 to be greater than our budgeted capital expenditures, expected debt payments, dividends, noncontrolling interest distributions and other cash requirements.

Cash and Cash Equivalents

At March 31, 2011, we had consolidated cash and cash equivalents of $4.1 billion. The following table reflects the U.S. and international components of consolidated cash and cash equivalents at March 31, 2011, and December 31, 2010 (in billions):

	March 31,			December 31,
	2011			2010
Cash at domestic companiesa	$	1.9		$	1.9
Cash at international operations		2.2			1.8
Total consolidated cash and cash equivalents		4.1	b		3.7
Less: Noncontrolling interests’ share		(0.7	)		(0.4	)
Cash, net of noncontrolling interests’ share		3.4			3.3
Less: Withholding taxes and other		(0.2	)		(0.2	)
Net cash available to FCX	$	3.2		$	3.1

a.   Includes cash at our parent company and other North America operations.

b.   Excludes restricted cash of $1.2 billion for the April 1, 2011, redemption of our 8.25% Senior Notes (refer to Note 6 for further discussion).

Operating Activities

Our operating cash flows vary with prices realized from copper, gold and molybdenum sales, our sales volumes, production costs, income taxes and other working capital changes and other factors. We generated operating cash flows totaling $2.4 billion in first-quarter 2011, including $114 million from working capital sources, compared with operating cash flows totaling $1.8 billion in first-quarter 2010, including $280 million from working capital sources. Higher operating cash flows for first-quarter 2011, compared with first-quarter 2010, primarily reflected higher copper and gold price realizations.

Refer to “Outlook” for further discussion of projected operating cash flows for the year 2011.

Investing Activities

Capital expenditures, including capitalized interest, increased to $505 million in first-quarter 2011, compared with $231 million in first-quarter 2010, primarily reflecting higher capital spending associated with our development projects, including increased spending for construction on the Climax molybdenum mine, the sulfide ore project at El Abra and the underground development projects at Grasberg.

Capital expenditures for the year 2011 are expected to approximate $2.5 billion (including $1.3 billion for major projects), which primarily includes underground development activities at Grasberg, construction activities at the

40

Climax molybdenum mine and completion of the initial phase of the sulfide ore project at El Abra. We are also considering additional investments at several of our sites. Capital spending plans will continue to be reviewed and adjusted in response to changes in market conditions and other factors. Refer to “Operations” for further discussion.

Financing Activities

Debt and Equity Transactions. Total debt approximated $4.8 billion at March 31, 2011, and December 31, 2010. On April 1, 2011, we redeemed the remaining $1.1 billion of our outstanding 8.25% Senior Notes due 2015. In second-quarter 2011, we expect to record a loss on early extinguishment of debt of $56 million ($49 million to net income attributable to FCX common stockholders) in connection with this redemption (refer to Note 6 for further discussion).

During first-quarter 2010, we had open-market purchases of $269 million of our 8.25% and 8.375% Senior Notes for $293 million (refer to Note 6 for further discussion).

After taking into account the April 1, 2011, redemption of our 8.25% Senior Notes, we have repaid approximately $3.7 billion, or approximately 50 percent of our outstanding debt, since January 1, 2009, resulting in estimated annual interest savings of approximately $260 million based on current interest rates.

We have no significant debt maturities in the near term; however, we may consider opportunities to prepay debt in advance of scheduled maturities. We have $3.0 billion in 8.375% Senior Notes that are redeemable in whole or in part, at our option, at make-whole redemption prices prior to April 2012, and afterwards at stated redemption prices.

On March 30, 2011, we entered into a new senior revolving credit facility, which replaced the revolving credit facilities that were scheduled to expire on March 19, 2012. This revolving credit facility is available until March 30, 2016, in an aggregate principal amount of $1.5 billion, with $500 million available to PT Freeport Indonesia. At March 31, 2011, we had no borrowings and $43 million in letters of credit issued under the revolving credit facility, resulting in availability of approximately $1.5 billion (of which $957 million could be used for additional letters of credit). Refer to Note 6 for further discussion.

The revolving credit facility and our senior notes contain certain restrictive covenants that vary among the instruments, but include limitations on the incurrence of debt, liens and certain asset sales.

We have an open-market share purchase program for up to 30 million shares. We made no purchases under this program during 2010 or the first quarter of 2011. There are 23.7 million shares remaining under this program, and the timing of future purchases of our common stock is dependent on many factors, including our operating results; cash flows and financial position; copper, gold and molybdenum prices; the price of our common shares; and general economic and market conditions.

Dividends. Common stock dividends paid totaled $238 million in first-quarter 2011, compared with $66 million in first-quarter 2010. After being suspended in late 2008, the Board reinstated a cash dividend on our common stock in October 2009 at an annual rate of $0.30 per share ($0.075 per share quarterly). In April 2010, the Board authorized an increase in the annual cash dividend to an annual rate of $0.60 per share ($0.15 per share quarterly) and in October 2010, the Board authorized another increase in the cash dividend to an annual rate of $1.00 per share ($0.25 per share quarterly). On March 31, 2011, the Board declared a regular quarterly dividend of $0.25 per share, which was paid on May 1, 2011, to common shareholders of record at the close of business on April 15, 2011.

In April 2011, the Board also declared a supplemental common stock dividend of $0.50 per share to be paid on June 1, 2011, to shareholders of record as of May 15, 2011.  The supplemental dividend represents an addition to the regular quarterly common stock dividend of $0.25 per share.  Based on approximately 947 million shares outstanding at March 31, 2011, the supplemental dividend payment will approximate $474 million.

The declaration of dividends is at the discretion of the Board. The amount of cash dividends on our common stock is dependent upon our financial results, cash requirements, future prospects and other factors deemed relevant by the Board. The Board will continue to review our financial policy on an ongoing basis.

41

Preferred stock dividends paid totaled $49 million in first-quarter 2010 representing dividends on our 6¾% Mandatory Convertible Preferred Stock. During 2010, our 6¾% Mandatory Convertible Preferred Stock automatically converted into 78.9 million shares of our common stock (refer to Note 6 for further discussion). As a result of this transactions we no longer have requirements to pay preferred stock dividends.

Cash dividends paid to noncontrolling interests totaled $133 million in first-quarter 2011 and $75 million in first-quarter 2010, reflecting dividends paid to the noncontrolling interest owners of PT Freeport Indonesia and our South America mines.

CONTRACTUAL OBLIGATIONS

There have been no material changes in our contractual obligations since year-end 2010. Refer to Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2010, for further information regarding our contractual obligations.

ENVIRONMENTAL AND RECLAMATION MATTERS

Our mining, exploration, production and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. There have been no material changes to our environmental and reclamation obligations since year-end 2010. Refer to Note 13 in our Annual Report on Form 10-K for the year ended December 31, 2010, for further information regarding our environmental and reclamation obligations.

NEW ACCOUNTING STANDARDS

We do not expect the impact of recently issued accounting standards to have a significant impact on our future financial statements and disclosures.

PRODUCT REVENUES AND PRODUCTION COSTS

Unit net cash costs per pound of copper and molybdenum are measures intended to provide investors with information about the cash-generating capacity of our mining operations expressed on a basis relating to the primary metal product for the respective operations. We use this measure for the same purpose and for monitoring operating performance by our mining operations. This information differs from measures of performance determined in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. This measure is presented by other metals mining companies, although our measures may not be comparable to similarly titled measures reported by other companies.

We present gross profit per pound of copper in the following tables using both a “by-product” method and a “co-product” method. We use the by-product method in our presentation of gross profit per pound of copper because (i) the majority of our revenues are copper revenues, (ii) we mine ore, which contains copper, gold, molybdenum, cobalt and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum, cobalt and other metals we produce, (iv) it is the method used to compare mining operations in certain industry publications and (v) it is the method used by our management and the Board to monitor operations. In the co-product method presentation below, shared costs are allocated to the different products based on their relative revenue values, which will vary to the extent our metals sales volumes and realized prices change.

We show adjustments for prior period open sales as separate line items. Because the copper pricing adjustments do not result from current period sales, we have reflected these separately from revenues on current period sales. Noncash and other costs consist of items such as stock-based compensation costs, write-offs of equipment and/or unusual charges. They are removed from site production and delivery costs in the calculation of unit net cash costs. As discussed above, gold, molybdenum and other metal revenues at copper mines are reflected as credits against site production and delivery costs in the by-product method. Following are presentations under both the by-product and co-product methods together with reconciliations to amounts reported in our consolidated financial statements.

42

North America Copper Mines Product Revenues and Production Costs

Three Months Ended March 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Molybdenuma		Otherb		Total
Revenues, excluding adjustments	$	1,211		$	1,211		$	124	$	21	$	1,356
Site production and delivery, before net noncash
and other costs shown below		481			432			52		8		492
By-product creditsa		(134	)		-			-		-		-
Treatment charges		29			28			-		1		29
Net cash costs		376			460			52		9		521
Depreciation, depletion and amortization		56			52			3		1		56
Noncash and other costs, net		41			40			1		-		41
Total costs		473			552			56		10		618
Revenue adjustments		1			1			-		-		1
Idle facility and other non-inventoriable costs		(11	)		(11	)		-		-		(11	)
Gross profit	$	728		$	649		$	68	$	11	$	728
Reconciliation to Amounts Reported
								Depreciation,
				Production				Depletion and
	Revenues			and Delivery				Amortization
Totals presented above	$	1,356		$	492		$	56
Treatment charges per above		N/A			29			N/A
Net noncash and other costs per above		N/A			41			N/A
Revenue adjustments per above		1			N/A			N/A
Idle facility and other non-inventoriable costs per above		N/A			11			N/A
Eliminations and other		(9	)		2			2
North America copper mines		1,348			575			58
South America mining		1,402			411			57
Indonesia mining		1,730			526			57
Africa mining		309			124			28
Molybdenum		374			240			14
Rod & Refining		1,487			1,481			2
Atlantic Copper Smelting & Refining		762			763			10
Corporate, other & eliminations		(1,703	)		(1,743	)		6
As reported in FCX’s consolidated financial statements	$	5,709		$	2,377		$	232

a.   Molybdenum by-product credits and revenues reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver product revenues and production costs.

43

North America Copper Mines Product Revenues and Production Costs (continued)

Three Months Ended March 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Molybdenuma		Otherb		Total
Revenues, excluding adjustments	$	965		$	965		$	77	$	12	$	1,054
Site production and delivery, before net noncash
and other costs shown below		381			349			41		5		395
By-product creditsa		(75	)		-			-		-		-
Treatment charges		22			21			-		1		22
Net cash costs		328			370			41		6		417
Depreciation, depletion and amortization		78			74			4		-		78
Noncash and other costs, net		24			24			-		-		24
Total costs		430			468			45		6		519
Revenue adjustments		(1	)		(1	)		-		-		(1	)
Idle facility and other non-inventoriable costs		(18	)		(18	)		-		-		(18	)
Gross profit	$	516		$	478		$	32	$	6	$	516
Reconciliation to Amounts Reported
								Depreciation,
				Production				Depletion and
	Revenues			and Delivery				Amortization
Totals presented above	$	1,054		$	395		$	78
Treatment charges per above		N/A			22			N/A
Net noncash and other costs per above		N/A			24			N/A
Revenue adjustments per above		(1	)		N/A			N/A
Idle facility and other non-inventoriable costs per above		N/A			18			N/A
Eliminations and other		1			5			4
North America copper mines		1,054			464			82
South America mining		1,069			376			61
Indonesia mining		1,459			475			63
Africa mining		249			110			30
Molybdenum		275			185			13
Rod & Refining		1,073			1,067			2
Atlantic Copper Smelting & Refining		633			628			10
Corporate, other & eliminations		(1,449	)		(1,387	)		10
As reported in FCX’s consolidated financial statements	$	4,363		$	1,918		$	271

a.   Molybdenum by-product credits and revenues reflect volumes produced at market-based pricing and also include tolling revenues at Sierrita.

b.   Includes gold and silver product revenues and production costs.

44

South America Mining Product Revenues and Production Costs

Three Months Ended March 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Other a			Total
Revenues, excluding adjustments	$	1,345		$	1,345		$	119		$	1,464
Site production and delivery, before net noncash
and other costs shown below		406			375			37			412
By-product credits		(113	)		-			-			-
Treatment charges		59			59			-			59
Net cash costs		352			434			37			471
Depreciation, depletion and amortization		57			53			4			57
Noncash and other costs, net		5			5			-			5
Total costs		414			492			41			533
Revenue adjustments, primarily for pricing on prior
period open sales		11			(8	)		19			11
Other non-inventoriable costs		(14	)		(13	)		(1	)		(14	)
Gross profit	$	928		$	832		$	96		$	928
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,464		$	412		$	57
Treatment charges per above		(59	)		N/A			N/A
Net noncash and other costs per above		N/A			5			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		11			N/A			N/A
Other non-inventoriable costs per above		N/A			14			N/A
Eliminations and other		(14	)		(20	)		-
South America mining		1,402			411			57
North America copper mines		1,348			575			58
Indonesia mining		1,730			526			57
Africa mining		309			124			28
Molybdenum		374			240			14
Rod & Refining		1,487			1,481			2
Atlantic Copper Smelting & Refining		762			763			10
Corporate, other & eliminations		(1,703	)		(1,743	)		6
As reported in FCX’s consolidated financial statements	$	5,709		$	2,377		$	232

a.   Includes molybdenum, gold and silver product revenues and production costs.

45

South America Mining Product Revenues and Production Costs (continued)

Three Months Ended March 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Other a			Total
Revenues, excluding adjustments	$	1,061		$	1,061		$	56		$	1,117
Site production and delivery, before net noncash
and other costs shown below		367			348			23			371
By-product credits		(51	)		-			-			-
Treatment charges		47			47			-			47
Net cash costs		363			395			23			418
Depreciation, depletion and amortization		60			58			3			61
Noncash and other costs, net		2			2			-			2
Total costs		425			455			26			481
Revenue adjustments, primarily for pricing on prior
period open sales		(2	)		(2	)		-			(2	)
Other non-inventoriable costs		(8	)		(7	)		(1	)		(8	)
Gross profit	$	626		$	597		$	29		$	626
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,117		$	371		$	61
Treatment charges per above		(47	)		N/A			N/A
Net noncash and other costs per above		N/A			2			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		(2	)		N/A			N/A
Other non-inventoriable costs per above		N/A			8			N/A
Eliminations and other		1			(5	)		-
South America mining		1,069			376			61
North America copper mines		1,054			464			82
Indonesia mining		1,459			475			63
Africa mining		249			110			30
Molybdenum		275			185			13
Rod & Refining		1,073			1,067			2
Atlantic Copper Smelting & Refining		633			628			10
Corporate, other & eliminations		(1,449	)		(1,387	)		10
As reported in FCX’s consolidated financial statements	$	4,363		$	1,918		$	271

a.   Includes molybdenum, gold and silver product revenues and production costs.

46

Indonesia Mining Product Revenues and Production Costs

Three Months Ended March 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Gold			Silver			Total
Revenues, excluding adjustments	$	1,184		$	1,184		$	636		$	32		$	1,852
Site production and delivery, before net noncash
and other costs shown below		511			327			175			9			511
Gold and silver credits		(650	)		-			-			-			-
Treatment charges		49			31			17			1			49
Royalty on metals		45			29			16			-			45
Net cash (credits) costs		(45	)		387			208			10			605
Depreciation and amortization		57			36			20			1			57
Noncash and other costs, net		15			10			4			1			15
Total costs		27			433			232			12			677
Revenue adjustments, primarily for pricing on prior
period open sales		(10	)		(10	)		(17	)		(1	)		(28	)
PT Smelting intercompany loss		48			31			16			1			48
Gross profit	$	1,195		$	772		$	403		$	20		$	1,195
Reconciliation to Amounts Reported
(In millions)							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,852		$	511		$	57
Treatment charges per above		(49	)		N/A			N/A
Royalty on metals per above		(45	)		N/A			N/A
Net noncash and other costs per above		N/A			15			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		(28	)		N/A			N/A
Indonesia mining		1,730			526			57
North America copper mines		1,348			575			58
South America mining		1,402			411			57
Africa mining		309			124			28
Molybdenum		374			240			14
Rod & Refining		1,487			1,481			2
Atlantic Copper Smelting & Refining		762			763			10
Corporate, other & eliminations		(1,703	)		(1,743	)		6
As reported in FCX’s consolidated financial statements	$	5,709		$	2,377		$	232

47

Indonesia Mining Product Revenues and Production Costs (continued)

Three Months Ended March 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Gold		Silver			Total
Revenues, excluding adjustments	$	1,039		$	1,039		$	508	$	22		$	1,569
Site production and delivery, before net noncash
and other costs shown below		456			302			148		6			456
Gold and silver credits		(530	)		-			-		-			-
Treatment charges		67			44			21		2			67
Royalty on metals		36			24			12		-			36
Net cash costs		29			370			181		8			559
Depreciation and amortization		63			42			21		-			63
Noncash and other costs, net		19			13			6		-			19
Total costs		111			425			208		8			641
Revenue adjustments, primarily for pricing on prior
period open sales		(7	)		(7	)		1		(1	)		(7	)
PT Smelting intercompany loss		12			8			4		-			12
Gross profit	$	933		$	615		$	305	$	13		$	933
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,569		$	456		$	63
Treatment charges per above		(67	)		N/A			N/A
Royalty on metals per above		(36	)		N/A			N/A
Net noncash and other costs per above		N/A			19			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		(7	)		N/A			N/A
Indonesia mining		1,459			475			63
North America copper mines		1,054			464			82
South America mining		1,069			376			61
Africa mining		249			110			30
Molybdenum		275			185			13
Rod & Refining		1,073			1,067			2
Atlantic Copper Smelting & Refining		633			628			10
Corporate, other & eliminations		(1,449	)		(1,387	)		10
As reported in FCX’s consolidated financial statements	$	4,363		$	1,918		$	271

48

Africa Mining Product Revenues and Production Costs

Three Months Ended March 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Cobalt			Total
Revenues, excluding adjustmentsa	$	249		$	249		$	64		$	313
Site production and delivery, before net noncash
and other costs shown below		90			80			32			112
Cobalt creditsb		(45	)		-			-			-
Royalty on metals		6			5			1			6
Net cash costs		51			85			33			118
Depreciation, depletion and amortization		28			23			5			28
Noncash and other costs, net		9			8			1			9
Total costs		88			116			39			155
Revenue adjustments, primarily for pricing on prior
period open sales		(1	)		(1	)		3			2
Other non-inventoriable costs		(3	)		(2	)		(1	)		(3	)
Gross profit	$	157		$	130		$	27		$	157
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	313		$	112		$	28
Royalty on metals per above		(6	)		N/A			N/A
Net noncash and other costs per above		N/A			9			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		2			N/A			N/A
Other non-inventoriable costs per above		N/A			3			N/A
Africa mining		309			124			28
North America copper mines		1,348			575			58
South America mining		1,402			411			57
Indonesia mining		1,730			526			57
Molybdenum		374			240			14
Rod & Refining		1,487			1,481			2
Atlantic Copper Smelting & Refining		762			763			10
Corporate, other & eliminations		(1,703	)		(1,743	)		6
As reported in FCX’s consolidated financial statements	$	5,709		$	2,377		$	232

a.   Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.

b.   Net of cobalt downstream processing and freight costs.

49

Africa Mining Product Revenues and Production Costs (continued)

Three Months Ended March 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Cobalt			Total
Revenues, excluding adjustmentsa	$	214		$	214		$	35		$	249
Site production and delivery, before net noncash
and other costs shown below		90			87			16			103
Cobalt creditsb		(26	)		-			-			-
Royalty on metals		5			5			-			5
Net cash costs		69			92			16			108
Depreciation, depletion and amortization		30			23			7			30
Noncash and other costs, net		1			1			-			1
Total costs		100			116			23			139
Revenue adjustments, primarily for pricing on prior
period open sales		-			-			4			4
Other non-inventoriable costs		(6	)		(5	)		(1	)		(6	)
Gross profit	$	108		$	93		$	15		$	108
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	249		$	103		$	30
Royalty on metals per above		(5	)		N/A			N/A
Net noncash and other costs per above		N/A			1			N/A
Revenue adjustments, primarily for pricing on prior
period open sales per above		4			N/A			N/A
Other non-inventoriable costs per above		N/A			6			N/A
Eliminations and other		1			-			-
Africa mining		249			110			30
North America copper mines		1,054			464			82
South America mining		1,069			376			61
Indonesia mining		1,459			475			63
Molybdenum		275			185			13
Rod & Refining		1,073			1,067			2
Atlantic Copper Smelting & Refining		633			628			10
Corporate, other & eliminations		(1,449	)		(1,387	)		10
As reported in FCX’s consolidated financial statements	$	4,363		$	1,918		$	271

a.   Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.

b.   Net of cobalt downstream processing and freight costs.

50

Henderson Molybdenum Mine Product Revenues and Production Costs

	Three Months Ended March 31,
(In millions)	2011			2010
Revenues, excluding adjustments	$	172		$	139
Site production and delivery, before net noncash
and other costs shown below		52			42
Treatment charges and other		9			10
Net cash costs		61			52
Depreciation, depletion and amortization		9			8
Noncash and other costs, net		-			1
Total costs		70			61
Gross profita	$	102		$	78
Reconciliation to Amounts Reported				Production			Depreciation,
				and			Depletion and
		Revenues		Delivery			Amortization
Three Months Ended March 31, 2011
Totals presented above	$	172		$	52		$	9
Treatment charges and other per above		(9	)		N/A			N/A
Net noncash and other costs per above		N/A			-			N/A
Henderson mine		163			52			9
Other molybdenum operations and eliminationsb		211			188			5
Molybdenum		374			240			14
North America copper mines		1,348			575			58
South America mining		1,402			411			57
Indonesia mining		1,730			526			57
Africa mining		309			124			28
Rod & Refining		1,487			1,481			2
Atlantic Copper Smelting & Refining		762			763			10
Corporate, other & eliminations		(1,703	)		(1,743	)		6
As reported in FCX’s consolidated financial statements	$	5,709		$	2,377		$	232
Three Months Ended March 31, 2010
Totals presented above	$	139		$	42		$	8
Treatment charges and other per above		(10	)		N/A			N/A
Net noncash and other costs per above		N/A			1			N/A
Henderson mine		129			43			8
Other molybdenum operations and eliminationsb		146			142			5
Molybdenum		275			185			13
North America copper mines		1,054			464			82
South America mining		1,069			376			61
Indonesia mining		1,459			475			63
Africa mining		249			110			30
Rod & Refining		1,073			1,067			2
Atlantic Copper Smelting & Refining		633			628			10
Corporate, other & eliminations		(1,449	)		(1,387	)		10
As reported in FCX’s consolidated financial statements	$	4,363		$	1,918		$	271

a.   Gross profit reflects sales of Henderson products based on volumes produced at market-based pricing. On a consolidated basis, the Molybdenum division includes profits on sales as they are made to third parties and realizations based on actual contract terms. As a result, the actual gross profit realized will differ from the amounts reported in this table.

b.   Primarily includes amounts associated with the molybdenum sales company, which includes sales of molybdenum produced by our North and South America copper mines.

51

CAUTIONARY STATEMENT

Our discussion and analysis contains forward-looking statements in which we discuss factors we believe may affect our future performance.  Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding projected ore grades and milling rates, projected production and sales volumes, projected unit net cash costs, projected operating cash flows, projected capital expenditures, exploration efforts and results, mine production and development plans, the impact of deferred intercompany profits on earnings, liquidity, other financial commitments and tax rates, the impact of copper, gold, molybdenum and cobalt price changes, potential prepayments of debt, future dividend payments and potential share purchases.  The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” and any similar expressions are intended to identify those assertions as forward-looking statements.  The declaration of dividends is at the discretion of our Board and will depend on our financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.

In making any forward-looking statements, we believe that the expectations are based on reasonable assumptions.  We caution readers that those statements are not guarantees of future performance and our actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements.  Important factors that can cause our actual results to differ materially from those anticipated in the forward-looking statements include commodity prices, mine sequencing, production rates, industry risks, regulatory changes, political risks, the potential effects of violence in Indonesia, the resolution of administrative disputes in the Democratic Republic of Congo, weather-related risks, labor relations, environmental risks, litigation results, currency translation risks and other factors described in more detail under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC.

Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after our forward-looking statements are made, including for example commodity prices, which we cannot control, and production volumes and costs, some aspects of which we may or may not be able to control. Further, we may make changes to our business plans that could or will affect our results. We caution investors that we do not intend to update our forward-looking statements notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes, and we undertake no obligation to update any forward-looking statements more frequently than quarterly.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risks during the three months ended March 31, 2011. For additional information on market risks, refer to “Disclosures About Market Risks” included in Part II, Item 7A of our annual report on Form 10-K for the year ended December 31, 2010. For projected sensitivities of our operating cash flow to changes in commodity prices, refer to “Outlook” in Part I, Item 2 of this quarterly report on Form 10-Q; for projected sensitivities of our provisionally priced copper sales to changes in commodity prices refer to “Consolidated Results – Revenues” in Part I, Item 2 of this quarterly report on Form 10-Q.

Item 4.  Controls and Procedures.

(a)   Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, with the participation of management, have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q. Based on their evaluation, they have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

(b)   Changes in internal control. There has been no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2011, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

52

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

We are involved in various legal proceedings that arise in the ordinary course of our business or are associated with environmental issues arising from legacy operations conducted over the years by Phelps Dodge Corporation and its affiliates.  We are also involved from time to time in other reviews, investigations and proceedings by government agencies, some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. There have been no new material legal proceedings and no material changes to the information included in Part I, Item 3. “Legal Proceedings,” of our report on Form 10-K for the year ended December 31, 2010. Management does not believe, based on currently available information, that the outcome of any proceeding reported in “Legal Proceedings” in our report on Form 10-K for the year ended December 31, 2010, will have a material adverse effect on our financial condition, although individual outcomes could be material to our operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period.

Item 1A.  Risk Factors.

There have been no material changes to our risk factors during the three months ended March 31, 2011. For additional information on risk factors, refer to Part I, Item 1A. “Risk Factors” in our report on Form 10-K for the year ended December 31, 2010.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

(c)   The following table sets forth information with respect to shares of Freeport-McMoRan Copper & Gold Inc. (FCX) common stock purchased by us during the three months ended March 31, 2011:

				(c) Total Number of	(d) Maximum Number
	(a) Total Number	(b) Average		Shares Purchased as Part	of Shares That May
	of Shares	Price Paid		of Publicly Announced	Yet Be Purchased Under
Period	Purchaseda	Per Share		Plans or Programsb	the Plans or Programsb
January 1-31, 2011	-	$	-	-	23,685,500
February 1-28, 2011	328,497	$	56.26	-	23,685,500
March 1-31, 2011	-	$	-	-	23,685,500
Total	328,497	$	56.26	-	23,685,500

a.   Consists of shares repurchased under FCX’s applicable stock incentive plans, which were repurchased to satisfy tax obligations on restricted stock awards and to cover the cost of option exercises.

b.   On July 21, 2008, our Board of Directors approved an increase in our open-market share purchase program for up to 30 million shares. This program does not have an expiration date.

Item 4. Mine Safety Disclosure.

The safety and health of all our employees are of the highest priority. Management believes that safety and health considerations are integral to, and compatible with, all other functions in the organization and that proper safety and health management will enhance production and reduce costs. Our approach towards the health and safety of our workforce is to continuously improve performance through implementing robust management systems and providing adequate training, safety incentive and occupational health programs. Refer to Exhibit 99.1 for mine safety disclosures required to be disclosed in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Item 6.  Exhibits.

The exhibits to this report are listed in the Exhibit Index beginning on Page E-1 hereof.

53

FREEPORT-McMoRan COPPER & GOLD INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FREEPORT-McMoRan COPPER & GOLD INC.

By:          /s/ C. Donald Whitmire, Jr.                                                      

C. Donald Whitmire, Jr.

Vice President and

Controller – Financial Reporting

(authorized signatory and

Principal Accounting Officer)

Date:  May 6, 2011

54

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-Q	Form	File No.	Date Filed
3.1	Composite Certificate of Incorporation of FCX.		10-Q	001-11307-01	08/06/2010
3.2	Amended and Restated By-Laws of FCX, as amended through February 2, 2010.		8-K	001-11307-01	02/05/2010
10.1	Credit Agreement dated as of March 30, 2011, among FCX, the Lenders party thereto, the Issuing Banks party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent and Bank of America, N.A., as Syndication Agent.	X
10.2*	Amendment to Amended and Restated Executive Employment Agreement by and between Freeport-McMoRan Copper & Gold Inc. and Richard C. Adkerson.		8-K	001-11307-01	04/28/2011
10.3*	Amendment to Amended and Restated Executive Employment Agreement by and between Freeport-McMoRan Copper & Gold Inc. and Kathleen L. Quirk.		8-K	001-11307-01	04/28/2011
10.4	Addendum No. 1 to the Amended and Restated Shareholders Agreement dated as of September 28, 2005, among La Générale des Carrières et des Mines and TF Holdings Limited, Chui Ltd., Faru Ltd., Mboko Ltd., Mofia Ltd., Tembo Ltd., and Tenke Fungurume Mining S.A.R.L., dated as of December 11, 2010.	X
10.5	Addendum No. 1 to the Amended and Restated Mining Convention dated as of September 28, 2005, among the Democratic Republic of Congo, La Générale des Carrières et des Mines, TF Holdings Limited and Tenke Fungurume Mining S.A.R.L., dated as of December 11, 2010.	X
10.6*	FCX Director Compensation.	X
15.1	Letter from Ernst & Young LLP regarding unaudited interim financial statements.	X
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d – 14(a).	X
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d – 14(a).	X
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.	X
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.	X
99.1	Mine Safety and Health Administration Safety Data.	X
101.INS	XBRL Instance Document.	X
101.SCH	XBRL Taxonomy Extension Schema.	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase.	X
101.LAB	XBRL Taxonomy Extension Label Linkbase.	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.	X

(*) Indicates management contract or compensatory plan or arrangement.

E-1

EX-10.1

Exhibit 10.1

EXECUTION VERSION

CREDIT AGREEMENT

dated as of

March 30, 2011,

among

FREEPORT-MCMORAN COPPER & GOLD INC.,

PT FREEPORT INDONESIA,

The Lenders Party Hereto,

The Issuing Banks Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

BANK OF AMERICA, N.A.

as Syndication Agent,

and

BNP PARIBAS,

CITIBANK, N.A.,

HSBC BANK USA, NATIONAL ASSOCIATION, and

THE BANK OF NOVA SCOTIA,

as Co-Documentation Agents,

___________________________

J.P. MORGAN SECURITIES LLC,

BNP PARIBAS SECURITIES CORP.,

CITIGROUP GLOBAL MARKETS INC.,

HSBC SECURITIES (USA) INC.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, and

THE BANK OF NOVA SCOTIA,

as Co-Lead Arrangers and Joint Bookrunners

[CS&M Ref. 06701-867]

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

TABLE OF CONTENTS

Page

ARTICLE I

Definitions

SECTION 1.01.	Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
SECTION 1.02.	Classification of Loans and Borrowings. . . . . . . . . . . . . . . . . . . .	25
SECTION 1.03.	Terms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
SECTION 1.04.	Accounting Terms; GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

ARTICLE II

The Credits

SECTION 2.01.	Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
SECTION 2.02.	Loans and Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
SECTION 2.03.	Requests for Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
SECTION 2.04.	Funding of Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
SECTION 2.05.	Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
SECTION 2.06.	Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
SECTION 2.07.	Interest Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	34
SECTION 2.08.	Termination and Reduction of Commitment . . . . . . . . . . . . . . . .	35
SECTION 2.09.	Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . . . . .	36
SECTION 2.10.	Prepayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
SECTION 2.11.	Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
SECTION 2.12.	Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
SECTION 2.13.	Alternate Rate of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
SECTION 2.14.	Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
SECTION 2.15.	Break Funding Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
SECTION 2.16.	Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
SECTION 2.17.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs. . .	47
SECTION 2.18.	Mitigation Obligations; Replacement of Lenders. . . . . . . . . . . . .	48
SECTION 2.19.	Defaulting Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	49
SECTION 2.20.	Incremental Revolving Commitments. . . . . . . . . . . . . . . . . . . . . .	51

ARTICLE III

Representations and Warranties

SECTION 3.01.	Organization; Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
SECTION 3.02.	Authorization Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	53
SECTION 3.03.	Governmental Approvals; No Conflicts. . . . . . . . . . . . . . . . . . . . .	53
SECTION 3.04.	Financial Condition; No Material Adverse Change. . . . . . . . . . . .	53
SECTION 3.05.	Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54
SECTION 3.06.	Litigation and Environmental Matters. . . . . . . . . . . . . . . . . . . . . .	54
SECTION 3.07.	Compliance with Laws and Agreements. . . . . . . . . . . . . . . . . . . .	54
SECTION 3.08.	Investment Company Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54
SECTION 3.09.	Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54
SECTION 3.10.	ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

SECTION 3.11. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

SECTION 3.12.	Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
SECTION 3.13.	Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
SECTION 3.14.	Federal Reserve Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
SECTION 3.15.	Pari Passu Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
SECTION 3.16.	Status of PTFI for Tax Purposes. . . . . . . . . . . . . . . . . . . . . . . . . .	55
SECTION 3.17.	OFAC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56
SECTION 3.18.	FCPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56

ARTICLE IV

Conditions

SECTION 4.01.	Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	56
SECTION 4.02.	Each Credit Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57

ARTICLE V

Affirmative Covenants

SECTION 5.01.	Financial Statements and Other Information. . . . . . . . . . . . . . . . .	58
SECTION 5.02.	Notices of Material Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	60
SECTION 5.03.	Existence; Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . .	60
SECTION 5.04.	Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	60
SECTION 5.05.	Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	61
SECTION 5.06.	Books and Records; Inspection and Audit Rights. . . . . . . . . . . . .	61
SECTION 5.07.	Compliance with Laws; Environmental Reports. . . . . . . . . . . . . .	61
SECTION 5.08.	Use of Proceeds and Letters of Credit. . . . . . . . . . . . . . . . . . . . . .	62
SECTION 5.09.	Source of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	62
SECTION 5.10.	Indonesian Translation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	62

ARTICLE VI

Negative Covenants

SECTION 6.01.	Subsidiary Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	63
SECTION 6.02.	Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	64
SECTION 6.03.	Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	67
SECTION 6.04.	Sale and Leaseback Transactions. . . . . . . . . . . . . . . . . . . . . . . . . .	67
SECTION 6.05.	Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	68
SECTION 6.06.	Total Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	68
SECTION 6.07.	Interest Expense Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . .	68

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

2

ARTICLE VII

Events of Default

ARTICLE VIII

The Agents

ARTICLE IX

Miscellaneous

SECTION 9.01.	Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	73
SECTION 9.02.	Waivers; Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	74
SECTION 9.03.	Expenses; Indemnity; Damage Waiver. . . . . . . . . . . . . . . . . . . . .	75
SECTION 9.04.	Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	77
SECTION 9.05.	Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	80
SECTION 9.06.	Counterparts; Integration; Effectiveness. . . . . . . . . . . . . . . . . . . .	81
SECTION 9.07.	Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
SECTION 9.08.	Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process; Sovereign Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
SECTION 9.10.	Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
SECTION 9.11.	Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
SECTION 9.12.	Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
SECTION 9.13.	Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	83
SECTION 9.14.	Patriot Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	83
SECTION 9.15.	No Fiduciary Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
SECTION 9.16.	Release of Guarantees; Rejurisdictioning of PTFI. . . . . . . . . . . . .	84
SECTION 9.17.	Non-Public Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84

ARTICLE X

Co-Borrower Obligations

SECTION 10.01.	Joint and Several Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	85
SECTION 10.02.	Obligations Unconditional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	85

ARTICLE XI

Subsidiary Guarantors

SECTION 11.01.	Designation of Subsidiary Guarantors. . . . . . . . . . . . . . . . . . . . . .	86
SECTION 11.02.	Guarantor Terminations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87

SCHEDULES:

Schedule 1.01A—	Disclosed Matters
Schedule 1.01B—	Existing Letters of Credit
Schedule 2.01 —	Commitments
Schedule 3.03 —	Governmental Approvals
Schedule 3.04(b) —	Certain Developments

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

3

Schedule 3.12 —	Insurance
Schedule 6.01—	Existing Indebtedness
Schedule 6.02 —	Existing Liens

EXHIBITS:

Exhibit A —	Form of Assignment and Assumption
Exhibit B	Form of Guarantee Agreement
Exhibit C —	Form of Issuing Bank Agreement
Exhibit D-1 —	Form of opinion of Jones, Walker, Waechter, Poitevant, Carrère & Denègre, L.L.P., U.S. counsel for the Borrowers and the Subsidiaries
Exhibit D-2 —	Form of opinion of Indonesian counsel for the Borrowers
Exhibit E —	Form of U.S. Tax Certificate

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CREDIT AGREEMENT dated as of March 30, 2011 (this “Agreement”), among FREEPORT-MCMORAN COPPER & GOLD INC., a Delaware corporation, PT FREEPORT INDONESIA, a limited liability company organized under the laws of the Republic of Indonesia and domesticated under the laws of Delaware as a corporation, the Lenders party hereto, the Issuing Banks party hereto, and JPMORGAN CHASE BANK, N.A., (“JPMCB”), as Administrative Agent, and BANK OF AMERICA, N.A., as Syndication Agent.

The Borrowers have requested that (a) the Lenders extend credit in the form of Revolving Loans, (b) the Swingline Lender extend credit in the form of Swingline Loans and (c) the Issuing Banks issue Letters of Credit, in each case at any time and from time to time during the Revolving Availability Period such that (i) the aggregate Revolving Exposures of FCX and PTFI together will not exceed $1,500,000,000 at any time and (ii) the aggregate Revolving Exposures in respect of Loans made to and Letters of Credit requested by PTFI will not exceed $500,000,000 at any time.  Letters of Credit and the proceeds of the Revolving Loans and Swingline Loans will be used for working capital and other general corporate purposes, including acquisitions, of the Borrowers and their Subsidiaries.

The Lenders are willing to extend such credit to the Borrowers, and the Issuing Banks are willing to issue Letters of Credit for the account of the Borrowers and their Subsidiaries, on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

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“Agents” means, collectively, the Administrative Agent and the Syndication Agent.

“Agreement” has the meaning assigned to such term in the preamble hereto.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate, on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%.  For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be based on the rate per annum appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to such day for deposits in dollars with a maturity of one month.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Applicable Percentage” means, at any time with respect to any Revolving Lender, the percentage of the aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time; provided that if any Defaulting Lender exists at such time, the Applicable Percentages shall be calculated disregarding such Defaulting Lender’s Revolving Commitment.  If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most-recently in effect, giving effect to any assignments of Revolving Loans, LC Exposures and Swingline Exposures that occur after such termination or expiration and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Rate” means, for any day, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread”, “Commitment Fee Rate”, “Financial LC Participation Fee” or “Performance LC Participation Fee” as the case may be, based upon the Credit Ratings by Moody’s and S&P applicable on such date:

Level	Rating (S&P, Moody’s)	Eurodollar Spread (bps per annum)	ABR Spread (bps per annum)	Commitment Fee (bps per annum)	Financial LC Participation Fee (bps per annum)	Performance LC Participation Fee (bps per annum)
1	BBB+ / Baa1 or higher	150.0	50.0	20.0	150.0	75.0
2	BBB / Baa2	175.0	75.0	25.0	175.0	87.5
3	BBB- / Baa3	200.0	100.0	30.0	200.0	100.0
4	BB+ / Ba1	225.0	125.0	37.5	225.0	112.5
5	BB/Ba2 or lower	250.0	150.0	45.0	250.0	125.0

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For purposes of the foregoing, (a) if either Moody’s or S&P shall not have in effect a Credit Rating (other than by reason of the circumstances referred to in the last sentence of this definition), then FCX and the Lenders shall negotiate in good faith to agree upon another rating agency to be substituted by an amendment to this Agreement for the rating agency which shall not have a Credit Rating in effect, and pending the effectiveness of such amendment, the Applicable Rate shall be determined by reference to the available Credit Rating; (b) if the Credit Ratings established or deemed to have been established by Moody’s and S&P shall fall within different Levels, the Applicable Rate shall be based on the higher of the two Credit Ratings unless one of the two Credit Ratings is two or more Levels lower than the other, in which case the Applicable Rate shall be determined by reference to the Level next below that of the higher of the two Credit Ratings; and (c) if the Credit Rating established or deemed to have been established by Moody’s and S&P shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency.  Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.  If the rating system of Moody’s or S&P shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, FCX and the Lenders shall negotiate in good faith to amend the definition of “Applicable Rate” to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the Credit Rating most recently in effect prior to such change or cessation.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A attached hereto or any other form approved by the Administrative Agent.

“Attributable Debt” means, on any date, in respect of any lease of FCX or any Subsidiary entered into as part of a Project Financing or a sale and leaseback transaction subject to Section 6.04, (a) if such lease is a Capital Lease Obligation, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP and (b) if such lease is not a Capital Lease Obligation, the capitalized amount of the remaining lease payments under such lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease Obligation.

“Attributable Debt Payments” means, for FCX and the Subsidiaries for any period, all payments made during such period in respect of Attributable Debt.

“Available Domestic Cash” means, as of any date, the aggregate amount of cash and Permitted Investments held on such date by FCX or any Subsidiary that is incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia or any Subsidiary Guarantor, other than cash and Permitted Investments (a) held in accounts outside the United States of America or (b) subject to any Lien securing Indebtedness or other obligations.

“Bankruptcy Event” means, with respect to any Person, that such Person has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for

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it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority; provided, however, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any agreements made by such Person.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means each of FCX and PTFI (together, the “Borrowers”).

“Borrowing” means (a) Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

“Borrowing Request” means a request by a Borrower for a Borrowing in accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Control” means (a) the failure of FCX to own, either directly or through its wholly owned Subsidiaries, PTFI Shares representing at least 50.1% of the aggregate ordinary voting power attributable to all of the issued and outstanding PTFI Shares; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in FCX; (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of FCX by Persons who were not (i) members of the board of directors of FCX on the Effective Date or (ii) appointed as, or nominated for election as, directors by a majority of directors referred to in clause (i) above or approved pursuant to this clause (ii); or (d) the occurrence of any “Change of Control” or “Change in Control” as defined in any indenture or other governing agreement relating to any Material Indebtedness of FCX.

“Change in Law” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following:  (a) the adoption of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the interpretation or application

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thereof by any Governmental Authority, or (c) compliance by any Lender or Issuing Bank with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided however, that notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Commitment” means a Revolving Commitment or Swingline Commitment or any combination thereof (as the context requires).

“Confidential Information Materials” means the confidential information materials dated February 2011 relating to the Borrowers and the Transactions.

“Consolidated Cash Interest Expense” means, for any period, the excess of (a) the sum, without duplication, of (i) the interest expense (including imputed interest expense in respect of Capital Lease Obligations, but excluding, to the extent included as interest expense under GAAP, (A) accretion of the fair values of environmental remediation obligations that were previously determined on a discounted basis under the “purchase method” of accounting and (B) accrual of amounts which have been reserved to fund future or contingent tax liabilities) of FCX and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, (ii) any interest or other financing costs becoming payable during such period in respect of Indebtedness of FCX or its consolidated Subsidiaries to the extent such interest or other financing costs shall have been capitalized rather than included in consolidated interest expense for such period in accordance with GAAP and (iii) any cash payments made during such period in respect of obligations referred to in clause (b)(ii) below that were amortized or accrued in a previous period, minus (b) to the extent included in such consolidated interest expense for such period, the sum of (i) noncash amounts attributable to amortization or write-off of capitalized interest or other financing costs paid in a previous period and (ii) noncash amounts attributable to amortization of debt discounts or accrued interest payable in kind for such period.

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense and Attributable Debt Payments for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary charges or significant nonrecurring non-cash charges or non-cash charges resulting from requirements to mark-to-market derivative obligations (including commodity-linked securities) for such period (provided that any cash payment made with respect to any such non-cash charge shall be subtracted in computing Consolidated EBITDA for the period in which such cash payment is made), (v) any impairment charges or asset write offs or amortization related to intangible assets and long-lived assets pursuant to GAAP (including pursuant to FASB ASC Topics 350, 360 or 805), (vi) restructuring charges and reserves, (vii) fees and expenses in respect of consummated or proposed acquisitions, dispositions or financings, (viii) any purchase accounting adjustments and any step-ups with respect to re-valuing assets and liabilities in connection with any acquisition or investment consummated after the Effective Date (including any increase in amortization, depletion or depreciation, increase in cost of goods sold attributable to metal inventories or any one-time non-cash charges), (ix) other

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non-cash charges, including non-cash charges attributable to stock options and other stock-based compensation, (x) any costs or expenses incurred by FCX or a Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of FCX or net cash proceeds from the issuance of Equity Interests of FCX, (xi) charges attributable to liability or casualty events or business interruption, to the extent covered (or reasonably expected to be covered) by insurance and (xii) payments made in respect of obligations of the types included in clause (j) of the definition of Indebtedness; minus (b) without duplication and to the extent included in determining such Consolidated Net Income, any extraordinary gains or non-cash gains for such period; and plus or minus, as applicable, (c) without duplication and to the extent deducted or included, as the case may be, in determining such Consolidated Net Income (i) any effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by FCX, (ii) any net gains or losses from early extinguishment of Indebtedness or hedging obligations or other derivative instruments, including without limitation, any write-off of deferred financing costs, (iii) any net non-cash gain or loss resulting from currency translation gains or losses related to currency re-measurements of Indebtedness, (iv) the cumulative effect of a change in accounting principles and (v) any net income or loss from discontinued operations and any net gain or loss on disposal of discontinued operations, all determined on a consolidated basis in accordance with GAAP.

For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), if during such Reference Period (or, in the case of pro forma calculations, during the period from the last day of such Reference Period to and including the date as of which such calculation is made) FCX or any Subsidiary shall have made a Material Disposition or Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Disposition or Material Acquisition occurred on the first day of such Reference Period (with the Reference Period for the purposes of pro forma calculations being the most recent period of four consecutive fiscal quarters for which the relevant financial information is available).  As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes common stock of any Person and (b) involves consideration in excess of $200,000,000; and “Material Disposition” means any sale, transfer or other disposition of property or series of related sales, transfers or other dispositions of property that (i)  involves assets comprising all or substantially all of an operating unit of a business or involves common stock of any Person owned by FCX and the Subsidiaries and (ii) yields gross proceeds to FCX or any Subsidiary in excess of $200,000,000.

“Consolidated Net Income” means, for any period, the net income or loss of FCX and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with FCX or any Subsidiary or the date that such Person’s assets are acquired by FCX or any Subsidiary.  Notwithstanding anything to the contrary contained herein, Consolidated Net Income shall be (a) computed without deduction for non-controlling interests and (b) subject to the final paragraph of the definition of “Consolidated EBITDA”.

“Consolidated Total Assets” means, at any time, the total assets of FCX and the Subsidiaries, as set forth in the most recent consolidated balance sheet of FCX

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and the Subsidiaries delivered pursuant to Section 5.01 (or prior to any such delivery, the balance sheet referred to in Section 3.04(a)) on or prior to such date of determination, determined on a consolidated basis in accordance with GAAP.

“Contract of Work” means the Contract of Work made December 30, 1991, between the Ministry of Mines of the Government of the Republic of Indonesia, acting for and on behalf of the Government of the Republic of Indonesia, and PTFI, together with any amendments and extensions thereto and any related implementation agreement or Memorandum of Understanding with such Ministry of Mines acting on behalf of the Government of the Republic of Indonesia, after giving effect to the PT-Rio Tinto Indonesia COW Assignment.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Party” means the Administrative Agent, each Issuing Bank, the Swingline Lender and each other Lender.

“Credit Rating” means a rating assigned by S&P or Moody’s to the Index Debt.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Revolving Lender that (a) has failed, within two Business Days of the date required to be funded or paid, (i) to fund any portion of its Loans, (ii) to fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) to pay to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified in such writing, including, if applicable, by reference to a specific Default) has not been satisfied, (b) has notified the Borrowers or any Credit Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good-faith determination that a condition precedent (specifically identified in such writing, including, if applicable, by reference to a specific Default) to funding a Loan cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party made in good faith to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

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“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 1.01A.

“Disqualified Stock” means, with respect to any Person, any Equity Interests of such Person that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is redeemable or exchangeable either mandatorily or at the option of the holder thereof), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Stock and cash in lieu of fractional shares of Qualified Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale to the extent the terms of such Equity Interests provide that such Equity Interests shall not be required to be repurchased or redeemed until the repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments have occurred or such repurchase or redemption is otherwise permitted by this Agreement (including as a result of a waiver hereunder)), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Stock and cash in lieu of fractional shares of Qualified Stock), in whole or in part, or (c) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Stock, in each case, prior to the date that is 91 days after the Maturity Date; provided, however, that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that if any Equity Interests are issued to any employee or to any plan for the benefit of employees of FCX or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by FCX or a Subsidiary in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.

“dollars” or “$” refers to lawful money of the United States of America.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, or to the management, release or threatened release of or exposure to any Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation or reclamation, fines, penalties or indemnities), of FCX or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with either Borrower, is treated as a single employer under Section 414(b) or (c) of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived) (b) failure by any Plan to meet the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA applicable to such Plan, in each instance), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by either Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by either Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by either Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by either Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from either Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Exchange Act” means the United States Securities Exchange Act of 1934.

“Exchange Filing Requirements” means (a) the monthly and semiannual foreignexchange transaction activities filing requirements under Bank IndonesiaRegulation No. 4/2/PBI/2002 dated March 28, 2002, as amended by BankIndonesia Regulation No. 5/1/PB1/2003 dated January 31, 2003 and Circular ofBank Indonesia No. 5/24/DSM dated October 3, 2003, as amended by Circular ofBank Indonesia No.9/9/DSM dated April 9, 2007, (b) the offshore borrowingplan filing requirements (i) with the Bank Indonesia under Bank IndonesiaRegulation No. 12/1/PBI/2010 dated January 28, 2010 and Bank IndonesiaCircular No.12/37/Dint dated December 23, 2010, (c) the offshore borrowingsfiling requirements with Bank Indonesia under Bank Indonesia RegulationNo.12/ 24 /PBI/2010 dated December 29, 2010 and Bank Indonesia CircularNo.13/1/DInt dated January 20, 2011; (ii) with the Team for the Coordination andManagement of Offshore Loans (PKLN Team) of the Republic of Indonesia underPresidential Decree No. 39 of 1991 dated September 4, 1991; and (iii) with theMinistry of Finance under Presidential Decree No. 59 of 1972 October 12,1972 (as amended), including in each case any successors thereto, and (d) any additionalor subsequent regulations requiring any of the Indonesian Loan Parties tosubmit filings regarding offshore borrowings or foreign exchange transactionactivities as they may relate to any of the Loan Documents, in each case asmay be amended and in effect from time to time.

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“Excluded Taxes” means, with respect to any payment made by any Loan Party under any Loan Document, any of the following Taxes imposed on or with respect to the Administrative Agent, any Lender or any Issuing Bank: (a) income or franchise Taxes imposed on (or measured by) its net income by the United States of America or by the jurisdiction under the laws of which such Lender, Issuing Bank or the Administrative Agent is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits Taxes imposed by the United States of America or any similar Taxes imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by FCX under Section 2.18(b)), any withholding Taxes that (i) result from any law in effect (including FATCA) on the date such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from any Loan Party with respect to any withholding Taxes pursuant to Section 2.16(a) or (ii) are attributable to such Foreign Lender’s failure to comply with Section 2.16(f).  Notwithstanding the foregoing, a U.S. withholding Tax shall not be an Excluded Tax if it arises because of a violation by PTFI of either Section 3.16 or Section 5.09(a).

“Existing Credit Agreements” means each of (a) the Amended and Restated Credit Agreement dated as of July 10, 2007, among FCX, the lenders party thereto, and JPMCB, as Administrative Agent and (b) the Amended and Restated Credit Agreement dated as of July 10, 2007, among FCX, PTFI, U.S. Bank National Association, as trustee, and JPMCB, as administrative agent.

“Existing Letters of Credit” means the existing letters of credit issued under the Existing Credit Agreements and listed on Schedule 1.01B.  FCX shall be deemed to have requested the issuance of each Existing Letter of Credit for purposes hereof.

“External Environmental Report” has the meaning assigned to such term in Section 5.07(c).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.

“FCPA” means the United States Foreign Corrupt Practices Act of 1977, as amended.

“FCX” means Freeport-McMoRan Copper & Gold Inc., a Delaware corporation,  and following any merger or consolidation permitted under Section 6.03 to which FCX is a party and is not the surviving Person, such surviving Person.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Financial Covenants”  means the covenants set forth in Sections 6.06 and 6.07.

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“Financial Letter of Credit” means any Letter of Credit other than a Performance Letter of Credit.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of FCX or PTFI, as applicable.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which either Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.  If a Borrower is located in more than one jurisdiction, a Lender’s status as a Foreign Lender shall be tested separately with respect to each jurisdiction.

“Funded Debt” of any Person means Indebtedness of such Person of the types referred to in clauses (a), (b), (c), (d), (e), (h), (j) and (k) of definition thereof and all Indebtedness of the types referred to in clauses (f), (g) and (i) of such definition relating to Indebtedness of others of the types referred to in such clauses (a), (b), (c), (d), (e), (h), (j) and (k).

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof in each case for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guarantee Agreement” means a Guarantee Agreement substantially in the form of Exhibit B hereto or, if reasonably requested by the Administrative Agent, a guarantee agreement governed by the laws of the jurisdiction of the Subsidiary Guarantor and otherwise reasonably satisfactory to the Administrative Agent in form and substance.

“Guarantor Designation” has the meaning assigned to such term in Section 11.01.

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“Guarantor Designation Date” has the meaning assigned to such term in Section 11.01.

“Guarantor Termination” has the meaning assigned to such term in Section 11.02.

“Guarantor Termination Date” has the meaning assigned to such term in Section 11.02.

“Hazardous Materials”  means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum, petroleum distillates or petroleum by-products, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other hazardous or toxic substances or wastes of any nature, including mine-tailings, regulated pursuant to any Environmental Law.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Incremental Facility Agreement” means an Incremental Facility Agreement, in form and substance reasonably satisfactory to the Administrative Agent, among the Borrowers, the Administrative Agent and one or more Incremental Revolving Lenders, establishing Incremental Revolving Commitments and effecting such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.20.

“Incremental Revolving Commitment” means, with respect to any Lender, the commitment, if any, of such Lender, established pursuant to an Incremental Facility Agreement and Section 2.20, to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Revolving Exposure under such Incremental Facility Agreement.

“Incremental Revolving Lender” means a Lender with an Incremental Revolving Commitment.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all Disqualified Stock, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding trade accounts payable and other accrued expenses incurred in the ordinary course of business and deferred compensation), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party (including reimbursement obligations to the issuer) in respect of letters of credit and letters of guaranty, which support or secure Indebtedness, (j) all obligations in respect of any Metalstream Transaction, all obligations in respect of any Receivables Facility and all other obligations in respect of prepaid production arrangements, prepaid forward sale

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arrangements or derivative contracts in respect of which such Person receives upfront payments in consideration of an obligation to deliver product or commodities (or make cash payments based on the value of product or commodities) at a future time, and (k) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; provided, however, that no series of preferred stock other than Disqualified Stock shall in any event be deemed to be Indebtedness.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.  For purposes of determinations hereunder, the amount of

(A) any Receivables Facility shall be deemed at any time to be (1) the aggregate principal or stated amount of the Indebtedness, fractional undivided interests (which stated amount may be described as a “net investment” or similar term reflecting the amount invested in such undivided interest) or other securities incurred or issued pursuant to such Receivables Facility, in each case outstanding at such time, or (2) in the case of any Receivables Facility in respect of which no such Indebtedness, fractional undivided interests or securities are incurred or issued, the cash purchase price paid by the buyer in connection with its purchase of Receivables less the amount of collections received in respect of such Receivables and paid to such buyer, excluding any amounts applied to purchase fees or discount or in the nature of interest; and

(B) any other transaction of any Person included under clause (j) above, at any time, (1) the amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP or (2) if such amount would not appear on such balance sheet, the amount that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such transaction were accounted for as a transaction that would appear on such balance sheet or (3) if such amount cannot be determined under clause (1) or (2), the amount reasonably agreed by FCX and the Administrative Agent.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document and (b) Other Taxes.

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of FCX that is not guaranteed by any other Person or subject to any other credit enhancement.

“Indonesian Subsidiary” means PTFI and each other Subsidiary that is organized under the laws of Indonesia.

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“Indonesian Taxes” means Taxes imposed, assessed, levied or collected by Indonesia or any political subdivision or taxing authority thereof or therein or any association or organization of which Indonesia may be a member (but excluding Taxes imposed upon the net income of, or any franchise taxes imposed on, the Administrative Agent, any Lender (or permitted assignee or Participant) or any Issuing Bank which, in each case, has its principal office in Indonesia or a branch office in Indonesia, unless and to the extent attributable to the enforcement of any rights hereunder with respect to an Event of Default) on or in respect of this Agreement, the Loans to PTFI, the Letters of Credit issued for the account of PTFI or any other Indonesian Subsidiary, any Guarantee Agreement entered into by an Indonesian Subsidiary or any promissory notes of PTFI issued hereunder, the execution, enforcement, registration, recordation, notarization or other formalization of any thereof, and any payments of principal, interest, charges, fees or other amounts made on, under or in respect of any thereof.

“Interest Election Request” means a request by either Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.

“Interest Payment Date” means (a) with respect to any ABR Loan (including a Swingline Loan), the last day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three, six or, to the extent made available by all the applicable Lenders, nine or twelve, months thereafter, as either Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means each of JPMCB, Bank of America, N.A. and each other Lender acceptable to the Administrative Agent and FCX that has entered into an Issuing Bank Agreement, in each case in its capacity as an issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i); provided that no Person shall at any time become an Issuing Bank if after giving effect thereto there would at such time be more than six Issuing Banks.  Each Issuing Bank may, in its discretion but with the consent of FCX, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

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“Issuing Bank Agreement” means an agreement in the form of Exhibit C, or in any other form reasonably satisfactory to the Administrative Agent, pursuant to which a Lender agrees to act as an Issuing Bank.

“JPMCB” has the meaning assigned to such term in the preamble to this Agreement.

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a lender hereunder pursuant to an Assignment and Assumption or an Incremental Facility Agreement, other than any person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means (a) any letter of credit issued pursuant to this Agreement and (b) the Existing Letters of Credit.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute page for such screen, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at the time of determination for any Interest Period for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Loan Documents” means this Agreement, the Incremental Facility Agreements, and any Guarantee Agreement.

“Loan Parties” means FCX, PTFI and each Subsidiary Guarantor.

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“Loans” means the loans made by the Lenders to the Borrowers pursuant to this Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of FCX and its Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform its obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under the Loan Documents.

“Material Company” has the meaning assigned to such term in clause (g) of Article VII.

“Material Indebtedness” means Indebtedness, Project Financings or obligations in respect of one or more Hedging Agreements, of FCX and/or any Subsidiary in an aggregate principal amount or amount of Attributable Debt exceeding $100,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of FCX or any Subsidiary in respect of any Hedging Agreement at any time shall be the aggregate amount (giving effect to any netting agreements) that FCX or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

“Maturity Date” means March 30, 2016.

“Memorandum of Understanding” means the Memorandum of Understanding dated as of December 27, 1991, between the Ministry of Mines and Energy of the Government of the Republic of Indonesia, and PTFI.

“Metalstream Transaction” means a transaction in which FCX or any Subsidiary incurs obligations in respect of prepaid production arrangements, prepaid forward sale arrangements or derivative contracts in respect of which FCX or any such Subsidiary receives upfront payments in consideration of an obligation to deliver gold, copper or any other metal mined by FCX and its Subsidiaries (each, a “Qualified Metal”) (or make cash payments based on the value of any Qualified Metal) at a future time.  For the avoidance of doubt, a Metalstream Transaction shall for all purposes hereof constitute Funded Debt.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Non-Defaulting Lender” means, at any time, any Revolving Lender that is not a Defaulting Lender at such time.

“Non-Indonesian Lender” has the meaning assigned to such term in Section 2.16(p).

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“Obligations” means the obligations of each of FCX and PTFI hereunder and of FCX and PTFI and the other Loan Parties under the other Loan Documents, including, without limitation, (a) the due and punctual payment by the Borrowers of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at

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maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon, and any obligation to provide cash collateral, and (iii) all other monetary obligations of the Borrowers under this Agreement or any other Loan Document, including in respect of fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including any monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrowers under or pursuant to this Agreement and each other Loan Document, and (c) the due and punctual payment and performance of all of the obligations of each other Loan Party under or pursuant to each of the other Loan Documents.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Other Connection Taxes” means, with respect to any Lender, any Issuing Bank or the Administrative Agent, Taxes imposed as a result of a present or former connection between such Lender, such Issuing Bank or the Administrative Agent and the jurisdiction imposing such Taxes (other than a connection arising from such Lender, such Issuing Bank or the Administrative Agent having executed, delivered, enforced, become a party to, performed its obligation under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

“Other Taxes” means any and all present or future recording, stamp, court, documentary, excise, filing, transfer, sales, property or similar Taxes, arising from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.18(b)).

“parent” has the meaning assigned thereto in the definition of “subsidiary”.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Participation Agreement” means the Participation Agreement dated October 11, 1996 between PTFI and PT-Rio Tinto Indonesia, as amended by the First Amendment dated April 30, 1999 and as further amended from time to time.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

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“Performance Letter of Credit” means any Letter of Credit issued (a) to ensure the performance of services and/or the delivery of goods or (b) primarily for the purpose of securing performance obligations of FCX or any Subsidiary to Governmental Authorities, including clean-up and remediation obligations, but in either case, does not secure Indebtedness.

“Permitted Encumbrances” means:

(a) Liens for Taxes not at the time delinquent or which are being contested in compliance with Section 5.04 or secure amounts that are not material to the value of the properties to which such Liens attach (it being understood that for purposes of this paragraph (a), all real properties that consist of multiple parcels but constitute a single asset (i.e., individual project sites consisting of multiple distinct parcels of real property) shall be deemed to be a single real property));

(b) Liens imposed by law, including landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04 or secure amounts that are not material to the value of the properties to which such Liens attach (it being understood that for purposes of this paragraph (b), all real properties that consist of multiple parcels but constitute a single asset (i.e., individual project sites consisting of multiple distinct parcels of real property) shall be deemed to be a single real property));

(c) pledges, deposits or Liens under workmen’s compensation laws, unemployment insurance laws, social security laws or similar legislation, or insurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements), or in connection with bids, tenders, contracts (other than for borrowed money) or leases, or to secure utilities, licenses, public or statutory obligations, or to secure surety, indemnity, judgment, appeal or performance bonds, guarantees of government contracts (or other similar bonds, instruments or obligations), or as security for contested taxes or import or customs duties or for the payment of rent, or other obligations of like nature, in each case incurred in the ordinary course of business;

(d) judgment liens in respect of judgments that do not constitute an Event of Default under clause (j) of Article VII;

(e) Liens in favor of issuers of surety, performance or other bonds, guarantees or letters of credit or bankers’ acceptances (not issued to support Indebtedness or Attributable Debt) issued pursuant to the request of and for the account of FCX or any Subsidiary in the ordinary course of its business;

(f) encumbrances, ground leases, easements (including reciprocal easement agreements), survey exceptions, or reservations of, or rights of others for, licenses, rights of way, sewers, canals, ditches, water rights, highways, roads, railroads, fences, oil and gas leases, electric lines, data communications, and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of the real properties or Liens incidental to the conduct of the business of FCX and its Subsidiaries or to the ownership of its properties which do not in the aggregate materially adversely affect the value of

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said properties or materially impair their use in the operation of the business of FCX and its Subsidiaries (it being understood that for purposes of this paragraph (f), all real properties that consist of multiple parcels but constitute a single asset (i.e., individual project sites consisting of multiple distinct parcels of real property) shall be deemed to be a single real property));

(g) contractual Liens which arise in the ordinary course of business under operating agreements, joint venture agreements, partnership agreements, leases, area of mutual interest agreements, royalty agreements, marketing agreements, processing agreements, development agreements, and other agreements which are usual and customary in the mining business;

(h) leases, licenses, subleases and sublicenses of assets (including real property and intellectual property rights), in each case entered into in the ordinary course of business;

(i) Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary or financial institution;

(j) Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases entered into by FCX and its Subsidiaries in the ordinary course of business;

(k) any interest or title of a lessor under any operating lease;

(l) (i) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any government, statutory or regulatory authority, developer, landlord or other third party on property over which FCX or any Subsidiary has easement rights or on any leased property and subordination or similar arrangements relating thereto and (ii) any condemnation or eminent domain proceedings affecting any real property;

(m) any encumbrance or restriction (including put and call arrangements) with respect to Equity Interests of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(n) Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets;

(o) Liens securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities or Liens over cash accounts securing cash pooling arrangements; and

(p) Liens arising out of conditional sale, title retention, hire purchase, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

provided that, except for Permitted Encumbrances referred to in clause (e) above, the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness or Attributable Debt.

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“Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating from S&P of A-2 or higher or from Moody’s of P-2 or higher;

(c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year after the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any commercial bank which has a short term deposit rating issued by Moody’s of P-2 or higher or by S&P of A-2 or higher;

(d) short-term tax exempt securities rated not lower than MIG-1/+1 by either Moody’s or S&P with provisions for liquidity or maturity accommodations of 183 days or less;

(e) repurchase agreements relating to securities described in clause (a), (b), (c) and (d) above and maturity not less than one year thereafter;

(f) investments in money market or similar funds with assets of at least $1,000,000,000 and rated Aaa by Moody’s and AAA by S&P; and

(g) in the case of any Subsidiary organized or having its principal place of business outside the United States, investments denominated in the currency of the jurisdiction in which such Subsidiary is organized or has its principal place of business which are similar to the assets referred to in clauses (a), (b), (c), (d), (e) and (f) above.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA sponsored, maintained or contributed to by either Borrower or any ERISA Affiliate.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Principal Issuing Bank” means JPMCB, Bank of America, N.A. and any other Issuing Bank whom FCX and the Administrative Agent agree will be a Principal Issuing Bank (or any of their Affiliates that shall act as Issuing Banks hereunder).

“Project Financing” means (a) the incurrence of Indebtedness of a Subsidiary, the proceeds of which are applied to fund any new acquisition, exploration,

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development, construction or expansion by, or upgrades of the assets of, including associated working capital requirements, such Subsidiary (or to refinance Indebtedness or equity financing incurred for such purpose) and that may be secured by the assets of such Subsidiary, (b) the incurrence of Attributable Debt in connection with a sale and leaseback transaction involving such assets (including any such Attributable Debt incurred to refinance Indebtedness or equity financing of such assets) or (c) the incurrence of Indebtedness or Attributable Debt in connection with an Off-take Financing (including any Indebtedness or Attributable Debt incurred to refinance Indebtedness or equity financing in connection with an Off-Take Financing); provided that “Project Financing” shall not include any Indebtedness or Attributable Debt the proceeds of which are applied to acquire a going concern.  As used in this definition, “Off-take Financing” means the incurrence of Indebtedness or Attributable Debt in the form of an agreement to purchase that is entered into by a Subsidiary to support the financing by a third party of the acquisition, exploration, development, construction or expansion by, or upgrades of, assets, including associated working capital requirements, legal title to, or ownership of, which under applicable law is vested in such third party or its affiliates.

“Project Financing Assets” means, with respect to any Project Financing, the assets of the acquisition, exploration, development or expansion, or the assets the upgrade of which is, funded by such Project Financing.

“Project Financing Subsidiary” means, with respect to any Project Financing, the Subsidiary that is the primary obligor in respect of such Project Financing.

“Proscribed Consolidation” has the meaning assigned to such term in Section 6.03.

“PTFI” means PT Freeport Indonesia, a limited liability company organized under the laws of the Republic of Indonesia and domesticated under the laws of Delaware as a corporation.

“PTFI Exposure Cap” means $500,000,000.

“PTFI Shares” means capital stock of PTFI.

“PT-Rio Tinto Indonesia” means PT Rio Tinto Indonesia (formerly P.T. RTZ-CRA Indonesia), a limited liability company organized under the laws of Indonesia and a wholly owned subsidiary of RTZ.

“PT-Rio Tinto Indonesia COW Assignment” means the Assignment Agreement dated as of October 11, 1996 between PTFI and PT-Rio Tinto Indonesia pursuant to which PTFI assigned a partial undivided interest in the Contract of Work to PT-Rio Tinto Indonesia.

“Qualified Stock” means, with respect to any Person, any Equity Interests of such Person that are not Disqualified Stock.

“Receivables Facility” means any of one or more receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated, refunded, replaced or refinanced from time to time, the Indebtedness of which is non-recourse (except for Standard Receivables Facility Undertakings) to FCX or any Subsidiary (other than any Receivables Subsidiary), pursuant to which FCX or any of the Subsidiaries sells its accounts, payment intangibles and related assets or interests therein to either (a) a

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Person that is not a Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts, payment intangibles and related assets to a Person that is not a Subsidiary.

“Receivables Facility Repurchase Obligation” means any obligation of FCX or a Subsidiary that is a seller of assets in a Receivables Facility to repurchase the assets it sold thereunder as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, offset or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

“Receivables Subsidiary” means any Subsidiary formed solely for the purpose of engaging, and that engages only, in one or more Receivables Facilities.

“Register” has the meaning assigned to such term in Section 9.04(b).

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, trustees and advisors of such Person and such Person’s Affiliates.

“Reporting Person” has the meaning assigned to such term in Section 5.01.

“Requesting Borrower” has the meaning assigned to such term in Section 2.06(c).

“Required Lenders” means, at any time, Lenders having Revolving Exposures, and unused Commitments (other than Swingline Commitments) representing more than 50% of the aggregate Revolving Exposures and unused Commitments (other than Swingline Commitments) at such time.

“Revolving Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitments.

“Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 or increased from time to time pursuant to Section 2.20 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or Incremental Facility Agreement pursuant to which such Lender shall have assumed its Revolving Commitment, as the case may be.  The initial aggregate amount of the Lenders’ Revolving Commitments is $1,500,000,000.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“Revolving Lender” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

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“Revolving Lender Parent” means, with respect to any Revolving Lender, any Person in respect of which such Lender is a subsidiary.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“RTZ” means Rio Tinto plc (formerly RTZ Corporation PLC), a company organized under the laws of England.

“RTZ Interests” means the interests of PT-Rio Tinto Indonesia in the Contract of Work and certain jointly held assets pursuant to the Participation Agreement.

“S&P” means Standard & Poor’s.

“SEC” means the United States Securities and Exchange Commission.

“Significant Subsidiary” means any Subsidiary of FCX that satisfies the criteria for a “significant subsidiary” set forth in Rule 1.02(w) of Regulation S-X under the Exchange Act, as amended.

“Specified PTFI Obligations” means the obligations of PTFI hereunder (a) to pay the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans made to PTFI, when and as due, (b) to make each payment in respect of any Letter of Credit requested by PTFI, when and as due, including payments in respect of reimbursement of disbursements, interest thereon, and any obligation to provide cash collateral and (iii) to pay amounts payable under Sections 2.14, 2.15 and 2.16, that are directly attributable to Loans made to PTFI or Letters of Credit issued at the request of PTFI hereunder.

“Standard Receivables Facility Undertakings” means representations, warranties, covenants and indemnities entered into by FCX or any Subsidiary that FCX has determined in good faith to be customary in financings similar to a Receivables Facility, including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Facility Repurchase Obligation shall be deemed to be a Standard Receivables Facility Undertaking.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability

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company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the equity or more than 50% of the general partnership interests are, as of such date, owned, Controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of FCX.

“Subsidiary Guarantor” means each Subsidiary that Guarantees the Obligations under the Credit Agreement pursuant to a Guarantee Agreement, provided that, for purposes only of Section 6.01 and 6.02 hereof, no Subsidiary shall be considered a Subsidiary Guarantor unless each of the conditions set forth in Section 11.01 with respect to such Subsidiary shall have been met, and provided further that, for all purposes of this Agreement and the Loan Documents, no Guarantee Termination shall be effective with respect to any Subsidiary Guarantor unless each of the conditions set forth in Section 11.02 with respect to such Subsidiary shall have been met.

“Swingline Commitment” means the commitment of the Swingline Lender to make Swingline Loans.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the Swingline Exposure at such time.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Syndication Agent” means Bank of America, N.A., in its capacity as syndication agent for the Lenders hereunder.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges, withholdings, assessments, fees and other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total Debt” means, as of any date, the sum as of such date of (a) the aggregate principal amount of Funded Debt of FCX and the Subsidiaries outstanding as of such date, in the amount that would be reflected as a liability on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, plus (b), without duplication of amounts included in clause (a), the aggregate amount of Attributable Debt of FCX and the Subsidiaries outstanding as of such date, minus (c) the lesser as of such date of (i) $1,000,000,000 and (ii) the aggregate amount of Available Domestic Cash.

“Total Leverage Ratio” means, on any date, the ratio of (a) Total Debt as of the last day of the fiscal quarter of FCX ended on such date or most recently prior to such date to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of FCX ended on such date or most recently prior to such date.

“Transactions” means (a) the execution and delivery by each of FCX and PTFI of the Loan Documents to which it is to be a party and (b) the repayment in full of

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all obligations under the Existing Credit Agreements, the termination of all commitments thereunder and the release of all Guarantees and Liens in respect thereof.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“U.S. Person” means a “United States Person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned to such term in Section 2.16(f)(ii)(D)(2).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” means any Loan Party and the Administrative Agent.

SECTION 1.02.Classification of Loans and Borrowings.  For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

SECTION 1.03.Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, amended and restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and to any successor law or regulation, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04.Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if FCX notifies the Administrative Agent that FCX requests an amendment to any provision hereof (other than Section 5.01(a) or 5.01(b)) to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies FCX that the Required Lenders

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request an amendment to any provision hereof (other than Section 5.01(a) or 5.01(b)) for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith; provided further that if at any time of delivery of financial statements under Section 5.01(a) or 5.01(b) GAAP as applied under the other provisions hereof shall as a result of the operation of this Section 1.04 be different from that used in such financial statements, FCX shall deliver together with such financial statements a reconciliation in reasonable detail of such financial statements to such different GAAP.

ARTICLE II

The Credits

SECTION 2.01.Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrowers from time to time during the Revolving Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the aggregate Revolving Exposure attributable to Loans made to PTFI and Letters of Credit issued at the request of PTFI exceeding the PTFI Exposure Cap.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02.Loans and Borrowings.  (a)  Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)Subject to Section 2.13, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request in accordance herewith, provided that all Borrowings made on the Effective Date must be made as ABR Borrowings unless the applicable Borrower shall have provided an indemnity satisfactory to the Administrative Agent extending the benefits of Section 2.15 to Lenders in respect of such Borrowings.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, provided that any exercise of such option shall not affect the obligation of the applicable Borrower to repay such Loan in accordance with the terms of this Agreement.

(c)At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000.  At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000.  Each Swingline Loan shall be in an amount that is an integral multiple of $1,000,000 and not less than $1,000,000.  Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time be more than a total of 14 Eurodollar Borrowings outstanding.  Notwithstanding anything to the contrary herein, an ABR Revolving Borrowing or a Swingline Loan may

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be in an aggregate amount that is equal to the entire unused balance of the aggregate Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e).

(d)Notwithstanding any other provision of this Agreement, neither Borrower shall be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03.Requests for Borrowings.  To request a Revolving Borrowing, a Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, including to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e), not later than 12:00 noon, New York City time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy (or by electronic transmission with telephonic confirmation of receipt thereof) to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the applicable Borrower.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)the aggregate amount of such Borrowing;

(ii)the date of such Borrowing, which shall be a Business Day;

(iii)whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv)in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v)the location and number of the applicable Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04.Funding of Borrowings.  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, provided that Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent will make such funds transferred to it available to the applicable Borrower by promptly crediting the amounts so received, in like funds, to an account of such Borrower maintained with the Administrative Agent in New York City and designated by such Borrower in the applicable Borrowing Request; provided that ABR

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Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to Section 2.06(e) to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear.

(b)Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available at such time in accordance with paragraph (a) of this Section and may, in reliance upon such assumption and in its sole discretion, make available to the applicable Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of such Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.05.Swingline Loans.  (a)  Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time during the Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $150,000,000, (ii) the aggregate Revolving Exposures exceeding the aggregate Revolving Commitments or (iii) the total Revolving Exposures in respect of Loans made to PTFI and Letters of Credit requested by PTFI exceeding the PTFI Exposure Cap; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans.

(b)To request a Swingline Loan, a Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 2:00 p.m., New York City time, on the day of such proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from a Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower that shall have requested such Swingline Loan by means of a credit to the general deposit account of such Borrower maintained with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the applicable Issuing Bank or, to the extent that the Revolving Lenders have made payments pursuant to Section 2.06(e) to reimburse an Issuing Bank, to such Lenders and such Issuing Bank as their interests may appear) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c)The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, New York City time, on any Business Day require the Revolving Lenders to acquire participations on such Business Day in all

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or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans.  Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.04 with respect to Loans made by such Lender (and Section 2.04 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders.  The Administrative Agent shall notify the Borrowers of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter (i) each participation so acquired in such Swingline Loan shall be deemed to be a Revolving Loan and (ii) payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear, provided that any such payment so remitted shall be repaid to the Swingline Lender or the Administrative Agent, as the case may be, if and to the extent such payment is required to be refunded to the Borrowers for any reason.  The failure of any Revolving Lender to purchase any participation in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the payment thereof.

SECTION 2.06.Letters of Credit.  (a)  General.  (i) Subject to the terms and conditions set forth herein, either Borrower may request the issuance of Letters of Credit for its own account or for the account of any Subsidiary of such Borrower, in each case in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and from time to time during the Revolving Availability Period.

(ii) On the Effective Date, each Issuing Bank that has issued an Existing Letter of Credit shall be deemed, without further action by any party hereto, to have granted to each Revolving Lender and each Revolving Lender shall be deemed to have purchased from such Issuing Bank a participation in such Existing Letter of Credit in accordance with paragraph (d) below.  The applicable Issuing Banks and the Lenders that are also party to the Existing Credit Agreements agree that concurrently with such grant, the participations in the Existing Letters of Credit granted to such Lenders under the Existing Credit Agreements, as applicable, shall be automatically canceled without further action by any of the parties thereto.  On and after the Effective Date, each Existing Letter of Credit shall constitute a Letter of Credit for all purposes hereof.  Any Lender that has issued an Existing Letter of Credit but has not entered into an Issuing

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Bank Agreement shall have the rights of an Issuing Bank as to such Letter of Credit for purposes of this Section 2.06.

(b)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), a Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying (1) the date of issuance, amendment, renewal or extension (which shall be a Business Day), (2) the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), (3) the amount of such Letter of Credit, (4) the name and address of the beneficiary thereof, (5) whether such Letter of Credit is a Financial Letter of Credit or a Performance Letter of Credit (subject to confirmation of such status by the Administrative Agent) and (6) such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by an Issuing Bank, the applicable Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request to it for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the applicable Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $1,000,000,000, (ii) the total Revolving Exposures shall not exceed the total Revolving Commitments and (iii) in the case of any Letter of Credit to be issued, amended, renewed or extended at the request of PTFI, the total Revolving Exposures in respect of Loans made to PTFI and outstanding Letters of Credit requested by PTFI shall not exceed the PTFI Exposure Cap.  Each determination by the Administrative Agent as to whether a Letter of Credit constitutes a Financial Letter of Credit or a Performance Letter of Credit shall be conclusive and binding upon the Borrowers and the Lenders.

(c)Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided, however, that a Letter of Credit may, upon the request of the Borrower that shall have requested such Letter of Credit (a “Requesting Borrower”), include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of one year or less (but not beyond the date that is five Business Days prior to the Maturity Date) unless the applicable Issuing Bank notifies the beneficiary thereof at least 30 days prior to the then-applicable expiration date that such Letter of Credit will not be renewed.  Notwithstanding the foregoing, any Letter of Credit issued hereunder may, in the sole discretion of the applicable Issuing Bank, expire after the fifth Business Day prior to the Maturity Date but on or before the date that is 90 days after the Maturity Date, provided that each Borrower hereby agrees that the applicable Borrower shall provide cash collateral in an amount equal to 102% of the LC Exposure in respect of any such outstanding Letter of Credit to the applicable Issuing Bank at least 30 days prior to the Maturity Date, which such amount shall be (A) deposited by the applicable Borrower in an account with and in the name of such Issuing Bank and (B) held by such Issuing Bank for the satisfaction of such Borrower’s reimbursement obligations in respect of such Letter of Credit until the expiration of such Letter of Credit.  Any Letter of Credit issued with an expiration date beyond the fifth Business Day prior to the Maturity Date shall, to the extent of any undrawn amount remaining thereunder on

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the Maturity Date, cease to be a “Letter of Credit” outstanding under this Agreement for purposes of the Revolving Lenders’ obligations to participate in Letters of Credit pursuant to clause (d) below.

(d)Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, the applicable Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to either Borrower for any reason.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e)Reimbursement.  If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Requesting Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 2:00 p.m., New York City time, on the date that such LC Disbursement is made, if such Requesting Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by such Requesting Borrower prior to such time on such date, then not later than (i) 2:00 p.m., New York City time, on the Business Day that such Requesting Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time on the day of receipt, or (ii) 12:00 noon, New York City time, on the Business Day immediately following the day that such Requesting Borrower receives such notice, if such notice is not received prior to 10:00 a.m., New York City time, on the day of receipt; provided that such Requesting Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with a Borrowing in an equivalent amount and, to the extent so financed, such Requesting Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Borrowing.  If a Requesting Borrower fails to make such a payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from such Requesting Borrower in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from such Requesting Borrower, in the same manner as provided in Section 2.04 with respect to Loans made by such Lender (and Section 2.04 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Revolving Lenders.  Promptly following receipt by the Administrative Agent of any payment from a Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this

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paragraph to reimburse an Issuing Bank for any LC Disbursement (other than the funding of Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the applicable Borrower of its obligation to reimburse such LC Disbursement.

(f)Obligations Absolute.  The Borrowers’ obligations to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse an Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of an Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g)Disbursement Procedures.  Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit and shall promptly notify the Administrative Agent and the Requesting Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Requesting Borrower of its obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h)Interim Interest.  If an Issuing Bank shall make any LC Disbursement, then, unless the Requesting Borrower shall reimburse such LC Disbursement in full on

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the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Requesting Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the Requesting Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such Revolving Lender to the extent of such payment.

(i)Replacement of an Issuing Bank.  An Issuing Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank.  At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued by it thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j)Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day on which the Borrowers receive notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to either Borrower described in clause (g) or (h) of Article VII.  Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrowers under this Agreement, and the Borrowers hereby grant the Lenders a security interest in all funds and investments in such account to secure such obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers’ risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Banks for LC Disbursements for which they have not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Borrowers under this Agreement.

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If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three Business Days after all Events of Default have been cured or waived.  If the Borrowers are required to provide an amount of cash collateral hereunder pursuant to the provisions of Section 2.10(b) or (c), the foregoing provisions will apply thereto, and, provided that no Event of Default has occurred and is continuing, such cash collateral will be returned to the Borrowers at their request to the extent such cash collateral is not then required to comply with Section 2.10(b) or (c).

(k)Issuing Bank Agreements.  Unless otherwise requested by the Administrative Agent, each Issuing Bank shall report in writing to the Administrative Agent (i) on the first Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancelations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such Issuing Bank expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension occurred (and whether the amount thereof changed), it being understood that such Issuing Bank shall not permit any issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent that it is then permitted under this Agreement, (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date of such LC Disbursement and the amount of such LC Disbursement, (iv) on any Business Day on which the Requesting Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request.

(l)Issuing Bank Exposure Limitation.  Notwithstanding anything herein to the contrary, no Issuing Bank shall have any obligation hereunder to issue Letters of Credit if, at the time of and after giving effect to such issuance, the aggregate amount of LC Exposure attributable to Letters of Credit issued by such Issuing Bank would exceed $250,000,000.

SECTION 2.07.Interest Elections.  (a)  Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request or deemed by Section 2.03, and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or deemed by Section 2.03.  Thereafter, the applicable Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  A Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b)To make an election pursuant to this Section, the applicable Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if such Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made

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on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the applicable Borrower.

(c)Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02 (including with respect to minimum amounts and borrowing multiples relating to any resulting Borrowing):

(i)the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)Promptly following receipt of an Interest Election Request with respect to a Borrowing, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)If the applicable Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrowers, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08.Termination and Reduction of Commitments.  (a)  Unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date.

(b)FCX may at any time terminate, or from time to time reduce, the Revolving Commitments or Swingline Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) FCX shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of Loans and provision of cash collateral, in each case in accordance with Section 2.10(b), the aggregate

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Revolving Exposures (excluding the LC Exposure with respect to which cash collateral has been provided in accordance with Section 2.10(b)) would exceed the total Revolving Commitments.

(c)FCX shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section, at least three Business Days prior to the effective date of such termination or reduction, specifying such election or reduction and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by FCX pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by FCX may state that such notice is conditioned upon the effectiveness of other financings or of asset dispositions, in which case such notice may be revoked by FCX (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with the amounts of their individual Commitments.

SECTION 2.09.Repayment of Loans; Evidence of Debt.  (a)  Each Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made, provided that on each date that a Revolving Borrowing is made, the Borrowers shall repay all Swingline Loans that were outstanding on the date such Borrowing was requested.

(b)Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c)The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of either Borrower to repay the Loans in accordance with the terms of this Agreement.

(e)Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04)) be represented by one or more promissory notes in such form payable to the order of the

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payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.10.Prepayment of Loans.  (a)  The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to the requirements of this Section and to the making of any payment required under Section 2.15.

(b)In the event and on each occasion on or prior to the Maturity Date that the sum of the Revolving Exposures exceeds the total Revolving Commitments, the Borrowers shall prepay Revolving Borrowings in an aggregate amount equal to such excess; provided that if no Revolving Borrowings are outstanding and the LC Exposure exceeds the total Revolving Commitments, the Borrowers shall provide cash collateral in an aggregate amount equal to such excess in accordance with Section 2.06(j).

(c)In the event and on each occasion on or prior to the Maturity Date that the sum of the Revolving Exposures in respect of (i) Loans made to PTFI and (ii) Letters of Credit requested by PTFI exceeds the PTFI Exposure Cap, PTFI shall prepay its Revolving Borrowings in an aggregate amount equal to such excess; provided that if no Revolving Borrowings of PTFI are outstanding and the LC Exposure in respect of Letters of Credit requested by PTFI exceeds the PTFI Exposure Cap, then PTFI shall provide cash collateral in an aggregate amount equal to such excess in accordance with Section 2.06(j).

(d)Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrowers shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (e) of this Section.

(e)The applicable Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that if a notice of optional voluntary prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08(c), then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08(c).  Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12.

SECTION 2.11.Fees.  (a)  The Borrowers agree to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the daily average unused amount of the Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Revolving Commitments terminate.  Accrued commitment fees shall be payable in arrears on the last day of March, June, September

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and December of each year, and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  For purposes of computing commitment fees, a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purpose).

(b)Each Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to such Lender’s participation in Letters of Credit requested by such Borrower, which shall accrue on the average daily amount of such Lender’s LC Exposure in respect of Performance Letters of Credit and Financial Letters of Credit (excluding, in each case, any LC Exposure attributable to unreimbursed LC Disbursements) at the Applicable Rate for Performance Letters of Credit or Financial Letters of Credit, as the case may be, during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at a rate per annum of 0.20% on the average daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as each Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate (and, if later, the date on which there ceases to be any Revolving Exposure) and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.

(d)All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.

SECTION 2.12.Interest.  (a)  The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

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(c)Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by either Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall, on and after the date the Required Lenders so request, bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.

(d)Accrued interest on each Loan made to a Borrower shall be payable by such Borrower in arrears on each Interest Payment Date for each such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.13.Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a)the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

(b)the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrowers and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

SECTION 2.14.Increased Costs.  (a)  If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank;

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(ii)impose on any Lender or any Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; or

(iii)subject any Lender or any Issuing Bank to any Taxes on its Loans, loan principal, Letters of Credit, Commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Connection Taxes on gross or net income, profits or revenue (including value-added or similar Taxes));

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder (whether of principal, interest or otherwise), in each case by or in an amount which such Lender in its sole judgment deems material in the context of this Agreement and its Loans or participations in Letters of Credit hereunder, then the relevant Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

(b)If any Lender or any Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), by an amount which such Lender in its sole judgment deems to be material in the context of this Agreement and its Loans, Commitments and participations in Letters of Credit hereunder, then from time to time the Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.

(c)A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (c) of this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or such Issuing Bank the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then

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the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.15.Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure by a Borrower to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.10(e) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by FCX pursuant to Section 2.18 or Section 2.19, then, in any such event, the applicable Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The relevant Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.16.Taxes.  (a)  Any and all payments by or on account of any obligation of either Borrower or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if either Borrower or any other Loan Party shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower or other Loan Party shall make such deductions and (iii) such Borrower or other Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b)Each Borrower and any other Loan Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)The Loan Parties shall jointly and severally indemnify the Administrative Agent, each Lender and each Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of a Loan Party hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, provided,

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however, that the Loan Parties shall not be obligated to make payment to the Administrative Agent or any Lender or Issuing Bank pursuant to this Section in respect of penalties, interest and other liabilities attributable to any Indemnified Taxes if such penalties, interest or other liabilities are attributable to the gross negligence or wilful misconduct of the Administrative Agent, such Lender or such Issuing Bank.  A certificate as to the amount of such payment or liability, including a calculation thereof determined in the sole discretion of the Lender, the Issuing Bank or the Administrative Agent, delivered to a Loan Party by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.

(d)As soon as practicable after any payment of Indemnified Taxes by a Loan Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.16(e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)(i) Any Lender that is entitled to an exemption from, or reduction of. any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrowers and the Administrative Agent, at the time or times reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrowers or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  In addition, any Lender, if requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such  documentation set forth in Section 2.16(f)(ii)(A) through (E) below) shall not be required if in the Lender’s judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  Upon the reasonable request of the Borrowers or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.16(f).  If any form or certification previously delivered by it pursuant to this Section 2.16(f) expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify the Borrowers and the Administrative Agent in writing of such

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expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(ii)  Without limiting the generality of the foregoing, any Lender shall, if it is legally eligible to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as is reasonably requested by the Borrowers and the Administrative Agent, on or prior to the date on which such Lender becomes a party hereto) duly completed and executed copies of  whichever of the following is applicable:

(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding Tax;

(B) in the case of a Non-U.S. Lender claiming the benefits of an income tax  treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(C) in the case of a Non-U.S. Lender for which payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit E (a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of either Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E) in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender), (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided, however, that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation as is necessary to enable the Borrowers or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

(iii)  If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were

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to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.16(f)(iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g)If any party determines, in its sole discretion exercised in good faith, that it has received a refund and/or credit of any Taxes as to which it has been indemnified pursuant to this Section 2.16 (including additional amounts paid pursuant to this Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnifying party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority.

(h)Nothing contained in this Section 2.16 shall require the Administrative Agent, any Issuing Bank or any Lender (or permitted assignee or Participant) to make available any of its Tax returns or any other information that it deems to be confidential or proprietary, to any Loan Party or any other Person.

(i)Each party’s obligations under this Section 2.16 shall survive any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other obligations under any Loan Document.

(j)For purposes of Section 2.16(e) and (f), the term “Lender” includes any Issuing Bank.

(k)PTFI shall pay to the relevant Governmental Authority when due all Indonesian Taxes in accordance with applicable law.

(l)PTFI shall indemnify the Administrative Agent, each Lender (or permitted assignee or Participant) and each Issuing Bank against, and shall reimburse the Administrative Agent, each Lender (or permitted assignee or Participant) and each Issuing Bank upon demand for, the full amount of any Indonesian Taxes paid by the Administrative Agent, such Lender (or permitted assignee or Participant) or such Issuing Bank, and any loss, liability, claim or expense (including interest, penalties, fines, surcharges and legal fees) which the Administrative Agent, such Lender (or permitted assignee or Participant) or such Issuing Bank may incur at any time arising out of or in connection with any failure of PTFI to make any payments of Indonesian Taxes, whether or not such Indonesian Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided, however, that PTFI shall not be obligated to

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make payment to the Administrative Agent, any Lender (or permitted assignee or Participant) or any Issuing Bank pursuant to this Section 2.16(l) in respect of penalties, interest and other liabilities attributable to any Indonesian Taxes if such penalties, interest and other liabilities are attributable to the gross negligence or wilful misconduct of the Administrative Agent, such Lender or such Issuing Bank; provided, further, that no permitted assignee or Participant of any Lender shall be entitled to receive any greater payment under this Section 2.16(l) than such Lender would have been entitled to receive with respect to the rights assigned, participated or otherwise transferred unless such assignment, participation or transfer shall have been made at a time when the circumstances giving rise to such greater payment did not exist.  A certificate as to the amount of such payment or liability, including a calculation thereof determined in the sole discretion of the Lender, the Issuing Bank or the Administrative Agent, delivered to PTFI by a Lender (or permitted assignee or Participant), an Issuing Bank or the Administrative Agent on its behalf or on behalf of a Lender or an Issuing Bank, absent manifest error, shall be final, conclusive and binding for all purposes.  Such indemnification shall be made within 30 days after the date such Lender (or permitted assignee or Participant), such Issuing Bank or the Administrative Agent, as the case may be, makes written demand therefor.

(m)Except as otherwise expressly provided in paragraph (p) below, all payments on account of the principal of or interest on the Loans made to PTFI, any promissory notes of PTFI issued hereunder and all other amounts payable by PTFI to or for the account of any Lender (or permitted assignee or Participant), an Issuing Bank or the Administrative Agent hereunder (including amounts payable under Section 2.16(k) or 2.16(l)) or under any other Loan Document shall be made free and clear of and without reduction by reason of any Indonesian Taxes, all of which shall be for the account of and paid in full when due by PTFI.  In the event that PTFI is required by any applicable law, decree or regulation to deduct or withhold Indonesian Taxes from any amounts payable on, under or in respect of this Agreement, any other Loan Document or any promissory note issued hereunder, PTFI shall make the required deduction or withholding, promptly pay the amount of such Indonesian Taxes to the appropriate taxing authorities and pay to the Administrative Agent such additional amounts as may be required, after the deduction or withholding of Indonesian Taxes (including deductions applicable to additional sums payable under this Section 2.16), to enable each Lender (or permitted assignee or Participant), each Issuing Bank and the Administrative Agent to receive from PTFI on the due date thereof an amount equal to the full amount stated to be payable to such Lender (or permitted assignee or Participant), such Issuing Bank or the Administrative Agent under this Agreement, any other applicable Loan Document or any promissory note issued hereunder.

(n)Without in any way affecting PTFI’s obligations under the other provisions of this Section 2.16, PTFI shall furnish to the Administrative Agent the originals or certified copies of all tax receipts issued by the relevant taxing authority in respect of each payment, deduction or withholding of Indonesian Taxes required to be made by applicable laws or regulations, as soon as practicable and in any event not later than 90 days after the date on which such payment is made, and PTFI shall, at the request of any Lender (or permitted assignee or Participant), any Issuing Bank or the Administrative Agent, promptly furnish to such Lender (or permitted assignee or Participant), such Issuing Bank or the Administrative Agent any other information, documents and receipts that such Lender (or permitted assignee or Participant), such Issuing Bank or the Administrative Agent may require to establish to its satisfaction that full and timely payment has been made of all Indonesian Taxes required to be paid hereunder.

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(o)PTFI will notify the Lenders (through the Administrative Agent) promptly upon becoming aware of the application or imposition, or scheduled future application or imposition, of Indonesian Taxes; and each Lender (if not theretofore notified by PTFI) will notify PTFI of any such application or imposition which becomes known to its officers then supervising the Loans of such Lender hereunder as part of their normal duties and of any change of its lending office or establishment or closing of a branch in Indonesia by such Lender which would give rise to the application or imposition of Indonesian Taxes.

(p)Each Lender (or permitted assignee or Participant) having its principal office and applicable lending office outside of Indonesia (a “Non-Indonesian Lender”) shall use reasonably diligent efforts to deliver to PTFI appropriate forms, duly completed, evidencing such Non-Indonesian Lender’s entitlement (if any) under any applicable tax treaty to a reduced rate of withholding of Indonesian Taxes with respect to payments of interest on Loans of such Non-Indonesian Lender (which, in the case of any Non-Indonesian Lender that is organized under the laws of the United States or any State thereof, including the District of Columbia, shall be both Internal Revenue Service Form 6166 (or any successor form thereto) and Indonesian Tax Form DGT-2 (or any successor form thereto)) on or prior to (i) the 90th day following (A) the date hereof or (B) in the case of any such Non-Indonesian Lender that is a permitted assignee or Participant, the date such Non-Indonesian Lender becomes a permitted assignee or Participant, and (ii) the anniversary day, in each subsequent year, of the applicable date in subsection (i); provided that in the event a Non-Indonesian Lender is a disregarded entity for United States federal income tax purposes, such forms shall be delivered by such Lender’s parent and provided further that, notwithstanding the foregoing, no Lender shall be required to obtain certification of Indonesian Tax Form DGT-2 (or any successor form or any similar form in connection with Indonesian Taxes) from any Governmental Authority in the country where such Lender is resident.  Following delivery by a Non-Indonesian Lender to PTFI of the appropriate forms referenced in the preceding sentence of this Section 2.16(p), duly completed, PTFI is authorized to file such forms with the appropriate Indonesian taxing authorities in order to obtain a reduced rate of withholding of Indonesian Taxes with respect to payments of interest on Loans of such Non-Indonesian Lender.

Each Non-Indonesian Lender shall use reasonably diligent efforts to deliver to PTFI such certificates, forms or other documents as may be necessary under any other provision of applicable law (including any amendment, modification or supplement to Form 6166 or such analogous form referred to in the second preceding sentence) to reduce the withholding rate of Indonesian Taxes with respect to payments of interest on Loans of such Non-Indonesian Lender on or by the 90th day following the date on which PTFI shall have delivered to such Non-Indonesian Lender written notice of the existence of such provision of applicable law together with a copy thereof (accompanied by a sworn English translation if such provision of applicable law is not in English); provided, however, that such Non-Indonesian Lender shall not be required to deliver any such certificate, form or other document that would, in the reasonable judgment of such Non-Indonesian Lender, be otherwise disadvantageous to such Non-Indonesian Lender; and provided further that such Non-Indonesian Lender shall have no obligation to deliver any such certificates, forms or other documents that it is not legally able to deliver or with respect to information deemed by such Non-Indonesian Lender to be confidential or proprietary.

If any Non-Indonesian Lender shall have failed to comply with the requirements of this Section 2.16(p) and the effect of such failure is to cause the rate of withholding of Indonesian Taxes with respect to payments of interest on such Non-

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Indonesian Lender’s Loans to be higher than that which would have been applicable had such certificates, forms or other documents been delivered to the applicable Indonesian taxing authority, then any withholding tax indemnity payment to any such Non-Indonesian Lender by PTFI pursuant to this Section 2.16 shall be computed as if such certificates, forms or other documents had been so delivered.

SECTION 2.17.Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  (a)  Each Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursements of LC Disbursements, or of amounts payable under Section 2.14, 2.15, 2.16 or otherwise) prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except payments to be made directly to an Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments under each Loan Document shall be made in dollars.

(b)If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

(c)If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by either Borrower pursuant to and in

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accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to such Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against either Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

(d)Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or an Issuing Bank hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption and in its sole discretion, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due.  In such event, if such Borrower has not in fact made such payment, then each of the Lenders or such Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e)If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04, 2.05(c), 2.06(d) or (e), 2.17(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.18.Mitigation Obligations; Replacement of Lenders.  (a)  If any Lender requests compensation under Section 2.14, or if either Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  Each Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)If any Lender requests compensation under Section 2.14, or if either Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender has become a Defaulting Lender, or if any Lender has failed to consent to a proposed amendment, waiver, discharge or termination which pursuant to the terms of Section 9.02 requires the consent of all of the Lenders affected and with respect to which the Required Lenders shall have granted their consent, then FCX may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign

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and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent, each Principal Issuing Bank and the Swingline Lender, which consents shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts), (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a material reduction in such compensation or payments, and (iv) in the case of any such assignment resulting from the failure to provide a consent, the assignee shall have given such consent and the fee required under Section 9.04(b)(ii)(C) shall have been paid by such assignee or by the Borrowers.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver, consent or approval by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

SECTION 2.19.Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Revolving Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Revolving Lender is a Defaulting Lender:

(a)commitment fees shall cease to accrue pursuant to Section 2.11(a) on the unused amount of the Revolving Commitment of such Defaulting Lender;

(b)the Revolving Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as otherwise provided in Section 9.02, require the consent of such Defaulting Lender in accordance with the terms hereof;

(c)if any Swingline Exposure or LC Exposure exists at the time such Revolving Lender becomes a Defaulting Lender then:

(i)so long as no Event of Default has occurred and is continuing, the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that the sum of all Non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the sum of all Non-Defaulting Lenders’ Revolving Commitments;

(ii)if (x) an Event of Default has occurred and is continuing or (y) the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one Business Day following notice by the Administrative Agent (A) first, prepay the portion of such Defaulting Lender’s Swingline Exposure that has not been reallocated and (B) second, cash

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collateralize for the benefit of the Issuing Banks the portion of such Defaulting Lender’s LC Exposure that has not been reallocated in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay participation fees to such Defaulting Lender pursuant to Section 2.11(b) with respect to such portion of such Defaulting Lender’s LC Exposure for so long as such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)if any portion of the LC Exposure of such Defaulting Lender is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.11(a) and 2.11(b) shall be adjusted to give effect to such reallocation; and

(v)if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Bank or any other Lender hereunder, all commitment fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment utilized by such LC Exposure) and participation fees payable under Section 2.11(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Banks (and allocated among them ratably based on the amount of such Defaulting Lender’s LC Exposure attributable to Letters of Credit issued by each Issuing Bank) until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(d)so long as such Revolving Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and no Issuing Bank shall be required to issue, amend, renew or extend any Letter of Credit, unless in each case it is satisfied that the related exposure and the Defaulting Lender’s then outstanding Swingline Exposure or LC Exposure, as applicable, will be fully covered by the Revolving Commitments of the Non-Defaulting Lenders and/or cash collateral provided by the Borrowers in accordance with Section 2.19(c), and, so long as no Event of Default has occurred and is continuing, participating interests in any such funded Swingline Loan or in any such issued, amended, reviewed or extended Letter of Credit will be allocated among the Non-Defaulting Lenders in a manner consistent with Section 2.19(c)(i) (and such Defaulting Lender shall not participate therein).

In the event that (a) a Bankruptcy Event with respect to a Revolving Lender Parent shall have occurred following the date hereof and for so long as such Bankruptcy Event shall continue or (b) the Swingline Lender or any Issuing Bank has a good faith belief that any Revolving Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan, and no Issuing Bank shall be required to issue, amend, renew or extend any Letter of Credit, unless the Swingline Lender or such Issuing Bank, as the case may be, shall have entered into arrangements with the Borrowers or such Revolving Lender satisfactory to the Swingline Lender or such Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrowers, the Swingline Lender and each Issuing Bank each agree that a Defaulting Lender has adequately

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remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Revolving Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Revolving Loans of the other Revolving Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Revolving Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.20.Incremental Revolving Commitments.  (a)  FCX may on one or more occasions, by written notice to the Administrative Agent, request, during the Revolving Availability Period, the establishment of Incremental Revolving Commitments, provided that the aggregate amount of all the Incremental Revolving Commitments established hereunder shall not exceed $500,000,000.  Each such notice shall specify (i) the date on which FCX proposes that the Incremental Revolving Commitments shall be effective, which shall be a date not less than 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) after the date on which such notice is delivered to the Administrative Agent and (ii) the amount of the Incremental Revolving Commitments being requested (it being agreed that (A) any Lender approached to provide any Incremental Revolving Commitment may elect or decline, in its sole discretion, to provide such Incremental Revolving Commitment and (B) any Person that FCX proposes to become an Incremental Revolving Lender must be reasonably acceptable to the Administrative Agent, each Principal Issuing Bank and the Swingline Lender).

(b)The terms and conditions of any Incremental Revolving Commitments and Loans and other extensions of credit to be made thereunder shall be identical to those of the Revolving Commitments and Loans and other extensions of credit made thereunder, and shall be treated as a single class with such Revolving Commitments and Loans.

(c)The Incremental Revolving Commitments shall be effected pursuant to one or more Incremental Facility Agreements executed and delivered by each Borrower, each Incremental Lender providing such Incremental Revolving Commitments and the Administrative Agent; provided that no Incremental Revolving Commitments shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing on the date of effectiveness thereof, both immediately prior to and immediately after giving effect to such Incremental Revolving Commitments and the making of Loans and issuance of Letters of Credit thereunder to be made on such date, (ii) on the date of effectiveness thereof, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct (A) in the case of the representations and warranties qualified as to materiality, in all respects and (B) otherwise, in all material respects, in each case on and as of such date, except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date, (iii) after giving effect to such Incremental Revolving Commitments and the making of Loans and other extensions of credit thereunder to be made on the date of effectiveness thereof and assuming that all Incremental Revolving Commitments are fully drawn, the Borrowers shall be in pro forma compliance with the financial covenants set forth in Sections 6.06 and 6.07, (iv) the Borrowers shall make any payments required to be made pursuant to Section 2.15 in connection with such Incremental Revolving Commitments and the related transactions under this Section and (v) the Borrowers shall have delivered to the Administrative Agent such legal opinions, board resolutions, secretary’s certificates, officer’s certificates and other documents as shall reasonably be requested by the Administrative Agent in connection with any such transaction.  Each Incremental

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Facility Agreement may, without the consent of any Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to give effect to the provisions of this Section.

(d)Upon the effectiveness of an Incremental Revolving Commitment of any Incremental Revolving Lender, (i) such Incremental Revolving Lender shall be deemed to be a “Revolving Lender” hereunder, and henceforth shall be entitled to all the rights of, and benefits accruing to, Lenders hereunder and shall be bound by all agreements, acknowledgements and other obligations of Lenders hereunder and under the other Loan Documents, and (ii)(A) such Incremental Revolving Commitment shall constitute (or, in the event such Incremental Revolving Lender already has a Revolving Commitment, shall increase) the Revolving Commitment of such Incremental Revolving Lender and (B) the aggregate Revolving Commitment shall be increased by the amount of such Incremental Revolving Commitment, in each case, subject to further increase or reduction from time to time as set forth in the definition of the term “Revolving Commitment”.  For the avoidance of doubt, upon the effectiveness of any Incremental Revolving Commitment, the Revolving Exposure of the Incremental Revolving Lender holding such Commitment, and the Applicable Percentage of all the Revolving Lenders, shall automatically be adjusted to give effect thereto.

(e)On the date of effectiveness of any Incremental Revolving Commitments, each Revolving Lender shall assign to each Incremental Revolving Lender holding such Incremental Revolving Commitment, and each such Incremental Revolving Lender shall purchase from each Revolving Lender, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans and participations in Letters of Credit outstanding on such date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans and funded participations in Letters of Credit will be held by all the Revolving Lenders (including such Incremental Revolving Lenders) ratably in accordance with their Applicable Percentages after giving effect to the effectiveness of such Incremental Revolving Commitment.

(f)The Administrative Agent shall notify the Lenders promptly upon receipt by the Administrative Agent of any notice from FCX referred to in Section 2.20(a) and of the effectiveness of any Incremental Revolving Commitments, in each case advising the Lenders of the details thereof and of the Applicable Percentages of the Revolving Lenders after giving effect thereto and of the assignments required to be made pursuant to Section 2.20(e).

ARTICLE III

Representations and Warranties

Each of FCX and PTFI represents and warrants to the Lenders on the date hereof and on each other date on which representations and warranties are made or deemed made hereunder that:

SECTION 3.01.Organization; Powers.  Each Borrower, each Loan Party and each of FCX’s other Subsidiaries is duly organized and validly existing (except to the extent that the failure of such other Subsidiaries to be duly organized and validly existing would not, individually or in the aggregate, be expected to result in a Material Adverse Effect) and, to the extent applicable, except where the failure to do so, individually or in

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the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is in good standing under the laws of the jurisdiction of its organization, has, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, all requisite power and authority to carry on its business as now conducted and to execute, deliver and perform its obligations under each Loan Document to which it is a party and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is, to the extent applicable, in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02.Authorization; Enforceability.  The performance by each Loan Party of the Loan Documents to which it is a party, the Borrowings and the issuances of Letters of Credit hereunder and the Transactions to be entered into by each Loan Party are within such Loan Party’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action.  This Agreement has been duly executed and delivered by each Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally, concepts of reasonableness and general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03.Governmental Approvals; No Conflicts.  Except as set forth in Schedule 3.03, the performance by each Loan Party of the Loan Documents to which it is to be party, the Borrowings and the issuances of Letters of Credit hereunder and the Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) other consents, approvals, registrations, filings or actions the failure of which to obtain or make, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, (b) will not violate the charter, by-laws or other organizational documents of FCX, PTFI or any other Loan Party, (c) except to the extent that any such violations or defaults would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) will not violate any applicable law or regulation or any order of any Governmental Authority and (ii) will not violate or result in a default under any indenture, agreement or other instrument binding upon FCX or any of its Subsidiaries or its assets and (d) will not result in the creation or imposition of any Lien on any asset of FCX or any of its Subsidiaries.

SECTION 3.04.Financial Condition; No Material Adverse Change.  (a)  FCX has heretofore furnished to the Lenders FCX’s consolidated balance sheet and consolidated statements of income, stockholders’ equity and cash flows as of and for the fiscal year ended December 31, 2010, reported on by Ernst & Young LLP, independent registered public accountants.  Such financial statements present fairly, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of FCX and its consolidated Subsidiaries as of such date and for such period in accordance with GAAP.

(b)Except as set forth in Schedule 3.04(b), since December 31, 2010, there has been no material adverse change in (i) the business, operations or financial condition of FCX and its Subsidiaries, taken as a whole, (ii) the ability of any Loan Party to perform its obligations under any Loan Document or (iii) the rights of or benefits available to the Lenders under the Loan Documents.

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SECTION 3.05.Properties.  (a)  Except to the extent that any failure to do so individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect, FCX and each of its Subsidiaries has good title to, or valid leasehold interests in, all of its real and personal property material to its business, except for Liens permitted by Section 6.02.

(b)Except to the extent that any such failure or infringement, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, FCX and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by FCX and its Subsidiaries does not infringe upon the rights of any other Person.

SECTION 3.06.Litigation and Environmental Matters.  (a)  Except for the Disclosed Matters, there are no actions, suits or proceedings by or before any Governmental Authority pending against or, to the knowledge of either Borrower, threatened against or affecting FCX or any of its Subsidiaries that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(b)Except for the Disclosed Matters and except for any other matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, neither FCX nor any of its Subsidiaries (i) has failed to comply with any applicable Environmental Law or to obtain, maintain or comply with any permit, license or other approval required for its operations or properties under any applicable Environmental Law, (ii) is obligated to remediate or correct any condition resulting from releases of Hazardous Materials or (iii) has received written notice of any claim with respect to any Environmental Liability.

SECTION 3.07.Compliance with Laws and Agreements.  FCX and its Subsidiaries are in compliance in all material respects with all laws, regulations and orders of any Governmental Authority applicable to them or their properties and all indentures, agreements (including without limitation, in the case of PTFI, the Contract of Work) and other instruments binding upon them or their properties, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08.Investment Company Status.  No Loan Party is an “investment company” under the Investment Company Act of 1940.

SECTION 3.09.Taxes.  FCX and its Subsidiaries have timely filed or caused to be filed all Tax returns and reports required to have been filed by them and have paid or caused to be paid all Taxes required to have been paid by them, except (i) any Taxes that are being contested in good faith by appropriate proceedings and for which FCX or such Subsidiary, as applicable, has, to the extent required by GAAP, set aside on its books adequate reserves and (ii) returns and reports the non-filing of which, and Taxes the non-payment of which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10.ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  Except as would not reasonably be expected to result in a Material Adverse Effect, the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial

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Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such Plans, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Financial Accounting Standards Codification Topic 715) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

SECTION 3.11.Disclosure.  The Confidential Information Materials and the other reports, financial statements, certificates and other information furnished in writing by the Borrowers or any of their representatives in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), are complete and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements have been made.  Notwithstanding the foregoing, it is understood and agreed that the periodic reports and other information of FCX filed with the SEC pursuant to Section 13 of the Exchange Act speak as of the date of such reports or other filings and not of any subsequent time and, therefore, the representation set forth in the first sentence of this paragraph is applicable to the information contained in such reports or other filings only as of the date of such reports or other filings.  Additionally, notwithstanding anything to the contrary contained herein, the representation in the first sentence of this paragraph shall not apply to forward-looking information contained in the filings made by FCX with the SEC pursuant to Section 13 of the Exchange Act, and the Borrowers shall have no liability with respect to such forward-looking information, except to the extent that FCX would have liability to investors in its public securities under the Exchange Act after the application of Section 21E of the Exchange Act.

SECTION 3.12.Insurance.  Schedule 3.12 sets forth a description of all material insurance maintained by or on behalf of FCX and its Subsidiaries as of the Effective Date.  As of the Effective Date, all material premiums in respect of such insurance are current and such insurance is in full force and effect.  FCX believes that the insurance maintained by or on behalf of FCX and its Subsidiaries is adequate.

SECTION 3.13.Labor Matters.  As of the Effective Date, there are no strikes, lockouts or slowdowns against FCX or any Subsidiary pending or, to the knowledge of FCX, threatened, that would reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.  The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which FCX or any Subsidiary is a party that would reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.

SECTION 3.14.Federal Reserve Regulations.  No part of the proceeds of the Loans will be used, whether directly or indirectly, for any purpose which entails a violation (including on the part of any Lender) of Regulation U or X of the Board.

SECTION 3.15.Pari Passu Status.  The Obligations of the Borrowers under this Agreement rank, and will rank, at least pari passu in right of payment with all unsecured, unsubordinated Indebtedness of the Borrowers.

SECTION 3.16.Status of PTFI for Tax Purposes.  As of the Effective Date, PTFI meets the “80-percent foreign business requirements” under Section 861(c)(1)

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of the Code as in effect before the enactment of The 2010 Education Jobs Act, and PTFI is an “existing 80/20 company” that is eligible for grandfathering treatment under Sections 871(i)(2)(B)(ii), 871(l), and 881(d) of the Code as amended by The 2010 Education Jobs Act.

SECTION 3.17.OFAC.  Neither FCX nor any of its Subsidiaries, nor any (a) director or officer thereof or (b) to the knowledge of either Borrower, any agent, employee or Affiliate thereof, is currently subject to any U.S. sanctions administered or enforced by OFAC, and the Borrowers will not directly or indirectly use the proceeds from the Loans or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, for the purpose of financing activities of or with any Person or any country or territory that, at the time of such financing, is the subject of any OFAC sanctions.

SECTION 3.18.FCPA.  No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any officer or employee of a government, or government-controlled entity, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA.

ARTICLE IV

Conditions

SECTION 4.01.Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Banks to issue, amend, renew or extend any Letter of Credit hereunder, and the incorporation of the Existing Letters of Credit as Letters of Credit hereunder, shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b)The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and, to the extent applicable, good standing of the Loan Parties, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(c)The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of each Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.

(d)The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date under this Agreement, including (i) all fees separately agreed to be payable to the Agents, J.P. Morgan

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Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated by FCX in respect of this Agreement and (ii) to the extent invoiced at least one Business Day prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by either Borrower under this Agreement or any other Loan Document.

(e)All consents and approvals required to be obtained from any Governmental Authority or other Person in connection with the execution of this Agreement shall have been obtained.

(f)The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of each of (i) Jones, Walker, Waechter, Poitevant, Carrère & Denègre, L.L.P., U.S. counsel for the Borrowers, substantially in the form of Exhibit D-1, and (ii) Indonesian counsel for the Borrowers, substantially in the form of Exhibit D-2.

(g)All commitments under the Existing Credit Agreements shall have been (or, substantially simultaneously with the effectiveness of this Agreement on the Effective Date, shall be) terminated, and all loans, interest and other amounts accrued or owing thereunder shall have been repaid in full (except that the Existing Letters of Credit shall remain outstanding as Letters of Credit hereunder) and all Guarantees and Liens granted in respect thereof (other than Liens permitted by Section 6.02(n)) shall have been (or, substantially simultaneously with the effectiveness of this Agreement on the Effective Date, shall be) released.  The Administrative Agent shall have received a payoff and release letter with respect to each of the Existing Credit Agreements in form and substance reasonably satisfactory to the Administrative Agent.

(h)The Administrative Agent shall have received a copy of the Phase II Audit Report:  Human Rights, Employment and Social Development of Papuan People in Indonesia, dated as of December 3, 2007.

The Administrative Agent shall promptly notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02.Each Credit Event.  The obligation of each Lender to make a Loan, and of any Issuing Bank to issue, amend, extend or renew a Letter of Credit, is subject to receipt of the request therefor in accordance herewith and to the satisfaction of the following conditions:

(a)With respect to any credit event, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.

(b)At the time of and immediately after giving effect to such Borrowing or issuance of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

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Each making of a Loan and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the applicable Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Borrower covenants and agrees with the Lenders and the Administrative Agent that:

SECTION 5.01.Financial Statements and Other Information.  FCX will furnish to the Administrative Agent and each Lender (for purposes of this Section 5.01, each of FCX and PTFI is referred to as a “Reporting Person”):

(a)within 90 days after the end of each fiscal year of such Reporting Person (or, so long as such Reporting Person shall be subject to periodic reporting obligations under the Exchange Act, by the date that the Annual Report on Form 10-K of such Reporting Person for such fiscal year would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), an audited consolidated balance sheet of such Reporting Person and its consolidated Subsidiaries and related consolidated statements of income, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young LLP or other registered independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of such Reporting Person and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; provided that PTFI shall only be required to furnish such audited reports for any fiscal year to the extent otherwise available, and if such audited reports are not otherwise available for any fiscal year, PTFI shall instead within 90 days after the end of such fiscal year, furnish an unaudited consolidated balance sheet of PTFI and its consolidated Subsidiaries and related unaudited consolidated statements of income, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of PTFI and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(b)within 45 days after the end of each of the first three fiscal quarters of each fiscal year of such Reporting Person (or, so long as such Reporting Person shall be subject to periodic reporting obligations under the Exchange Act, by the date that the Quarterly Report on Form 10-Q of such Reporting Person for such

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fiscal quarter would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), an unaudited consolidated balance sheet of such Reporting Person and its consolidated Subsidiaries and related consolidated statements of income as of the end of and for such fiscal quarter and related consolidated statements of income and cash flows for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of such Reporting Person and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c)concurrently with any delivery of financial statements of FCX under clause (a) or (b) above, a certificate of a Financial Officer of FCX (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.06 and 6.07, (iii) setting forth reasonably detailed calculations of Consolidated Net Income, Consolidated Total Assets, Consolidated Cash Interest Expense and Consolidated EBITDA as at the end of and for the applicable fiscal period, (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (v) certifying as to compliance with all Exchange Filing Requirements or specifying the details of any noncompliance and any action taken or proposed to be taken with respect thereto;

(d)concurrently with any delivery of financial statements under clause (a) above, a certificate of the accountants that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Event of Default under Sections 6.06 or 6.07 (which certificate may be limited to the extent required by accounting rules or guidelines);

(e)promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials publicly filed by either Borrower with the SEC or any Governmental Authority succeeding to any or all of the functions of said Commission (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration statement on Form S-8) and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(f)in the case of PTFI, a copy of any amendment to the Contract of Work or Memorandum of Understanding within 30 days following the execution and delivery thereof;

(g)promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of such Borrower or any Subsidiary, or compliance with the terms of any Loan

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Document, as the Administrative Agent or any Lender may reasonably request; and

(h)in the case of FCX, within 180 days after the end of each fiscal year of FCX, a copy of the Voluntary Principles on Security and Human Rights, prepared in a manner consistent with FCX’s past practice.

Materials required to be delivered pursuant to clause (e) of this Section 5.01 shall be deemed to have been delivered on the date on which such materials are posted on the SEC’s website at www.sec.gov; provided that the Borrowers shall promptly notify the Administrative Agent and the Lenders of any such posting.

SECTION 5.02.Notices of Material Events.  Promptly after any Financial Officer obtains knowledge thereof, FCX will furnish to the Administrative Agent and each Lender written notice of the following:

(a)the occurrence of any Default;

(b)the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting FCX or any Subsidiary thereof that would reasonably be expected to result in a Material Adverse Effect;

(c)the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in  a Material Adverse Effect; and

(d)any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of FCX setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03.Existence; Conduct of Business.  FCX will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect (a) its legal existence, except in the case of any Subsidiary other than PTFI , to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect, and (b) the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, except to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or, in the case of PTFI, permitted by Section 9.16(c).

SECTION 5.04.Payment of Obligations.  Each Borrower will, and will cause each of its Subsidiaries to, pay all Tax liabilities, before the same shall become delinquent or in default, except where (a)(i) the validity or amount thereof is being contested in good faith by appropriate proceedings and (ii) such Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make any such payments, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

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SECTION 5.05.Insurance.  FCX will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurance companies insurance in such amounts and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations (after giving effect to any self-insurance reasonable and customary for similarly situated companies).

SECTION 5.06.Books and Records; Inspection and Audit Rights.  Each Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account sufficient to permit the preparation of financial statements in accordance with GAAP.  Each Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice and during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights under this Section 5.06 and the Administrative Agent shall not exercise such rights more than two times during any calendar year absent the existence of an Event of Default and for one such time the reasonable expenses of the Administrative Agent in connection with such visit or inspection shall be for the Borrowers’ account; provided, further, that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives) may do any of the foregoing at the reasonable expense of the Borrowers at any time during normal business hours and upon reasonable advance notice.  The Administrative Agent and the Lenders shall give each Borrower the opportunity to participate in any discussions with such Borrower’s independent accountants.

SECTION 5.07.Compliance with Laws; Environmental Reports.  (a)  Each Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect and to comply with all Exchange Filing Requirements.

(b)Except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, each Borrower will, and will cause each Subsidiary to, (i) comply, in all material respects with all Environmental Laws applicable to its operations and properties, (ii) obtain and renew all permits required by Environmental Laws necessary for its operations and properties, and (iii) conduct any remedial or reclamation actions in compliance with applicable Environmental Laws; provided, however, that the Borrowers and the Subsidiaries shall not be required to undertake any remedial or reclamation action or obtain or renew any environmental permit, or comply with any Environmental Law to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves, in accordance with GAAP, are maintained in connection therewith.  If either Borrower is in default of its obligations under this paragraph, the Borrowers will, at the request of the Required Lenders through the Administrative Agent, provide to the Lenders within 60 days after such request, at the expense of the Borrowers, an environmental site assessment report for the properties to which such default relates, prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent and evaluating whether or not Hazardous Materials are likely to have been released at or to have adversely affected the property, or otherwise resulted in Environmental Liability and the estimated cost of any compliance or remedial action in connection with such matters.

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(c)With respect to the environmental report evaluating PTFI’s environmental practices at its properties in Indonesia and prepared by one or more reputable environmental consulting firms (an “External Environmental Report”), FCX shall deliver the voluntary External Environmental Report to the Administrative Agent within 30 days of delivery of the final such report to FCX, commencing with the report relating to the environmental evaluation that will be commenced during 2011.  Thereafter, FCX shall deliver a copy of any subsequent voluntary External Environmental Report to the Administrative Agent within 30 days of delivery of the final such report to FCX.  The voluntary External Environmental Reports shall be delivered to the Administrative Agent by FCX at three year intervals (though for the avoidance of doubt, delivery will in no event be required to be made on a specific date following such interval) unless the applicable Governmental Authority in Indonesia makes preparation of such a report mandatory, in which case, FCX shall provide such External Environmental Reports to the Administrative Agent at intervals as required by Indonesian law.  The Borrowers will implement, as promptly as practicable after the receipt of any External Environmental Report, any recommendations contained in such report if the failure to implement such recommendations could reasonably be expected to result in a Material Adverse Effect.

SECTION 5.08.Use of Proceeds and Letters of Credit.  On the Effective Date, the proceeds of Revolving Loans may be used by the Borrowers to repay all amounts outstanding under the Existing Credit Agreements.  At any time on or after the Effective Date, Letters of Credit and the proceeds of Revolving Loans and Swingline Loans will be used for working capital and other general corporate purposes, including acquisitions, of FCX and its Subsidiaries.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation (including on the part of any Lender) of Regulation T, U or X of the Board.  FCX shall ensure that at all times not more than 25% of the value of the assets subject to the provisions of Sections 6.02 and 6.03 will consist of Margin Stock (as defined in Regulation U of the Board); provided that FCX may permit such Margin Stock to exceed 25% of the value of the assets subject to the provisions of Sections 6.02 and 6.03 if FCX shall have otherwise put into place currently effective arrangements to ensure compliance with Regulation U and X and the Administrative Agent shall have received an opinion satisfactory to it as to such compliance from a law firm satisfactory to the Administrative Agent.

SECTION 5.09.Source of Interest.  To the extent that PTFI continues to be characterized as a domestic corporation for the purposes of Section 861 of the Code, PTFI (a) will conduct its business so that PTFI meets the definition of “existing 80/20 company” within the meaning of Section 871(l) of the Code as in effect on the Effective Date, and so that interest paid on the Loans by PTFI to any Lender (or permitted assignee or Participant) will be deemed to be interest paid by an existing 80/20 company within the meaning of Sections 871(i)(2)(B)(ii), 871(l) and 881(d) of the Code as in effect on the Effective Date and (b) will use its best efforts (without undue cost) to conduct its business so that PTFI will meet the definition of “existing 80/20 company” within the meaning of Section 871(l) of the Code (as it may be amended or substituted after the Effective Date), and so that interest paid on the Loans by PTFI to any Lender (or permitted assignee or Participant) will be deemed to be interest paid by an existing 80/20 company within the meaning of Sections 871(i)(2)(B)(ii), 871(l) and 881(d) of the Code (as it may be amended or substituted after the Effective Date).

SECTION 5.10.Indonesian Translation.  Within 90 days of the Effective Date, or such later date as determined in the sole discretion of the Administrative Agent, FCX shall have delivered a reasonably satisfactory Indonesian version of this Agreement to the Administrative Agent.  This Agreement is executed in a text using the English

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language and the Indonesian language.  Both texts are the same and effective as of the execution of this Agreement.  Each of the parties hereto agrees that if there is any conflict between the English language text and the Indonesian language text of this Agreement, the English language text shall, to the extent permitted by applicable law, prevail.  Each of the parties hereto confirms that it has read and understood the content and consequences of this Agreement and has no objection if the English language text prevails in the event of any such conflict.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Borrower covenants and agrees with the Lenders and the Administrative Agent that:

SECTION 6.01.Subsidiary Indebtedness.  Each Borrower will not permit any Subsidiary (other than PTFI or any Subsidiary Guarantor) to create, incur, assume or permit to exist any Indebtedness or Attributable Debt, except:

(a)Guarantees of Indebtedness created under the Loan Documents;

(b)Indebtedness, including Guarantees, existing on the date hereof and set forth in Schedule 6.01;

(c)Guarantees of Indebtedness of any Subsidiary (other than PTFI or any Subsidiary Guarantor) to the extent such Indebtedness is permitted under this Agreement;

(d)Indebtedness of any Subsidiary to FCX or any Subsidiary;

(e)Indebtedness of any Person that becomes a Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Subsidiary in a transaction permitted hereunder) after the date hereof; or Indebtedness of any Person that is assumed by any Subsidiary in connection with an acquisition of assets by such Subsidiary, provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Subsidiary (or such merger or consolidation) or such assets being acquired and (ii) no other Subsidiary (other than a Subsidiary into which the acquired Person is merged or any existing Subsidiary of the acquired Person) shall Guarantee or otherwise become liable for the payment of such Indebtedness, except to the extent that such Guarantee is incurred pursuant to Section 6.01(i) ;

(f)Indebtedness and Attributable Debt in respect of sale and leaseback transactions permitted by Section 6.04, in each case incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the

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acquisition thereof but excluding Project Financings; provided that (i) any such Indebtedness or Attributable Debt is incurred within 180 days prior to or within 180 days after such acquisition or the completion of such construction or improvement and (ii) any such Attributable Debt is incurred in accordance with Section 6.04;

(g)Project Financings and Guarantees thereof in each case by the direct or indirect parent or parents of the applicable Project Financing Subsidiary,

(h)letters of credit in connection with environmental assurances and reclamation, provided that the aggregate face amount of all outstanding letters of credit issued pursuant to this paragraph (h), when taken together with the aggregate amount of cash and other assets of FCX, PTFI and the Subsidiaries securing, in accordance with Section 6.02(k), (i) environmental assurance and reclamation claims and (ii) letters of credit in connection with environmental assurance and reclamation claims (other than cash and other assets of any Subsidiary (other than PTFI or any Subsidiary Guarantor) securing any letter of credit as to which any Subsidiary (other than PTFI or a Subsidiary Guarantor) is the account party), shall not at any time exceed $700,000,000.

(i)other Indebtedness (including, for the avoidance of doubt, letters of credit in connection with environmental assurances and reclamation) and Attributable Debt in respect of sale and leaseback transactions permitted pursuant to Section 6.04, provided that, at the time of incurrence of any such Indebtedness and Attributable Debt and after giving effect thereto, the sum of (i) the aggregate principal amount of outstanding Indebtedness and Attributable Debt incurred pursuant to this paragraph (i), (ii) the aggregate principal amount of outstanding Indebtedness and Attributable Debt of FCX, PTFI or any Subsidiary Guarantor secured by a Lien pursuant to Section 6.02(l) and (iii) the total book value (as would be reflected on a balance sheet prepared on a consolidated basis in accordance with GAAP) of all assets subject to any Lien pursuant to Section 6.02(p) shall not exceed the greater of (A) $2,250,000,000 and (B) 7.5% of Consolidated Total Assets (provided, however, that the limitations set forth in clauses (A) and (B) shall not restrict the incurrence of any Indebtedness or Attributable Debt under this paragraph (i) which (1) is incurred to refinance Indebtedness or Attributable Debt previously incurred pursuant to this paragraph (i) and (2) does not increase the outstanding principal amount of such refinanced Indebtedness or Attributable Debt by more than the amount of accrued interest thereon and fees, expenses and premiums paid in connection with such refinancing); and

(j)Indebtedness and Attributable Debt incurred in connection with the refinancing of any Indebtedness or Attributable Debt outstanding pursuant to Section 6.01(b), (e), (f) or (g), provided that such refinancing shall not increase the outstanding principal amount of the Indebtedness or Attributable Debt being refinanced by more than the amount of accrued interest thereon and fees, expenses and premiums paid in connection with such refinancing.

SECTION 6.02.Liens.  Each Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)Permitted Encumbrances;

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(b)any Lien on any property or asset of FCX, PTFI or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) any such Lien shall not apply to any other property or asset of FCX, PTFI or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof;

(c)Liens on fixed or capital assets acquired, constructed or improved by FCX, PTFI or any Subsidiary; provided that (i) such Liens secure Indebtedness or Attributable Debt incurred by FCX, PTFI or any Subsidiary to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and Indebtedness assumed in connection with the acquisition of any such assets and secured by a Lien on any such assets prior to the acquisition thereof, but excluding Project Financings; provided that any such Attributable Debt is incurred in accordance with Section 6.04, (ii) such Liens and the Indebtedness or Attributable Debt secured thereby are incurred by FCX, PTFI or such Subsidiary no earlier than 180 days prior to, and no later than 180 days after, the completion of such acquisition, construction or improvement, (iii) the principal amount of the Indebtedness or Attributable Debt secured thereby does not exceed by more than a de minimis amount the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of FCX, PTFI or any Subsidiary;

(d)Liens securing any Project Financing or any Guarantee thereof by any direct or indirect parent of the applicable Project Financing Subsidiary; provided that such Liens do not apply to any property or assets of FCX, PTFI or any Subsidiaries other than the assets of the applicable Project Financing Subsidiary and Equity Interests in the applicable Project Financing Subsidiary or any direct or indirect parent thereof that holds no significant assets other than direct or indirect ownership interests in such Project Financing Subsidiary or assets related to, or ownership interests in Subsidiaries that hold assets related to, the operations of such Project Financing Subsidiary;

(e)required margin deposits on, and other Liens on assets (other than Equity Interests) of, FCX, PTFI or any Subsidiary securing obligations under Hedging Agreements entered into in the ordinary course of business to hedge or protect against actual or reasonably anticipated risks to which FCX, PTFI or any Subsidiary is exposed in the conduct and financing of its business, and not in any event for speculation;

(f)Liens on property, other assets or shares of stock of a Person at the time such Person becomes a Subsidiary (or at the time FCX, PTFI or a Subsidiary acquires such property, other assets or shares of stock, including any acquisition by means of a merger, consolidation or other business combination transaction with or into any Subsidiary); provided, however, that such Liens are not created, incurred or assumed in anticipation of or in connection with such other Person becoming a Subsidiary (or such acquisition of such property, other assets or stock); and provided, further, that such Liens are limited to all or part of the same property, other assets or stock (plus improvements, accession, proceeds or dividends or distributions in connection with the original property, other assets or stock) that secured the obligations to which such Liens relate;

(g)Liens on assets or property of FCX, PTFI or any Subsidiary securing Indebtedness or other obligations of FCX, PTFI or such Subsidiary owing to any Borrower or any Subsidiary Guarantor;

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(h)Liens securing any refinancing of Indebtedness or Attributable Debt that was previously so secured and permitted to be secured under this Agreement pursuant to Section 6.02(b), (c), (d) or (f); provided that (i) such Lien is limited to all or part of the same property or assets (plus improvements and accessions thereto) that secured the Indebtedness or Attributable Debt being refinanced at the time of such refinancing and (ii) such refinancing shall not increase the outstanding principal amount of the Indebtedness or Attributable Debt being refinanced by more than the amount of accrued interest thereon and fees, expenses and premiums paid in connection with such refinancing;

(i)Liens incurred in the ordinary course of business with respect to obligations (other than Indebtedness for borrowed money) which do not exceed $500,000,000 at any one time outstanding;

(j)the RTZ Interests;

(k)Liens on cash and other assets securing (i) environmental assurance and reclamation claims and (ii) letters of credit in connection with environmental assurance and reclamation claims, provided that the aggregate amount of cash and other assets of FCX, PTFI and the Subsidiaries subject to Liens under this paragraph (k) (other than cash or other assets of any Subsidiary (other than PTFI or any Subsidiary Guarantor) securing letters of credit as to which any Subsidiary (other than PTFI or a Subsidiary Guarantor) is the account party), when taken together with the aggregate face amount of all outstanding letters of credit issued pursuant to Section 6.01(h), shall not at any time exceed $700,000,000;

(l)Liens not expressly permitted by clauses (a) through (k) securing Indebtedness and Attributable Debt, provided that, at the time of incurrence of any such Indebtedness or Attributable Debt (or, if such Indebtedness or Attributable Debt was previously outstanding but unsecured, at the time of incurrence of any such Lien) and after giving effect thereto, the sum of (i) the aggregate principal amount of outstanding Indebtedness and Attributable Debt secured by a Lien pursuant to this paragraph (l), (ii) the aggregate principal amount of outstanding Indebtedness and Attributable Debt incurred pursuant to Section 6.01(i) and (iii) the total book value (as would be reflected on a balance sheet prepared on a consolidated basis in accordance with GAAP) of all assets subject to any Lien pursuant to Section 6.02(p) shall not exceed the greater of (A) $2,250,000,000 and (B) 7.5% of Consolidated Total Assets as of such time (provided, however, that the limitations set forth in clauses (A) and (B) shall not restrict the incurrence of any Lien under this paragraph (l) to secure Indebtedness or Attributable Debt which (1) is incurred to refinance Indebtedness or Attributable Debt previously incurred pursuant to this paragraph (l) and (2) does not increase the outstanding principal amount of such refinanced Indebtedness or Attributable Debt by more than the amount of accrued interest thereon and fees, expenses and premiums paid in connection with such refinancing);

(m)Liens on the receivables, metals and related assets subject to any Receivables Facility, Metalstream Transaction or other Indebtedness included in clause (j) of the definition of “Indebtedness”;

(n)Liens on assets of FCX, PTFI or any Subsidiary, or of Equity Interests of any Subsidiary, provided that (i) such assets are located in, or owned by a Subsidiary organized under the laws of (or in the case of Equity Interests, issued by any such Subsidiary), the Republic of Indonesia, Bermuda, the Kingdom of

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Spain, the Republic of Chile and the Cayman Islands, (ii) such Liens shall have secured obligations under the Existing Credit Agreements and shall not secure any other outstanding obligations of FCX, PTFI or any Subsidiary and (iii) such Liens shall be released within 180 days of the Effective Date, or such later date as determined in the sole discretion of the Administrative Agent;

(o)Liens on assets of any Subsidiary, other than PTFI or any Subsidiary Guarantor, securing Indebtedness and Attributable Debt permitted by Section 6.01 (including, for the avoidance of doubt, intercompany Indebtedness incurred under Section 6.01(d)); and

(p)Liens incurred with respect to obligations (other than Indebtedness for borrowed money); provided that, at the time of incurrence of any such Lien and after giving effect thereto, the sum of (i) the total book value (as would be reflected on a balance sheet prepared on a consolidated basis in accordance with GAAP) of all assets subject to any Lien pursuant to this paragraph (p), (ii) the aggregate principal amount of outstanding Indebtedness and Attributable Debt secured by a Lien pursuant to Section 6.02(l) and (iii) the aggregate principal amount of outstanding Indebtedness and Attributable Debt incurred pursuant to Section 6.01(i) shall not exceed the greater of (A) $2,250,000,000 and (B) 7.5% of Consolidated Total Assets as of such time.

SECTION 6.03.Fundamental Changes.  (a)  FCX will not, nor will it permit any Subsidiary to, effect any Proscribed Consolidation.  “Consolidation” means the merger, consolidation, liquidation or dissolution of any Person with or into any other Person or the sale, transfer, lease or other disposition of all or substantially all the assets of any Person to another Person.  “Proscribed Consolidation” means any merger or consolidation involving FCX in which FCX is not the surviving Person (the “Successor Company”) unless (i) the Successor Company will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company will expressly assume, by an agreement executed and delivered to the Administrative Agent, in form reasonably satisfactory to the Administrative Agent, all the obligations of FCX under the Loan Documents; and (ii) immediately after giving effect to such transaction, (y) no Event of Default shall have occurred and be continuing or would result therefrom and (z) the Borrowers would be in pro forma compliance with the Financial Covenants.

(b)The Borrowers will not, and will not permit the Subsidiaries to, sell, transfer, lease or otherwise dispose of, in any transaction or series of related transactions, assets (including Equity Interests of Subsidiaries) constituting all or substantially all the assets of FCX and the Subsidiaries taken as a whole.

SECTION 6.04.Sale and Leaseback Transactions.  Each Borrower will not, and will not permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (a) any such sale and leaseback of any fixed or capital assets that is made for cash consideration in an amount not less than the cost of such fixed or capital asset and is consummated within 180 days after FCX or any Subsidiary acquires or completes the construction of such fixed or capital asset; (b) any such sale and leaseback of Project Financing Assets as part of a Project Financing, provided in each case that such sale and leaseback is solely for cash; and (c) any sale and leaseback of fixed or capital assets; provided that the aggregate amount of the

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Attributable Debt in respect of such sale and leaseback transactions under this clause (c) is permitted (i) in the case of FCX, PTFI or any Subsidiary Guarantor, to be secured by a Lien pursuant to Section 6.02(l) and (ii) in the case of any Subsidiary, other than PTFI or any Subsidiary Guarantor, to be incurred pursuant to Section 6.01(i).

SECTION 6.05.Fiscal Year.  FCX will not change its fiscal year to end on any date other than December 31.

SECTION 6.06.Total Leverage Ratio.  The Borrowers will not permit the Total Leverage Ratio on the last day of any fiscal quarter to exceed 3.75 to 1.00.

SECTION 6.07.Interest Expense Coverage Ratio.  The Borrowers will not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest Expense, in each case for any period of four consecutive fiscal quarters, to be less than 2.50 to 1.00.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a)either Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)either Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c)any representation or warranty made or deemed made by or on behalf of either Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)either Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a), 5.03 (with respect to the existence of either Borrower), 5.09 or in Article VI;

(e)any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to FCX (which notice will be given at the request of any Lender);

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(f)(i) default shall be made with respect to any Material Indebtedness if the effect of any such default shall be to accelerate, or to permit the holder or obligee of any such Material Indebtedness (or any trustee on behalf of such holder or obligee) to accelerate, the stated maturity of such Material Indebtedness or, in the case of Hedging Agreements, require the payment of any net termination value in respect thereof or, in the case of Project Financings, permit foreclosure upon, or require FCX or any Subsidiary to repurchase the related Project Financing Assets; or (ii) any amount of principal or interest of any Material Indebtedness or any payment under a Hedging Agreement constituting Material Indebtedness, in each case regardless of amount, shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any period of grace specified in the instrument evidencing or governing such Material Indebtedness);

(g)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of either Borrower or any Significant Subsidiary (each, a “Material Company”) or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Material Company or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(h) any Material Company shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Material Company or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (v) make a general assignment for the benefit of creditors;

(i)any Material Company shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(j)one or more judgments for the payment of money in an aggregate amount in excess of $100,000,000 shall be rendered against either Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 45 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of either Borrower or any Subsidiary to enforce any such judgment;

(k)an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect;

(l)any Guarantee under any Guarantee Agreement shall cease to be, or shall be asserted by any Loan Party in writing not to be, a valid and enforceable Guarantee;

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(m)any Governmental Authority shall condemn, seize, nationalize, assume the management of, or appropriate any material portion of the property, assets or revenues of either Borrower or any Subsidiary (either with or without payment of compensation);

(n)a Change in Control shall occur; or

(o)the applicable Borrower shall fail to provide cash collateral in respect of any outstanding Letter of Credit having an expiration date after the fifth Business Day prior to the Maturity Date, by the date that is 30 days prior to the Maturity Date, in an amount equal to 102% of the LC Exposure in respect of such Letter of Credit and otherwise in compliance with Section 2.06(c);

then, and in every such event (other than an event with respect to either Borrower described in clause (g), (h) or (o) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrowers, take any or all of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower and (iii) exercise any or all the remedies then available under the Loan Documents; and in case of any event with respect to either Borrower described in clause (g), (h) or (o) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower.

ARTICLE VIII

The Agents

Each of the Lenders and the Issuing Banks hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors to serve as administrative agent under the Loan Documents, and authorizes the Administrative Agent to take such actions and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

Each of the Agents hereunder shall have the same rights and powers in its capacity as a Lender or an Issuing Bank as any other Lender or Issuing Bank and may exercise the same as though it were not an Agent, and such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with either Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

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The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or to exercise any discretionary power, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion, could expose the Administrative Agent to liability or be contrary to any Loan Document or applicable law, and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers, any Subsidiary or any other Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or in the absence of its own gross negligence or wilful misconduct, as determined by a court of competent jurisdiction by a final and non-appealable judgment.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by FCX, a Lender or an Issuing Bank, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent.  Notwithstanding anything herein to the contrary, the Administrative Agent shall not have any liability arising from (A) any confirmation of the Revolving Exposure or the component amounts thereof, (B) any confirmation of the aggregate Revolving Exposure attributable to Loans made to PTFI and Letters of Credit issued at the request of PTFI or of the component amounts thereof or (C) any determination as to whether a Letter of Credit constitutes a Financial Letter of Credit or a Performance Letter of Credit.

The Administrative Agent shall be entitled to rely, and shall not incur any liability for relying, upon any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the signatory, sender or authenticator thereof).  The Administrative Agent also shall be entitled to rely, and shall not incur any liability for relying, upon any statement made to it orally or by telephone and believed by it to be made by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the signatory, sender or

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authenticator thereof), and may act upon any such statement prior to receipt of written confirmation thereof.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any of and all its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any of and all their duties and exercise their rights and powers through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the terms of this paragraph, the Administrative Agent may resign at any time from its capacity as such.  In connection with such resignation, the Administrative Agent shall give notice of its intent to resign to the Lenders, the Issuing Banks and the Borrowers.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents.  The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed by the Borrowers and such successor.  Notwithstanding the foregoing, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Borrowers, whereupon, on the date of effectiveness of such resignation stated in such notice, (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents, and (b) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, provided that (i) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (ii) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall also directly be given or made to each Lender and each Issuing Bank.  Following the effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

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Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon either Agent, any person listed on the cover page of this Agreement as an Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon either Agent, any person listed on the cover page of this Agreement as an Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

Each Lender, by delivering its signature page to this Agreement and funding its Loans on the Effective Date, or delivering its signature page to an Assignment and Assumption or an Incremental Facility Agreement pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date.

No Credit Party shall have any right individually to enforce any Guarantee of the Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Credit Parties in accordance with the terms thereof.  Each Credit Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Guarantees of the Obligations provided under the Loan Documents, to have agreed to the foregoing provisions.

Notwithstanding anything herein to the contrary, neither the Syndication Agent nor any Person named on the cover page of this Agreement as an Arranger or a Documentation Agent shall have any duties or obligations under this Agreement or any other Loan Document (except in its capacity, as applicable, as a Lender or an Issuing Bank), but all such Persons shall have the benefit of the indemnities provided for hereunder.

The provisions of this Article are solely for the benefit of the Agents, the Lenders and the Issuing Banks, and neither Borrower nor any other Loan Party shall have any rights as a third party beneficiary of any such provisions.

ARTICLE IX

Miscellaneous

SECTION 9.01.Notices.  (a)  Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

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(i)if to either Borrower, to it at Freeport-McMoRan Copper & Gold Inc., 333 N. Central Avenue, Phoenix, AZ  85004, Attention of Treasurer (Telecopy No. (602) 366-7321);

(ii)if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002, Attention of Ms. Monica Espitia (Telecopy No. (713) 427-6301), with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, New York 10017, Attention of Peter Predun (Telecopy No. (212) 270-5100);

(iii)if to the Swingline Lender, to JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002, Attention of Ms. Monica Espitia (Telecopy No. (713) 427-6301), with a copy to the Administrative Agent as provided under clause (ii) above;

(iv)if to any Issuing Bank, to it at the address most recently specified by it in a notice delivered to the Administrative Agent and the Borrowers, with a copy to the Administrative Agent as provided under clause (ii) above; and

(v)if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

(b)Notices and other communications to the Lenders hereunder may be delivered pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or a Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communication pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c)Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02.Waivers; Amendments.  (a)  No failure or delay by any Agent, any Lender or any Issuing Bank in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Agents, the Lenders and the Issuing Banks hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or the issuance, amendment, extension or renewal of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

(b)Except as provided in Section 2.20, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or

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modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by each of the Borrowers and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or the required date of reimbursement of any LC Disbursement under Section 2.06, or any date for the payment of any interest or fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the percentage set forth in the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (it being understood that, with the consent of the Required Lenders, additional extensions of credit or revolving commitments pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Revolving Commitments on the date hereof), or (vi) except as expressly provided for in the Loan Documents, release all or substantially all the Subsidiary Guarantors from their Guarantees, if any, under the Loan Documents or limit the liability of all or substantially all the Subsidiary Guarantors in respect of such Guarantees, without the written consent of each Lender, provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of any Agent, any Issuing Bank or the Swingline Lender without the prior written consent of such Agent, such Issuing Bank or the Swingline Lender, as the case may be.  Notwithstanding the foregoing, (x) any provision of this Agreement may be amended by an agreement in writing entered into by each of the Borrowers, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement any remaining Commitment and/or Revolving Exposure of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement and (y) no consent with respect to any amendment, waiver or other modification of this Agreement or any other Loan Document shall be required of (i) any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be affected by such amendment, waiver or other modification

SECTION 9.03.Expenses; Indemnity; Damage Waiver.  (a)  Each Borrower agrees to pay (i) all reasonable out-of-pocket expenses incurred by each Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for each Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by each Issuing Bank in connection with the issuance, amendment, extension or renewal of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,

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including the fees, charges and disbursements of any counsel for any Agent, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)Each Borrower agrees to indemnify each Agent, each Lender and each Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by either Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to either Borrower or any of its Subsidiaries, other than losses, claims, damages, liabilities and related costs and expenses arising from a release of Hazardous Materials or Environmental Liability (except releases of Hazardous Materials or Environmental Liabilities actually caused by either Borrower or any of its Subsidiaries or any of their respective tenants, contractors or agents) to the extent (and only to the extent) first occurring and first existing after title to the relevant real property or facility is vested in any Agent or Lender or other party after the completion of foreclosure proceedings or the granting of a deed-in-lieu of foreclosure or similar transfer of title, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.  This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c)To the extent that either Borrower fails to pay any amount required to be paid by it to any Agent under paragraph (a) or (b) of this Section (but without affecting such Borrower’s obligations thereunder), each Lender severally agrees to pay to the applicable Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent in its capacity as such.  For purposes of the immediately preceding sentence, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the total Revolving Exposures and unused Revolving Commitments at the time.  To the extent that the Borrower fails to pay any amount required to be paid by it to any Issuing Bank under paragraph (a) or (b) of this Section (but without affecting the Borrower’s obligations thereunder), each Revolving Lender severally agrees to pay to the applicable Issuing Bank such Revolving Lender’s pro rata share (determined as of the time that the

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applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Issuing Bank in its capacity as such.  For purposes of the immediately preceding sentence, a Revolving Lender’s “pro rata share” shall be determined based upon its share of the sum of the total Revolving Exposures and unused Revolving Commitments at the time.  The obligations of the Lenders under this paragraph (c) are subject to the last sentence of Section 2.02(a) (which shall apply mutatis mutandis to the Lenders’ obligations under this paragraph (c)).  If any action, suit or proceeding arising from any of the foregoing is brought against any Lender, any Agent, any Issuing Bank or other Person indemnified or intended to be indemnified pursuant to this Section 9.03, PTFI and FCX, to the extent and in the manner directed by such indemnified party, will resist and defend such action, suit or proceeding or cause the same to be resisted and defended by counsel designated by PTFI and FCX (which counsel shall be satisfactory to such Lender, such Agent, such Issuing Bank or other Person indemnified or intended to be indemnified).  If PTFI or FCX shall fail to do any act or thing which it has covenanted to do hereunder or any representation or warranty on the part of PTFI or FCX contained in this Agreement shall be breached, any Lender, any Issuing Bank or any Agent may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend its funds for such purpose.  Any and all amounts so expended by any Lender, any Issuing Bank or any Agent shall be repayable to it by PTFI and FCX immediately upon such Person’s demand therefor.

(d)To the extent permitted by applicable law, neither Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e)All amounts due under this Section shall be payable not later than 10 days after written demand therefor.

SECTION 9.04.Successors and Assigns.  (a)  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) a Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment or LC Exposure and the Loans at the time owing to it) with the prior consent (such consent not to be unreasonably withheld or delayed, it being understood that the Borrowers may withhold

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their consent to an assignment to a Lender that would, as of the effective date of such assignment, be entitled to claim compensation under Section 2.14 which the assignor Lender would not be entitled to claim as of that date) of:

(A) the Borrowers, the Swingline Lender and each Principal Issuing Bank; provided that no consent of either Borrower shall be required for an assignment to a Revolving Lender or to an Affiliate of a Revolving Lender having credit ratings equal to or better than the credit ratings of such Revolving Lender, or, if an Event of Default under clause (a), (b), (g) or (h) of Article VII has occurred and is continuing, any other assignee;  provided further that the Borrowers shall be deemed to have consented to any such assignment unless they object thereto by written notice to the Administrative Agent within ten Business Days after having received noticed thereof; and

(B)  the Administrative Agent.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund, or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall (1) be an integral multiple of $5,000,000 and (2) not be less than $10,000,000 unless each of the Borrowers and the Administrative Agent otherwise consent; provided that no such consent of either Borrower shall be required if an Event of Default under clause (a), (b), (g) or (h) of Article VII has occurred and is continuing; and provided further that simultaneous assignments in respect of a Lender and its Approved Funds shall be aggregated for purposes of such requirement;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, payable by either the assignee or the assignor (provided that only one such fee shall be payable in respect of simultaneous assignments by a Lender and its Approved Funds); and

(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and any Tax forms required by Section 2.16(f).

For purposes of this Section 9.04(b), the terms “Approved Fund” and “CLO” have the following meanings:

“Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

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“CLO” means an entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course and is administered or managed by a Lender or an Affiliate of such Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Agents, the Issuing Banks and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, any Agent, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) Any Lender may, without the consent of, or notice to, the Borrowers, the Administrative Agent, the Issuing Banks or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment or LC Exposure and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (C) the Borrowers, the Agents, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (D) such Lender will continue to give prompt attention to and process (including, if required, through discussions with Participants) requests for waivers or amendments hereunder.  Any agreement or instrument pursuant to

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which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.  The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the requirements and limitations therein, including the requirements under Section 2.16(f) (it being understood that the documentation required under Section 2.16(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.17 and 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.14 or 2.16, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(d) Any Lender may, without the consent of the Borrowers or the Administrative Agent, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05.Survival.  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and

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unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06.Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to any Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07.Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08.Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations at any time owing (although such obligations may be unmatured) by such Lender or Issuing Bank or Affiliate to or for the credit or the account of either Borrower against any of and all the obligations then due of either Borrower now or hereafter existing under this Agreement.  The applicable Lender or Issuing Bank shall notify the Borrowers and the Administrative Agent of such setoff and application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff and application under this Section.  The rights of each Lender, each Issuing Bank and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, Issuing Bank and Affiliates may have.

SECTION 9.09.Governing Law; Jurisdiction; Consent to Service of Process; Sovereign Immunity.  (a)  This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or

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enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that any Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against either Borrower or its properties in the courts of any jurisdiction.

(c)Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10.WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11.Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12.Confidentiality.  Each of the Agents, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, trustees, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or

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any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any actual or prospective assignee of or Participant in any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to either Borrower or any other Loan Party and its obligations, (g) with the consent of the Borrowers or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than either Borrower.  For the purposes of this Section, “Information” means all information received from or on behalf of either Borrower relating to either Borrower or its business, other than any such information that is available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by either Borrower.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13.Judgment Currency.  The specification of payment in dollars and in New York City, New York, with respect to amounts payable to any Lender (or permitted assignee or Participant), any Agent or any Issuing Bank hereunder and under the other Loan Documents is of the essence, and dollars shall be the currency of account in all events.  The payment obligations of a Borrower under this Agreement or any other Loan Document shall not be discharged by an amount paid by such Borrower in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to dollars and transfer to New York City under normal banking procedures does not yield the amount of dollars in New York City due hereunder.  If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in dollars into another currency (the “second currency”), the rate of exchange which shall be applied shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase dollars with the second currency on the Business Day next preceding that on which such judgment is rendered.  The obligation of a Borrower in respect of any such sum due from such Borrower to any Agent, any Issuing Bank or any Lender (or permitted assignee or Participant) hereunder or under any other Loan Document (an “entitled person”) shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be discharged only to the extent that on the Business Day following receipt by such entitled person of any sum adjudged to be due hereunder or under any other Loan Document in the second currency such entitled person may in accordance with normal banking procedures purchase in the free market and transfer to New York City dollars with the amount of the second currency so adjudged to be due; and each Borrower hereby agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such entitled person against, and to pay such entitled person on demand, in dollars in New York City, the difference between the sum originally due to such entitled person from such Borrower in dollars and the amount of dollars so purchased and transferred.

SECTION 9.14.Patriot Act.  Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Borrower in accordance with the Patriot Act.  Each Borrower agrees to provide the Lenders, upon request, with all documentation and other information required from time to time to be obtained by the

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Lenders pursuant to applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

SECTION 9.15.No Fiduciary Relationship.  The Borrowers, on behalf of themselves and the Subsidiaries, agree that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Borrowers, the Subsidiaries and their Affiliates, on the one hand, and the Agents, the Lenders, the Issuing Banks and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Agents, the Lenders, the Issuing Banks or their Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

SECTION 9.16.Release of Guarantees; Rejurisdictioning of PTFI.  (a)  A Subsidiary Guarantor shall automatically be released from its obligations under the Loan Documents upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary; provided that, if so required by this Agreement, the Required Lenders (or such greater number of Lenders as may be required under Section 9.02) shall have consented to such transaction and the terms of such consent did not provide otherwise.  In connection with any release pursuant to this Section, the Administrative Agent shall promptly execute and deliver to any Subsidiary Guarantor, at such Subsidiary Guarantor’s expense, all documents that such Subsidiary Guarantor shall reasonably request to evidence such termination or release.

(b)Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.

(c)Notwithstanding any provision of any Loan Document to the contrary PTFI may elect at any time to effect a transaction in which it will cease to be domesticated under the laws of Delaware as a corporation and shall become solely a limited liability company organized under the laws of the Republic of Indonesia.

SECTION 9.17.Non-Public Information.  (a)  Each Lender acknowledges that all information furnished to it pursuant to this Agreement from the Borrowers or on their behalf and relating to the Borrowers, the Subsidiaries or their respective businesses may include material non-public information concerning the Borrowers and the Subsidiaries or their securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with the procedures and applicable law, including Federal and state securities laws.

(b)All such information, including requests for waivers and amendments, furnished by the Borrowers or the Administrative Agent pursuant to, or in the course of administering, this Agreement will be syndicate-level information, which may contain material non-public information about the Borrowers and the Subsidiaries and their securities.  Accordingly, each Lender represents to the Borrowers and the Administrative Agent that it has identified in its Administrative Questionnaire a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law, including Federal and state securities laws.

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ARTICLE X

Co-Borrower Obligations

SECTION 10.01.Joint and Several Liability.  (a)  In consideration of the establishment of the Commitments and the making of the Loans and issuance of the Letters of Credit hereunder, and of the benefits to each of the Borrowers that are anticipated to result therefrom, each of the Borrowers agrees that, subject to paragraph (b) below, but notwithstanding any other provision contained herein or in any other Loan Document, it will be a co-borrower hereunder and shall be fully liable for all of the Obligations, both severally and jointly with the other Borrower.  Accordingly, each Borrower irrevocably agrees with each Lender and the Administrative Agent and their respective successors and assigns that such Borrower will make prompt payment in full when due (whether at stated maturity, by acceleration, by optional prepayment or otherwise) of the Obligations, strictly in accordance with the terms thereof.  Each of the Borrowers hereby further agrees that if any Loan Party shall fail to pay in full when due (whether at stated maturity, by acceleration, by optional prepayment or otherwise) any of the Obligations, then the Borrowers will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

(b)Notwithstanding paragraph (a) above or any other provision herein or in any other Loan Document to the contrary, PTFI shall have no liability for any Obligations other than the Specified PTFI Obligations.  FCX hereby acknowledges the foregoing limitation, and agrees that FCX shall be liable for all Obligations, regardless of whether such Obligations are Specified PTFI Obligations or otherwise.

SECTION 10.02.Obligations Unconditional.  (a)  The obligations of each of the Borrowers under Section 10.01 hereof are absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of either Borrower under this Agreement or any other Loan Document, or any substitution, release or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section that the joint and several obligations (subject, in the case of PTFI, to Section 10.01(b) above) of the Borrowers hereunder shall be absolute and unconditional under any and all circumstances.  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not affect the joint and several liability of either Borrower hereunder:

(i)at any time or from time to time, without notice to either Borrower, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;

(ii)any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein or therein shall be done or omitted; or

(iii)the maturity of any of the Obligations shall be accelerated or delayed, or any of the Obligations shall be modified, supplemented or amended in any

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

85

respect, or any right under this Agreement or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with.

(b)Certain Waivers.  Each of the Borrowers hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against either Borrower under this Agreement or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Obligations.

(c)Reinstatement.  The obligations of each of the Borrowers under this Article X shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of either Borrower in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

(d)Remedies.  Each of the Borrowers agrees that, as between the Borrowers, in their capacity as co-obligors with joint and several liability, and the Lenders, the obligations of either Borrower under this Agreement may be declared to be forthwith due and payable as provided in Article VII hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Article VII) for purposes of Section 10.01 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing such obligations from becoming automatically due and payable) as against either Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by such Borrower) shall forthwith become due and payable by the other Borrower, in its capacity as co-obligor, for purposes of such Section 10.01.

(e)Continuing Obligation.  Each of the agreements of the Borrowers in this Article X is a continuing agreement and undertaking, and shall apply to all Obligations whenever arising.

(f)Standstill.  Upon payment by either of the Borrowers of any sums as provided under Section 10.01, all rights, if any, of such paying Borrower against the other Borrower arising as a result thereof by way of subrogation or otherwise shall in all respects be irrevocably waived prior to the indefeasible payment in full in cash of all of the Obligations.

ARTICLE XI

Subsidiary Guarantors

SECTION 11.01.Designation of Subsidiary Guarantors.  FCX may designate any Subsidiary (other than PTFI) as a Subsidiary Guarantor (a “Guarantor Designation”), provided that, for purposes of Sections 6.01 and 6.02, such Designation shall only become effective on the date that each of the following conditions has been met (the “Guarantor Designation Date”):

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

86

(a)FCX shall have delivered to the Administrative Agent a written notice of such Guarantor Designation at least 10 Business Days in advance of (but not more than 30 days in advance of) the Guarantor Designation Date, specifying the Subsidiary subject to the Guarantor Designation;

(b)at the time of and after giving effect to such Guarantor Designation on the Guarantor Designation Date, the Borrowers shall be in pro forma compliance with Sections 6.01 and 6.02;

(c)such Subsidiary shall have executed and delivered to the Administrative Agent a Guarantee Agreement (or a supplement thereto), and such Guarantee Agreement shall be in full force and effect;

(d)the Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of such Subsidiary, the authorization of its execution of and performance of its obligations under the applicable Guarantee Agreement, and any other legal matters relating to the Guarantor Designation and reasonably requested by the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent;

(e)the Administrative Agent shall have received a favorable opinion (addressed to the Agents, the Issuing Banks and the Lenders and dated the Guarantor Designation Date) from each of (i) New York counsel and (ii) if reasonably requested by the Administrative Agent (and in all cases where the applicable Subsidiary is organized under the laws of a jurisdiction outside of the United States of America), local counsel, and such opinions shall be reasonably satisfactory to the Administrative Agent and cover such matters relating to the Guarantor Designation as the Administrative Agent may reasonably request; and

(f)FCX shall have delivered to the Administrative Agent a certificate of a Financial Officer of FCX, dated as of the Guarantor Designation Date, certifying as to the matters set forth in clauses (b) and (c) above and setting forth reasonably detailed calculations demonstrating compliance with clause (b) above.

SECTION 11.02.Guarantor Terminations.  FCX may elect to terminate any Guarantee of the Obligations by any Subsidiary Guarantor (a “Guarantor Termination”), provided that, for all purposes hereunder and under the other Loan Documents, including under any Guarantee Agreement, such Guarantor Termination shall only become effective on the date that each of the following conditions has been met (the “Guarantor Termination Date”)

(a)FCX shall have delivered to the Administrative Agent a written notice of such Guarantor Termination at least 10 Business Days in advance of (but not more than 30 days in advance of) the Guarantor Termination Date, specifying (i) the Subsidiary subject to such Guarantor Termination and (ii) the intended Guarantor Termination Date;

(b)at the time of and after giving effect to such Guarantor Termination, the Borrowers shall be in pro forma compliance with Sections 6.01 and 6.02;

(c)at the time of and after giving effect to such Guarantor Termination, no Default or Event of Default shall have occurred and be continuing, and the conditions set forth in Sections 4.02(a) and (b) shall each be satisfied as of the Guarantor Termination Date; and

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87

(d)FCX shall have delivered to the Administrative Agent a certificate of a Financial Officer of FCX, dated as of the Guarantor Termination Date, certifying as to the matters specified in clauses (b) and (c) above and setting forth reasonably detailed calculations demonstrating compliance with clause (b) above.

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88

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

FREEPORT-MCMORAN COPPER & GOLD INC.,
by
	/s/ Kathleen L. Quirk
	Name: Kathleen L. Quirk
	Title: Senior Vice President, Chief Financial Officer and Treasurer

PT FREEPORT INDONESIA,
by
	/s/ Robert R. Boyce
	Name: Robert R. Boyce
	Title:Treasurer

[FREEPORT-MCMORAN COPPER & GOLD INC. CREDIT AGREEMENT]

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent, and Issuing Bank,
by
	/s/ Peter S. Predun
	Name: Peter S. Predun
	Title: Executive Director

[FREEPORT-MCMORAN COPPER & GOLD INC. CREDIT AGREEMENT]

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

BANK OF AMERICA, N.A., as Syndication Agent,
by
	/s/ W. Thomas Barnett
	Name: W. Thomas Barnett
	Title: Managing Director

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

LENDER SIGNATURE PAGE TO FREEPORT-MCMORAN COPPER & GOLD INC. CREDIT AGREEMENT
by
	/s/
	Name:
	Title:

For any Lender requiring a second signature line:
by
	Name:
	Title:

[[NYCORP:3265188v16:REMOTE_KFASULLO:03/30/11--12:01 a]]

EX-10.4

Exhibit 10.4

ADDENDUM No. 1

TO THE

AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

OF 28 SEPTEMBER 2005

AMONG

LA GENERALE DES CARRIERES ET DES MINES

AND

TF HOLDINGS LIMITED

CHUI LTD

FARU LTD

MBOKO LTD

MOFIA LTD

TEMBO LTD

AND

TENKE FUNGURUME MINING

DATE:  11 DEC 2010

Addendum No. 1 to the ARSA

Page 1 sur 6

ADDENDUM No. 1

TO THE AMENDED AND RESTATED MINING CONVENTION

AMONG

LA GENERALE DES CARRIERES ET DES MINES a public enterprise established under Congolese law created by Decree Number 049 of 07 November 1995, registered with the New Register of Commerce in Lubumbashi under number453 and having its principal place of business at Boulevard Kamanyola, No. 419, B.P. 450, in Lubumbashi, Democratic Republic of Congo (DRC), in the process of being transformed into a joint stock company (SARL) by virtue of Decree No. 09/12 of 24 April 2009 establishing the list of public enterprises transformed into commercial companies, governmental institutions and public service entities governed temporarily by Decree No. 09/11 of 24 April 2009 enacting the transitional measures in connection with the transformation of public enterprises in application of the Law No. 08/007 of 07 July 2008 enacting the general provisions relative to the transformation of public enterprises, represented by its President of the Board of Directors, Mr. Albert YUMA MULIMBI and its  General Managing Director, Mr. KALEJ NKAND, hereafter referred to as « GECAMINES  »

hereinafter referred to as "Gécamines",

OF THE FIRST PART

– and –

TF HOLDINGS LIMITED (formerly LUNDIN HOLDINGS LTD), a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda), hereinafter referred to as "TF Holdings", and

CHUI LTD, a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda), and

FARU LTD, a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda), and

MBOKO LTD, a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda), and

MOFIA LTD, a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda), and

TEMBO LTD, a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12 (Bermuda),

all represented by their Vice President, Mr. Mark R. Mollison,

hereinafter referred to as the "TF Holdings Shareholders"

OF THE SECOND PART

– and –

Addendum No. 1 to the ARSA

Page 2 sur 6

TENKE FUNGURUME MINING SARL, a company incorporated under the laws of the Democratic Republic of Congo, having its registered office at 790 avenue Panda, Lubumbashi (Democratic Republic of Congo), registered with the Lubumbashi New Register of Commerce under No. 7325, represented by its Managing Director, Mr. Claude Polet,

hereinafter referred to as "T.F.M.",

OF THE THIRD PART

All the parties are hereinafter referred to together as the "Parties".

It is considered as follows:

A. The Parties signed on 28 September 2005 the Amended and Restated Shareholders Agreement (the "ARSA") which amended and restated the Agreement for the Formation of Tenke Fungurume Mining the Parties had concluded on 30 November 1996 (the "Original Convention");

B. Within the framework of the mining contracts review process (the "Revisitation"), the Democratic Republic of Congo, Gécamines, TF Holdings and TFM signed on 11 DEC 2010 the Addendum No. 1 to the Amended and Restated Mining Convention they signed on 28 September 2005 (the "ARMC");

C. In the same framework, the Parties wish to amend the ARSA.

Now therefore it is agreed as follows:

ARTICLE 1

An article 3.2 (d) is added to the ARSA, as follows:

"(d) In addition, TFM will pay to Gécamines the following additional amounts:

(i) An additional USD 30 million upon reaching the following benchmarks:

§   USD 5 mm after signature of the addendums to the ARMC and the ARSA and the amendment to the By-laws of TFM  and such addendums and amendment are in full force and effect (e.g., after approvals by presidential decrees);

§   USD 5 mm at 0.5 mm tonnes cumulative copper production from the Project;

§   USD 5 mm at 1.0 mm tonnes cumulative copper production from the Project;

§   USD 5 mm at 1.5 mm tonnes cumulative copper production from the Project;

§   USD 5 mm at 2.0 mm tonnes cumulative copper production from the Project; and

§   USD 5 mm at 2.5 mm tonnes cumulative copper production from the Project.

Addendum No. 1 to the ARSA

Page 3 sur 6

  (ii) An additional royalty of US$ 1.2 million for each 100,000 tonnes of additional reserves of copper at the time the new reserves achieve an amount greater than 2.5 million tonnes of copper calculated as currently calculated.

This additional royalty will be paid on the determination of recoverable proven and probable copper reserves calculated in accordance with the same criteria as that currently used by the ultimate majority shareholder of TF Holdings Limited in connection with its filings made to the United States Security and Exchange Commission. Payment of the additional royalty will be made by April 15 of each year.

  (iii) Subsequent to the payment dates referred to above, before each payment, T.F.M. will in writing request from Gécamines that it provide in writing to T.F.M., a corresponding demand for payment including the bank and account of Gécamines to which the payment must be made.  T.F.M. will have five Business Days to make the requested payment."

ARTICLE 2

The article 3.4 of the ARSA is replaced by the following provision:

"TF Holdings will cause the increase of the Gécamines 17.5% (non dilutable) interest in the share capital of TFM to 20% (non dilutable). The parties will work together to insure the increase of Gécamines’ interest is done in as tax efficient a manner as possible. It is the initial intent of the parties to provide Gécamines a 20% non dilutable interest through the dilution of TF Holdings' current interest in TFM.

An extraordinary general meeting of the shareholders of TFM will amend accordingly Article 5 of the By-Laws."

ARTICLE 3

The article 3.5 of the ARSA is replaced by the following provision:

"T.F.M. will increase its share capital by USD 50 million, to USD 65,050,000 from the current USD 15,050,000.  Share capital will be contributed as a contribution in-kind entirely by TF Holdings that will be deducted from accrued Advances and for which Gécamines will be attributed a 20% non-dilutable share.  The share capital increase will occur after the increase referred to in Article 3.4 hereof.

An extraordinary general meeting of the T.F.M. shareholders will accordingly amend article 5 of the Bylaws."

ARTICLE 4

The article 4.1 (c) of the ARSA is replaced by the following provision:

"The Parties agree, as from the signature of this Addendum No. 1, to modify the annual interest rate on the Advances made by TF Holdings to T.F.M. by bringing it from LIBOR at one year + 2% to LIBOR at one year + 6% ."  

Addendum No. 1 to the ARSA

Page 4 sur 6

An article 4.1 (e) of the ARSA is added as follows:

“T.F.M. will exercise all reasonable efforts to obtain "project financing" at more advantageous terms and conditions.”

ARTICLE 5

The article 12.4 of the ARSA is replaced by the following provision:

"Management Team. The Managing Director shall appoint all members of the management team and will have the power and authority to hire and fire such employees.  Two members of the management team shall be seconded from candidates employed and recommended by the Class A Shareholder. In addition, TFM will provide the Class A Shareholder with two additional Management positions: (1) Deputy General Manager, based in Fungurume, and (2) Deputy Manager of Operations, based in Fungurume. In any event, however, the Managing Director may, should the case arise, require the Class A Shareholder to replace staff it seconded.  In such cases, the Class A Shareholder will submit another recommendation for replacement.  The Class A Shareholder shall hold T.F.M. and the Managing Director harmless and shall indemnify them against any Claim brought against them by any rejected candidate or any employee of Gécamines whose secondment is terminated."

ARTICLE 6

The parties agree to enter into a consultancy agreement, (hereafter referred to as the (“Gecamines Consultancy Agreement”), between Gécamines and TFM within a time period not to surpass thirty (30) Business Days from the signature of the Addendum No. 1 to the ARMC.

ARTICLE 7

This Addendum will enter into force after its signature by all the Parties and upon the date of the entry into force of the Addendum No. 1 to the ARMC, and will remain in effect for so long as the ARSA remains in effect.

Until the entry into effect of this Addendum, the ARSA will remain validly and fully in force as such and thereafter the ARSA will remain validly and fully in force as amended by this Addendum.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Addendum on the 11 DEC 2010, in 16 original copies, 8 in English and 8 in French, each Party acknowledging receipt of one English and one French copy.

Addendum No. 1 to the ARSA

Page 5 sur 6

LA GENERALE DES CARRIERES ET DES MINES

    /s/ Kalej Nkand  The Director General Manager, KALEJ NKAND     /s/ Albert Yuma Mulimbi  The Chairman of the Board, Albert YUMA MULIMBI

  TF HOLDINGS LIMITED     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President   CHUI LTD     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President

  FARU LTD     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President   MBOKO LTD     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President

  MOFIA LTD     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President   TEMBO LTD     /s/ Mr. Mark R. Mollison Mr. Mark R. Mollison Vice President

TENKE FUNGURUME MINING SARL

/s/ Mr. Claude Polet

Mr. Claude Polet

Managing Director

Addendum No. 1 to the ARSA

Page 6 sur 6

EX-10.5

Exhibit 10.5

ADDENDUM No. 1

TO THE

AMENDED AND RESTATED MINING CONVENTION

OF 28 SEPTEMBER 2005

AMONG

LA REPUBLIQUE DEMOCRATIQUE DU CONGO

AND

LA GENERALE DES CARRIERES ET DES MINES

AND

LUNDIN HOLDINGS LTD

(now TF HOLDINGS LIMITED)

AND

TENKE FUNGURUME MINING S.A.R.L.

DATE: 11 DEC 2010

Addendum No. 1 to the ARMC

Page 1 on 40

Article 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				5
Article 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				6
Article 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				6
Article 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				7
Article 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				7
Article 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				7
"Article 8 : Tax and Customs Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				7
I : GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				8
	8.1. Tax and customs regime applicable to T.F.M. . . . . . . . . . . . . . . . . . . . . . . . . . . .			8
	8.2. Exhaustive tax and customs legal regime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			9
	8.3. Modifications to the tax and customs regime. . . . . . . . . . . . . . . . . . . . . . . . . . . .			10
	8.4. More favorable tax or customs provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			10
	8.5. Benefit of the regime which is applicable to T.F.M. . . . . . . . . . . . . . . . . . . . . . .			10
	8.6. Tax and customs procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			11
II. CUSTOMS REGIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .				11
	8.7. List of assets benefiting from the preferential regime with respect to importation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			11
		8.7.1. Application for approval of the list of goods to be imported . . . . . . . . .		12
		8.7.2. Review of the list of goods to be imported . . . . . . . . . . . . . . . . . . . . . . .		13
		8.7.3. Decision approving or rejecting the list of Goods to be imported . . . . .		13
		8.7.4. Registration and notification of the decision approving or rejecting the approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		14
		8.7.5. Changes to the list of goods falling under the preferential customs regime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		14
		8.7.6. Interministerial Commission responsible for the Approval of the List of Goods to be iimported under the Preferential Customs Regime . . .		15
			8.7.6.1 Duties of the Interministerial Commission . . . . . . . . . . . . . . .	15
			8.7.6.2 Composition of hte Interministerial Commission . . . . . . . . . .	15
			8.7.6.3 Organisation and Operation of the Interministerial Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
	8.8. Exporting samples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			16
	8.9. Imports of personal items belonging to expatriates. . . . . . . . . . . . . . . . . . . . . . .			17
	8.10.  Imported goods made available for consumption on the National Territory. . .			17

Addendum No. 1 to the ARMC

	8.11. Consequences of halting the Project on/before completion. . . . . . . . . . . . . . . .		17
	8.12. Transfer of goods, equipment and/or tools . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17
	8.13. Temporary import free of duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18
	8.14. Import duties at preferential rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18
	8.15. Imports during the extension work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18
		8.15.1. Review by the Registry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
		8.15.2. Technical and environmental investigation . . . . . . . . . . . . . . . . . . . . .	20
	8.16. Export duty ["droit de sorte"] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		20
	8.17. Consumption and excise duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		21
III. FISCAL REGIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			22
A. Asset-Based Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			23
	8.18. Property tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		23
	8.19. Tax on Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		23
	8.20. Tax on the surface area of mining concessions . . . . . . . . . . . . . . . . . . . . . . . . .		24
	8.21. Special tax on road traffic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		24
B. The Mining Royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			24
	8.22. Basis of the mining royalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		24
	8.23. Rate of the mining royalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25
	8.24. Distribution of the mining royalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25
	8.25. Tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25
C. Revenue based taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			25
	8.26. Professional tax on remunerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25
	8.27. Tax on rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		26
	8.28. Tax on income from movable assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		26
	8.29. Professional tax on profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		26
D. Determination of the taxable profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			27
	8.30. Taxable profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		27
	8.31. Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		27
	8.32. Deferred depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		27
	8.33. Tax loss carried forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28
	8.34. Research and development expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		28
	8.35. Capital gain and capital loss on mining title transfers . . . . . . . . . . . . . . . . . . . .		28
	8.36. Deduction of interest paid abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		29

Addendum No. 1 to the ARMC

	8.37. Deduction of mining royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
	8.38. Deductible professional expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
	8.39.  Provision for restoration of the deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
	8.40. Provision for site rehabilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
E. Turnover taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		31
	8.41. Domestic tunrover tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
F. Exceptional Tax on the remunerations of expatriates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		32
	8.42. Preferential regime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		32
Article 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
"Article 30 : Stabilized Legilation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
Article 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
Article 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
"Article 47 : Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
I : MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		33
	47.1. Assets that can be mortgaged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33
	47.2. Procedure for the approval of the mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . .	34
	47.3. Reasons for the refusal to approve mortgages . . . . . . . . . . . . . . . . . . . . . . . . . .	35
	47.4. Registration and enforceability of the mortgage deeds . . . . . . . . . . . . . . . . . . .	35
	47.5. Execution of mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
	47.6. Mining registry examination in case of transfer . . . . . . . . . . . . . . . . . . . . . . . .	36
	47.7. Legal consequences of the transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
	47.8. Legal Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
II : PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		37
	47.9. Pledges of marketable products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
Article 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		37
Article 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		37
Article 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		37
Article 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		38
Article 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		38

Addendum No. 1 to the ARMC

ADDENDUM No. 1

TO THE AMENDED AND RESTATED MINING CONVENTION

AMONG :

THE DEMOCRATIC REPUBLIC OF CONGO represented by the Ministers of Mines,  Finance, and Budget, hereinafter referred to as “the State”

OF THE FIRST PART

– and –

LA GENERALE DES CARRIERES ET DES MINES a public enterprise established under Congolese law created by Decree Number 049 of 07 November 1995, registered with the New Register of Commerce in Lubumbashi under number453 and having its principal place of business at Boulevard Kamanyola, No. 419, B.P. 450, in Lubumbashi, Democratic Republic of Congo (DRC), in the process of being transformed into a joint stock company (SARL) by virtue of Decree No. 09/12 of 24 April 2009 establishing the list of public enterprises transformed into commercial companies, governmental institutions and public service entities governed temporarily by Decree No. 09/11 of 24 April 2009 enacting the transitional measures in connection with the transformation of public enterprises in application of the Law No. 08/007 of 07 July 2008 enacting the general provisions relative to the transformation of public enterprises, represented by its President of the Board of Directors, Mr. Albert YUMA MULIMBI and its  General Managing Director, Mr. KALEJ NKAND, hereafter referred to as « GECAMINES  »

hereinafter referred to as "Gécamines",

OF THE SECOND PART

– and –

TF HOLDINGS LIMITED (formerly LUNDIN HOLDINGS LTD), a company incorporated under the laws of Bermuda, having its registered office at Clarendon House, 2 Church Street, Hamilton HM12, Bermuda, represented by its Vice President, Mr. Mark R. Mollison, hereinafter referred to as “TF Holdings”

OF THE THIRD PART

– and –

TENKE FUNGURUME MINING S.A.R.L., a company incorporated under the laws of the Democratic Republic of Congo, having its registered office at 790 Avenue Panda, Lubumbashi, Democratic Republic of Congo, registered with the New Register of Commerce in Lubumbashi under No. 7325, represented by represented by its Managing Director, Mr. Claude Polet, hereinafter referred to as “T.F.M.”

OF THE FOURTH PART

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Hereinafter referred to together as the "Parties"

It is considered as follows:

A. The Parties signed on 28 September 2005 the Amended and Restated Mining Convention (the "ARMC") which amended and restated the Mining Convention the Parties concluded on 30 November 1996 (the "Original Mining Convention");

B. The Original Mining Convention is based on and governed by the contractual mining regime set forth in articles 38 to 43 of Ordinance-Law No. 81-013 of 2 April 1981 with respect to the general legislation in force regarding Mines and Hydrocarbons (the "Mining Law");

C. Pursuant to article 340 of Law No. 007/2002 of 11 July 2002 establishing the Mining Code (the "Mining Code"), T.F.M. opted to remain governed by its Original Mining Convention and not the Mining Code;

D. Consistent with articles 340 and 343.a of the Mining Code, the ARMC incorporated, as a matter of contract and not by choice of applicable law, solely the terms of Titles IX (tax and customs regime) and VI (securities) of the Mining Code, and therefore maintained for the Parties the purely contractual regime that was initially agreed upon in the Original Mining Convention concluded pursuant to the Mining Law;

E.   The Parties’ intention, as reflected in ARMC Articles 8, 47, 51, and 52, was that the Project continued to be governed by the Original Mining Convention, as amended and restated in 2005.  Insofar as it was never the intention of the Parties that the ARMC be governed by both the Mining Code and the Mining Law, the Parties have decided to enter into this Addendum to the ARMC (the "Addendum") which amends and restates the relevant provisions of the ARMC in order to reaffirm the contractual mining regime governing the ARMC.

Now therefore it is agreed as follows:

ARTICLE 1

Item D of the Preamble of the ARMC is hereby deleted in is entirety and replaced as follows, where “this Agreement” means the ARMC:

"By means of this Amended and Restated Mining Convention, the Parties amend and restate the Original Convention so as to permit T.F.M. to benefit from the advantages of this Agreement, to revise production targets and to integrate into this Agreement the relevant modifications of the rights and obligations of the Shareholders of T.F.M., to confirm the formation of T.F.M., to add T.F.M. as a party to the ARMC as it was originally in effect in 2005, to set forth a new capital structure within T.F.M by the signature of the Amended and Restated Shareholders Agreement, as well as to modify certain rights and obligations of the parties in connection with the purpose of the Original Convention."

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ARTICLE 2

Item (c) of Article 1.4 of the ARMC is hereby deleted in its entirety and replaced as follows: 

"(c)Law

Subject to Article 30, any reference to a law includes the executory measures made pursuant thereto, all amendments made to such law or executory measures and any law or executory measure that may be passed which has the effect of supplementing or superseding such law or executory measure.”

ARTICLE 3

Item (a) of Article 2 of the ARMC is hereby deleted in its entirety and replaced as follows, where “this Agreement” means the ARMC:  

"(a) to grant to T.F.M. the benefits of this Agreement without prejudice to the rights previously granted and enjoyed by T.F.M. pursuant to the terms of the Original Convention and Article 40 of the ARMC in force from 2005 until this amendment.”

ARTICLE 4

Article 4 of the ARMC is hereby amended by adding new paragraph (d) as follows:

"(d) In addition, T.F.M. will pay to Gécamines the following additional amounts:

(i)  An additional US$ 30 million upon reaching the following benchmarks:

§   US$ 5 mm after the conditions set forth in Article 15 herein have been met in full force and effect;

§   US$ 5 mm at 0.5 mm tonnes cumulative copper production from the Project;

§   US$ 5 mm at 1.0 mm tonnes cumulative copper production from the Project;

§   US$ 5 mm at 1.5 mm tonnes cumulative copper production from the Project;

§   US$ 5 mm at 2.0 mm tonnes cumulative copper production from the Project; and

§   US$ 5 mm at 2.5 mm tonnes cumulative copper production from the Project.

(ii)  An additional royalty of US$ 1.2 million for each 100,000 tonnes of additional reserves of copper at the time the new reserves achieve an

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amount greater than 2.5 million tonnes of copper calculated as currently calculated.

This additional royalty will be paid on the determination of recoverable proven and probable copper reserves calculated in accordance with the same criteria as that currently used by the ultimate majority shareholder of TF Holdings Limited in connection with its filings made to the United States Security and Exchange Commission. Payment of the additional royalty will be made by April 15 of each year.

(iii)  Subsequent to the payment dates referred to above, before each payment, T.F.M. will in writing request from Gécamines that it provide in writing to T.F.M., a corresponding demand for payment including the bank and account of Gecamines to which the payment must be made.  T.F.M. will have five Business Days to make the requested payment."

ARTICLE 5

Article 6 of the ARMC is completed with the following provisions:

"(d) T.F.M. will increase its share capital by US$ 50 million, to US$ 65,050,000 from the current US$ 15,050,000.  Share capital will be contributed as a contribution in-kind entirely by TF Holdings that will be deducted from accrued Advances and for which Gécamines will be attributed a 20% non-dilutable share.  The share capital increase will occur after the increase referred to in item (e) hereinafter.

(e) TF Holdings will cause the increase of the Gécamines 17.5% interest in the share capital of T.F.M. to 20% (non dilutable). The parties will work together to insure the increase of Gecamines’ interest is done in as tax efficient a manner as possible.  It is the initial intent of the parties to provide Gecamines a 20% non dilutable interest through the dilution of TF Holdings' current interest in T.F.M."

ARTICLE 6

Article 8 of the ARMC is hereby deleted in its entirety and replaced with the following provisions, where “this Agreement” means the ARMC:

"Article 8: Tax and Customs Provisions

The tax and customs regimes applicable to the Project as from the entry into force of this Amended and Restated Mining Convention are exclusively the provisions of this Article 8.

Law No. 007/2002 of 11 July 2002 enacting the Mining Code as well as Decree No. 038/2003 dated 26 March 2003 enacting the mining regulations, shall not apply to this Agreement or to the Rights and Titles on the Property.

The fiscal levies and customs duties applicable to T.F.M. are detailed in this Addendum and the non tax related fees applicable to T.F.M. are those provided by the Law No.

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04/015 of 16 July 2004 setting the List of Administrative, Judicial, Domaniales and Participation Generating Receipts, it being understood however that the duties and taxes on the establishments classed as dangerous, unhealthy and noxious to be collected at the initiative of the Ministry of Environment, Conservation of Nature, Waters and Forests, do not apply to T.F.M.

I. GENERAL PROVISIONS

8.1. Tax and customs regime applicable to T.F.M.

T.F.M. is subject to the tax and customs legal regime set forth under this Article 8 for all its mining activities carried out in the Democratic Republic of Congo ("National Territory").

Without prejudice to the provisions of Article 8.5, the tax and customs legal regime provided for under this Article 8 also applies to the affiliated companies and the sub-contractors of T.F.M.

The activities of concentration, processing and/or transformation carried out by T.F.M. and/or its affiliated companies and sub-contractors are governed by the tax and customs legal regime provided for in this Article 8.

In this Article 8:

a)   the sub-contractors of T.F.M. include the contractors (qualified as "sub-contractors" in the Democratic Republic of Congo) of T.F.M. and the formers' own contractors in so far as their work is related to the Project.

b)   the activities of concentration, processing and/or transformation include "Operations" as defined in Article 1.1 (gg) of the ARMC, it being understood that Operations include, as part of "all other activities necessary or desirable for the successful accomplishment of the objectives of this Agreement", notably and without limitation, the following activities: the agriculture and social investments under Article 21 of the ARMC, housing, recreational, catering and office facilities for workers on the Project, the activities related to the plant and the storage facilities and those related to roads, water, electricity, railroads and other infrastructure, as well as the supply of administrative and professional services, including but not limited to accounting, legal, design, architecture, consulting services, banking, financial and insurance services in support of any such activities.

c)   any law, decree, ordinance or other legal instrument of any kind, and any administrative circular or instruction from the tax authorities limiting the scope of the tax and customs regime applicable to mining companies will not apply to T.F.M., which will exclusively remain governed by the provisions of this Agreement.

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8.2. Exhaustive tax and customs legal regime

Subject to the provisions of Articles 8.3 and 8.4, the tax and customs regime which applies to T.F.M. mining activities on the National Territory is defined in this Article 8, to the exclusion of all other forms of present and future taxation.

Upon entry into force of this Amended and Restated Mining Convention, only the taxes, customs duties, charges, royalties and other fees due to the public Treasury mentioned hereafter are applicable to T.F.M., according to the conditions provided for under the present title:

a) The taxes applicable to T.F.M. are: the tax on vehicles, tax on the surface area of mining and hydrocarbon concessions, property tax, tax on income from movable assets, professional tax on profits, tax on rental income, professional tax on remunerations, exceptional tax on remunerations of expatriates and domestic turnover tax (tax on internal turnover);

Taxes applicable to T.F.M. as set forth in this Article 8.2 (a) are those referred to in the following provisions of this Article 8:

-   tax on vehicles: Article 8.19;

-   tax on the surface area of mining concessions: Article 8.20;

-   property tax: Article 8.18;

-   tax on income from movable assets: Article 8.28;

-   professional tax on profits: Article 8.29;

-   tax on rental income: Article 8.27;

-   professional tax on remunerations: Article 8.26;

-   exceptional tax on remunerations of expatriates: Article 8.42;

-   domestic turnover tax: Article 8.41.

b) The duties charged by the Customs Administration applicable to T.F.M. within the National Territory are: import duties, consumption and excise duties;

The import and consumption and excise duties applicable to T.F.M. as set forth in this Section 8.2 (b) are those referred to in the following provisions of this Article 8:

-   import duties: Articles 8.7 to 8.15.2 (except Article 8.8);

-   consumption and excise duties: Article 8.17.

c) T.F.M. is subject to the special tax on road traffic, to the surface area feesand to the mining royalty.

The aforementioned tax, fees and mining royalty applicable to T.F.M. as set forth in this Section 8.2(c) are those referred to in the following provisions of this Article 8:

-   special tax on road traffic: Article 8.21;

-   surface area fees: this Article 8.2 (c);

-   mining royalty: Articles 8.22 to 8.25.

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The rate of the annual surface area fees per square ("surface area fees") as set forth in this Section 8.2(c) is US$ 424.78 per square, equivalent to US$ 5.00 per hectare.  T.F.M.’s current Tenke and Fungurume Mining Concessions 198 and 199, have been redesignated and renumbered as Exploitation Permits 123, 9707, 9708, 159, 4728 and 4729, and total 1879 squares.

Commencing with the fiscal year 2011, T.F.M. will pay such fee at the rate of US$ 424.78 per square. In addition, T.F.M. will pay an amount of US$ 5,080,632.83 covering the surface area fees for all prior periods had such fees been applicable.

d) Without prejudice to the provisions in Article 8.16, paragraph 5, T.F.M., its Affiliated Companies and its sub-contractors are subject, when carrying out activities outside their mining projects, to the duties and remunatory taxes which contribute to the costs of the functioning of the public administrations or the customized public services.

T.F.M., its Affiliated Companies and its sub-contractors are not subject to these duties and remunatory taxes ("redevances et taxes rémunératoires") as set forth in the preceding paragraph with respect to activities related to the Project.

Pursuant to this provision, T.F.M. is totally exonerated, for imports, from the duties and costs ("remuneration taxes") in remuneration for services rendered by public service entities  such as the Office Congolais de Contrôle, OGEFREM, other entities dealing with import services be they public, para-public, customs, para-customs, fiscal, para-fiscal or para-statal (the "public service entities").

These duties and remunatory taxes referred to in this Article 8.2(d) are subject to Article 8.16.

8.3. Modifications to the tax and customs regime

Subject to the provisions of Article 31 of this Agreement, the tax and customs regime specified in this Article 8 may only be modified in accordance with the provisions of Article 38 of this Agreement.

8.4. More favorable tax or customs provisions

In accordance with Article 31 of this Agreement, if any legislation generally applicable adopted or enacted in the National Territory after the date this Amended and Restated Mining Convention entered into force, provides for more favorable tax or customs provisions than those contained in this Article 8, these new provisions are immediately applicable, as of right, as of the date they enter into force.

8.5. Benefit of the regime which is applicable to T.F.M.

The following also benefit from the entire tax and customs regime provided for by this Article 8:

a) The affiliated companies of T.F.M. carrying out mining activities;

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b) The sub-contractors of T.F.M. carrying out mining activities and which result exclusively from contracts entered into with T.F.M.

8.6. Tax and customs procedure

Without prejudice to the provisions of this Article 8, the tax and customs procedure applicable is that of the generally applicable law.

The procedure for the collection and distribution of the mining royalty as established in Article 8.24 is determined by a specific agreement to be concluded between T.F.M., the Ministry of Mines and the Direction Générale des Recettes Administratives, Judiciaires, Domaniales et de Participation ("DGRAD").

II. CUSTOMS REGIME

8.7. List of assets benefiting from the preferential regime with respect to importation

Before commencing the work, T.F.M. will submit pursuant to Article 8.7.1 hereinafter a list containing the number and the value of the movable property, equipment, vehicles, mineral substances and other items which are governed by the preferential regime provided for in this Article 8. The list must be approved in advance by a joint Decree issued by the Ministries of Mines and Finance (see Interministerial Commission referred to in Article 8.7.1), within thirty working days following the date of receipt of the letter of application for approval by the Ministry of Mines and the copy by the Ministry of Finance.

All of the following terms or phrases, namely "goods, tools and equipment", "movable goods", "materials", "equipment", "movable property, equipment, vehicles, mineral substances and other input item" referred to in this Article 8 will mean those goods that are or can be validly imported under the preferential customs regime of this Agreement, unless they are rejected pursuant to the provisions of this Article 8.7.

If upon expiry of the thirty days, the acknowledgement of the filing serving as proof, no reply is given, the list will be deemed to have been approved. In such case, the competent authorities must issue the Decree of approval, within seven days.

T.F.M. will notify the Minister of Finance of the expiry of the thirty day period during which the Interministerial Commission referred to in Article 8.7.6 failed to provide a reply.  Upon receipt by the Minister of Mines of this notification, the Minister of Mines will issue the Decree of approval within the said seven days.

In case of refusal of approval of the list as described in paragraph 3 of this Article 8.7, the decision must be in writing and contain the reasons for refusal.

The list referred to in the previous paragraph shall indicate the categories of equipment, non-obsolete goods and tools required respectively at the stage of exploration, construction and development, as well as at the stage of exploitation of the Project which benefits from the advantages of the customs regime defined hereafter.

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The supplies of consumer goods, reagents and maintenance products needed for everyday use, but not directly related to mining activity, are excluded from said lists.

Imports by T.F.M. or its sub-contractors of equipment, goods, tools and other goods which do not appear on the approved lists, are subject to the provisions of the generally applicable law.

The import of goods not benefitting from the preferential regime are subject to the following rates under generally applicable law1:

Oils, petroleum oils, and fuel oils: 5%

Paints and varnishes: 10%

Glues: 10%

Matches: 20%

Rosin and resin acids, ester gum: 5%

Industrial fatty acids, industrial fatty alcohols: 5%

Polymers: 5%

Silicones: 5%

Plastic packaging: 5%

Bricks: 10%

Electrical equipment: 10%

Iron or steel materials: 5%

8.7.1. Application for approval of the list of goods to be imported

Pursuant to the provisions of the first paragraph of Article 8.7., above, the benefit of the preferential customs regime will be subject to the submission of an application for the approval of the list of movable property, equipment, vehicles, mineral substances and other input items to be imported.

The application by T.F.M. for the approval of all goods to be imported into the Democratic Republic of Congo will be addressed to the Minister of Mines and will be made in two copies by T.F.M. and submitted to the Office of the Interministerial Commission for approval of the lists referred to in Article 8.7.6. A copy of the application will be addressed to the Minister responsible for Finance.

The application letter for the approval will contain:

a) the list of classes of goods which are to benefit from the preferential customs regime indicating the approximate quantity and value per unit of each class of goods, as well as the phase of the Project in respect of which each class of goods is imported for;

b) a certified copy of the decree granting the mining title;

 

1 See Law No. 04/014 of July 16, 2004 modifying and supplementing Law No. 002/03 of March 13, 2003 establishing new import duty and tax rates.

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c) a certified copy of the mining title;

d) a description of the Project together with the work program and budget sufficiently detailed in order to allow the assessing of the relationship between the planned imports and the mining Project, especially as regards consumables, including fuel, reagents and maintenance items;

e) a justification of the need to import in terms of not being capable of finding on the national market the same quantity and quality of goods at the same price, terms of delivery and payment.

Upon submission of the application, the office of the Interministerial Commission will record the application in the register of applications for the approval of the lists of goods falling under the preferential regime which it keeps up to date and will deliver to T.F.M. or to its representative a receipt signed by the permanent secretary and by T.F.M. or its representative. The registration and the receipt will make mention of the identity of T.F.M., the reference of the mining rights concerned, the date of submission and the supporting documentation attached to the application.

8.7.2. Review of the list of goods to be imported

Within five days of the receipt of the application referred to above, the Interministerial Commission will meet upon notice of its Chairman pursuant to the provisions of Article 8.7.6.3 paragraph 3, and will verify:

a)      the lawfulness and the validity of the mining right of T.F.M.;

b)       the type of goods to be imported pursuant to the specifications of Article 8.7., particularly:

-   the quality of non obsolete material, goods and equipment;

-   the phase of the works for which such material, goods and equipment are to be used;

-   the consumables, reagents and maintenance items excluded from the list of goods falling under the preferential regime;

c)      the lawfulness of the pro forma invoices and of the price of material, goods and equipment to be imported;

Following the investigation, the Interministerial Commission will make a positive or negative recommendation and draw up a draft of an interministerial decree approving or rejecting the list which will be forwarded by the Chairman of the Commission to the Minister of Mines.

8.7.3. Decision approving or rejecting the list of Goods to be imported

Upon receipt of the application file in respect of the approval of the list of goods to be imported together with the positive or negative recommendation of the Interministerial Commission for the approval of lists of goods to be imported and within thirty working

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days following the date of submission of the application for approval, the Ministers responsible for Mines and Finance will issue and forward to said Commission the interministerial decree approving or rejecting the list of goods falling under the preferential customs regime and forward it to the Commission.

8.7.4. Registration and notification of the decision approving or rejecting the approval

Within three working days following receipt of the signed interministerial decree and in the event that the list of goods to be imported is deemed approved or not, the Permanent Secretary of the Interministerial Commission will record the approved or not approved list in the register of approved or non approved goods falling under the preferential customs regime.

Within the same period of time, the Permanent Secretary will notify the decision to T.F.M. or its mines and quarries agent using the quickest and most reliable means, specifying the volume and the pages of the register in which the approved or non approved list was recorded and will transmit to T.F.M. a copy of the signed Interministerial Decree.

The Interministerial Decree approving the list or the official excerpt of the recording of the approved list will be, without further documentation of any kind whatsoever,  conclusive for any import audit of goods featuring on the list, without that any other document whatsoever is required.

8.7.5. Changes to the list of goods falling under the preferential customs regime

If T.F.M. wishes to add goods to the classes or quantities of the goods mentioned on the list after the approval thereof, it may submit an amendment to such list for approval. In this case, the procedure set forth in Articles 8.7.1. to 8.7.3. hereof will apply mutatis mutandis to such amendment.

Failing an Interministerial Decree within the period referred to in the first paragraph, the list submitted by T.F.M. or its agent will, depending on the recommendation of the Interministerial Commission being positive or not, be deemed approved or not, pursuant to the provisions of Article 8.7.herabove.

In such case, the Permanent Secretary will draw up at the same time a draft decree approving or rejecting the list which, within two working days following the date of registration, will be forwarded by the Chairman of the Interministerial Commission to the Ministers of Mines and Finance so as to regularize the situation pursuant to the provisions of paragraph 3 of Article 8.7. hereabove.

The preceding paragraphs permit T.F.M. to modify the list of goods to be imported under the preferential customs regime.

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8.7.6. Interministerial Commission responsible for the Approval of the List of Goods to be imported under the Preferential Customs Regime

8.7.6.1 Duties of the Interministerial Commission

The duties of the Interministerial Commission responsible for approving the lists referred to in the previous article will be as follows:

a)       ensure that the list of goods for which T.F.M. requests the benefit of the preferential customs regime contains only goods destined solely for mining purposes during any phase of the Project in accordance with the provisions of paragraph 6 of Article 8.7, and which are not obsolete and which are likely to contribute to the development of the mining Project of T.F.M.

b)       issue opinions in respect of the imports of the goods mentioned on the lists referred to in Article 8.7.5.

The phrase "goods destined solely for mining purposes during any phase of the Project" relates to goods required for the Operations.

8.7.6.2: Composition of the Interministerial Commission

The Interministerial Commission will consist of 13 members appointed by an Interministerial Decree of the Ministers responsible for Mines and Finance, upon a proposal of the following Ministries and Departments:

a)   a representative of the Cabinet of the President of the Republic;

b)   six representatives of the Ministry of Mines of which three of the Directorate of Mines, including the Director, one of the Directorate of Geology, one of the Directorate responsible for the Protection of the Mining Environment and one of the Department responsible for Assistance and Training related to Small Scale Mining Operations.

c)   a representative of the Ministry of Finance;

d)   an OFIDA representative;

e)   a representative of the Logistics Department of the Ministry of Defense;

f)   a representative of the Central Bank of Congo;

g)   a representative of the Congolese Office of Control;

h)   a representative of the National Agency for the Promotion of Investments;

A deputy will be appointed for each representative of the Interministerial Commission.

The above mentioned public agencies and authorities will be those in place upon conclusion of the ARMC or will be any entity subsequently legally designated to

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perform the same public functions or services, such as the DGDA (Direction Générale des Douanes et Accises) that now replaces the OFIDA.

8.7.6.3: Organisation and Operation of the Interministerial Commission

The Director of Mines will chair the Interministerial Commission. The OFIDA representative will be the recording secretary.

The Directorate of Mines will be in charge of the permanent secretariat/office of the Interministerial Commission.

The Chairman will call the meeting of the Interministerial Commission. The Chairman will call the meeting of the Interministerial Commission within five days following each submission of an application for the approval of a list in accordance with the provisions of Article 8.7.1 and whenever needed.

The Interministerial Commission will validly meet provided that two thirds of its members or deputy members are present. It will resolve matters upon a simple majority decision. When the voting for and against is equally divided, the Chairman will have a casting vote.

If need be, the Commission will be entitled to request the recommendations of the Mines Administration or of any other state body concerned by the list of goods falling under the preferential (customs) regime. Such recommendations are advisory opinions only.

Upon completion of the deliberations minutes and a recommendation will be drawn up and signed by the Chairman and the recording secretary of the Interministerial Commission. Any modification of the list submitted together with the application will state the reasons therefor. These documents will be forwarded to the Ministers of Mines and Finance together with a draft of a joint decree to which is attached the list in respect of which the approval is proposed within ten working days as of the call for the Interministerial Commission to meet. Beyond such period of time, the recommendation will be deemed to be in favour of the approval of the list submitted by T.F.M. or submitted by its agent. The Interministerial Commission will notify a copy of the recommendation to T.F.M. using the quickest and most reliable means.

A set of in-house rules adopted by the Interministerial Commission and approved by the Minister will determine the other terms and conditions of operation of the Commission.

The members of the Interministerial Commission will receive an attendance fee for each meeting they attend.

8.8. Exporting samples

The export by T.F.M. of samples in connection with the Project for industrial analysis and assaying is exempt from any customs duty or other taxes, regardless of their nature, when leaving the National Territory.

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Samples sold to third parties for the benefit of or by T.F.M., before or after analysis, are taxable at the rate set forth under generally applicable law.

The rate referred to in the preceding paragraph is 5% for copper and cobalt ores and their concentrates.

Any export of samples which is of a commercial nature is also taxable. This is the case, in particular, for samples exported in exorbitant quantities in comparison with the reasonable requirements of an analysis.

8.9. Imports of personal items belonging to expatriates

The personal items belonging to expatriate employees employed by T.F.M. in connection with the Project are exempt from import taxes and duties in accordance with customs legislation.

8.10. Imported goods made available for consumption on the National Territory

The equipment, goods and the tools imported under the preferential customs regime may not be transferred on the National Territory without the authorization of the Customs Authority. A breach thereof can be sanctioned by the penalties provided by the customs regulation. If said equipment, goods and tools are made available for consumption in violation of the preceding sentence, they will be subject to the payment of duties and taxes which remain due, at the rate in force on the date of transfer, calculated on the basis of the updated residual value, derived from the information on the initial import declaration.

8.11. Consequences of halting the Project on/before completion

In case the Project is halted on or before completion, the materials, goods and tools which have benefited from the preferential customs regime must either be re-exported or be made available for consumption within the National Territory after complying with the customs regime by paying the duties and taxes which remain due, calculated on the basis of the updated residual value, derived from the information on the initial import declaration.

The declaration indicating the halting of the work must be made immediately to the Customs and Mines Authorities.

For the purpose of this Article 8.11, "consumption" means "acquisition or use".

8.12. Transfer of goods, equipment and/or tools

In the event of a transfer of equipment used in connection with a given mining title, to a project relating to another mining title belonging to a different holder than T.F.M., this holder-transferee must benefit from a customs regime similar to the one from which T.F.M. benefited, and in order to bring this about, the latter must obtain prior written authorization from the Customs administration.

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8.13. Temporary import free of duty

The goods, tools and equipment imported by T.F.M. under this Agreement that are intended to be exported (within six months) are admitted into the National Territory temporarily free of customs duty with the authorization of the Customs Authority for a period of six months. This term may be extended twice for six months in the event T.F.M. cannot export the concerned goods, tools or equipment for reasons which are beyond its control.

8.14. Import duties at preferential rates

Before the effective commencement of exploitation work at the mine, all of the goods and products which are strictly for mining use that were imported by T.F.M., its affiliates and sub-contractors are subject to an import duty at the rate of 2%, provided these goods appear on the list referred to in the first paragraph of Article 8.7. Any amounts collected greater than this maximum rate of 2% will be subject to a credit note in favor of T.F.M. The latter may use such credit note to set off future payments of import duties.

As from the effective commencement of exploitation work, all of the goods and products which are strictly for mining use and imported by T.F.M., its affiliates and sub-contractors are subject to the single rate of 5%, provided these goods appear on the list referred to in the first paragraph of Article 8.7.

Fuel, lubricants, reagents and consumer goods destined for mining activities are subject to a single import duty of 3% throughout the duration of the Project.

The terms "mining use" and "mining activities" referred to in this Agreement relate to activities included in the Operations as defined in this Agreement.

8.15. Imports during the extension work

In the event, after the Commencement of Commercial Production, T.F.M. makes a capital investment in order to expand Project capacity, it may benefit from the preferential customs regime provided for in the first paragraph of Article 8.14 provided T.F.M. files an application with the Mining Registry and demonstrates that the work to be carried out is for the purpose of increasing the production capacity of the mine by at least 30%. The application should indicate the date on which the expansion work will be completed.

After the application has been processed, in accordance with the provisions of Articles 8.15.1 and 8.15.2., and prior to the application being sent to the Minister, the Mining Registry will deliver an authorization to T.F.M.  T.F.M. will be able to use it before the customs authorities in order to benefit from the customs regime applicable during the period of construction and development. The list of imports relating to the expansion work will be appended to the authorization.

The period referred to in the preceding paragraph will be the period of construction and development of the expansion.

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The issuing of an authorization is only possible provided favorable registrar, technical and environmental opinions have been rendered. However, in case of refusal to issue such authorization, T.F.M. reserves the right to legal recourse.

The authorization referred to in the preceding paragraph will be the one to be issued by the Mining Registry, without need for an advice from the Interministerial Commission or for a Ministerial Decree.

If the extension work is not completed in the manner or within the deadline indicated at the time of the application provided for in the first paragraph above, and/or if the production capacity does not effectively increase by 30%, T.F.M. is retroactively liable for the import duties on the imports made at the rate applicable during the Exploitation phase.

However, in the event of fraud in the declaration at the time of import in relation to the present provision, T.F.M. is subject to the import duties and turnover tax on the imports at the rate specified under generally applicable law.

The generally applicable rate of the abovementioned import duties is the following2:

Oils, petroleum oils, and fuel oils: 5%

Paints and varnishes: 10%

Glues: 10%

Matches: 20%

Rosin and resin acids, ester gum: 5%

Industrial fatty acids, industrial fatty alcohols: 5%

Polymers: 5%

Silicones: 5%

Plastic packaging: 5%

Bricks: 10%

Electrical equipment: 10%

Iron or steel materials: 5%

The generally applicable rate of the abovementioned turnover tax on imports is the following3:

-   3 per cent for equipment, agricultural, breeding and veterinary input items, and products specifically designated in the rates of import duties and taxes; 

-   15 per cent for the others.

8.15.1. Review by the Registry

The Mining Registry will undertake its examination within a maximum period of ten working days as from the date of filing of the application.

 

2 See Law No. 04/014 of July 16, 2004 modifying and supplementing Law No. 002/03 of March 13, 2003 establishing new import duty and tax rates.

 

3 See Law No. 04/013 of 15 July 2004 amending and supplementing certain provisions of Ordinance-Law No. 69-058 on the Turnover Tax, article 6.

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For the purposes of the examination, the Mining Registry verifies whether T.F.M. is eligible for the benefit of the preferential customs regime applied for.

At the end of the registry examination, the Mining Registry sends the file, accompanied by the registrar’s opinion, to the Mines Directorate and the Service in charge of mining environmental protection for their advice.

8.15.2. Technical and environmental investigation

The Mines Directorate and the Service in charge of mining environmental protection will, respectively, evaluate whether T.F.M. is complying with its technical and environmental obligations under this Agreement.

The provisions relating to environmental obligations applicable to T.F.M. are those contained in Article 22.

Within five days following the end of the evaluation, they will provide their respective opinions on the technical and environmental aspects to the Mining Registry.

Within a maximum period of five working days following receipt of the favorable advices on the technical and environmental aspects, the Mining Registry will deliver the authorization as provided in Article 8.15 paragraph 2.

8.16. Export duty["droit de sortie"]

Without affecting the validity of the application of the provisions of Article 8.8 paragraphs 2 to 4, T.F.M. is completely exempted upon export from all customs duties and other taxes ["droits de douane et autres impôts à la sortie"], regardless of their nature, for its exports in relation to the Project.

However, in addition to the imposition of taxes pursuant to the generally applicable law, fraudulent and irregular exports made by T.F.M. are subject to fines and penalties provided for in customs legislation.

The rate referred to in the preceding paragraph is 5% for copper and cobalt ores and their concentrates.

The fines and penalties provided for in customs legislation are mentioned in Chapter VIII "Sanctions" of Decree of 29 January 1949 concerning the Customs Regime.

The duties and remuneration costs for services rendered in connection with the export ["redevances et frais en rémunération des services rendus à l'exportation"] of commercial products or goods for temporary export for processing may not exceed 1% of their value.

Within a period of three months following the entry into force of this Addendum No. 1, a Protocol Agreement between T.F.M. and the Minister of Finance shall set forth the terms and conditions in respect of the implementation of the preceding paragraph of this Article. Such Protocol Agreement shall establish:

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a)    a one-stop-shop for payment of duties and remuneration costs for services rendered upon exportation;

b)   the distribution of collected duties and remuneration costs for services rendered;

c)   the tax credit mechanism to be deducted from future duties and remuneration costs for services rendered in the event of payment beyond the ceiling established in this Article.

In terms of this Article, the following will mean:

a)      "customs duties and other taxes of any type whatsoever": any taxes collected by the State Agencies;

b)       "duties and remuneration costs for services rendered upon exportation": any charge of any kind whatsoever claimed by a State Agency, a Province or a Municipality for payment of services rendered pertaining to the exportation of commercial products or items exported temporarily for processing purposes, including handling, transportation and warehousing;

c)      "the value of products or items exported temporarily for processing" will mean, as the case may be, the price of sale of commercial products after deduction of costs or the price of sale of processed items after deduction of all expenditure incurred for transport and temporary exportation for processing purposes, for the processing itself and for the reimportation of the items so processed, without prejudice to the customs legislation.

The value referred to in the preceding paragraph will be based on the Mercuriale in effect on the day of delivery of the related services or on the value agreed upon in a Protocol Agreement to be concludedbetween T.F.M. and the Ministry of Finance.

The total of these duties and remuneration costs imposed by the relevant public service entities on each export of said products cannot exceed 1% of the Mercuriale value of the product exported. A statement will be prepared monthly to allocate the duties and remuneration costs proportionally between the various public service entities, as the case may be. Any payment in excess of the maximum will be the object of a credit note of the relevant public service entity in favor of T.F.M., which T.F.M. may use as future payment for duties and remuneration costs imposed by the same public service entity.

8.17. Consumption and excise duties

T.F.M. is liable for the consumption and excise duties in accordance with generally applicable law, except for mineral oils indicated in Article 7 of Ordinance-Law no. 68/010 of January 6, 1968 and intended for and exclusively linked to mining activities.

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The exempt mineral oils are: airline fuel, other gasoline; lamp oil or kerosene, jet A1, diesel oil, fuel-oil and petroleum gas.4

The applicable rates for the consumption and excise duties of the following non exempt items are as follows5:

Alcohol:

- Beer:          measuring less than 6°: 15%;

measuring 6° and more: 20%

- Wines (fresh grapes):

measuring less than 15°: 15%;

measuring 15° and more: 25%

- Vermouth and other wines prepared additives:

measuring less than 15°: 20%;

measuring 15° and more: 20%

- Cider, mead, other fermented beverages: 15%

- Non-denatured ethyl alcohol, eaux-de-vie, etc.: 30%

- Denatured ethyl alcohol:

a) for medical uses: 3%;

b) for the manufacture of perfumed waters: 10%;

c) for all other industrial uses: 3%;

- Other industrial alcohols: 3%

Table Waters and Soft Drinks

- Mineral water, bottled drinking water: 10%

- Lemonades or other sugared beverages, fruit based juice beverages: 3%

Tobacco Products: 40%

Sugars, Cement and Matches: 0%6

Perfumes: 10%7

III. FISCAL REGIME

The phrases "area of the mining concession", the "perimeter of the Project compound", "perimeter covered by the mining title", "mining perimeter" and "mining exploitation perimeter" referred to in this Agreement mean the surface area resulting from the

 

4 See Ordinance Law n° 68-010 of January 6, 1968 [hereinafter “Excise and Consumption Duties”], art. 7.  Rates and the contents of this list were modified by Law n° 010/03 of 18 March 2003.  Without this exemption, tariffs for fuel oils and diesel are 25%; for all other mineral oils listed they are 15%.

 

5 See Excise and Consumption Duties, arts. 4-11.  For alcohol and tobacco, rates were established by Order 0010 dated January 22, 1997.  For waters, rates were established by Ordinance Law n° 89-013 dated 3 January 1989.

 

6 Excise and consumption taxes on cements, matches, and sugars were abrogated by Law n° 04/011 of 5 July 2004.  Previously, rates were 5 % for these items.

 

7 These rates were established by Ordinance Law n° 89-013 dated 3 January 1989.

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 addition of the squares composing the mining perimeter of T.F.M. as provided in the mining titles of T.F.M., each square representing a surface of 89.955 hectares.

A.  Asset-Based Taxes

8.18. Property tax

T.F.M. is liable for property tax in accordance with the provisions of generally applicable law, only on the properties for which the tax on the surface area of mining and hydrocarbons concessions is not due.

The property tax rates as defined in the Ministerial Order no. 19 of 8 October 1997 are variable depending upon the type of property, and the Rank of Locality8 in which the property is located.9  Applicable rates for non-exempt properties are the following:

Detached Houses:10

1.50 Ff/m2 in First Rank

1.00 Ff/m2 in Second Rank

0.50 Ff/m2 in Third Rank

0.30 Ff/m2 in Fourth Rank

Buildings:

75.00 Ff per storey in First Rank

37.50 Ff per storey in Second Rank

30.00 Ff per storey in Third Rank

22.50 Ff per storey in Fourth Rank.

Lands without Buildings (lump sum annual tax):11

30.00 Ff in First Rank

7.50 Ff in Second Rank located in Kinshasa

4.50 Ff in Second Rank in the interior

3.00 Ff for Third Rank located in Kinshasa

2.00 Ff for Third Rank located in interior

1.50Ff in Fourth Rank.

8.19. Tax on Vehicles

T.F.M. is liable for taxes on vehicles in accordance with the provisions of generally applicable law. However, the tax on vehicles is not payable on vehicles used for transporting people or materials, vehicles used for handling or traction, which are used exclusively within the perimeter of the Project compound.

 

8 The Rank of Localities was set by Ministerial Order n° 19 of 8 October 1997.

 

9 See Arts. 2-38 of Ordinance Law n° 69-006 of 10 February 1969 [hereinafter “Asset-Based Taxes”].

 

10 See Asset-Based Taxes, Art. 13.  The tax rates specified here were made applicable by Ministerial Order n° 62 of 19 October 1999, art.1 and the rate of the tax was set in Fiscal Francs by Ministerial Order n° 081 of 26 February 2002.  Where appropriate, the rates specified are those applicable to legal entities.

 

11 Art. 18 of Asset-Based Taxes, inserted by Ministerial Order n° 20/97 of 8 October 1997, qualifies that taxation of lands without buildings shall only apply to land located in urban districts.

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The rates of the tax applicable to non-exempt vehicles are the following: 12

(1)  Motorcycles: 5 Ff;

(2)  Utility motor vehicles:

of less than 2,500 kg: 9 Ff;

from 2,500 to 10,000 kg: 14 Ff;

over 10,000 kg: 17 Ff;

(3)  Passenger cars:

from 01 to 10 horse power (“HP”): 23 Ff;

from 11 to 15 HP: 29 Ff;

over 15 HP: 44 Ff.

8.20. Tax on the surface area of mining concessions

T.F.M. is liable for the tax on the surface area of the mining concessions at the rates in Congolese Francs equivalent to US$0.04 per hectare for the first year, in Congolese Francs equivalent to US$0.06 per hectare for the second year, in Congolese francs equivalent to US$0.07 per hectare for the third year and in Congolese Francs equivalent to US$0.08 per hectare for the subsequent years.

8.21. Special tax on road traffic

T.F.M. is liable for the special tax on road traffic in accordance with the provisions of generally applicable law.

The rates of the tax referred to in the preceding paragraph are the following:13

(1) Motorcycles: 6 Ff;

(2) Utility motor vehicles:

weighing 2,500 kg : 20 Ff;

from 2,500 kg to 10,000 kg : 25 Ff;

over 10,000 kg, such as buses, trailers and cranes: 45 Ff;

(3) Passenger vehicles:

from 01 to 10 horsepower (HP) : 12 Ff;

from 11 to 15 HP: 25 Ff

over 15 HP: 37 Ff.

B. The Mining Royalty

8.22. Basis of the mining royalty

T.F.M. is subject to a mining royalty which is calculated on the basis of the amount of sales minus the costs of transport, analysis concerning the quality control of the commercial product for sale, insurance, and marketing costs. The selling price must be

 

12 See Asset-Based Taxes, Art. 41.  These rates were set pursuant to Ministerial Order n° 081 of 26 February 2002.

 

13 See Ordinance Law n° 88-029 of 15 July 1988.  The rates specified are those applicable to legal entities that went into effect in 2002, pursuant to Decree n° 038 of 10 April 2002.

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higher than or equal to the price which could be obtained for any sale of products to a non-affiliated entity.

T.F.M. is liable for this royalty on all commercial products as of the effective date the exploitation commences.

The mining royalty is due upon sale of the product.

The method of calculation and the timing of the payment of the mining royalty will be agreed upon in a specific agreement with the Ministry of Mines and the DGRAD.

8.23. Rate of the mining royalty

The rate of the mining royalty is 0.5% for iron or ferrous metals, 2% for non-ferrous metals, 2.5% for precious metals, 4% for precious stones, 1% for industrial minerals, solid hydrocarbons and other substances not specifically mentioned, and 0% for standard construction materials.

8.24. Distribution of the mining royalty

The mining royalty will be paid by T.F.M. to the Public Treasury.

8.25. Tax credit

T.F.M. benefits from a tax credit equal to a third of the mining royalties paid on products sold to a transformation entity located on the National Territory.

C.  Revenue based taxes

8.26. Professional tax on remunerations

T.F.M. is legally liable for the professional tax on remunerations payable by the employees at the rate set forth in the generally applicable law.

The following progressively increasing rates are applicable to T.F.M., provided, however that in no case may the total tax exceed 30% of the taxable income.14 The rates applicable to T.F.M. are:15

Tax Rate                     Income Bracket16

3%                        0.00 FC to 72,000.00 FC

5%                              72,001.00 FC to 126,000.00 FC

10%                           126,001.00 FC to 208,800.00 FC

 

14 See Ordinance Law n° 69/009 of 10 February 1969 relating to taxes on income [hereinafter “Taxes on Income”], at Art. 84 (2).

 

15 The rates specified are set forth in Taxes on Income, Art. 84.  The tax rate table was last modified by Decree Law n° 015 of 30 March 2002.

 

16 The average exchange rate between US Dollars and Congolese Franc is $1 = 900 F.C.  Thus, the highest marginal tax rate of 50% is applicable to salaries exceeding US $2,590.

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15%                           208,801.00 FC to 330,000.00 FC

20%                           330,001.00 FC to 498,000.00 FC

25%                           498,001.00 FC to 788,400.00 FC

30%                           788,401.00 FC to 1,200,000.00 FC

35%                           1,200,001.00 FC to 1,686,000.00 FC

40%                           1,686,001.00 FC to 2,091,600.00 FC

45%                           2,091,601.00 FC to 2,331,600.00 FC

50%                           excess.

T.F.M. is to pay a 10% tax on indemnities paid as the result of the termination of employment or the breach of the employment contract or contract for the hiring of services.17

8.27. Tax on rental income

T.F.M. is liable for the tax on rental income in accordance with the provisions of generally applicable law.

The rate of tax on rental income is 22%18 of the gross income of buildings and lands rented out, and gross profit of sublets.19  The tax is also due if the premises are made available free-of-cost to the tenant.20

8.28. Tax on income from movable assets

T.F.M. is liable for the tax on income from movable assets, in accordance with the provisions of generally applicable law, with the exception of the following income:

a) interest paid by T.F.M. by virtue of loans contracted in foreign currency abroad; provided, however, that interest paid by T.F.M. to its affiliates by virtue of loans contracted abroad are only exempted from the tax on investment income if the interest rates and the other loan conditions are as favorable or better than the rates and the conditions which T.F.M., as applicable, could obtain from money lenders who are not affiliates;

b) dividends and other distributions paid by T.F.M. to its shareholders will be subject to tax on investment income at the rate of 10%.

The generally applicable rate of the tax referred to in the preceding paragraph is 20%.21

8.29. Professional tax on profits

T.F.M. is liable for the professional tax on profits at the rate of 30%.

 

17 See Taxes on Income, Art. 86.

 

18 See Taxes on Income, Art. 11.  This rate was amended by Decree Law n° 109/2000 of 19 July 2000.

 

19 See Taxes on Income, Art. 5.

 

20 See Law n° 83/004 of 23 February 1983, as amended, Arts. 3-4.

 

21 See Taxes on Income, Art. 26.

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Subject to the provisions on provisional advances and contrary to Decree-law No. 058 of February 18, 1998 instituting the deduction of tax at source known as the Industrial and Commercial Profit, ICP in abbreviated form, the tax regime for the advance payment of the professional tax on ICP, is not applicable to T.F.M. Nonetheless, the latter has the obligation to collect the ICP at source.

D. Determination of the taxable profit

8.30. Taxable profit

The net profits from exploitation which are subject to the professional tax on profits are determined in accordance with accounting law and fiscal legislation in force, as well as the provisions of Articles 8.31 to 8.40.

Contrary to Congolese legislation on accounting, T.F.M. may keep its accounts in foreign currencies quoted by the Central Bank of Congo.

8.31. Depreciation

The amount of the first year’s exceptional depreciation is equal to 60% of the cost of the asset at issue.

Declining balance depreciation applies for each of the subsequent taxable years.

The following are excluded from the system of depreciation on declining balance:

-   The depreciable items which normal duration of utilization is less than four years or higher than twenty years;

-   Patents, trademarks, businesses, customers, the name and all other intangible fixed assets.

T.F.M. may exclude assets from the system of depreciation on declining balance and utilize linear depreciation at T.F.M.'s option.

Subject to the provisions in the previous paragraphs of this Article and Article 8.32, the provisions of generally applicable law as regards depreciation apply.22

8.32. Deferred depreciation

Depreciation accrued in loss periods is deemed to be deferred. Deferred depreciation may be accumulated and deferred without any restriction in time over the subsequent tax years, up to the amount of the taxable income.

 

22 See Taxes on Income, Arts. 43ter.

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8.33. Tax loss carried forward

Professional losses in a tax year may, at the express request of T.F.M. addressed to the tax administration, be deducted from the profits made during the subsequent tax years until the fifth year which follows the loss tax year, in accordance with the tax legislation.23

The absence of a tax declaration or the late submission of a tax declaration for a given tax year precludes the possibility of the deduction of the loss incurred during the year relating to said tax year of being subsequently allowed.

The competent tax authority shall reply within a period of thirty days to an application for deductibility of business losses incurred in an accounting year prior to profits made in the following accounting years, submitted in accordance with the provisions of this Article 8.33. Beyond such period, the approval of the deductibility shall be deemed obtained.

Such request shall only be rejected in the case of absence of a tax declaration or late submission of a tax declaration for a given tax year as provided in this Article 8.33.

8.34. Research and development expenditures

The amount of the research and development expenditures incurred by T.F.M., other than those relating to the acquisition of fixed assets, is converted to current value as of the day of the granting of the Exploitation Permit, and depreciated during the following two tax years at the rate of 50% per year.

The loss in a given tax year resulting from the provisions of the preceding paragraph is deferred without limitation in terms of time, over the subsequent tax years.

8.35. Capital gain and capital loss on mining title transfers

T.F.M. will include the capital gain or the capital loss made upon the transfer of a mining title, in the basis for the calculation of the professional tax on profits.

The professional capital gain or the capital loss thus made is equal to the difference between the total transfer price and the non-depreciated amount of the research and development expenditures.

Research and development expenditures include expenditures related to the following activities: "Development" and "Exploration" as defined in Articles 1.1 (o) and 1.1 (q), respectively, of the ARMC.

The words "construction or installation of a mill, metallurgical processing plant, or any other improvements to be used for the Operations and the preparation of financing plans" in Article 1.1 (o) of the ARMC include, for the purpose of this Article 8.35, any activity by means of which a person carries out, via land development works,

 

23 See Taxes on Income, Art. 42.

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construction of infrastructure, setting up and testing of material and equipment, the development of his mining or quarry exploitation project in order to ensure its commercial viability.

T.F.M. amortizes the price of the acquisition of the mining title acquired as a staggered charge.

8.36. Deduction of interest paid abroad

The interest paid by T.F.M. to affiliates by virtue of external loans is only deductible from the taxable basis of the professional tax on profits if the interest rates and the other loan conditions are as favorable or better than the rates and the conditions that T.F.M. can obtain from creditors who are not affiliates.

8.37. Deduction of mining royalties

The mining royalties paid by T.F.M. are deductible from the taxable basis of the professional tax on profits.

8.38. Deductible professional expenses

Without affecting the tax regime contained in this Agreement or the provisions of general tax law otherwise applicable to T.F.M., the following are notably deemed professional expenses that can be deducted from taxable revenue:

a)   Rent actually paid and rental charges relating to the buildings or parts of buildings used in carrying out the activities of T.F.M., and all general costs resulting, in particular, from their maintenance and lighting. However, the rental value of buildings or parts of buildings of which T.F.M. is the owner is not considered as a rent or as a rental charge;

b)   The general expenses resulting from the maintenance of the equipment and the movables used for the Operations;

c)   The wages, salaries, bonuses and allowances of the employees and the workers performing Operations, including the taxable advantages in kind provided they have been added to the salaries;

d)   The interest on capital borrowed from third parties and destined for Operations, and all similar charges, interest or royalties relating to it; provided, however, that under no circumstances can the interest on mortgage debts relating to buildings which are rented out, in whole or in part, be considered as deductible expenses;

e)   The costs of transportation, insurance, brokerage, commissions. However, the expenses consisting of commissions, brokerage fees, commercial or other discounts, attendance fees, occasional or non-occasional fees, bonuses and other rewards of any kind, will not be allowed to be deducted unless supported by an exact indication of the name and the address of the beneficiaries as well as the date of the payments of the amounts allocated to each of them. Similarly, as

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regards commissions and brokerage costs, the deduction will only be allowed after proof of compliance with taxes on turnover. In case of failure to provide an exact declaration of the aforesaid amounts and/or of their beneficiaries, or in case of failure to provide proof of payment of the turnover tax, said amounts will be added to the profits of the entity that has paid them, without prejudice to the penalties provided for in case of fraud;

f)   The amount of the profit distributed among the personnel of the company;

g)   The wages allocated to the members of the board of directors of T.F.M., provided it is evidenced that they correspond to normal remuneration in relation to the nature of the actual and permanent functions performed in the company on the National Territory;

h)   The depreciation of fixed assets used in the performance of the activities;

i)   The asset-based tax considered as an operating expense settled in due time, to the extent it has not been set ex officio.

The amounts paid by T.F.M. to a foreign individual or legal entity with whom it is affiliated, either by means of a direct stake in its share capital, or through holdings held by one or more other companies of the same group, as payment for a service rendered, will not be admitted as professional expenses of the company unless on the triple condition that:

a)   The quality of the service rendered is clearly demonstrated;

b)   The service in question cannot be rendered on the National Territory;

c)   The amount of the remuneration corresponds to the actual value of the services rendered.

8.39. Provision for restoration of the deposit

T.F.M. is authorized to set aside, free of the professional tax on profits, an amount for restoring the mineral deposit, up to a maximum equivalent to 5% of the taxable profits for the tax year during the course of which it is set aside.

This provision must be used before the expiry of a period of three years as of the end of the tax year during the course of which it is set aside, either in exploration activities on the National Territory, or in participations in the capital of companies which hold exclusively one or more exploration permits on the National Territory.

If the deposit is not used pursuant to the conditions set forth in the previous paragraph, the amount for restoring the mineral deposit is reintegrated into the taxable profits for the fourth tax year following the one during which it was set aside.

8.40. Provision for site rehabilitation

T.F.M. must make, free of tax on profits, a provision for rehabilitation of the site on which the mining activities take place.

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The maximum amount to be allocated for this provision is equal to 0.5% of the turnover for the tax year during which it is made.

In case T.F.M. is required to make a provision or to fulfill other financial obligations in compliance with the regulations on the protection of the environment, the amount of this second provision or of these financial obligations will be deducted from the maximum authorized amount of the provision for the rehabilitation of the site.

This provision must be used within a period of ten years as of the end of the tax year during which it was made. The unused amount of the provision is reintegrated into the taxable profits for the eleventh tax year following the one during which said provision was made.

The unused amount of the provision at the end of the last tax year of the project is reintegrated into the taxable profits for said tax year.

The duties of T.F.M. in terms of rehabilitation are those provided by Article 22 (b) of this Agreement.

E. Turnover taxes

8.41. Domestic turnover tax

T.F.M. is liable for domestic turnover tax on the sales made and the services rendered on the National Territory.

The sales of products to a transformation entity located in the National Territory are expressly exempted.

The other sales of products within the National Territory constitute the tax base for the calculation of the taxable amount and the applicable rate is 10 %.

The services rendered by T.F.M. are taxable at the rate set forth under generally applicable law.

T.F.M. pays the turnover tax at a preferential rate of 5% if it benefits from the supply of services relating to its company’s corporate purpose.

Article 3 of T.F.M.’s Amended and Restated By-Laws, which sets forth T.F.M.’s corporate purpose, provides as follows:

"The purpose of the company is: the exploration, research, exploitation, treatment and related operations, including the marketing, of the exploitable mineral substances in the mining concessions of Tenke and Fungurume, in compliance with the Congolese legal provisions, and in particular the general and special mining legislation and their enforcement measures.

It may carry out all commercial, industrial, mining and financial activities and all transactions involving moveable and immoveable property, directly or indirectly connected with its purpose or those activities which may contribute to procure it any

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advantage in view of its development. The company may, in the capacity of director, liquidator or otherwise, provide for the management, supervision, and control, of any affiliated companies; it may take an interest in by way of contribution in cash or in kind, by merger, subscrip­tion, participation, financial intervention or otherwise, in all other companies or enterprises, existing or to be created, in the Democratic Republic of Congo or abroad, the purpose of which would be identical to, or of a nature to promote the development of its own purpose.

The company may also grant any loans or guarantee any loans granted by third parties to affiliated companies."

As a result, this preferential rate of 5% shall be applied to the Operations as the Operations are specified in Article 8.1, provided the services relate to T.F.M.'s corporate purpose, including, but not limited to:

-   catering for supply of food and meals for T.F.M.'s and its subcontractors' personnel;

-   banking and financial services rendered by financial institutions, including banks;

-   insurance services;

-   real estate works, including construction works;

-   legal, tax, audit and accounting services.

The acquisition by T.F.M. of goods produced locally is taxable at the rate of 3% for goods related to the mining activities.

The rate in the preceding paragraph applies to goods used in the Project including, sales of capital equipment and agricultural input items24.

F. Exceptional Tax on the remunerations of expatriates

8.42. Preferential regime

T.F.M. is liable for the exceptional tax on the remunerations of expatriatesat the rate of 10%. It is set in terms of the salaries generated by the work carried out or the position held in the Democratic Republic of Congo, and is deductible from the taxable base of the professional tax on profits.

ARTICLE 7

Article 21 in fine of the ARMC is hereby modified by adding to the end the following sentence:

"T.F.M. will regularly consult with the Ministry of Mines in furtherance of execution of infrastructure and other social actions."

 

24 See Ordinance Law n° 69-058 of 5 December 1969 on Turnover tax [hereinafter “Turnover Tax”] at art. 13 (4)(a).

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ARTICLE 8

Article 30 of the ARMC is hereby deleted in its entirety and replaced as follows, where “this Agreement” means the ARMC:

"Article 30: Stabilized Legislation

a)   The State guarantees, for the whole duration of this Agreement, to T.F.M., its Shareholders, its consultant(s), its officers, its salaried expatriate agents and its lenders, stability of legislation and regulations which are in force on September 28, 2005, and in particular with respect to judicial, land, fiscal and customs, commercial, monetary, social, employment, health and Mining legislation matters, and in matters of residence and work conditions for foreigners.

b)   References to provisions of “generally applicable law” in this Agreement shall mean the rules, whether legal, regulatory, or administrative, pertaining to, where appropriate, customs matters, consumption and excise matters and tax and non tax fees in force on September 28, 2005.

c)   No legal or regulatory provision effective after September 28, 2005 may entail a restriction or reduction of the special advantages of this Agreement or hinder the exercise of the rights resulting therefrom."

ARTICLE 9

Article 35 of the ARMC is hereby completed as follows, where “this Agreement” means the ARMC:

"T.F.M. will regularly consult with the Ministry of Mines in furtherance of defending the rights and guarantees granted under this Agreement and the T.F.M. Amended and Restated Shareholders Agreement."

ARTICLE 10

Article 47 of the ARMC is hereby deleted in its entirety and replaced as follows:

"Article 47:  Securities

I: MORTGAGES

47.1. Assets that can be mortgaged

T.F.M. may mortgage:

a)   its exploitation permits, in whole or in part;

b)   the movables by incorporation which are located within the mining exploitation perimeter, in particular, factories, installations and machines built for the

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concentration, processing and the transformation of the mineral substances contained in the deposits or in the artificial deposits;

The phrases "area of the mining concession", "perimeter of the Project compound", "perimeter covered by the mining title", "mining perimeter" and "mining exploitation perimeter" referred to in this Agreement mean the surface area resulting from the addition of the squares composing the mining perimeter of T.F.M. as provided in the mining titles of T.F.M., each square representing a surface of 89.955 hectares.

c)   The fixtures used in mining exploitation.

47.2. Procedure for the approval of the mortgage

Any mortgage contract concerning one of the assets referred to in Article 47.1 must be approved in advance by the Minister of Mines (the "Minister") upon request of the mortgagee or T.F.M.

The application for the approval of the mortgage will be addressed to the Mining Registry. The following should be attached to the application:

a)   The mortgage deed indicating the amount or the estimate of the debt guaranteed by the mortgage;

b)   A certified copy of the mining title which right is affected by the mortgage.

The Mining Registry will complete the registrar examination of the application within a maximum period of seven working days. This registrar examination consists of verifying the existence of one or several previous mortgages, the authenticity of the mortgage deed which is the subject of the application and the validity of the title relating to the mining title covering the perimeter subject to mortgage.

 The technical evaluation will be carried out by the Mines Directorate. It consists of the verification that the mortgage contract is properly drafted to guarantee the financing of T.F.M.’s mining activities within the perimeter covered by its mining title.

The Mines Directorate will send its technical opinion to the Mining Registry within a period of ten working days as of the date on which the file sent by the Mining Registry is received by the Mines Directorate.

The Minister will render and transmit his decision to approve or his reasoned decision to refuse, to the Mining Registry within a period of forty-five days from the date the application was submitted.

The application is made by T.F.M. or the mortgagee.

The Mining Registry will register the mortgage within the period of five days following the Minister’s sending of a decision to grant approval.

The Head of the Mining Registry or his representative has the power of a notary with respect to the authentication of mortgage contracts.

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47.3. Reasons for the refusal to approve mortgages

The Minister may only refuse to approve the creation of a mortgage if:

a)   The amount of the mortgage is lower than the guaranteed debt. In case there is a previous mortgage, the mortgage contract can only relate to the part of the asset which is not yet mortgaged;

b)   The mortgage guarantees debts which do not have any relation to the mining activity for which the mortgage has been approved;

c)   The amount of the financing obtained is insignificant;

d)   The mortgagee is prohibited from holding mining rights;

e)   T.F.M.’s mining right is no longer valid.

Any refusal to approve the mortgage must be reasoned and confers the right to legal recourse.

The right to legal recourse is open to T.F.M. or the mortgagee.

47.4. Registration and enforceability of the mortgage deeds

The mortgage is registered against the payment of a registration fee the amount of which is set forth in the regulations in force.

In order to be enforced against third parties, any mortgage approved by the Minister is compulsorily registered on the back of the mining title before being entered in a registry book set up and kept for this purpose at the Mining Registry.

47.5. Execution of mortgages

In case of default by T.F.M. of its obligations vis-à-vis the mortgagee, on the due date agreed to and specified in the mortgage deed, the latter may proceed with the procedure of forced execution in accordance with the provisions of the generally applicable mortgage law.

However, the mortgagee may, contrary to the provisions of article 261 of the law number 73-021 of July 20, 1973 on the general legal regime of assets, legal regime of land and real estate, and the legal regime of securities as modified and supplemented to date, take the place of the defaulting debtor and in this capacity require the partial or total transfer of the mining right into its own name, if it complies with the legal conditions of eligibility.

The letter of application for the transfer of the right in the name of the mortgagee will be addressed to the Mining Registry. It must:

a)   be accompanied by a certified copy of the mortgage deed;

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b)   certify that the mortgagee is eligible for the mining right affected by the mortgage which will be executed;

c)   contain its undertaking to assume the rights and obligations which arise from the mining right affected by the mortgage which will be executed.

If the mortgagee is not eligible for the mining rights, it will be granted a period of six months, either to comply with the rules of eligibility, or to be replaced by another person who is eligible for the mining rights subject to the mortgage.

47.6. Mining registry examination in case of transfer

Subject to the provisions below, the Mining Registry will proceed with the mining registry examination in accordance with the law.

At the conclusion of the mining registry examination, the Mining Registry will proceed:

a)   To provisionally register the mining right subject to the mortgage on the mining registry survey map. This registration is valid for the entire duration of the examination;

b)   To display the result of the examination in a room specified by the regulations in force. A copy of the opinion is provided to the applicant.

c)   To reject the application in the event of an unfavorable opinion and to notify the applicant of the decision to reject its application.

In the event of a favorable opinion, the Mining Registry will proceed to register the transfer and to issue a new title issued in the name of the mortgagee or a third party in its place, within a period of five days. After the expiry of such period of five days, the mortgagee or the third party in its place may demand the registration by judicial means.

The validity of the new title will correspond to the unexpired period of the term of validity of the initial title.

The transfer of the mining rights into the name of the mortgagee or the third party in its place will be made within a period of one month as of the date the application was received from the mortgagee.

47.7. Legal consequences of the transfer

In case of execution of the mortgage and transfer of the mining right into its name, the mortgagee or the third party in its place thereby commits to assume all of the obligations arising from the initial title vis-à-vis the State and third parties.

47.8. Legal Mortgages

The provisions of articles 253 to 255 of law No. 73-021 of July 20, 1973 on the general legal regime of assets, legal regime of land and real estate, and the legal regime of securities as modified and supplemented to date for the mortgages of the Treasury and

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the rescue company, may apply provided they are not contrary to the provisions of Articles 47.1 to 47.8. of this Agreement.

II: PLEDGE

47.9. Pledges of marketable products

Marketable products originating from the deposits or artificial deposits may be pledged.

Pledges affecting marketable products are governed by the provisions of articles 322 to 336 of heading IV of the law No. 73-021 of July 20, 1973 on the general legal regime of assets, legal regime of land and real estate, and the legal regime of securities as modified and supplemented to date."

ARTICLE 11

The Parties agree, as from the signature of this Addendum No. 1, to modify the annual interest rate on the Advances made by TF Holdings to T.F.M. by bringing it from LIBOR at one year + 2% to LIBOR at one year + 6%.

The Parties agree, however, that TFM will exercise all reasonable efforts to obtain “project financing” at more advantageous terms and conditions.

ARTICLE 12

Article 51 of the ARMC is hereby deleted in its entirety.

Article 32 is hereby amended as follows:

“Subject to the provisions of Articles 30 and 31, T.F.M. undertakes to comply with applicable laws and regulations in force in the Democratic Republic of Congo. T.F.M. will make every effort to obtain from the members of its expatriate staff and their families their compliance with regulations on the entrance and residence of foreigners and their fulfillment of their normal obligations with that respect.”

Article 42 is hereby replaced in its entirety with the following provision, where “this Agreement” means the ARMC:

“This Agreement and the T.F.M. Amended and Restated Shareholders Agreement, as amended, contain the entire understanding of the Parties with respect to the Project.”

ARTICLE 13

The contents of Appendix B and C of the ARMC and any references thereto in the ARMC are hereby deleted in their entirety.

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ARTICLE 14

 Disputes arising under or relating to the present Addendum shall be deemed to arise under the ARMC and shall be subject to the arbitration agreement therein;

(a)   The Parties hereby confirm that pursuant to Article 25 paragraph 2(b) of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 18 March 1965 (the "ICSID Convention"), T.F.M. is considered as a National of Another Member State within the meaning of said article, by reason of the control exercised on it by foreign interests, for the purposes of this Addendum and the ARMC;

(b)   The designation of Gécamines pursuant to Article 25 paragraph 1 of the ICSID Convention shall be deemed to apply to the present Addendum, as well as to the ARMC;

(c)   Pursuant to Article 25 paragraph 3 of the ICSID Convention, the State hereby confirms its approval to Gécamines under the Original Convention and the ARMC to consent to submit disputes to ICSID and continues to give such approval.

ARTICLE 15

The parties agree to enter into a consultancy agreement, (hereafter referred to as the (“Gecamines Consultancy Agreement”), between Gécamines and T.F.M. within a time period not to surpass thirty (30) Business Days from the date of entry into this Addendum.

ARTICLE 16

This Addendum will enter into force on the last of the following events:

(i) its signature by all interested Parties,

(ii) the signature by the Shareholders of the addendum to the T.F.M. Amended and Restated Shareholders Agreement, to be entered into separately,

(iii) the amendments to the Amended and Restated Bylaws of T.F.M. to be made pursuant to the addendum to the T.F.M. Amended and Restated Shareholders Agreement,

(iv)the date of the approval by Presidential Decree of this Addendum,

(v)the date of the approval by Presidential Decree of the above amendments to the Amended and Restated Bylaws of T.F.M.,

and will remain in effect for so long as the ARMC remains in effect.

Until the entry into force of this Addendum, the ARMC will remain validly and fully in force as such and thereafter the ARMC will remain validly and fully in force as amended 

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by this Addendum. The Parties agree that all terms of the ARMC not amended herein remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Addendum on the 11 DEC 2010, in 12 original copies, 6 in English and 6 in French, each Party acknowledging receipt of one English and one French copy, and both languages being equally authoritative.

THE DEMOCRATIC REPUBLIC OF CONGO

/s/ Mr. Martin Kabwelulu The Minister of Mines, Mr. Martin KABWELULU	/s/ Mr. Matata Mponyo Mapon The Minister of Finance, Mr. MATATA MPONYO MAPON
/s/ Mr. Jean Baptiste Ntahwa Kuderhwa The Minister of Budget, Mr. Jean Baptiste NTAHWA KUDERHWA

LA GENERALE DES CARRIERES ET DES MINES

  /s/ Mr. Kalej Nkand The Managing Director General, Mr. KALEJ NKAND   /s/ Mr. Albert Yuma Mulimbi  The Chairman of the Board, Mr. Albert YUMA MULIMBI

TF HOLDINGS LIMITED

/s/ Mr. Mark R. Mollison

Mr. Mark R. Mollison

Vice President

TENKE FUNGURUME MINING S.A.R.L.

/s/ Mr. Claude Polet

Mr. Claude Polet

Managing Director

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EX-10.6

Exhibit 10.6

FREEPORT-McMoRan COPPER & GOLD INC.

DIRECTOR COMPENSATION

(as of May 4, 2011)

Cash Compensation

Each non-management director of Freeport-McMoRan Copper & Gold Inc.receives an annual fee of $75,000.  Committee chairs receive an additional annual fee as follows:  Audit Committee, $25,000; Corporate Personnel Committee, $20,000; and all other committees, $15,000.  Each committee member, excluding the chair of each committee, receives an additional annual fee as follows:  Audit Committee members, $12,500; Corporate Personnel Committee members, $10,000; and members of other committees, $7,500.

Each non-management director also receives a fee of $3,000 for attending each board meeting and each committee meeting (for which he or she is a member) and is reimbursed for reasonable out-of-pocket expenses incurred in attending such meetings.

Equity-Based Compensation; Deferrals

Non-management directors receive equity-based compensation under our Amended and Restated 2006 Stock Incentive Plan, which was approved by our stockholders.  The Nominating and Corporate Governance Committee is authorized to make an annual grant of options to acquire shares of our common stock and restricted stock units to each non-management director.  The options are granted at fair market value on the grant date, vest ratably over the first four anniversaries of the grant date and expire on the tenth anniversary of the grant date.  The restricted stock units also vest ratably over the first four anniversaries of the grant date.  Each restricted stock unit entitles the director to receive one share of our common stock upon vesting.  Dividend equivalents are accrued on the restricted stock units on the same basis as dividends are paid on our common stock and include market rate interest.  The dividend equivalents are only paid upon vesting of the restricted stock units.

Non-management directors may elect to exchange all or a portion of their annual fee for an equivalent number of shares of our common stock on the payment date, based on the fair market value of our common stock on the date preceding the payment date.  Non-management directors may also elect to defer all or a portion of their annual fee and meeting fees, and such deferred amounts will accrue interest at a rate equal to the prime commercial lending rate announced from time to time by JPMorgan Chase (compounded quarterly), and shall be paid out at such time or times as directed by the participant.

Matching Gifts Program

Our foundation administers a matching gifts program that is available to our directors, officers, employees, full-time consultants and certain retirees.  Under the program, the foundation will match a participant’s gifts to eligible institutions, including educational institutions, educational associations, educational funds, cultural institutions, social service community organizations, hospital organizations and environmental organizations.  The foundation provides the gifts directly to the institution.  For directors, the foundation double matches the first $1,000 of donations per year per eligible institution.  Donations above $1,000 are single matched.  The annual amount of our matching gifts for any director may not exceed $40,000.

Retirement Plan for Current Non-Management Directors

We have a retirement plan for the benefit of our current non-management directors who reach age 65.  In April 2008, the Board amended the plan to freeze the maximum annual benefit at $40,000, except as provided below, and to terminate the plan for future directors.  Thus, under the retirement plan, an eligible director will be entitled to an annual benefit equal to a minimum of $20,000 and a maximum of $40,000, depending on the number of years the retiree served as a non-management director for us or our predecessors.  The benefit is payable from the date of retirement until the retiree’s death.  Each eligible director who was also a director of Freeport-McMoRan Inc., our former parent, and who did not retire from that board of directors, will receive upon retirement from our board an additional annual benefit of $20,000, which is also payable from the date of retirement until the retiree’s death.  This additional benefit is not subject to the $40,000 maximum annual benefit described above.

EX-15.1

Exhibit 15.1

To the Board of Directors and Stockholders of Freeport-McMoRan Copper & Gold Inc.:

We are aware of the incorporation by reference in the Registration Statements of Freeport-McMoRan Copper & Gold Inc. on Forms S-8 (File Nos. 33-63267, 33-63269, 33-63271, 333-85803, 333-105535, 333-115292, 333-136084, 333-141358 and 333-147413) of our report dated May 6, 2011 relating to the unaudited condensed consolidated interim financial statements of Freeport-McMoRan Copper & Gold Inc. that is included in its Form 10-Q for the quarter ended March 31, 2011.

/s/ ERNST & YOUNG LLP

Phoenix, Arizona

May 6, 2011

EX-31.1

Exhibit 31.1

Certification

I, Richard C. Adkerson, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Freeport-McMoRan Copper & Gold Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 6, 2011
	By:          /s/  Richard C. Adkerson
	Richard C. Adkerson
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Kathleen L. Quirk, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Freeport-McMoRan Copper & Gold Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 6, 2011
	By:          /s/  Kathleen L. Quirk
	Kathleen L. Quirk
	Executive Vice President,
	Chief Financial Officer and Treasurer

EX-31.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Freeport-McMoRan Copper & Gold Inc. (the “Company”) for the quarter ending March 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Richard C. Adkerson, as President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  May 6, 2011
	By:          /s/  Richard C. Adkerson
	Richard C. Adkerson
	President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification shall not be deemed filed by the Company for purposes of § 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Freeport-McMoRan Copper & Gold Inc.(the “Company”) for the quarter ending March 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Kathleen L. Quirk, as Executive Vice President, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of her knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  May 6, 2011
	By:          /s/  Kathleen L. Quirk
	Kathleen L. Quirk
	Executive Vice President,
	Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification shall not be deemed filed by the Company for purposes of § 18 of the Securities Exchange Act of 1934, as amended.

EX-99.1

Exhibit 99.1

Mine Safety and Health Administration (MSHA) Safety Data

FCX’s U.S. mining operations are subject to regulation by MSHA under the U.S. Federal Mine Safety and Health Act of 1977 (the Mine Act). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation. Citations or orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments varies depending on the size and type (underground or surface) of the mine, among other factors.

The following disclosures have been provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). The U.S. Securities and Exchange Commission (SEC) has not issued final rules under these provisions; therefore, it is possible that any final rules or guidelines adopted by the SEC will require disclosures to be presented in a different form.

Mine Safety Data. During the three months ended March 31, 2011, we had no mining related fatalities at our U.S. mining operations. In addition, during the three months ended March 31, 2011, none of our U.S. mining operations received written notice from MSHA of a pattern of, or the potential to have a pattern of, violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under Section 104(e) of the Mine Act.

Following provides additional information about references used in the tables below to describe the categories of violations, orders or citations issued by MSHA under the Mine Act:

·   Section 104(a): Citations issued by MSHA under Section 104(a) of the Mine Act for violations of health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.

·   Section 104(b): Orders issued under Section 104(b) of the Mine Act, which represent a failure to abate a citation under Section 104(a) within the period prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

·   Section 104(d): Citations and orders issued by MSHA under Section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards. These types of violations could significantly and substantially contribute to a serious injury; however, the conditions do not cause imminent danger (refer to discussion of imminent danger orders below).

·   Section 110(b)(2): Flagrant violations identified by MSHA under Section 110(b)(2) of the Mine Act. The term flagrant with respect to a violation is defined as “a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonably could have expected to cause, death or serious bodily injury.”

·   Section 107(a): Orders issued by MSHA under Section 107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed. Orders issued under Section 107(a) of the Mine Act require the operator of the mine to cause all persons (except authorized persons) to be withdrawn from the mine until the imminent danger and the conditions that caused such imminent danger cease to exist.

The following tables reflect the violations, citations and orders issued to us by MSHA during the three months ended March 31, 2011:

		Three Months Ended March 31, 2011
		Section	Section		Section	Section	Section	Proposed
Mine ID(1)	Mine or Operation Name	104(a)	104(b)		104(d)	110(b)(2)	107(a)	Assessments(2)
0200137	Freeport-McMoRan Bagdad Inc. (Bagdad)	1	-		-	-	-	$	1,944
	Freeport-McMoRan Chino Mines Company (Chino):
2900708	Chino Mines Co Mine	38	-		1	-	-	$	-
2900762	SX-EW	6	-		-	-	-	$	-
2901882	Ivanhoe Concentrator	-	-		-	-	-	$	-
0200112	Freeport-McMoRan Miami Inc (Miami)	86	2		-	-	-	$	18,524
0200024	Freeport-McMoRan Morenci Inc (Morenci)	70	1	(3)	-	-	-	$	58,220
0203131	Freeport-McMoRan Safford Inc (Safford)	-	-		-	-	-	$	-
0200144	Freeport-McMoRan Sierrita Inc (Sierrita)	79	-		-	-	-	$	63,719
2900159	Tyrone Mine (Tyrone)	14	-		-	-	-	$	8,752
0500790	Henderson Operations (Henderson)	13	-		-	-	-	$	8,022
0502256	Climax Mine (Climax)	11	-		-	-	-	$	1,100
	Freeport-McMoRan Cobre Mining Company :
2900725	Open Pit & Continental Surf Comp	-	-		-	-	-	$	-
2900731	Continental Mill Complex	-	-		-	-	-	$	-
0201656	Copper Queen Branch	-	-		-	-	-	$	-
0202579	Cyprus Tohono Corporation	-	-		-	-	-	$	-
0203262	Twin Buttes Mine	-	-		-	-	-	$	-
2902395	Chieftain 2100 Screening Plant	-	-		-	-	-	$	-
0203254	Warrior 1800 Screening Plant	-	-		-	-	-	$	-

(1)   MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities.

(2)   Amounts represent the total dollar value of proposed assessments received on or before April 29, 2011, for citations or orders issued by MSHA during the three months ended March 31, 2011 ($27,058 of which are being contested by FCX). Refer to “Pending Legal Actions” below for further discussion of the process by which a citation, order or penalty received from MSHA may be challenged.

(3)   This order was incorrectly issued to Morenci by MSHA and should have been issued to a contractor working at the mine. MSHA has acknowledged this error and is working to update their system.

Outstanding Proposed Assessments. At March 31, 2011, the cumulative total of all outstanding proposed assessments was $519,880. These amounts do not necessarily relate to the citations or orders issued by MSHA during the three months ended March 31, 2011, or to the pending legal actions reported below.

Pending Legal Actions. The Federal Mine Safety and Health Review Commission (the Commission) is an independent adjudicative agency established by the Mine Act that provides administrative trial and appellate review of legal disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under Section 105 of the Mine Act. The following provides additional information of the types of proceedings that may be brought before the Commission:

·   Contest Proceedings – A contest proceeding may be filed with the Commission by an operator to challenge the issuance of a citation or order issued by MSHA.

·   Civil Penalty Proceedings – A civil penalty proceeding may be filed with the Commission by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order.

·   Discrimination Proceedings – A discrimination proceeding involves a miner’s allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint.

·   Temporary Reinstatement Proceedings – A temporary reinstatement proceeding involves cases in which a miner has filed a complaint with MSHA stating that he or she has suffered discrimination and the miner has lost his or her position.

·   Compensation Proceedings – A compensation proceeding may be filed with the Commission by miners entitled to compensation when a mine is closed by certain closure orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due to miners idled by the orders.

At March 31, 2011, there were 27 pending legal actions before the Commission that related to matters instituted during the three months ended March 31, 2011. The following table provides further information of the pending legal actions before the Commission at March 31, 2011, all of which were initiated by us, and all of which are contest or civil penalty proceedings. These matters were instituted during first-quarter 2011, but do not necessarily relate to the violations, citations, orders or proposed assessments issued by MSHA during the three months ended March 31, 2011, that have been presented in the above table.

		Date	Mine Act
Mine ID(1)	Mine  or Operation Name	Instituted(2)	Section(3)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0200024	Freeport-McMoRan Morenci Inc (Morenci)	1/13/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0500790	Henderson Operations (Henderson)	1/24/2011	104(a)
0502256	Climax Mine (Climax)	3/7/2011	104(d)

(1)   MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities.

(2)   Represents the date a docket number was assigned to the proceeding.

(3)   Represents the category of violation, order or citation underlying the pending legal action. Refer to “Mine Safety Data” above for further discussion of these references, which describe the categories of violations, orders or citations issued by MSHA under the Mine Act.