10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 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 incorporation or organization)	(I.R.S. Employer Identification No.)
333 North Central Avenue
Phoenix, Arizona	85004-2189
(Address of principal executive offices)	(Zip Code)
(602) 366-8100
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $0.10 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act  þ Yes ¨ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes þ No

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.   þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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).           þ Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   þ

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.   þ Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company

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

The aggregate market value of common stock held by non-affiliates of the registrant was $39.9 billion on February 15, 2012, and $50.1 billion on June 30, 2011.

Common stock issued and outstanding was 948,358,926 shares on February 15, 2012, and 947,880,420 shares on June 30, 2011.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our proxy statement for our 2012 annual meeting of stockholders are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this report.

FREEPORT-McMoRan COPPER & GOLD INC.

TABLE OF CONTENTS
	Page
Part I	1
Items 1. and 2. Business and Properties	1
Item 1A. Risk Factors	40
Item 1B. Unresolved Staff Comments	57
Item 3. Legal Proceedings	57
Item 4. Mine Safety Disclosures	59
Executive Officers of the Registrant	59
Part II	60
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities	60
Item 6. Selected Financial Data	62
Items 7. and 7A. Management’s Discussion and Analysis of Financial Condition and Results
of Operations and Quantitative and Qualitative Disclosures about Market Risk	66
Item 8. Financial Statements and Supplementary Data	115
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	178
Item 9A. Controls and Procedures	178
Item 9B. Other Information	178
Part III	178
Item 10. Directors, Executive Officers and Corporate Governance	178
Item 11. Executive Compensation	178
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters	179
Item 13. Certain Relationships and Related Transactions, and Director Independence	179
Item 14. Principal Accounting Fees and Services	179
Part IV	180
Item 15. Exhibits, Financial Statement Schedules	180
Signatures	S-1
Index to Financial Statements	F-1
Exhibit Index	E-1

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PART I

Items 1. and 2. Business and Properties.

All of our periodic reports filed with the Securities and Exchange Commission (SEC) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, through our website, www.fcx.com, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports. These reports and amendments are available through our website as soon as reasonably practicable after we electronically file or furnish such material to the SEC.

References to “we,” “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries, including, except as otherwise stated, Phelps Dodge Corporation and its subsidiaries, which we acquired on March 19, 2007. In 2008, we changed Phelps Dodge Corporation’s legal name to Freeport-McMoRan Corporation (FMC). References to “Notes” refer to the Notes to Consolidated Financial Statements included herein (refer to Item 8), and references to “MD&A” refer to Management's Discussion and Analysis of Financial Condition and Results of Operations included herein (refer to Item 7).

GENERAL

We are a leading international mining company with headquarters in Phoenix, Arizona, and we were incorporated under the laws of the state of Delaware on November 10, 1987. 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 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 have significant reserves, resources and future development opportunities within our portfolio of assets. At December 31, 2011, consolidated recoverable proven and probable reserves totaled 119.7 billion pounds of copper, 33.9 million ounces of gold, 3.42 billion pounds of molybdenum, 330.3 million ounces of silver and 0.86 billion pounds of cobalt. Approximately 34 percent of our copper reserves are in North America, 33 percent are in South America, 26 percent are in Indonesia and 7 percent are in Africa.  Approximately 95 percent of our gold reserves are in Indonesia, with our remaining gold reserves primarily in South America. Approximately 79 percent of our molybdenum reserves are in North America, with our remaining molybdenum reserves in South America. Refer to “Ore Reserves” for further discussion.

We currently operate seven copper mines in North America – Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. Certain of our North America copper mines (primarily Sierrita, Bagdad and Morenci) also produce molybdenum concentrates.

We operate four copper mines in South America – Cerro Verde in Peru, and El Abra, Candelaria and Ojos del Salado in Chile. In addition to copper, the Cerro Verde mine also produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines produce gold and silver.

In Indonesia, PT Freeport Indonesia operates the mines in the Grasberg minerals district. In addition to copper, the Grasberg minerals district also produces significant quantities of gold and silver.

In Africa, Tenke Fungurume Mining S.A.R.L. (TFM) operates the mine in the Tenke Fungurume minerals district (the Tenke mine). In addition to copper, Tenke produces cobalt hydroxide.

During 2011, 34 percent of our consolidated copper production was from North America, 35 percent from South America, 23 percent from Grasberg and 8 percent from Tenke. The Grasberg minerals district also accounted for 92 percent of our consolidated gold production for 2011. Refer to "Production Data" for further information.

We produce molybdenum at our Henderson molybdenum mine in Colorado. During 2011, 46 percent of our consolidated molybdenum production was from the Henderson molybdenum mine, 42 percent was produced at certain of our North America copper mines and 12 percent was produced at our Cerro Verde copper mine. Refer to "Production Data" for further information.

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The locations of our operating mines are shown on the map below. For information about our operating segments and financial data by geographic area refer to Note 17.

The diagram below shows our ownership interest in our operating mines at December 31, 2011.

(1) FCX's interest in TFM will be reduced to 56 percent after receiving the required government approval of the modifications to TFM's bylaws that reflect the agreement reached in December 2010 with the DRC government (refer to Note 14).

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COPPER, GOLD AND MOLYBDENUM

A brief discussion of our primary metals appears below. For further discussion of the markets and prices of these metals refer to MD&A.

Copper

Copper is an internationally traded commodity, and its prices are determined by the major metals exchanges – the London Metal Exchange (LME), New York Mercantile Exchange (COMEX) and Shanghai Futures Exchange (SHFE). Prices on these exchanges generally reflect the worldwide balance of copper supply and demand and can be volatile and cyclical. During 2011, LME spot copper prices ranged from $3.08 per pound to a record high of $4.60 per pound, averaged $4.00 per pound and closed at $3.43 per pound on December 30, 2011.

In general, demand for copper reflects the rate of underlying world economic growth, particularly in industrial production and construction. According to Brook Hunt, a widely followed independent metals market consultant, copper’s end-use markets (and their estimated shares of total consumption) are:

Construction	33	%
Electrical applications	33	%
Industrial machinery	13	%
Transportation	13	%
Consumer products	8	%

Gold

Gold is used for jewelry, coinage and bullion as well as various industrial and electronic applications. Gold can be readily sold on numerous markets throughout the world. Benchmark prices are generally based on London Bullion Market Association quotations. During 2011, London PM gold prices ranged from $1,319 per ounce to a record high of $1,895 per ounce, averaged $1,572 per ounce and closed at $1,575 per ounce on December 30, 2011.

Molybdenum

Molybdenum is a key alloying element in steel and the raw material for several chemical-grade products used in catalysts, lubrication, smoke suppression, corrosion inhibition and pigmentation. Molybdenum, as a high-purity metal, is also used in electronics such as flat-panel displays and in super alloys used in aerospace. Molybdenum’s end-use markets (and their estimated shares of total consumption) according to the International Molybdenum Association are:

Construction steel	40	%
Stainless steel	20	%
Chemicals	14	%
Tool and high-speed steel	10	%
Cast iron	7	%
Molybdenum metal	5	%
Super alloys	4	%

Reference prices for molybdenum are available in several publications, including Metals Week, Ryan’s Notes and Metal Bulletin. During 2011, the weekly average price of molybdenum quoted by Metals Week ranged from $12.70 per pound to $17.88 per pound, averaged $15.49 per pound and was $13.35 per pound on December 30, 2011.

PRODUCTS AND SALES

FCX’s consolidated revenues for 2011 primarily included sales of copper (78 percent), gold (12 percent) and molybdenum (6 percent). PT Freeport Indonesia’s sales to PT Smelting (PT Freeport Indonesia's 25 percent owned copper smelter and refinery in Indonesia - refer to "Smelting Facilities" for further discussion) represented 11 percent of our consolidated revenues for 2011, 12 percent in 2010 and 13 percent in 2009. No other customer accounted for more than 10 percent of our consolidated revenues in any of the past three years.

Refer to Note 17 for a summary of our consolidated revenues and operating income by business segment and geographic area.

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Copper Products

We are one of the world’s leading producers of copper concentrate, cathode and continuous cast copper rod. During 2011, 51 percent of our mined copper was sold in concentrate, 26 percent as cathodes and 23 percent as rod (principally from our North America operations).

Our copper ores are generally processed either by smelting and refining or by solution extraction and electrowinning (SX/EW). Before being subject to the smelting and refining process, ore is crushed and treated to produce a copper concentrate with copper content of approximately 20 to 30 percent. Copper concentrate is then smelted (i.e., subjected to extreme heat) to produce copper anodes, which weigh between 800 and 900 pounds each and have an average copper content of 99.5 percent. The anodes are further treated by electrolytic refining to produce copper cathodes, which weigh between 100 and 350 pounds each and have an average copper content of 99.99 percent. Our copper cathodes are used as the raw material input for copper rod, brass mill products and for other uses. For ore subject to the SX/EW process, copper is extracted from the ore by dissolving it with a weak sulphuric acid solution. The copper content of the solution is increased in two additional solution-extraction stages and then the copper-bearing solution undergoes an electrowinning process to produce cathode that is 99.99 percent copper.

Copper Concentrate.  We produce copper concentrate at eight of our mines, of which PT Freeport Indonesia is our largest producer. In North America, copper concentrate is produced at our Morenci, Bagdad, Sierrita and Chino mines, and is generally shipped to our Miami smelter in Arizona. In South America, we produce copper concentrate at our Cerro Verde, Candelaria and Ojos del Salado mines.

Copper Cathode.  We produce copper cathode at two electrolytic refineries (located in El Paso, Texas, and Huelva, Spain) and at 10 of our mines.  In North America, SX/EW cathode is produced from our Morenci, Bagdad, Safford, Sierrita, Miami, Tyrone and Chino mines; in South America from our Cerro Verde and El Abra mines; and from our Tenke mine in Africa. PT Smelting also produces copper cathode.

Continuous Cast Copper Rod.  We manufacture continuous cast copper rod at our facilities in El Paso, Texas; Norwich, Connecticut; and Miami, Arizona, primarily using copper cathode produced at our North America mines.

Other Copper Products.  We produce specialty copper products at our Bayway operations in Elizabeth, New Jersey. These products include specialty copper alloys in the forms of rod, bar and strip. We manufacture electrode wire for use in welding steel cans at our Norwich, Connecticut, and El Paso, Texas, facilities. We also produce copper sulfate pentahydrate for use in agricultural and industrial applications at our facility in Sierrita, Arizona. These facilities primarily use copper cathode produced at our North America mines to manufacture their end products.

Copper Sales

North America.  The majority of the copper produced at our North America copper mines and refined in our El Paso, Texas, refinery is consumed at our rod plants. The remainder of our North America copper production is sold in the form of copper cathode or copper concentrate to third parties. Generally, copper rod and cathode are sold to wire and cable fabricators and brass mills under United States (U.S.) dollar-denominated, annual contracts. Cathode and rod contract prices are generally based on the prevailing COMEX monthly average spot price for the month of shipment and include a premium.

South America.Production from our South America mines is sold as copper concentrate or copper cathode to third parties under U.S. dollar-denominated, annual and multi-year contracts. Our South America mines generally sell approximately 60 to 70 percent of their copper production in concentrate and the rest as cathode.  During 2011, 16 percent of our South America mines' copper concentrate was shipped to Atlantic Copper S.L. (Atlantic Copper - our wholly owned copper smelting and refining unit in Spain).

Substantially all of South America’s copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot copper prices. Revenues from South America’s concentrate sales are recorded net of treatment and refining charges (i.e., fees paid to smelters and refiners that are generally negotiated annually), including any applicable price participation charges that are based on the market price of copper. In addition, because a portion of the metals contained in copper concentrates is unrecoverable from the smelting process, revenues from South America’s concentrate sales are also recorded net of allowances for unrecoverable metals. These allowances are a negotiated term of our contracts and vary by customer.

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Indonesia.PT Freeport Indonesia sells its production in the form of copper concentrate, which contains significant quantities of gold and silver, under U.S. dollar-denominated, long-term contracts.  PT Freeport Indonesia also sells a small amount of copper concentrates in the spot market.

During 2011, 54 percent of PT Freeport Indonesia’s concentrate was sold to affiliated smelters, Atlantic Copper and PT Smelting.  A summary of PT Freeport Indonesia’s aggregate percentage concentrate sales to PT Smelting, Atlantic Copper and to third parties for the last three years follows:

	2011		2010		2009
PT Smelting	44	%	36	%	32	%
Atlantic Copper	10	%	21	%	18	%
Third parties	46	%	43	%	50	%
	100	%	100	%	100	%

Substantially all of PT Freeport Indonesia's concentrate sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot copper prices. Revenues from PT Freeport Indonesia's concentrate sales are recorded net of royalties and treatment and refining charges.  PT Freeport Indonesia's concentrate sales are also net of allowances for unrecoverable metals.

Africa.  TFM sells its production in the form of copper cathode under U.S. dollar-denominated contracts. Substantially all of TFM's cathode sales provide final copper pricing in the month after the shipment date based on quoted LME monthly average spot prices. Revenues from TFM's cathode sales are recorded net of royalties and also include adjustments for point-of-sale transportation costs that are negotiated in customer contracts.

Europe.Atlantic Copper sells copper cathode directly to rod and brass mills, primarily located in Europe. Atlantic Copper has occasionally sold copper cathode to merchants. Copper cathode is generally sold under annual contracts and priced based on the LME monthly average spot price for the month of arrival at the buyer’s facilities.

Our copper mining operations provide Atlantic Copper with approximately 50 to 60 percent of its concentrate requirements at market prices. Following is a summary of Atlantic Copper's concentrate purchases from our copper mining operations and third parties for the last three years:

	2011			2010		2009
South America mining	30	%		25	%	35	%
Indonesia mining	17	%	a	28	%	25	%
Morenci mine	2	%		—	%	—	%
Third parties	51	%		47	%	40	%
	100	%		100	%	100	%

a. The decrease in 2011 primarily reflects the impact of labor disruptions and the temporary suspension of milling operations in fourth-quarter 2011 because of damage to PT Freeport Indonesia's concentrate and fuel pipelines (refer to MD&A for further discussion).

Gold Products and Sales

We also produce gold, primarily from the Grasberg minerals district. Gold is primarily sold as a component of our copper concentrate or in slimes, which are a by-product of the smelting and refining process. Gold generally is priced at the average London Bullion Market Association price for a specified month near the month of shipment. Revenues from gold sold as a component of our copper concentrate are recorded net of treatment and refining charges. Revenues from gold sold in slimes are recorded net of refining charges.

Molybdenum Products and Sales

We are the world’s largest producer of molybdenum and molybdenum-based chemicals. In addition to production from our Henderson molybdenum mine, we produce molybdenum concentrate at certain of our North America copper mines, and at our Cerro Verde copper mine in Peru.

The majority of our molybdenum concentrates are processed in our own conversion facilities. Technical-grade oxide is produced from molybdenum concentrates in Sierrita, Arizona; Fort Madison, Iowa; and Rotterdam, the Netherlands. Ferromolybdenum is produced from technical-grade oxide in Stowmarket, United Kingdom, through a metallothermic reduction process. High-quality molybdenum concentrates are converted into molybdenum

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chemicals at Fort Madison and Rotterdam. Molybdenum generally is priced based on the average Metals Week price for the month prior to the month of shipment.

Cobalt, Silver and Other Products and Sales

We produce cobalt hydroxide at the Tenke mine. Cobalt hydroxide is priced at a discount to the average monthly low price published by Metal Bulletin for a specified month near the month of shipment. We produce silver as a component of our copper concentrate or in slimes. Silver generally is priced at the average London Bullion Market Association price for a specified month near the month of shipment. Sales of cobalt hydroxide, silver and other

metals, such as rhenium and magnetite, do not represent a significant component of our total consolidated revenues.

MINES

Following are maps and descriptions of our mining operations in North America (including both copper and molybdenum operations), South America, Indonesia and Africa.

North America

In the U.S., most of the land occupied by our copper and molybdenum mines, concentrators, SX/EW facilities, smelter, refinery, rod mills, molybdenum roasters and processing facilities is generally owned by us or is located on unpatented mining claims owned by us. Certain portions of our Bagdad, Sierrita, Miami, Tyrone, Chino, Cobre and Henderson operations are located on government-owned land and are operated under a Mine Plan of Operations or other use permit. Various federal and state permits or leases on government land are held for purposes incidental to mine operations.

Morenci

We own an 85 percent undivided interest in Morenci, with the remaining 15 percent owned by affiliates of Sumitomo Corporation. Each partner takes in kind its share of Morenci’s production.

Morenci is an open-pit copper mining complex that has been in continuous operation since 1939 and previously was mined through underground workings. Morenci is located in Greenlee County, Arizona, approximately 50 miles northeast of Safford on U.S. Highway 191. The site is accessible by a paved highway and a railway spur.

The Morenci mine is a porphyry copper deposit that has oxide and secondary sulfide mineralization, and primary sulfide mineralization. The predominant oxide copper mineral is chrysocolla. Chalcocite is the most important secondary copper sulfide mineral with chalcopyrite as the dominant primary copper sulfide.

The Morenci operation consists of a 50,000 metric ton-per-day concentrator, that produces copper and molybdenum concentrates; a 68,000 metric ton-per-day crushed-ore leach pad and stacking system; a low-grade run-of-mine (ROM) leaching system; four SX plants; and three EW tank houses that produce copper cathode. Total EW tank house capacity is approximately 900 million pounds of copper per year. Morenci’s concentrate leach, direct-electrowinning facility was commissioned in third-quarter 2007 and processed copper concentrate until early 2009 when it was placed on care-and-maintenance status. The available mining fleet consists of 102 235-metric ton haul trucks loaded by 11 shovels with bucket sizes ranging from 42 to 55 cubic meters, which are capable of moving over 750,000 metric tons of material per day.

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After reducing rates at Morenci in late 2008 and early 2009 because of weak market conditions, during 2011, we completed the ramp up of Morenci's mining rates to 635,000 metric tons of ore per day and milling rates to approximately 50,000 metric tons of ore per day, resulting in increased copper production of approximately 125 million pounds of copper per year. We are also advancing a feasibility study to expand mining and milling capacity at Morenci to process additional sulfide ore identified through exploratory drilling (refer to “Development Projects and Exploration” for further discussion).

Morenci’s copper production, including our joint venture partner’s share, totaled 614 million pounds in 2011, 514 million pounds in 2010 and 504 million pounds in 2009. In 2011, Morenci also had molybdenum production, including our joint venture partner's share, totaling 2 million pounds.

Morenci is located in a desert environment with rainfall averaging 13 inches per year. The highest bench elevation is 2,000 meters above sea level and the ultimate pit bottom is expected to have an elevation of 840 meters above sea level. The Morenci operation encompasses approximately 56,732 acres, comprising 50,235 acres of patented mining claims and other fee lands, 6,002 acres of unpatented mining claims, and 495 acres of land held by state or federal permits, easements and rights-of-way.

The Morenci operation's electrical power is primarily sourced from Tucson Electric Power Company, Arizona Public Service Company and the Luna Energy facility in Deming, New Mexico (in which we own a one-third interest). Although we believe the Morenci operation has sufficient water sources to support current operations, we are a party to litigation that may impact our water rights claims or rights to continued use of currently available water supplies, which could adversely affect our water supply for the Morenci operation. Refer to Item 1A. "Risk Factors" and Item 3. “Legal Proceedings,” for further discussion.

Bagdad

Our wholly owned Bagdad mine is an open-pit copper and molybdenum mining complex located in Yavapai County in west-central Arizona. It is approximately 60 miles west of Prescott and 100 miles northwest of Phoenix. The property can be reached by Arizona Highway 96, which ends at the town of Bagdad. The closest railroad is at Hillside, Arizona, approximately 24 miles southeast on Arizona Highway 96. The open-pit mining operation has been ongoing since 1945, and prior mining was conducted through underground workings.

The Bagdad mine is a porphyry copper deposit containing both sulfide and oxide mineralization. Chalcopyrite and molybdenite are the dominant primary sulfides and are the primary economic minerals in the mine. Chalcocite is the most common secondary copper sulfide mineral, and the predominant oxide copper minerals are chrysocolla, malachite and azurite.

The Bagdad operation consists of a 75,000 metric ton-per-day concentrator that produces copper and molybdenum concentrates, an SX/EW plant that can produce up to 25 million pounds per year of copper cathode from solution generated by low-grade stockpile leaching and a pressure leach plant to process molybdenum concentrates. The available mining fleet consists of 30 235-metric ton haul trucks loaded by five shovels with bucket sizes ranging from 40 to 56 cubic meters, which are capable of moving over 200,000 metric tons of material per day.

Bagdad’s production totaled 194 million pounds of copper and 10 million pounds of molybdenum in 2011, 203 million pounds of copper and 7 million pounds of molybdenum in 2010, and 225 million pounds of copper and 6 million pounds of molybdenum in 2009.

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Bagdad is located in a desert environment with rainfall averaging 15 inches per year. The highest bench elevation is 1,200 meters above sea level and the ultimate pit bottom is expected to be 310 meters above sea level. The Bagdad operation encompasses approximately 21,743 acres, comprising 21,143 acres of patented mining claims and other fee lands, and 600 acres of unpatented mining claims.

Bagdad receives electrical power from Arizona Public Service Company. Although we believe the Bagdad operation has sufficient water sources to support current operations, we are a party to litigation that may set legal precedents, which could adversely affect our water rights at Bagdad and at our other properties in Arizona. Refer to Item 3. “Legal Proceedings,” for information concerning the status of these proceedings.

Safford

Our wholly owned Safford mine has been in operation since 2007 and is an open-pit copper mining complex located in Graham County, Arizona, approximately eight miles north of the town of Safford and 170 miles east of Phoenix. The site is accessible by paved county road off U.S. Highway 70.

The Safford mine includes two copper deposits that have oxide mineralization overlaying primary copper sulfide mineralization. The predominant oxide copper minerals are chrysocolla and copper-bearing iron oxides with the predominant copper sulfide material being chalcopyrite.

The property is a mine-for-leach project and produces copper cathodes. The operation consists of two open pits feeding a crushing facility with a capacity of 103,000 metric tons per day of crushed ore. The crushed ore is delivered to a single leach pad by a series of overland and portable conveyors. Leach solutions feed an SX/EW facility with a capacity of 240 million pounds of copper per year. The available mining fleet consists of 20 235-metric ton haul trucks loaded by four shovels with bucket sizes ranging from 31 to 34 cubic meters, which are capable of moving an average of approximately 225,000 metric tons of material per day.

During 2011, we completed construction of a sulphur burner at Safford, which is providing a more cost-effective source of sulphuric acid used in SX/EW operations and lower transportation costs.

Safford’s copper production totaled 151 million pounds in 2011, 143 million pounds in 2010 and 184 million pounds in 2009.

Safford is located in a desert environment with rainfall averaging 10 inches per year. The highest bench elevation is 1,250 meters above sea level and the ultimate pit bottom is expected to have an elevation of 750 meters above sea level. The Safford operation encompasses approximately 24,957 acres, comprising 20,994 acres of patented lands, 3,932 acres of unpatented lands and 31 acres of land held by federal permit.

The Safford operation’s electrical power is primarily sourced from Tucson Electric Power Company, Arizona Public Service Company and the Luna Energy facility. Although we believe the Safford operation has sufficient water sources to support current operations, we are a party to litigation that may impact our water right claims or rights to continued use of currently available water supplies, which could adversely affect our water supply for the Safford operation. Refer to Item 1A. "Risk Factors" and Item 3. “Legal Proceedings,” for further discussion.

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Sierrita

Our wholly owned Sierrita mine has been in operation since 1959 and is an open-pit copper and molybdenum mining complex located in Pima County, Arizona, approximately 20 miles southwest of Tucson and seven miles west of the town of Green Valley and Interstate Highway 19. The site is accessible by a paved highway and by rail.

The Sierrita mine is a porphyry copper deposit that has oxide and secondary sulfide mineralization, and primary sulfide mineralization. The predominant oxide copper minerals are malachite, azurite and chrysocolla. Chalcocite is the most important secondary copper sulfide mineral, and chalcopyrite and molybdenite are the dominant primary sulfides.

The Sierrita operation includes a 102,000 metric ton-per-day concentrator that produces copper and molybdenum concentrates. Sierrita also produces copper from a ROM oxide-leaching system. Cathode copper is plated at the Twin Buttes EW facility, which has a design capacity of approximately 50 million pounds of copper per year. In 2004, a copper sulfate crystal plant began production, which has the capacity to produce 40 million pounds of copper sulfate per year. The Sierrita operation also has molybdenum facilities consisting of a leaching circuit, two molybdenum roasters and a packaging facility. The molybdenum facilities process molybdenum concentrate produced by Sierrita, from our other mines and from third-party sources. The available mining fleet consists of 25 235-metric ton haul trucks loaded by four shovels with bucket sizes ranging from 34 to 56 cubic meters, which are capable of moving an average of 200,000 metric tons of material per day.

Sierrita’s production totaled 177 million pounds of copper and 23 million pounds of molybdenum in 2011, 147 million pounds of copper and 18 million pounds of molybdenum in 2010, and 170 million pounds of copper and 19 million pounds of molybdenum in 2009.

Sierrita is located in a desert environment with rainfall averaging 12 inches per year. The highest bench elevation is 1,160 meters above sea level and the ultimate pit bottom is expected to be 440 meters above sea level. The Sierrita operation, including the adjacent Twin Buttes site (refer to "Development Projects and Exploration" for further discussion), encompasses approximately 27,000 acres, comprising 13,282 acres of patented mining claims and other fee lands, 11,694 acres of unpatented mining claims and 2,024 acres of leased lands.

Sierrita receives electrical power through long-term contracts with the Tucson Electric Power Company. Although we believe the Sierrita operation has sufficient water sources to support current operations, we are a party to litigation that may impact our water rights claims or rights to continued use of currently available water supplies, which could adversely affect our water supply for the Sierrita operation. Refer to Item 1A. "Risk Factors" and Item 3. “Legal Proceedings,” for further discussion.

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Miami

Our wholly owned Miami mine is an open-pit copper mining complex located in Gila County, Arizona, approximately 90 miles east of Phoenix and six miles west of the city of Globe on U.S. Highway 60. The site is accessible by a paved highway and by rail.

The Miami mine is developed on a porphyry copper deposit that has leachable oxide and secondary sulfide mineralization. The predominant oxide copper minerals are chrysocolla, copper-bearing clays, malachite and azurite. Chalcocite and covellite are the most important secondary copper sulfide minerals.

Since about 1915, the Miami mining operation had processed copper ore using both flotation and leaching technologies. Current operations include leaching with copper recovered (from solution) by the SX/EW process. The design capacity of the SX/EW plant is 200 million pounds of copper per year. The available mining fleet consists of 24 227-metric ton haul trucks loaded by 3 shovels with bucket sizes ranging from 31 to 34 cubic meters, which are capable of moving an average of approximately 155,000 metric tons of material per day.

Miami’s copper production totaled 66 million pounds in 2011, 18 million pounds in 2010 and 16 million pounds in 2009.

Miami is located in a desert environment with rainfall averaging 18 inches per year. The highest bench elevation is 1,390 meters above sea level, and the ultimate pit bottom will have an elevation of 810 meters above sea level. The Miami operation encompasses approximately 9,058 acres, comprising 8,725 acres of patented mining claims and other fee lands and 333 acres of unpatented mining claims.

Miami receives electrical power through long-term contracts with the Salt River Project and natural gas through long-term contracts with El Paso Natural Gas as the transporter. Although we believe the Miami operation has sufficient water sources to support current operations, we are a party to litigation that may impact our water right claims or rights to continued use of currently available water supplies, which could adversely affect our water supply for the Miami operation. Refer to Item 1A. "Risk Factors" and Item 3. “Legal Proceedings,” for further discussion.

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Tyrone and Chino

Tyrone

Our wholly owned Tyrone mine is an open-pit copper mining complex which has been in operation since 1967. It is located in southwestern New Mexico in Grant County, approximately 10 miles south of Silver City, New Mexico, along State Highway 90. The site is accessible by paved road and rail.

The Tyrone mine is a porphyry copper deposit. Mineralization is predominantly secondary sulfide consisting of chalcocite with leachable oxide mineralization consisting of chrysocola.

Copper processing facilities consist of a SX/EW operation with a maximum capacity of 153 million pounds of copper cathodes per year. The available mining fleet consists of 20 240-metric ton haul trucks loaded by three shovels with bucket sizes ranging from 17 to 47 cubic meters, which are capable of moving an average of 136,000 metric tons of material per day.

Tyrone’s copper production totaled 76 million pounds in 2011, 82 million pounds in 2010 and 86 million pounds in 2009.

Tyrone is located in a desert environment with rainfall averaging 16 inches per year. The highest bench elevation is 2,000 meters above sea level and the ultimate pit bottom is expected to have an elevation of 1,500 meters above sea level. The Tyrone operation encompasses approximately 35,200 acres, comprising 18,755 acres of patented mining claims and other fee lands, and 16,445 acres of unpatented mining claims.

Tyrone receives electrical power from the Luna Energy facility and from the open market. We believe the Tyrone operation has sufficient water resources to support current operations.

Chino

Our wholly owned Chino mine is an open-pit copper mining complex located in southwestern New Mexico in Grant County, approximately 15 miles east of the town of Silver City off of State Highway 180. The mine is accessible by paved roads and by rail. Chino has been in operation since 1910.

The Chino mine is a porphyry copper deposit with adjacent copper skarn deposits. There is leachable oxide and secondary sulfide mineralization, and millable primary sulfide mineralization. The predominant oxide copper minerals are chrysocolla and azurite. Chalcocite is the most important secondary copper sulfide mineral, and chalcopyrite and molybdenite the dominant primary sulfides.

The Chino operation consists of a 39,000 metric ton-per-day concentrator that produces copper and molybdenum concentrates, and a 150 million pound-per-year SX/EW plant that produces copper cathode from solution generated by ROM leaching. The available mining fleet consists of 34 240-metric ton haul trucks loaded by four shovels with bucket sizes ranging from 42 to 48 cubic meters, which are capable of moving an average of 218,000 metric tons of material per day.

During 2011, we restarted mining and milling activities at the Chino mine, which were suspended in late 2008. Chino’s copper production totaled 69 million pounds in 2011 and is expected to increase to approximately 200 million pounds of copper per year by 2014. Chino's copper production totaled 34 million pounds in 2010 and 36 million pounds in 2009.

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Chino is located in a desert environment with rainfall averaging 16 inches per year. The highest bench elevation is 2,250 meters above sea level, and the ultimate pit bottom is expected to be 1,500 meters above sea level. The Chino operation encompasses approximately 118,623 acres comprising 113,221 acres of patented mining claims and other fee lands, and 5,402 acres of unpatented mining claims.

Chino receives power from the Luna Energy Facility and from the open market. We believe Chino has sufficient water resources to support current operations.

Henderson

Our wholly owned Henderson molybdenum mine has been in operation since 1976 and is located approximately 42 miles west of Denver, Colorado, off U.S. Highway 40. Nearby communities include the towns of Empire, Georgetown and Idaho Springs. The Henderson mill site is located approximately 15 miles west of the mine and is accessible from Colorado State Highway 9. The Henderson mine and mill are connected by a 10-mile conveyor tunnel under the Continental Divide and an additional five-mile surface conveyor. The tunnel portal is located five miles east of the mill.

The Henderson mine is a porphyry molybdenum deposit with molybdenite as the primary sulfide mineral.

The Henderson operation consists of a large block-cave underground mining complex feeding a concentrator with a current capacity of approximately 32,000 metric tons per day. Henderson has the capacity to produce approximately 40 million pounds of molybdenum per year. The majority of the molybdenum concentrate produced is shipped to our Fort Madison, Iowa, processing facility. The available underground mining equipment fleet consists of 13 nine-metric ton load-haul-dump (LHD) units and six 73-metric ton haul trucks, which deliver ore to a gyratory crusher feeding a series of three overland conveyors to the mill stockpiles.

Henderson’s molybdenum production totaled 38 million pounds in 2011, 40 million pounds in 2010 and 27 million pounds in 2009.

The Henderson mine is located in a mountain region with the main access shaft at 3,180 meters above sea level. The main production levels are currently at elevations of 2,200 and 2,350 meters above sea level. This region experiences significant snowfall during the winter months.

The Henderson mine and mill operations encompass approximately 11,878 acres, comprising 11,843 acres of patented mining claims and other fee lands, and a 35-acre easement with the U.S. Forest Service for the surface portion of the conveyor corridor.

Henderson operations receive electrical power through long-term contracts with Xcel Energy and natural gas through long-term contracts with Anadarko Energy Services Company, with Xcel Energy as the transporter. We believe the Henderson operation has sufficient water resources to support current operations.

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Other North America Mines

In addition to the currently operating mines described above, we have four non-operating copper mines: Ajo, Bisbee and Tohono in Arizona, and Cobre in New Mexico; and the Climax molybdenum mine in Colorado.

Our four non-operating copper mines have been on care-and-maintenance status for several years and would require significant capital investment to return them to operating status.

Construction activities at the Climax molybdenum mine are substantially complete, and we expect to commence production during 2012. Production from the Climax molybdenum mine is expected to ramp up to a rate of 20 million pounds of molybdenum per year during 2013 and, depending on market conditions, may be increased to 30 million pounds of molybdenum per year. We intend to operate our Climax and Henderson molybdenum mines in a flexible manner to meet market requirements.

South America

At our operations in South America, mine properties and facilities are controlled through mining claims or concessions under the general mining laws of the relevant country. The claims or concessions are owned or controlled by the operating companies in which we or our subsidiaries have a controlling ownership interest. Roads, power lines and aqueducts are controlled by easements.

Cerro Verde

We have a 53.56 percent ownership interest in Cerro Verde, with the remaining 46.44 percent held by SMM Cerro Verde Netherlands B.V. (21.0 percent), Compañia de Minas Buenaventura S.A.A. (19.3 percent) and other stockholders whose shares are publicly traded on the Lima Stock Exchange (6.14 percent).

Cerro Verde is an open-pit copper and molybdenum mining complex that has been in operation since 1976 and is located 20 miles southwest of Arequipa, Peru. The site is accessible by paved highway.  Approximately one-third of Cerro Verde’s copper cathode production is sold locally and the remaining copper cathodes and concentrate production are transported approximately 70 miles by truck and rail to the Port of Matarani for shipment to international markets.

The Cerro Verde mine is a porphyry copper deposit that has oxide and secondary sulfide mineralization, and primary sulfide mineralization. The predominant oxide copper minerals are brochantite, chrysocolla, malachite and copper “pitch.” Chalcocite and covellite are the most important secondary copper sulfide minerals. Chalcopyrite and molybdenite are the dominant primary sulfides.

Cerro Verde’s current operation consists of an open-pit copper mine, a 120,000 metric tons of ore per day concentrator and SX/EW leaching facilities. Leach copper production is derived from a 39,000 metric ton-per-day crushed leach facility and a ROM leach system. This leaching operation has a capacity of approximately 200 million pounds of copper per year. The available fleet consists of 32 230-metric ton haul trucks loaded by five shovels with bucket sizes ranging in size from 21 to 53 cubic meters, which are capable of moving an average of approximately 308,000 metric tons of material per day.

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Cerro Verde’s production totaled 647 million pounds of copper and 10 million pounds of molybdenum in 2011, 668 million pounds of copper and 7 million pounds of molybdenum in 2010, and 662 million pounds of copper and 2 million pounds of molybdenum in 2009.

Refer to “Development Projects and Exploration” for further discussion of the large-scale concentrator expansion project at Cerro Verde.

Cerro Verde is located in a desert environment with rainfall averaging 1.5 inches per year and is in an active seismic zone. The highest bench elevation is 2,900 meters above sea level and the ultimate pit bottom is expected to be 2,000 meters above sea level. Cerro Verde has a mining concession covering approximately 157,007 acres plus 24 acres of owned property and 79 acres of rights-of-way outside the mining concession area.

Cerro Verde receives electrical power under long-term contracts with Kallpa Generación SA and Empresa de Generación Eléctrica de Arequipa. Water for our Cerro Verde processing operations comes from renewable sources through a series of storage reservoirs on the Rio Chili watershed that collect water primarily from seasonal precipitation. Cerro Verde’s participation in the Pillones Reservoir Project has secured water rights that we believe will be sufficient to support Cerro Verde’s current operations.

In 2011, Cerro Verde reached an agreement with the Regional Government of Arequipa, the National Government, Servicio de Agua Potable y Alcantarillado de Arequipa S.A. (SEDAPAR) and other local institutions to allow it to finance the engineering and construction of a wastewater treatment plant, should Cerro Verde proceed with plans for a large-scale concentrator expansion. Once Cerro Verde obtains a license for the treated water, it would be used to supplement its existing water supplies to support the potential concentrator expansion.

For further discussion of risks associated with the availability of water, see Item 1A. “Risk Factors.”

El Abra

We own a 51 percent interest in El Abra, and the remaining 49 percent interest is held by the state-owned copper enterprise Corporación Nacional del Cobre de Chile (CODELCO).

El Abra is an open-pit copper mining complex that has been in operation since 1996 and is located 47 miles north of Calama in Chile’s El Loa province, Region II. The site is accessible by paved highway and by rail.

The El Abra mine is a porphyry copper deposit that has sulfide and oxide mineralization. The predominant primary sulfide copper minerals are bornite and chalcopyrite. There is a minor amount of secondary sulfide mineralization

as chalcocite. The oxide copper minerals are chrysocolla and pseudomalachite. There are lesser amounts of copper-bearing clays and tenorite.

The El Abra operation consists of an open-pit copper mine and an SX/EW facility with a capacity of 500 million pounds of copper cathode per year from a 115,000 metric ton-per-day crushed leach circuit and a similar-sized ROM leaching operation. The available fleet consists of 34 220-metric ton haul trucks loaded by four shovels with buckets ranging in size from 26 to 41 cubic meters, which are capable of moving an average of 223,000 metric tons of material per day.

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During 2011, we commenced production from El Abra’s newly commissioned stacking and leaching facilities to begin transitioning from production of oxide to sulfide ores. Production from the sulfide ore will approximate 300 million pounds of copper per year, replacing the depleting oxide copper production.

El Abra’s copper production totaled 274 million pounds in 2011, 320 million pounds in 2010 and 358 million pounds in 2009.

El Abra is located in a desert environment with rainfall averaging less than one inch per year and is in an active seismic zone. The highest bench elevation is 4,180 meters above sea level and the ultimate pit bottom is expected to be 3,410 meters above sea level. El Abra controls a total of 151,272 acres of mining claims covering the ore deposit, stockpiles, process plant, and water wellfield and pipeline. In addition, El Abra has acquired land surface rights for the road between the processing plant and the mine, the water wellfield, power transmission lines and for the water pipeline from the Salar de Ascotán.

El Abra currently receives electrical power under a long-term contract with Electroandina. Water for our El Abra processing operations comes from pumping of groundwater from the Salar de Ascotán aquifer pursuant to regulatory approval. We believe El Abra has sufficient water rights to support current operations. For a discussion of risks associated with the availability of water, see Item 1A. “Risk Factors.”

Candelaria and Ojos del Salado

Candelaria

We have an 80 percent ownership interest in Candelaria, with the remaining 20 percent interest owned by affiliates of Sumitomo Corporation.

Candelaria’s open-pit copper mine has been in operation since 1993 and the underground mine has been in operation since 2005. The Candelaria copper mining complex is located approximately 12 miles south of Copiapó in northern Chile’s Atacama province, Region III. The site is accessible by two maintained dirt roads, one coming through the Tierra Amarilla community and the other off of Route 5 of the International Pan-American Highway. Copper concentrates are transported by truck to the Punta Padrones port facility located in Caldera, approximately 50 miles northwest of the mine.

The Candelaria mine is an iron oxide, copper and gold deposit. Primary sulfide mineralization consists of chalcopyrite.

The Candelaria operation consists of an open-pit copper mine and a 6,000 metric ton-per-day underground copper mine, which is mined by sublevel stoping, feeding a 75,000 metric ton-per-day concentrator.  The available fleet consists of 46 225-metric ton haul trucks loaded by six shovels with bucket sizes ranging from 28 to 43 cubic meters, which are capable of moving 250,000 metric tons of material per day.

Candelaria’s production totaled 327 million pounds of copper and 85 thousand ounces of gold in 2011, 300 million pounds of copper and 76 thousand ounces of gold in 2010, and 296 million pounds of copper and 74 thousand ounces of gold in 2009.

Candelaria is located in a desert environment with rainfall averaging less than one inch per year and is in an active seismic zone. The highest bench elevation is 675 meters above sea level and the ultimate pit bottom is expected to

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be 32 meters below sea level. The Candelaria property encompasses approximately 13,390 acres, including approximately 125 acres for the port facility in Caldera. The remaining property consists of mineral rights owned by us in which the surface is not owned but controlled by us, which is consistent with Chilean law.

Candelaria receives electrical power through long-term contracts with Empresa Eléctrica Guacolda S.A., a local energy company. Candelaria’s water supply comes from well fields in the area of Tierra Amarilla and Copiapó that draw water from the Copiapó River aquifer. Because of rapid depletion of that aquifer in recent years, Candelaria is expanding its sources of water supply. During 2010, we completed construction of a pipeline to bring water from a nearby water treatment facility. We have also completed engineering and began construction for a desalination plant near the Pacific Ocean that will supply all of Candelaria’s longer term water needs. The plant is expected to be completed in early 2013. For further discussion of risks associated with the availability of water, see Item 1A. “Risk Factors.”

Ojos del Salado

We have an 80 percent ownership interest in Ojos del Salado, with the remaining 20 percent interest owned by affiliates of Sumitomo Corporation.

The Ojos del Salado operation began commercial production in 1929 and consists of two underground copper mines (Santos and Alcaparrosa) and a 3,800 metric ton-per-day concentrator. The operation is located approximately 10 miles east of Copiapó in northern Chile’s Atacama province, Region III, and is accessible by paved highway. The Ojos del Salado mines are iron oxide and copper and gold deposits. Primary sulfide mineralization consists of chalcopyrite.

The Ojos del Salado operation has a capacity of 3,800 metric tons per day of ore from the Santos underground mine and 4,000 metric tons of ore per day from the Alcaparrosa underground mine. The ore from both mines is mined by sublevel stoping since both the ore and enclosing rocks are competent. The broken ore is removed from the stopes using scoops and loaded into an available fleet of 26 28-metric ton trucks, which transport the ore to the surface. The ore from the Santos mine is hauled directly to the Ojos del Salado mill for processing, and the ore from the Alcaparrosa mine is reloaded into six 54-metric ton trucks and hauled seven miles to the Candelaria mill for processing. The Ojos del Salado concentrator has the capacity to produce over 30 million pounds of copper and 9,000 ounces of gold per year. Tailings from the Ojos del Salado mill are pumped to the Candelaria tailings facility for final deposition. The Candelaria facility has sufficient capacity for the remaining Ojos del Salado tailings.

Ojos del Salado’s production totaled 58 million pounds of copper and 16 thousand ounces of gold in 2011, 66 million pounds of copper and 17 thousand ounces of gold in 2010, and 74 million pounds of copper and 18 thousand ounces of gold in 2009.

Ojos del Salado is located in a desert environment with rainfall averaging less than one inch per year and is in an active seismic zone. The highest underground level is at an elevation of 500 meters above sea level, with the lowest underground level at 150 meters above sea level. The Ojos del Salado mineral rights encompass approximately 15,815 acres, which includes approximately 6,784 acres of owned land in and around the Ojos del

Salado underground mines and plant site. The remaining property consists of mineral rights owned by us in which the surface is not owned but controlled by us, which is consistent with Chilean law.

Ojos del Salado receives electrical power through long-term contracts with Empresa Eléctrica Guacolda S.A. Ojos del Salado’s water supply comes from well fields in the area of Tierra Amarilla and Copiapó that draw water from the Copiapó River aquifer. For a discussion of risks associated with the availability of water, see Item 1A. “Risk Factors.”

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Indonesia

Ownership. PT Freeport Indonesia is a limited liability company organized under the laws of the Republic of Indonesia and incorporated in Delaware. We directly own 81.28 percent of PT Freeport Indonesia and 9.36 percent indirectly through our wholly owned subsidiary, PT Indocopper Investama; the Government of Indonesia owns the remaining 9.36 percent.

We have established certain unincorporated joint ventures with Rio Tinto plc (Rio Tinto). Under the joint venture arrangements, Rio Tinto has a 40 percent interest in PT Freeport Indonesia’s Contract of Work (COW) and the option to participate in 40 percent of any other future exploration projects in Papua, Indonesia. Refer to Note 2 for further discussion.

Contract of Work. PT Freeport Indonesia conducts its current exploration and mining operations in Indonesia through a COW with the Government of Indonesia. The COW governs our rights and obligations relating to taxes, exchange controls, royalties, repatriation and other matters, and was concluded pursuant to the 1967 Foreign Capital Investment Law, which expresses Indonesia’s foreign investment policy and provides basic guarantees of remittance rights and protection against nationalization, a framework for economic incentives and basic rules regarding other rights and obligations of foreign investors. Specifically, the COW provides that the Government of Indonesia will not nationalize or expropriate PT Freeport Indonesia’s mining operations. Any disputes regarding the provisions of the COW are subject to international arbitration. We have experienced no disputes requiring arbitration during the more than 40 years we have operated in Indonesia.

PT Freeport Indonesia’s original COW was entered into in 1967 and was replaced by a new COW in 1991. The initial term of the current COW expires in 2021, but can be extended for two 10-year periods subject to Indonesian government approval, which pursuant to the COW cannot be withheld or delayed unreasonably. The COW allows us to conduct exploration, mining and production activities in the 24,700-acre Block A area, which is where all of PT Freeport Indonesia’s proven and probable mineral reserves and current mining operations are located. Under the COW, PT Freeport Indonesia also conducts exploration activities in the Block B area. We expect the Block B area to be reduced to approximately 413,000 acres once the Department of Energy and Mineral Resources (DEMR) formally accepts PT Freeport Indonesia's relinquishment of approximately 89,000 acres. As further discussed in Note 14, PT Freeport Indonesia pays copper royalties under its COW, and has agreed to pay additional royalties to the Government of Indonesia that are not required under its COW. The additional royalties provide further support to the local governments and to the people of the Indonesian province of Papua. PT Freeport Indonesia’s share of the combined royalties totaled $137 million in 2011, $156 million in 2010 and $147 million in 2009.

PT Irja Eastern Minerals (Eastern Minerals), of which we own 100 percent, conducts exploration in Papua through a joint venture agreement under a separate COW. We expect Eastern Minerals' exploration area to be reduced to approximately 283,000 acres once the DEMR formally accepts Eastern Minerals' relinquishment of approximately

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164,000 acres.

Under a joint venture agreement through PT Nabire Bakti Mining (PTNBM), we conduct exploration activities under a separate COW in an area in three parcels contiguous to PT Freeport Indonesia’s Block B and one of Eastern Minerals’ blocks. We expect PTNBM's exploration area to be reduced to approximately 301,000 acres once the DEMR formally accepts PTNBM's relinquishment of approximately 192,000 acres.

In 2009, Indonesia enacted a new mining law, which will operate under a licensing system as opposed to the contract of work system that applies to PT Freeport Indonesia, Eastern Minerals and PTNBM. In 2011 and 2010, the Government of Indonesia promulgated regulations under the 2009 mining law and certain provisions that address existing contracts of work. The laws and regulations provide that contracts of work will continue to be honored until their expiration. However, the regulations attempt to apply certain provisions of the new law to existing contracts of work and may seek to apply the licensing system to any extension periods of contracts of work, even though our COW provides for two 10-year extension periods subject to Indonesian government approval, which pursuant to the COW cannot be withheld or delayed unreasonably. In February 2012, a new regulation was adopted that would require mining companies in Indonesia to process all minerals domestically and possibly ban export of concentrates and other unrefined minerals. PT Freeport Indonesia's existing COW includes specific provisions that define PT Freeport Indonesia's rights to export product and obligate it to develop domestic smelting facilities, if commercially feasible, or to contract with other domestic smelters on a market basis. In connection with the obligations under its COW, in 1995, PT Freeport Indonesia constructed the only copper smelter and refinery in Indonesia, which is owned and operated by PT Smelting.

In January 2012, the President of Indonesia issued a decree calling for the creation of a team to evaluate contracts of work for adjustment to the 2009 Mining Law, and accordingly, to take steps to assess and negotiate size of work areas, government revenues and domestic processing of minerals (refer to Item 1A. "Risk Factors" for further discussion). We intend to continue to work cooperatively with the Government of Indonesia to complete this review and to seek extension of the COW beyond 2021, as provided under the terms of the COW. The COW can only be modified by mutual agreement between PT Freeport Indonesia and the Government of Indonesia.

Grasberg Minerals District.  PT Freeport Indonesia operates in the remote highlands of the Sudirman Mountain Range in the province of Papua, Indonesia, which is on the western half of the island of New Guinea. We and our predecessors have been the only operator of exploration and mining activities in Block A since 1967. The Grasberg minerals district currently has three mines in operation: the Grasberg open pit, the Deep Ore Zone (DOZ) mine and the Big Gossan mine. We also have significant development projects in the Grasberg minerals district, which are discussed in more detail in “Development Projects and Exploration” and in MD&A.

PT Freeport Indonesia’s production, including our joint venture partner’s share, totaled 882 million pounds of copper and 1.4 million ounces of gold in 2011, 1.3 billion pounds of copper and 2.0 million ounces of gold in 2010 and 1.6 billion pounds of copper and 3.0 million ounces of gold in 2009.

Our principal source of power for all our Indonesian operations is a coal-fired power plant that we built in 1998. Diesel generators supply peaking and backup electrical power generating capacity. A combination of naturally occurring mountain streams and water derived from our underground operations provides water for our operations. Our Indonesian operations are in an active seismic zone and experience average annual rainfall of approximately 200 inches.

Grasberg Open Pit  

We began open-pit mining of the Grasberg ore body in 1990. Open-pit operations are expected to continue through mid-2016, at which time underground mining operations are scheduled to begin at our Grasberg Block Cave mine, which is currently in development.Production in the open-pit is currently at the 3,220- to 3,940- meter elevation level and totaled 42 million metric tons of ore in 2011, which provided approximately 70 percent of PT Freeport Indonesia's 2011 mill feed.

The current equipment fleet consists of over 500 units. The larger mining equipment directly associated with production includes an available fleet of 163 haul trucks with payloads ranging from approximately 215 metric tons to 330 metric tons and 18 shovels with bucket sizes ranging from 30 cubic meters to 42 cubic meters, which moved an average of 486,000 metric tons of material per day during 2011 and 701,000 metric tons per day in 2010. The decrease in 2011 primarily reflects the impact of labor disruptions and the temporary suspension of milling operations in fourth-quarter 2011 because of damage to the concentrate and fuel pipelines (refer to MD&A for

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further discussion).

Grasberg crushing and conveying systems are integral to the mine and provide the capacity to transport up to 225,000 metric tons per day of Grasberg ore to the mill and 135,000 metric tons per day of overburden to the overburden stockpiles. The remaining overburden is moved by haul trucks.

DOZ mine

The DOZ ore body lies vertically below the now depleted Intermediate Ore Zone. We began production from the DOZ ore body in 1989 using open stope mining methods, but suspended production in 1991 in favor of production from the Grasberg deposit. Production resumed in September 2000 using the block-cave method. Production is at the 3,110-meter elevation level and totaled 19 million metric tons of ore in 2011. Production at the DOZ mine is expected to continue through 2019. Beginning in 2015, we plan to ramp up production at our Deep Mill Level Zone (DMLZ) block cave mine, which lies below the DOZ mine and is currently under development.

The DOZ mine fleet consists of over 195 pieces of mobile heavy equipment, which is capable of moving an average of 80,000 metric tons of material per day. The primary mining equipment directly associated with production and development includes an available fleet of 52 LHD units and 25 haul trucks. Our production LHD units typically carry approximately 11 metric tons of ore. Using ore passes and chutes, the LHD units transfer ore into 55-metric ton capacity haul trucks. The trucks dump into two gyratory crushers and the ore is then conveyed to the surface stockpiles.

During 2011, we completed over 5,000 meters of development drifting in support of the block-cave mining method for the DOZ mine. The success of the development of the DOZ mine, one of the world’s largest underground mines, provides confidence in the future development of PT Freeport Indonesia’s large-scale undeveloped underground ore bodies.

Big Gossan mine

The Big Gossan mine lies underground and adjacent to the current mill site. It is a tabular, near vertical ore body with approximate dimensions of 1,200 meters along strike and 800 meters down dip with varying thicknesses from 20 meters to 120 meters.  The mine utilizes a blasthole stoping method with delayed paste backfill.  Stopes of varying sizes are mined and the ore dropped down passes to a truck haulage level.  Trucks are chute loaded and transport the ore to a jaw crusher.  The crushed ore is then hoisted vertically via a two skip production shaft to a level where it is loaded onto a conveyor belt.  The belt carries the ore to one of the main underground conveyors where the ore is transferred and carried to the surface mill stockpile for processing.

Production from the Big Gossan mine began in fourth-quarter 2010 and is designed to ramp up to 7,000 metric tons of ore per day by mid-2013, which will result in 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.

Description of Ore Bodies. Our Indonesia ore bodies are located within and around two main igneous intrusions, the Grasberg monzodiorite and the Ertsberg diorite. The host rocks of these ore bodies include both carbonate and clastic rocks that form the ridge crests and upper flanks of the Sudirman Range, and the igneous rocks of monzonitic to dioritic composition that intrude them. The igneous-hosted ore bodies (the Grasberg open pit and block cave, and portions of the DOZ block cave) occur as vein stockworks and disseminations of copper sulfides, dominated by chalcopyrite and, to a much lesser extent, bornite. The sedimentary-rock hosted ore bodies (portions of the DOZ and all of the Big Gossan) occur as “magnetite-rich, calcium/magnesian skarn” replacements, whose location and orientation are strongly influenced by major faults and by the chemistry of the carbonate rocks along the margins of the intrusions.

The copper mineralization in these skarn deposits is dominated by chalcopyrite, but higher bornite concentrations are common. Moreover, gold occurs in significant concentrations in all of the district’s ore bodies, though rarely visible to the naked eye. These gold concentrations usually occur as inclusions within the copper sulfide minerals, though, in some deposits, these concentrations can also be strongly associated with pyrite.

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The following diagram indicates the relative elevations (in meters) of our reported ore bodies.

The following map, which encompasses an area of approximately 42 square kilometers (approximately 16 square miles), indicates the relative positions and sizes of our reported ore bodies and their locations.

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Africa

TFM is organized under the laws of the DRC, and we currently own an effective 57.75 percent interest. The remaining ownership interests are held by Lundin Mining Corporation (Lundin) (currently an effective 24.75 percent interest) and La Générale des Carrières et des Mines (Gécamines), which is wholly owned by the Government of the DRC (currently a 17.5 percent non-dilutable interest).

TFM is entitled to mine in the DRC under an Amended and Restated Mining Convention (ARMC) with the Government of the DRC. The original Mining Convention was entered into in 1996 and was replaced with the ARMC in 2005. As further discussed in Note 14, in October 2010, the Government of the DRC concluded its review of TFM’s existing mining contracts and confirmed that they are in good standing. 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 receiving the required government approval of the modifications to TFM's bylaws that reflect agreement with the Government of the DRC, our effective ownership interest in the project will be reduced to 56.0 percent, Lundin’s effective ownership interest will be reduced to 24.0 percent and Gécamines' ownership interest will increase to 20.0 percent (non-dilutable), prospectively.

TFM pays a royalty of 2 percent of net revenues under the ARMC, which totaled $24 million in 2011, $20 million in 2010 and $7 million in 2009.

The Tenke Fungurume deposits are located in the Katanga province of the DRC approximately 110 miles northwest of Lubumbashi and are accessible by unpaved roads and by rail. The deposits are sediment-hosted copper and cobalt deposits with oxide, mixed oxide-sulfide and sulfide mineralization. The dominant oxide minerals are malachite, pseudomalachite and heterogenite. Important sulfide minerals consist of bornite, carrollite, chalcocite and chalcopyrite.

Initial copper production commenced at the Tenke mine in late March 2009. Targeted copper production rates were achieved in September 2009 and the cobalt and sulphuric acid plants were commissioned in third-quarter 2009. Copper and cobalt are recovered through an agitation-leach plant. The milling facilities at the Tenke mine, which were designed to process ore at a rate of 8,000 metric tons of ore per day, have been performing above capacity, with mill throughput averaging 11,100 metric tons of ore per day in 2011. Mining rates have been increased to enable additional copper production from the initial project capacity of 250 million pounds of copper per year to ramp up to approximately 290 million pounds of copper per year. The current equipment fleet includes one 10-cubic meter mass excavator, two 12-cubic meter front-end loaders, eleven 7-cubic meter front-end loaders, six 91-metric ton haul trucks, 28 45-metric ton haul trucks, surface miners, production drills, sampling machines and crawler dozers.

Production from the Tenke mine totaled 281 million pounds of copper and 25 million pounds of cobalt in 2011, 265 million pounds of copper and 20 million pounds of cobalt in 2010 and 154 million pounds of copper in 2009.

We are undertaking a second phase of the project, which would include optimizing the current plant and increasing capacity (refer to “Development Projects and Exploration” for further discussion of the Tenke mill expansion project). We continue to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective Tenke Fungurume minerals district. These analyses are being incorporated into future

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plans to evaluate opportunities for expansion. Future expansions are subject to a number of factors, including economic and market conditions and the business and investment climate in the DRC.

The Tenke Fungurume minerals district is located in a tropical region; however, temperatures are moderated by its higher altitudes. Weather in this region is characterized by a dry season and a wet season, each lasting about six months with average rainfall of 47 inches per year. The highest bench elevation is expected to be 1,518 meters above sea level and the ultimate pit bottom is expected to be 1,110 meters above sea level. The Tenke Fungurume deposits are covered by six exploitation permits totaling 394,455 acres.

TFM has entered into long-term power supply and infrastructure funding agreements with La Société Nationale d’Electricité, the state-owned electric utility company serving the region. The results of a recent water exploration program, as well as the regional geological and hydro-geological conditions, indicate that adequate water is available for the project, and for hydro-electric generation during the expected life of the operation.

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For comparative purposes, production and sales data shown below for the year ended December 31, 2007, combines our historical data with FMC's pre-acquisition data. As the pre-acquisition operating data represents the results of operations under FMC management, such combined data is not necessarily indicative of what past results would have been under FCX management or of future operating results.

PRODUCTION DATA

	Years Ended December 31,
COPPER (millions of recoverable pounds)	2011		2010	2009	2008		2007a
(FCX’s net interest in %)
North America
Morenci (85%)b	522		437	428	626		687
Bagdad (100%)	194		203	225	227		202
Safford (100%)	151		143	184	133		1
Sierrita (100%)	177		147	170	188		150
Miami (100%)	66		18	16	19		20
Tyrone (100%)	76		82	86	76		50
Chino (100%)	69		34	36	155		190
Other (100%)	3		3	2	6		20
Total North America	1,258		1,067	1,147	1,430		1,320	c
South America
Cerro Verde (53.56%)	647		668	662	694		594
El Abra (51%)	274		320	358	366		366
Candelaria/Ojos del Salado (80%)	385		366	370	446		453
Total South America	1,306		1,354	1,390	1,506		1,413	c
Indonesia
Grasberg (90.64%)d	846		1,222	1,412	1,094		1,151
Africa
Tenke Fungurume (57.75%)	281		265	154	—		—
Consolidated	3,691		3,908	4,103	4,030		3,884
Less noncontrolling interests	710		766	754	693		653
Net	2,981		3,142	3,349	3,337		3,231
GOLD (thousands of recoverable ounces)
(FCX’s net interest in %)
North America (100%)b	10		7	4	14		15
South America (80%)	101		93	92	114		116
Indonesia (90.64%)d	1,272		1,786	2,568	1,163		2,198
Consolidated	1,383		1,886	2,664	1,291		2,329	c
Less noncontrolling interests	139		186	258	132		229
Net	1,244		1,700	2,406	1,159		2,100
MOLYBDENUM(millions of recoverable pounds)
(FCX’s net interest in %)
Henderson (100%)	38		40	27	40		39
North America copper mines (100%)	35	b	25	25	30	b	30	b
Cerro Verde (53.56%)	10		7	2	3		1
Consolidated	83		72	54	73		70	c
Less noncontrolling interest	5		3	1	1		—
Net	78		69	53	72		70

a. For comparative purposes, operating data for the year ended December 31, 2007, combines our historical data with FMC's pre-acquisition data. As the pre-acquisition data represents the results of operations under FMC management, such combined data is not necessarily indicative of what past results would have been under FCX management or of future operating results.

b. Amounts are net of Morenci’s 15 percent joint venture partner interest.

c. Includes FMC's pre-acquisition results of 258 million pounds of copper in North America, 259 million pounds of copper in South America, 21 thousand ounces of gold and 14 million pounds of molybdenum.

d. Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with terms of the joint venture agreement.

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SALES DATA

	Years Ended December 31,
COPPER (millions of recoverable pounds)	2011		2010		2009		2008		2007a
(FCX’s net interest in %)
North America
Morenci (85%)b	521		434		459		646		693
Bagdad (100%)	201		206		225		226		200
Safford (100%)	147		155		176		107		—
Sierrita (100%)	175		152		172		184		157
Miami (100%)	59		17		16		20		24
Tyrone (100%)	79		83		85		71		53
Chino (100%)	62		35		52		174		186
Other (100%)	3		3		2		6		19
Total North America	1,247		1,085		1,187		1,434		1,332		c
South America
Cerro Verde (53.56%)	657		654		667		701		587
El Abra (51%)	276		315		361		365		365
Candelaria/Ojos del Salado (80%)	389		366		366		455		447
Total South America	1,322		1,335		1,394		1,521		1,399		c
Indonesia
Grasberg (90.64%)d	846		1,214		1,400		1,111		1,131
Africa
Tenke Fungurume (57.75%)	283		262		130		—		—
Consolidated sales from mines	3,698		3,896		4,111		4,066		3,862
Less noncontrolling interests	717		756		746		699		647
Net	2,981		3,140		3,365		3,367		3,215
Consolidated sales from mines	3,698		3,896		4,111		4,066		3,862
Purchased copper	223		182		166		483		650
Total copper sales, including purchases	3,921		4,078		4,277		4,549		4,512
Average realized price per pound	$	3.86	$	3.59	$	2.60	$	2.69	$	3.22	e
GOLD(thousands of recoverable ounces)
(FCX’s net interest in %)
North America (100%)b	7		5		6		16		21
South America (80%)	101		93		90		116		114
Indonesia (90.64%)d	1,270		1,765		2,543		1,182		2,185
Consolidated sales from mines	1,378		1,863		2,639		1,314		2,320		c
Less noncontrolling interests	139		184		256		134		228
Net	1,239		1,679		2,383		1,180		2,092
Consolidated sales from mines	1,378		1,863		2,639		1,314		2,320
Purchased gold	1		1		1		2		6
Total gold sales, including purchases	1,379		1,864		2,640		1,316		2,326
Average realized price per ounce	$	1,583	$	1,271	$	993	$	861	$	682
MOLYBDENUM(millions of recoverable pounds)
Consolidated sales from mines	79		67		58		71		69		c
Less noncontrolling interests	4		3		1		1		—
Net	75		64		57		70		69
Consolidated sales from mines	79		67		58		71		69
Purchased molybdenum	—		2		6		8		9
Total molybdenum sales, including purchases	79		69		64		79		78
Average realized price per pound	$	16.98	$	16.47	$	12.36	$	30.55	$	25.87

a. For comparative purposes, operating data for the year ended December 31, 2007, combines our historical data with FMC's pre-acquisition data. As the pre-acquisition data represents the results of operations under FMC management, such combined data is not necessarily indicative of what past results would have been under FCX management or of future operating results.

b. Amounts are net of Morenci’s joint venture partner’s 15 percent interest.

c. Includes FMC pre-acquisition results of 283 million pounds of copper in North America, 222 million pounds of copper in South America, 18 thousand ounces of gold and 17 million pounds of molybdenum.

d. Amounts are net of Grasberg’s joint venture partner’s interest, which varies in accordance with terms of the joint venture agreement.

e. Before charges for hedging losses related to copper price protection programs, amount was $3.27 per pound.

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DEVELOPMENT PROJECTS AND EXPLORATION

We have increased production at several of our copper mines and have several projects and potential opportunities to expand production volumes, extend mine lives and develop large-scale underground ore bodies. Our near-term major development projects, which will require substantial additional capital investment, are presented below (refer to MD&A for further discussion of these projects, our other development projects and exploration activities).

Morenci. We are advancing a feasibility study at Morenci to process additional sulfide ore identified through exploratory drilling. This project would increase milling rates from the current level of 50,000 metric tons of ore per day to 115,000 metric tons of ore per day and targets incremental annual copper production of approximately 225 million pounds within a three-year timeframe. Completion of the feasibility study is expected in the first half of 2012.

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 2012.

Cerro Verde. Plans for a large-scale concentrator at Cerro Verde continue to be advanced. The project will expand the concentrator facilities from the current level of 120,000 metric tons per day to 360,000 metric tons of ore per day, targeting incremental annual production of approximately 600 million pounds of copper and 15 million pounds of molybdenum beginning in 2016. An environmental impact assessment was filed in fourth-quarter 2011.

El Abra. We are 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. Exploration results at El Abra indicate the potential for a significant additional sulfide resource.

Grasberg. We have several projects in progress in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open pit. In aggregate, these ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following the currently anticipated transition from the Grasberg open pit in 2016.

Tenke. We are undertaking a second phase of the project in the Tenke minerals district, which includes optimizing the current plant and increasing capacity. As part of the second phase, we plan to expand the mill rate to 14,000 metric tons of ore per day and to construct related processing facilities that would target the addition of approximately 150 million pounds of copper per year. The project, which includes mill upgrades, additional mining equipment and a new tankhouse and sulphuric acid plant expansion, is targeted for completion in 2013.

In addition to the near-term development projects in progress in the Grasberg minerals district, we also have an additional long-term underground mine development project in the Grasberg minerals district for the Kucing Liar ore body, which lies on the southern flank of and underneath the southern portion of the Grasberg open pit at the 2,605-meter elevation level. We expect to mine the Kucing Liar ore body using the block-cave method; aggregate capital cost estimates for development of the Kucing Liar ore body are projected to approximate $2 billion (which are expected to be made between 2019 and 2031). Additionally, our current mine development plans include approximately $3 billion of capital expenditures at our processing facilities to optimize the handling of underground ore types once the Grasberg open-pit operations cease (we expect substantially all of these expenditures to be made between 2016 and 2030).

Considering the long-term nature and large size of our development projects, actual costs and timing could differ materially from our estimates. We continue to review our mine development and processing plans to maximize the value of our reserves.

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SMELTING FACILITIES

Atlantic Copper, S.L. Our wholly owned Atlantic Copper smelter and refinery is located on land concessions from the Huelva, Spain, port authorities, which expire in 2027.

The design capacity of the smelter is 290,000 metric tons of copper per year and the refinery currently has a capacity of 285,000 metric tons of copper per year. During 2011, Atlantic Copper treated 935,700 metric tons of concentrate and scrap and produced 253,000 metric tons of copper anodes and 247,400 metric tons of copper cathodes. During 2010, Atlantic Copper treated 980,700 metric tons of concentrate and scrap and produced 255,000 metric tons of copper anodes and 253,000 metric tons of copper cathodes.

In May 2011, Atlantic Copper successfully completed a scheduled 26-day maintenance turnaround.  Major maintenance turnarounds typically are expected to occur approximately every eight years for Atlantic Copper, with short-term maintenance turnarounds in the interim. The next long-term maintenance turnaround is scheduled for 2013.

During 2011, we made capital contributions of $202 million to Atlantic Copper; no capital contributions were made for the years 2005 through 2010. We loan funds to Atlantic Copper from time to time, and at December 31, 2011, these loans totaled $586 million.

PT Smelting. PT Freeport Indonesia’s 1991 COW required us to construct or cause to be constructed a smelter in Indonesia if we and the Indonesian government determined that such a project would be economically viable. In 1995, following the completion of a feasibility study, we entered into agreements relating to the formation of PT Smelting, an Indonesian company, and the construction of the copper smelter and refinery in Gresik, Indonesia. PT Smelting owns and operates the smelter and refinery. PT Freeport Indonesia, Mitsubishi Materials Corporation (Mitsubishi Materials), Mitsubishi Corporation Unimetals Ltd. (Mitsubishi) and JX Nippon Mining & Metals Corporation (Nippon) own 25 percent, 60.5 percent, 9.5 percent, and 5 percent, respectively, of the outstanding PT Smelting common stock.

PT Freeport Indonesia’s contract with PT Smelting provides for the supply of 100 percent of the copper concentrate requirements (subject to a minimum or maximum rate) necessary for PT Smelting to produce 205,000 metric tons of copper annually on a priority basis.  PT Freeport Indonesia also sells copper concentrate to PT Smelting (at market rates) for quantities in excess of 205,000 metric tons of copper annually.  Refer to Note 2 for further discussion of our investment in PT Smelting.

During 2011, PT Smelting treated 1,087,300 metric tons of concentrate and produced 276,200 metric tons of copper anodes and 274,900 metric tons of copper cathodes. During 2010, PT Smelting treated 1,034,800 metric tons of concentrate and produced 262,700 metric tons of copper anodes and 277,500 metric tons of copper cathodes.

In 2008, PT Smelting completed a scheduled 25-day maintenance turnaround. Major maintenance turnarounds typically are expected to occur approximately every four years for PT Smelting, with significantly shorter term maintenance turnarounds in the interim. The next major maintenance turnaround is scheduled for May 2012.

Miami Smelter. We own and operate a smelter at our Miami, Arizona, mining operation. The smelter has been in production for over 80 years and has been upgraded numerous times during that period to implement new technologies, to improve production and to comply with air quality requirements. Additionally, there are new air regulations that may require the Miami smelter to implement additional new technologies to meet these requirements (refer to Item 1A. “Risk Factors” for further discussion).

The Miami smelter processes copper concentrate primarily from our Arizona copper mines. Concentrate processed through the smelter totaled approximately 625,000 metric tons in each of 2011 and 2010. In addition, because sulphuric acid is a by-product of smelting concentrates, the Miami smelter is also the most significant source of sulphuric acid for our North America leaching operations.

Major maintenance turnarounds typically occur approximately every 14 months for the Miami smelter, with shorter term maintenance turnarounds in the interim.

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OTHER PROPERTIES AND INVESTMENTS

Rod & Refining Operations. Our Rod & Refining operations consist of conversion facilities located in North America, including a refinery in El Paso, Texas; rod mills in El Paso, Texas, Norwich, Connecticut, and Miami, Arizona; and a specialty copper products facility in Bayway, New Jersey. We refine our copper anode production from our Miami smelter, along with purchased anodes, at our El Paso refinery. The El Paso refinery has the potential to operate at an annual production capacity of about 900 million pounds of copper cathode, which is sufficient to refine all of the copper anode we produce at Miami. Our El Paso refinery also produces nickel carbonate, copper telluride, and autoclaved slimes material containing gold, silver, platinum and palladium.

Molybdenum Conversion Facilities. We process molybdenum concentrates at our conversion plants in the U.S. and Europe into such products as technical-grade molybdic oxide, ferromolybdenum, pure molybdic oxide, ammonium molybdates, molybdenum disulfide and molybdenum metal powder. We operate molybdenum roasters in Sierrita, Arizona; Fort Madison, Iowa; and Rotterdam, the Netherlands.

The conversion facility located at our Sierrita mine consists of two molybdenum roasters that process molybdenum concentrates produced at our mines and on a toll basis for third parties. The facility produces molybdenum oxide and related products.

The Fort Madison facility consists of two molybdenum roasters, a sulphur dioxide conversion plant, a metallurgical (technical oxide) packaging facility, and a chemical conversion plant, which includes a wet-chemicals plant, sublimation equipment and molybdenum disulfide processing and packaging. In the chemical plant, molybdic oxide is further refined into various high-purity molybdenum chemicals for a wide range of uses by chemical and catalyst manufacturers. In addition to metallurgical oxide products, the Fort Madison facility produces ammonium dimolybdate, pure molybdic oxide, ammonium heptamolybdate, ammonium octamolybdate, sodium molybdate, sublimed pure molybdic oxide and molybdenum disulfide.

The Rotterdam facility consists of a molybdenum roaster, sulphuric acid plant, metallurgical packaging

facility and chemical conversion plant. The plant produces metallurgical products primarily for third parties. Ammonium dimolybdate and pure molybdic oxide are produced in the wet-chemicals plant.

We also produce ferromolybdenum for customers worldwide at our conversion plant located in Stowmarket, United Kingdom. The plant is operated both as an internal and external customer tolling facility.

McMoRan Exploration Co. (MMR). In December 2010, we purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock for an aggregate purchase price of $500 million (refer to Note 6 for further discussion).  In connection with the purchase, we entered into a registration rights agreement and a stockholder agreement with MMR.

MMR is engaged in the exploration, development and production of oil and natural gas in the shallow waters of the Gulf of Mexico Shelf. MMR is currently undertaking a major capital program to fund recent and planned additional exploration. Our investment allows us to participate in MMR’s highly prospective North American exploration and development activities, which have the potential to general significant value.

Several of our directors and executive officers also serve as directors or executive officers of MMR, and our wholly owned subsidiary FM Services Company (FM Services) provides certain executive, technical administrative, accounting, financial, tax and other services to us and to MMR on a cost-reimbursement basis. Refer to Part III, Item 13. “Certain Relationships and Related Transactions, and Director Independence,” for additional information.

SOURCES AND AVAILABILITY OF RAW MATERIALS

Our copper mining operations require significant energy, principally diesel, electricity, coal and natural gas, most of which is obtained from third parties under long-term contracts. Energy represented approximately 21 percent of our 2011 consolidated copper production costs and included purchases of approximately 225 million gallons of diesel fuel; 6,475 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); 650 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. For 2012, we estimate energy costs will approximate 23 percent of our consolidated copper production costs.

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Sulphuric acid is used in the SX/EW process and is produced as a by-product of the smelting process at our smelters and from our sulphur burners at the Safford and Tenke mines. Sulphuric acid needs in excess of the sulphuric acid produced by our operations are purchased from third parties as required.

Our mining operations also require significant quantities of water for mining, ore processing and related support facilities. Although we believe our mining operations have sufficient water rights, the loss of water rights for any of our mines, in whole or in part, or shortages of water to which we have rights, could require us to curtail or shut down mining operations. For a further discussion of risks and legal proceedings associated with the availability of water, refer to Item 1A. “Risk Factors” and Item 3. “Legal Proceedings.”

COMPETITION

The top 10 producers of copper comprise approximately 50 percent of total worldwide mined copper production. We currently rank second among those producers at approximately nine percent of total worldwide estimated mined copper production. Our competitive position is based on the quality and grade of our ore bodies and our ability to manage costs compared with other producers. We have a diverse portfolio of mining operations with varying ore grades and cost structures. Our costs are driven by the location, grade and nature of our ore bodies and the level of input costs, including energy, labor and equipment. The metals markets are cyclical and our ability to maintain our competitive position over the long term is based on our ability to acquire and develop quality deposits, hire and retain a skilled workforce and to manage our costs.

LABOR MATTERS

At December 31, 2011, we employed approximately 31,800 people (approximately 12,300 in Indonesia, 11,000 in North America, 4,800 in South America, 2,800 in Africa and 900 in Europe and other locations). Additionally, we have contractors that have personnel at many of our operations, including approximately 10,500 at our Grasbergminerals district, 11,500 at our South America mining operations, 3,900 at our Tenke Fungurume minerals district, 1,500 in North America and 400 at Atlantic Copper.

Employees represented by unions are listed below, with the approximate number of employees represented and the expiration date of the applicable union agreements. Refer to Item 1A. "Risk Factors" for further information on labor agreements.

Location	Number of Unions	Number of Union- Represented Employees	Expiration Date
PT Freeport Indonesia – Indonesia	1	8,712	September 2013
Tenke Fungurume – DRC	6	2,750	August 2013
Cerro Verde – Peru	1	1,407	August 2014
El Abra – Chile	2	925	December 2015
Candelaria – Chile	2	805	July 2013
Atlantic Copper – Spain	2	427	December 2011a
Chino – New Mexico	1	286	November 2014
Rotterdam – The Netherlands	2	48	March 2013
Bayway – New Jersey	1	43	April 2013
Aurex – Chile	1	39	December 2013
Stowmarket – United Kingdom	1	31	May 2014

a. Negotiations are in progress while employees continue to work under the provisions of the expired contract.

ENVIRONMENTAL AND RECLAMATION MATTERS

The cost of complying with environmental laws is a fundamental and substantial cost of our business. For information about environmental regulation, litigation and related costs, refer to Item 1A. “Risk Factors”, and Notes 1 and 13.

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COMMUNITY AND HUMAN RIGHTS

We have adopted policies that govern our working relationships with the communities where we operate and are designed to guide our practices and programs in a manner that respects basic human rights and the culture of the local people impacted by our operations. We continue to make significant expenditures on community development, education, training and cultural programs, which include:

• comprehensive job training programs

• basic education programs

• public health programs, including malaria control and HIV testing                                                                                             

• agricultural assistance programs

• small and medium enterprise development programs

• cultural preservation programs

• water and sewage treatment projects

• clean water access

• charitable donations

In December 2000, we endorsed the joint U.S. State Department-British Foreign Office Voluntary Principles on Human Rights and Security (Voluntary Principles). Several major natural resources companies and international human rights organizations participated in developing the Voluntary Principles and have endorsed them. We participated in developing these principles and they are incorporated into our human rights policy.

We believe that our social and economic development programs are responsive to the issues raised by the local communities near our areas of operation and should help us maintain good relations with the surrounding communities and avoid disruptions of mining operations. Nevertheless, social and political instability in the areas of our operations may adversely impact our mining operations. Refer to Item 1A. “Risk Factors” for further discussion.

South America. Cerro Verde has provided a variety of community support projects over the years. During 2006, as a result of discussions with local mayors in the Arequipa region, Cerro Verde agreed to contribute to the design and construction of domestic water and sewage treatment plants for the benefit of the region. These facilities are being designed in a modular fashion so that initial installations can be readily expanded in the future.

Additionally, 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, which expired in 2010, was equal to 3.75 percent of after-tax profits and totaled $41 million in 2010 and $28 million in 2009. Refer to Note 14 for further discussion.

Indonesia. In 1996, PT Freeport Indonesia established the Freeport Partnership Fund for Community Development (the Partnership Fund), through which PT Freeport Indonesia has made available funding and technical assistance to support community development initiatives in the areas of health, education and economic development of the area. PT Freeport Indonesia has committed through 2016 to provide one percent of its annual revenue for the development of the local people in its area of operation through the Partnership Fund. Our share of contributions to the Partnership Fund totaled $50 million in 2011, $64 million in 2010 and $59 million in 2009.

The Amungme and Kamoro Community Development Organization (Lembaga Pembangunan Masyarakat Amungme dan Kamoro or LPMAK) oversees disbursement of the program funds we contribute to the Partnership Fund. LPMAK is governed by a board of commissioners and a board of directors, which are comprised of representatives from the local Amungme and Kamoro tribal communities, government leaders, church leaders, and one representative of PT Freeport Indonesia on each board. The Amungme and Kamoro people are original inhabitants of the land in our area of operations.

Security Matters.Consistent with our COW in Indonesia and the requirement to protect our employees and property, we have taken appropriate steps to provide a safe and secure working environment. As part of its security program, PT Freeport Indonesia maintains its own internal security department, which is unarmed and performs functions such as protecting company facilities, monitoring the shipment of company supplies and products, assisting in traffic control and aiding in emergency response operations. The security department has received human rights training and each member is required to certify his or her compliance with our human rights policy.

PT Freeport Indonesia’s share of costs for its internal civilian security department totaled $37 million for 2011, $28

29

million for 2010 and $18 million for 2009.

PT Freeport Indonesia, and all businesses and residents of Indonesia, rely on the Indonesian government for the maintenance of public order, upholding the rule of law and the protection of personnel and property. The Grasberg minerals district has been designated by the Indonesian government as one of Indonesia’s vital national assets. This designation results in the police and to a lesser extent, the military, playing a significant role in protecting the area of our operations. The Indonesian government is responsible for employing police and military personnel and directing their operations.

From the outset of PT Freeport Indonesia’s operations, the Indonesian government has looked to PT Freeport Indonesia to provide logistical and infrastructure support and assistance for these necessary services because of the limited resources of the Indonesian government and the remote location of and lack of development in Papua. PT Freeport Indonesia’s financial support for the Indonesian government security institutions assigned to the operations area represents a prudent response to its requirements to protect its workforce and property, better

ensuring that personnel are properly fed and lodged, and have the logistical resources to patrol PT Freeport Indonesia’s roads and secure its operating area. In addition, the provision of such support is consistent with PT Freeport Indonesia’s obligations under the COW, reflects our philosophy of responsible corporate citizenship, and is in keeping with our commitment to pursue practices that will promote human rights.

PT Freeport Indonesia’s share of support costs for the government-provided security was $14 million for each of the years 2011 and 2010, and $10 million for 2009. This supplemental support consists of various infrastructure and other costs, such as food, housing, fuel, travel, vehicle repairs, allowances to cover incidental and administrative costs, and community assistance programs conducted by the military and police.

Refer to Item 1A. "Risk Factors" for further discussion of security risks in Indonesia.

Africa. TFM has committed to assist the communities living within its concession in the Katanga province of the DRC. Initiatives include an integrated malaria control program, construction and operational support for six elementary schools, as well as renovation and construction of an additional four schools, installation of over 70 clean water wells, a public sanitation (latrines and hand washing) program reaching over 2,000 households, a mobile clinic for rural villages, and economic development programs supporting micro-credit and development of local entrepreneurs, contractors, and farmers. We have also made significant investments in infrastructure in the region that will have lasting benefits to the country, including upgrading a portion of a national road and the regional power generation and transmission systems.

TFM has also committed to contribute 0.3 percent of net sales revenue from production to a community development fund to assist the local communities with development of local infrastructure and related services. This fund will be a platform to work jointly with the local government and community to further assist them to fulfill their local development plans, meet basic community needs and promote good governance. Community development fund contributions totaled $4 million in 2011, $3 million in 2010 and $1 million in 2009.

Security Matters. TFM maintains an unarmed internal security department. The national government also has assigned Mines Police to the TFM concession area. The Mines Police are a division of the Congolese National Police and are responsible for maintaining security in mining concessions throughout the DRC. TFM provides food, housing, monetary allowances and logistical support as well as direct payments to the government for the provision of the security assigned to the concession area. The total cost to TFM for this support, including in-kind support, totaled less than $1 million in each of the years 2011, 2010 and 2009.

TFM also participates in monthly security coordination meetings with host country security personnel, other mining companies, and representatives from the United Nations to discuss security issues and concerns.

30

ORE RESERVES

Recoverable proven and probable reserves summarized below and detailed on the following pages have been calculated as of December 31, 2011, in accordance with Industry Guide 7 as required by the Securities Exchange Act of 1934. Proven and probable reserves may not be comparable to similar information regarding mineral reserves disclosed in accordance with the guidance of other countries. Proven and probable reserves were determined by the use of mapping, drilling, sampling, assaying and evaluation methods generally applied in the mining industry, as more fully discussed below. The term “reserve,” as used in the reserve data presented here, means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “proven reserves” means reserves for which (1) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (2) grade and/or quality are computed from the results of detailed sampling; and (3) the sites for inspection, sampling and measurements are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well established. The term “probable reserves” means reserves for which quantity and grade are computed from information similar to that used for proven reserves but the sites for sampling are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

Our reserve estimates are based on the latest available geological and geotechnical studies. We conduct ongoing studies of our ore bodies to optimize economic values and to manage risk. We revise our mine plans and estimates of recoverable proven and probable mineral reserves as required in accordance with the latest available studies. Our estimates of recoverable proven and probable reserves are prepared by and are the responsibility of our employees; a majority of these estimates are reviewed and verified by independent experts in mining, geology and reserve determination.

Estimated recoverable proven and probable reserves at December 31, 2011, were determined using long-term average prices of $2.00 per pound for copper, $750 per ounce for gold, $10 per pound for molybdenum, $15 per ounce for silver and $10 per pound for cobalt. For the three-year period ended December 31, 2011, LME spot copper prices averaged $3.25 per pound, London PM gold prices averaged $1,245 per ounce, and the weekly average price of molybdenum quoted by Metals Week averaged $14.06 per pound. The recoverable proven and probable reserves presented in the table below represent the estimated metal quantities from which we expect to be paid after application of estimated metallurgical recovery rates and smelter recovery rates, where applicable. Recoverable reserves are the part of a mineral deposit that we estimate can be economically and legally extracted or produced at the time of the reserve determination.

	Recoverable Proven and Probable Reserves at December 31, 2011
	Coppera (billion pounds)	Gold (million ounces)	Molybdenum (billion pounds)	Silver (million ounces)	Cobalt (billion pounds)
North America	40.6	0.4	2.71	98.2	—
South America	39.1	1.3	0.71	113.4	—
Indonesia	31.6	32.2	—	118.7	—
Africa	8.4	—	—	—	0.86
Consolidated basisb	119.7	33.9	3.42	330.3	0.86
Net equity interestc	96.1	30.6	3.09	272.1	0.49

a. Recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles (refer to “Mill and Leach Stockpiles” for further discussion).

b. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and at the Grasberg minerals district in Indonesia.

c. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

31

Recoverable Proven and Probable Reserves
Estimated at December 31, 2011
		Proven Reserves								Probable Reserves
			Average Ore Grade								Average Ore Grade
	Processing	Million	Copper	Gold		Moly	Silver	Cobalt		Million	Copper	Gold		Moly	Silver	Cobalt
	Method	metric tons	%	g/t		%	g/t	%		metric tons	%	g/t		%	g/t	%
North America
Morenci	Mill	443	0.48	—		0.025	—	—		5	0.48	—		0.022	—	—
	Crushed leach	594	0.58	—		—	—	—		9	0.45	—		—	—	—
	ROM leach	3,103	0.18	—		—	—	—		96	0.15	—		—	—	—
Bagdad	Mill	1,038	0.35	—	a	0.021	1.75	—		229	0.32	—	a	0.017	1.70	—
	ROM leach	218	0.12	—		—	—	—		144	0.11	—		—	—	—
Safford	Crushed leach	129	0.44	—		—	—	—		77	0.42	—		—	—	—
Sierrita	Mill	2,420	0.24	—	a	0.026	1.42	—		346	0.21	—	a	0.020	1.25	—
	ROM leach	7	0.20	—		—	—	—		4	0.22	—		—	—	—
Miami	ROM leach	50	0.49	—		—	—	—		10	0.38	—		—	—	—
Tyrone	ROM leach	141	0.30	—		—	—	—		7	0.19	—		—	—	—
Chino	Mill	110	0.59	0.04		0.011	0.48	—		69	0.55	0.03		0.006	0.44	—
	ROM leach	186	0.33	—		—	—	—		56	0.25	—		—	—	—
Henderson	Mill	118	—	—		0.174	—	—		3	—	—		0.171	—	—
Climax	Mill	75	—	—		0.189	—	—		112	—	—		0.137	—	—
Cobreb	ROM leach	71	0.40	—		—	—	—		2	0.23	—		—	—	—
		8,703	0.27	—	a	0.015	0.61	—		1,169	0.23	—	a	0.023	0.73	—
South America
Cerro Verde	Mill	888	0.41	—		0.016	1.75	—		2,864	0.39	—		0.015	1.64	—
	Crushed leach	91	0.52	—		—	—	—		55	0.45	—		—	—	—
	ROM leach	37	0.21	—		—	—	—		42	0.21	—		—	—	—
El Abra	Crushed leach	386	0.52	—		—	—	—		131	0.49	—		—	—	—
	ROM leach	218	0.32	—		—	—	—		146	0.27	—		—	—	—
Candelaria	Mill	317	0.57	0.13		—	2.05	—		22	0.64	0.16		—	2.25	—
Ojos del Salado	Mill	3	1.17	0.28		—	4.44	—		3	0.81	0.22		—	3.50	—
		1,940	0.45	0.02		0.007	1.14	—		3,263	0.39	—	a	0.013	1.46	—
Indonesia
Grasberg open pit	Mill	204	0.91	1.05		—	2.35	—		108	0.74	0.64		—	1.87	—
Deep Ore Zone	Mill	62	0.58	0.68		—	2.50	—		144	0.56	0.69		—	2.33	—
Big Gossan	Mill	14	2.34	1.14		—	15.41	—		42	2.12	0.91		—	12.80	—
Grasberg Block Caveb	Mill	335	1.21	1.04		—	3.46	—		684	0.88	0.64		—	3.29	—
Kucing Liarb	Mill	149	1.31	1.15		—	8.00	—		271	1.18	1.06		—	6.47	—
Deep Mill Level Zoneb	Mill	65	0.95	0.76		—	4.70	—		445	0.83	0.71		—	4.11	—
		829	1.10	1.01		—	4.22	—		1,694	0.91	0.73		—	4.08	—
Africa
Tenke Fungurume	Agitation leach	54	3.26	—		—	—	0.36		87	2.84	—		—	—	0.30
Total FCX - 100% Basis		11,526	0.38	0.08		0.013	0.96	—	a	6,213	0.53	0.20		0.011	2.01	—	a

a. Grade not shown because of rounding.

b. Undeveloped reserves that would require significant capital investment to bring into production.

The reserve table above and the tables on the following pages utilize the abbreviations described below:

• g/t – grams per metric ton

• Moly – Molybdenum

• ROM – Run of Mine

32

Recoverable Proven and Probable Reserves
Estimated at December 31, 2011
(continued)
			Average Ore Grade						Recoveriesa
		Proven and
		Probable
	Processing	Million	Copper	Gold		Moly	Silver	Cobalt	Copper	Gold	Moly	Silver	Cobalt
	Method	metric tons	%	g/t		%	g/t	%	%	%	%	%	%
North America
Morenci	Mill	448	0.48	—		0.025	—	—	79.1	—	38.9	—	—
	Crushed leach	603	0.58	—		—	—	—	77.8	—	—	—	—
	ROM leach	3,199	0.18	—		—	—	—	43.3	—	—	—	—
Bagdad	Mill	1,267	0.35	—	b	0.020	1.74	—	85.6	59.1	70.7	49.3	—
	ROM leach	362	0.12	—		—	—	—	25.4	—	—	—	—
Safford	Crushed leach	206	0.43	—		—	—	—	67.2	—	—	—	—
Sierrita	Mill	2,766	0.23	—	b	0.025	1.39	—	83.0	60.6	80.7	49.3	—
	ROM leach	11	0.21	—		—	—	—	52.7	—	—	—	—
Miami	ROM leach	60	0.47	—		—	—	—	60.5	—	—	—	—
Tyrone	ROM leach	148	0.29	—		—	—	—	61.1	—	—	—	—
Chino	Mill	179	0.57	0.04		0.009	0.47	—	78.7	78.0	41.8	78.5	—
	ROM leach	242	0.31	—		—	—	—	43.1	—	—	—	—
Henderson	Mill	121	—	—		0.174	—	—	—	—	85.4	—	—
Climax	Mill	187	—	—		0.158	—	—	—	—	88.8	—	—
Cobrec	ROM leach	73	0.39	—		—	—	—	50.7	—	—	—	—
		9,872
South America
Cerro Verde	Mill	3,752	0.39	—		0.015	1.67	—	86.0	—	54.4	44.9	—
	Crushed leach	146	0.50	—		—	—	—	79.8	—	—	—	—
	ROM leach	79	0.21	—		—	—	—	41.0	—	—	—	—
El Abra	Crushed leach	517	0.51	—		—	—	—	58.3	—	—	—	—
	ROM leach	364	0.30	—		—	—	—	24.0	—	—	—	—
Candelaria	Mill	339	0.58	0.13		—	2.06	—	89.2	71.9	—	76.3	—
Ojos del Salado	Mill	6	1.00	0.25		—	3.99	—	90.4	60.6	—	65.8	—
		5,203
Indonesia
Grasberg open pit	Mill	312	0.85	0.91		—	2.19	—	83.4	80.2	—	43.1	—
Deep Ore Zone	Mill	206	0.57	0.69		—	2.38	—	86.5	77.3	—	64.2	—
Big Gossan	Mill	56	2.18	0.97		—	13.44	—	91.6	65.0	—	63.8	—
Grasberg Block Cavec	Mill	1,019	0.98	0.77		—	3.34	—	84.3	64.9	—	57.9	—
Kucing Liarc	Mill	420	1.23	1.09		—	7.01	—	85.6	46.1	—	38.5	—
Deep Mill Level Zonec	Mill	510	0.85	0.72		—	4.19	—	87.0	79.3	—	64.7	—
		2,523
Africa
Tenke Fungurume	Agitation leach	141	3.00	—		—	—	0.32	86.3	—	—	—	75.2
Total FCX - 100% Basis		17,739

a. Recoveries are net of estimated mill and smelter losses.

b. Grade not shown because of rounding.

c. Undeveloped reserves that would require significant capital investment to bring into production.

33

Recoverable Proven and Probable Reserves
Estimated at December 31, 2011
(continued)
			Recoverable Reserves
			Copper		Gold	Moly		Silver	Cobalt
	FCX’s	Processing	billion		million	billion		million	billion
	Interest	Method	lbs.		ozs.	lbs.		ozs.	lbs.
North America
Morenci	85%	Mill	3.7		—	0.09		—	—
		Crushed leach	6.0		—	—		—	—
		ROM leach	5.4		—	—		—	—
Bagdad	100%	Mill	8.3		0.1	0.40		35.0	—
		ROM leach	0.3		—	—		—	—
Safford	100%	Crushed leach	1.3		—	—		—	—
Sierrita	100%	Mill	11.8		0.1	1.24		61.1	—
		ROM leach	—	a	—	—		—	—
Miami	100%	ROM leach	0.4		—	—		—	—
Tyrone	100%	ROM leach	0.6		—	—		—	—
Chino	100%	Mill	1.8		0.2	0.01		2.1	—
		ROM leach	0.7		—	—		—	—
Henderson	100%	Mill	—		—	0.40		—	—
Climax	100%	Mill	—		—	0.58		—	—
Cobre	100%	ROM leach	0.3		—	—		—	—
			40.6		0.4	2.72		98.2	—
Recoverable metal in stockpilesb			2.4		—	—	a	—	—
100% operations			43.0		0.4	2.72		98.2	—
Consolidatedc			40.6		0.4	2.71		98.2	—
Net equity interestd			40.6		0.4	2.71		98.2	—
South America
Cerro Verde	53.56%	Mill	28.0		—	0.69		90.2	—
		Crushed leach	1.3		—	—		—	—
		ROM leach	0.2		—	—		—	—
El Abra	51%	Crushed leach	3.4		—	—		—	—
		ROM leach	0.5		—	—		—	—
Candelaria	80%	Mill	3.8		1.0	—		17.1	—
Ojos del Salado	80%	Mill	0.1		0.1	—		0.5	—
			37.3		1.1	0.69		107.8	—
Recoverable metal in stockpilesb			1.8		0.2	0.02		5.6	—
100% operations			39.1		1.3	0.71		113.4	—
Consolidatedc			39.1		1.3	0.71		113.4	—
Net equity interestd			22.1		1.0	0.38		66.4	—
Indonesia
Grasberg open pit	e	Mill	4.9		7.3	—		9.5	—
Deep Ore Zone	e	Mill	2.2		3.5	—		10.1	—
Big Gossan	e	Mill	2.4		1.2	—		15.4	—
Grasberg Block Cave	e	Mill	18.7		16.3	—		63.3	—
Kucing Liar	e	Mill	9.7		6.8	—		36.5	—
Deep Mill Level Zone	e	Mill	8.3		9.3	—		44.4	—
100% operations			46.2		44.4	—		179.2	—
Consolidatedc			31.6		32.2	—		118.7	—
Net equity interestd			28.6		29.2	—		107.5	—
Africa
Tenke Fungurume	57.75%	Agitation leach	8.1		—	—		—	0.75
Recoverable metal in stockpilesb			0.3		—	—		—	0.11
100% operations			8.4		—	—		—	0.86
Consolidatedc			8.4		—	—		—	0.86
Net equity interestd			4.8		—	—		—	0.49
Total FCX –  100% basis			136.7		46.1	3.43		390.8	0.86
Total FCX –  Consolidated basisc			119.7		33.9	3.42		330.3	0.86
Total FCX –  Net equity interestd			96.1		30.6	3.09		272.1	0.49

a. Amounts not shown because of rounding.

b. Refer to "Mill and Leach Stockpiles" for additional information.

c. Consolidated basis represents estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and at the Grasberg minerals district in Indonesia.

d. Net equity interest represents estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

e. Our joint venture agreement with Rio Tinto provides that PT Freeport Indonesia will receive cash flow from specified annual amounts of copper, gold and silver through 2021, calculated by reference to its proven and probable reserves as of December 31, 1994, and 60 percent of all remaining cash flow.

34

In defining our open-pit reserves, we apply a “variable cutoff grade” strategy. The objective of this strategy is to maximize the net present value of our operations. We use a break-even cutoff grade to define the in-situ reserves for our underground ore bodies. The break-even cutoff grade is defined for a metric ton of ore as that equivalent copper grade, once produced and sold, that generates sufficient revenue to cover all operating and administrative costs associated with our production.

Our copper mines may contain other commercially recoverable metals, such as gold, molybdenum, silver and cobalt. We value all commercially recoverable metals in terms of a copper equivalent percentage to determine a single cutoff grade. Copper equivalent percentage is used to express the relative value of multi-metal ores in terms of one metal. The calculation expresses the relative value of the ore using estimates of contained metal quantities, metals prices as used for reserve determination, recovery rates, treatment charges and royalties. Our molybdenum properties use a molybdenum cutoff grade.

The table below shows the minimum cutoff grade by process for each of our existing ore bodies as of December 31, 2011:

	Copper Equivalent Cutoff Grade (Percent)			Molybdenum Cutoff Grade (Percent)
	Mill	Crushed or Agitation Leach	ROM Leach	Mill
North America
Morenci	0.25	0.19	0.03	N/A
Bagdad	0.20	N/A	0.01	N/A
Safford	N/A	0.12	N/A	N/A
Sierrita	0.18	N/A	0.09	N/A
Miami	N/A	N/A	0.05	N/A
Tyrone	N/A	N/A	0.05	N/A
Chino	0.20	N/A	0.08	N/A
Henderson	N/A	N/A	N/A	0.12
Climax	N/A	N/A	N/A	0.06
Cobre	N/A	N/A	0.17	N/A
South America
Cerro Verde	0.20	0.20	0.14	N/A
El Abra	N/A	0.16	0.06	N/A
Candelaria	0.23	N/A	N/A	N/A
Ojos del Salado	0.64	N/A	N/A	N/A
Indonesia
Grasberg open pit	0.25	N/A	N/A	N/A
Deep Ore Zone	0.62	N/A	N/A	N/A
Big Gossan	1.55	N/A	N/A	N/A
Grasberg Block Cave	0.58	N/A	N/A	N/A
Kucing Liar	0.68	N/A	N/A	N/A
Deep Mill Level Zone	0.62	N/A	N/A	N/A
Africa
Tenke Fungurume	N/A	1.11	N/A	N/A

35

Drill hole spacing data is used by mining professionals, such as geologists and geological engineers, in determining the suitability of data coverage (on a relative basis) in a given deposit type and mining method scenario so as to achieve a given level of confidence in the resource estimate. Drill hole spacing is only one of several criteria necessary to establish resource classification. Drilling programs are typically designed to achieve an optimum sample spacing to support the level of confidence in results that apply to a particular stage of development of a mineral deposit.

The following table sets forth the average drill hole spacing based on average sample distance or drill pattern spacing for proven and probable ore reserves by process type:

		Average Drill Hole Spacing (in Meters)
		Proven		Probable
	Mining Unit	Mill	Leach	Mill	Leach
North America
Morenci	Open Pit	86	86	122	122
Bagdad	Open Pit	86	86	122	122
Safford	Open Pit	N/A	86	N/A	122
Sierrita	Open Pit	73	37	120	75
Miami	Open Pit	N/A	61	N/A	91
Tyrone	Open Pit	N/A	86	N/A	86
Chino	Open Pit	43	86	86	122
Henderson	Block Cave	38	N/A	85	N/A
Climax	Open Pit	61	N/A	122	N/A
Cobre	Open Pit	N/A	61	N/A	91
South America
Cerro Verde	Open Pit	50	50	100	100
El Abra	Open Pit	N/A	75	N/A	120
Candelaria	Open Pit	35	N/A	70	N/A
Ojos del Salado	Sublevel Stoping	25	N/A	50	N/A
Indonesia
Grasberg	Open Pit	37	N/A	114	N/A
Deep Ore Zone	Block Cave	23	N/A	56	N/A
Big Gossan	Open Stope	12	N/A	39	N/A
Grasberg	Block Cave	32	N/A	97	N/A
Kucing Liar	Block Cave	39	N/A	107	N/A
Deep Mill Level Zone	Block Cave	21	N/A	84	N/A
Africa
Tenke Fungurume	Open Pit	N/A	50	N/A	100

36

Production Sequencing

The following chart illustrates our current plans for sequencing and producing our proven and probable reserves at each of our ore bodies and the years in which we currently expect production from each ore body. The chart also shows the term of PT Freeport Indonesia’s COW. Production volumes are typically lower in the first few years for each ore body as development activities are ongoing and as the mine ramps up to full production and production volumes may also be lower as the mine reaches the end of its life. The ultimate timing of the start of production from our undeveloped mines is dependent upon a number of factors, including the results of our exploration and development efforts, and may vary from the dates shown below. In addition, we develop our mine plans based on maximizing the net present value from the ore bodies. Significant additional capital expenditures will be required at many of these mines in order to achieve the life-of-mine plans reflected below.

Mill and Leach Stockpiles

Mill and leach stockpiles generally contain lower grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles, recovery is through milling, concentrating, smelting and refining or, alternatively, by concentrate leaching. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve contained copper and deliver it in solution to extraction processing facilities.

Because it is generally impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grades of material delivered to mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production-scale process), historical trends and other factors, including mineralogy of the ore and rock type. Ultimate recovery of copper contained in leach stockpiles can vary

37

significantly from a low percentage to more than 90 percent depending on several variables, including type of copper recovery, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 70 percent of the copper ultimately recoverable may be extracted during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates are monitored continuously, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Following are our stockpiles and the estimated recoverable copper contained within those stockpiles as of December 31, 2011:

				Recoverable
	Millions of	Average	Recovery	Copper
	Metric Tons	Grade (%)	Rate (%)	(billion pounds)
Mill stockpiles
Cerro Verde	86	0.42	81.4	0.6
Candelaria	96	0.37	83.1	0.7
	182	0.39	82.3	1.3
Leach stockpiles
Morenci	4,957	0.25	1.9	0.5
Bagdad	427	0.27	2.7	0.1
Safford	114	0.44	23.1	0.3
Sierrita	649	0.15	12.4	0.3
Miami	460	0.38	2.0	0.1
Tyrone	1,029	0.28	2.4	0.1
Chino	1,602	0.26	11.4	1.0
Cerro Verde	411	0.53	2.6	0.1
El Abra	373	0.36	11.7	0.4
Tenke Fungurume	14	1.10	92.4	0.3
	10,036	0.27	5.2	3.2
Total FCX - 100% basis				4.5
Total FCX - Consolidated basisa				4.4
Total FCX - Net equity interestb				3.6

a. Consolidated basis represents estimated metal quantities after reduction for our joint venture partner’s interest in the Morenci mine in North America.

b. Net equity interest represents estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

MINERALIZED MATERIAL

We hold various properties containing mineralized material that we believe could be brought into production should market conditions warrant. However, permitting and significant capital expenditures would be required before operations could commence at these properties. Mineralized material is a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support the reported tonnage and average metal grades. Such a deposit cannot qualify as recoverable proven and probable reserves until legal and economic feasibility are confirmed based upon a comprehensive evaluation of development costs, unit costs, grades, recoveries and other material factors. Estimated mineralized materials as presented on the following page were assessed using prices of $2.20 per pound for copper, $1,000 per ounce for gold and $12 per pound for molybdenum.

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Mineralized Material
Estimated at December 31, 2011
		Milling Material					Leaching Material		Total Mineralized Material
		Million					Million		Million
	FCX’s	metric	Copper	Gold		Moly	metric	Copper	metric	Copper	Gold		Moly
	Interest	tons	%	g/t		%	tons	%	tons	%	g/t		%
North America
Morenci	85%	508	0.37	—		0.018	1,893	0.22	2,401	0.26	—		0.004
Bagdada	100%	301	0.30	—	b	0.019	31	0.12	332	0.29	—	b	0.017
Safforda	100%	685	0.45	0.08		0.004	118	0.26	803	0.43	0.07		0.004
Sierritaa	100%	1,587	0.18	—	b	0.022	15	0.15	1,602	0.18	—	b	0.022
Miami	100%	—	—	—		—	27	0.47	27	0.47	—		—
Tyrone	100%	—	—	—		—	84	0.32	84	0.32	—		—
Chino	100%	177	0.45	—		0.013	179	0.32	356	0.39	—		0.006
Henderson	100%	158	—	—		0.148	—	—	158	—	—		0.148
Climax	100%	332	—	—		0.147	—	—	332	—	—		0.147
Cobre	100%	45	0.57	—		—	12	0.29	57	0.51	—		—
Ajoa	100%	915	0.33	0.06		0.007	—	—	915	0.33	0.06		0.007
Cochise/Bisbee	100%	—	—	—		—	280	0.44	280	0.44	—		—
Lone Star	100%	—	—	—		—	645	0.45	645	0.45	—		—
Sanchez	100%	—	—	—		—	178	0.29	178	0.29	—		—
Tohono	100%	220	0.70	—		—	261	0.65	481	0.67	—		—
Twin Buttesa	100%	595	0.40	—		0.026	59	0.21	654	0.38	—		0.024
South America
Cerro Verdea	53.56%	919	0.37	—		0.014	12	0.35	931	0.37	—		0.014
El Abra	51%	929	0.45	—		—	383	0.26	1,312	0.40	—		—
Candelariaa	80%	77	0.58	0.13		—	—	—	77	0.58	0.13		—
Indonesia
Grasberg minerals districta	54.38%c	2,386	0.62	0.57		—	—	—	2,386	0.62	0.57		—
Africa
Tenke Fungurumed	57.75%	83	3.44	—		—	22	2.81	105	3.31	—		—
Kisanfud	95%	55	2.32	—		—	50	3.00	105	2.64	—		—
Total FCX - 100% basis		9,972					4,249		14,221
Total FCX - Consolidated basise		8,941					3,965		12,906
Total FCX - Net equity interestf		7,872					3,759		11,631

a. Stated tonnage also includes silver at Bagdad (0.6 g/t), Safford (1.5 g/t), Sierrita (1.1 g/t), Ajo (0.9 g/t), Twin Buttes (2.3 g/t), Cerro Verde (1.6 g/t), Candelaria (1.9 g/t) and the Grasberg minerals district (3.5 g/t).

b. Amounts not shown because of rounding.

c. FCX's interest in the Grasberg minerals district reflects our 60 percent joint venture ownership further reduced by noncontrolling interest ownership.

d. Stated tonnage also includes cobalt at Tenke Fungurume (0.29 percent) and Kisanfu (1.08 percent).

e. Consolidated basis represents estimated mineralized materials after reduction for our joint venture partners' interest in the Morenci mine and the Grasberg minerals district.

f. Net equity interest represents estimated consolidated basis mineralized material further reduced for noncontrolling interest ownership.

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Item 1A. Risk Factors

This report contains “forward-looking statements” within the meaning of United States (U.S.) federal securities laws. Forward-looking statements are all statements other than statements of historical facts, such as 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, 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, availability of power, water, labor and equipment, reclamation and closure costs and plans, environmental liabilities and expenditures, litigation contingencies and results, dividend payments, potential prepayments of debt, reserve estimates, and anticipated political, economic and social conditions in our areas of operations. We undertake no obligation to update any forward-looking statements. Readers are cautioned that forward-looking 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 could cause our actual results to differ materially from those anticipated in the forward-looking statements include the following.

Financial risks

Extended declines in the market prices of copper, gold and/or molybdenum could adversely affect our earnings and cash flows and, if sustained, could adversely affect our ability to repay debt. Fluctuations in the market prices of copper, gold or molybdenum can cause significant volatility in our financial performance and adversely affect the trading prices of our debt and equity securities.

Our financial results vary as a result of fluctuations in metal market prices, including copper, gold and molybdenum (for further information about the market prices of these commodities, refer to discussion below and in Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations”). An extended decline in the market prices of these commodities could adversely affect our financial results, affect our ability to repay our debt and meet our other fixed obligations, and depress the trading prices of our common stock and of our publicly traded debt securities.

Additionally, if market prices for the metals we produce decline for a sustained period of time, we may have to revise our operating plans, including curtailing production, reducing operating costs and capital expenditures and discontinuing certain exploration and development programs. We may be unable to decrease our costs in an amount sufficient to offset reductions in revenues, and may incur losses.

Substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted London Metal Exchange (LME) monthly average spot copper prices. Accordingly, in times of rising copper prices, our revenues benefit from adjustments 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.

Copper prices have fluctuated historically, with LME spot copper prices ranging from $1.38 to $4.60 per pound during the three years ended December 31, 2011. Copper prices are affected by numerous factors beyond our control, including:

• The strength of the U.S. economy and the economies of other industrialized and developing nations, including China, which has become the largest consumer of refined copper in the world;

• Available supplies of copper from mine production and inventories;

• Sales by holders and producers of copper;

• Demand for industrial products containing copper;

• Investment activity, including speculation, in copper as a commodity;

• The availability and cost of substitute materials; and

• Currency exchange fluctuations, including the relative strength or weakness of the U.S. dollar.

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Gold prices have also fluctuated historically, with the London PM gold price ranging from $810 to $1,895 per ounce during the three years ended December 31, 2011. Gold prices are affected by numerous factors beyond our control, including:

• The strength of the U.S. economy and the economies of other industrialized and developing nations, including China and India;

• Global or regional political or economic crises;

• The relative strength or weakness of the U.S. dollar and other currencies;

• Expectations with respect to the rate of inflation;

• Interest rates;

• Purchases and sales of gold by governments, central banks and other holders;

• Demand for jewelry containing gold; and

• Investment activity, including speculation, in gold as a commodity.

Molybdenum prices also fluctuate, with the Metals Week Molybdenum Dealer Oxide weekly average price ranging from $7.83 to $18.60 per pound during the three years ended December 31, 2011. Molybdenum prices are affected by numerous factors beyond our control, including:

• The worldwide balance of molybdenum demand and supply;

• Rates of global economic growth, especially construction and infrastructure activity that requires significant amounts of steel;

• The volume of molybdenum produced as a by-product of copper production;

• Inventory levels;

• Currency exchange fluctuations, including the relative strength or weakness of the U.S. dollar; and

• Production costs of U.S. and foreign competitors.

Under U.S. federal and state laws that require closure and reclamation plans for our mines, we generally are required to provide financial assurance sufficient to allow a third party to implement those plans if we are unable to do so. The U.S. Environmental Protection Agency (EPA) and state agencies may seek financial assurance for investigation and remediation actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or equivalent state regulations.The failure to comply with these requirements could have a material adverse affect on us.

We are required by U.S. federal and state laws to provide financial assurance sufficient to allow a third party to implement approved closure and reclamation plans if we are unable to do so. These laws are complex and vary from jurisdiction to jurisdiction. The laws govern the determination of the scope and cost of the closure and reclamation obligations and the amount and forms of financial assurance.

EPA and state agencies may seek financial assurance for investigation and remediation actions under CERCLA or equivalent state regulations. In July 2009, EPA published a Priority Notice of Action identifying classes of facilities within the hardrock mining industry for which the agency will develop financial responsibility requirements concerning the degree and duration of risk associated with the production, transportation, treatment, storage or disposal of hazardous substances. In EPA's semi-annual regulatory agenda published on February 13, 2012, EPA indicated that it intends to propose regulations regarding hardrock mining financial responsibility in April 2013. It is uncertain how the new requirements, if promulgated, will affect the amount and form of our existing and future financial assurance obligations.

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The amount of financial assurance we are required to provide will vary with changes in laws, regulations and reclamation and closure requirements and cost estimates. As of December 31, 2011, our financial assurance obligations associated with closure and reclamation costs in New Mexico, Arizona and Colorado totaled $899 million, of which $565 million was in the form of parent company guarantees and financial capability demonstrations. Our ability to continue to provide financial assurance in the form of parent guarantees and financial capability demonstrations depends on our ability to meet financial tests. Certain of the ratios in these tests are significantly more rigorous for companies that do not have an investment grade rating from a state-approved ratings service. We are currently rated investment grade by Standard & Poor's Rating Services (S&P), Fitch Ratings and Moody's Investors Service (Moody's). If we fail to maintain our investment grade rating, we would be subject to these more rigorous tests, in which case the regulatory agencies may require us to provide alternative forms of financial assurance, such as letters of credit, surety bonds or collateral. Depending on our financial condition and market conditions, these other forms of financial assurance may be difficult or costly to provide. Issuance of letters of credit under our credit facilities would reduce our available liquidity. Failure to provide the required financial assurance could result in the closure of mines. As of December 31, 2011, we had limited financial assurance obligations associated with CERCLA-related remediation obligations, although EPA and certain states are currently considering increasing the use of financial assurance requirements for such obligations.For additional information, see the environmental risk factor “Mine closure regulations impose substantial costs on our operations.”

In July 2011, the Chilean senate passed legislation regulating mine closure, which establishes new requirements for closure plans and becomes effective in November 2012. Our Chilean operations will be required to update closure plans and provide financial assurance for these obligations. We cannot predict at this time the costs of these closure plans or the levels or forms of financial assurance that may be required.

In December 2010, the President of Indonesia issued a regulation regarding mine reclamation and closure, which requires a company to provide a mine closure guarantee in the form of a time deposit placed in a state-owned bank in Indonesia. In accordance with its Contract of Work (COW), PT Freeport Indonesia is working with the Department of Energy and Mineral Resources to review these requirements, including discussions of other options for the mine closure guarantee. In December 2009, PT Freeport Indonesia submitted its revised mine closure plan to the Department of Energy and Minerals Resources for review and has addressed comments received during the course of this review process.

Movements in foreign currency exchange rates could negatively affect our operating results.

The functional currency for most of our operations is the U.S. dollar. All of our revenues and a significant portion of our costs are denominated in U.S. dollars; however, some costs and certain asset and liability accounts are denominated in local currencies, including the Indonesian rupiah, Australian dollar, Chilean peso, Peruvian nuevo sol, euro and South African rand. Generally, our results are positively affected when the U.S. dollar strengthens in relation to those foreign currencies and adversely affected when the U.S. dollar weakens in relation to those foreign currencies. Refer to Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” for a summary of the estimated impact of changes in foreign currency rates on our annual operating costs.

From time to time, we may implement currency hedges intended to reduce our exposure to changes in foreign currency exchange. However, our hedging strategies may not be successful, and any of our unhedged foreign exchange payments will continue to be subject to market fluctuations.

International risks

Our international operations are subject to political, social and geographic risks of doing business in foreign countries.

We are a global mining company with substantial assets located outside of the U.S. We conduct international mining operations in Indonesia, Peru, Chile and the Democratic Republic of Congo (DRC). Accordingly, in addition to the usual risks associated with conducting business in foreign countries, our business may be adversely affected by political, economic and social uncertainties in each of these countries. Such risks include:

• Renegotiation, cancellation or forced modification of existing contracts,

• Expropriation or nationalization of property,

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• Changes in a foreign country's laws, regulations and policies, including those relating to labor, taxation, royalties, divestment, imports, exports, trade regulations, currency and environmental matters,

• Political instability, bribery, extortion, corruption, civil strife, acts of war, guerrilla activities, insurrection and terrorism,

• Foreign exchange controls, and

• The risk of having to submit to the jurisdiction of a foreign court or arbitration panel or having to enforce the judgment of a foreign court or arbitration panel against a sovereign nation within its own territory.

Our insurance does not cover most losses caused by the above described risks. Accordingly, our exploration, development and production activities outside of the U.S. could be substantially affected by factors beyond our control, some of which could materially and adversely affect our financial position or results of operations.

In October 2010, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $106 million and interest of $52 million related to various audit exceptions for 2005. In November 2011, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $22 million and interest of $10 million related to various audit exceptions for 2006. PT Freeport Indonesia has paid $109 million for these disputed tax assessments and filed objections to these assessments because it believes it has properly paid all taxes. PT Freeport Indonesia is working with the Indonesian tax authorities to resolve these matters and expects to receive additional assessments from the Indonesian tax authorities for their audit of its 2007 tax return.

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 such taxes and related penalties under this view would be significant. PT Freeport Indonesia believes that, pursuant to the terms of its COW, it is only required to pay value added taxes on these types of goods imported after December 30, 2009. PT Freeport Indonesia has not received a formal assessment and is working with the applicable government authorities to resolve this matter.

SUNAT, the Peruvian national tax authority, has assessed mining royalties on materials processed by the Cerro Verde concentrator which commenced operations in late 2006. These assessments cover the period October 2006 to December 2007 and the years 2008 and 2009. SUNAT has issued rulings denying Cerro Verde's protest of the assessments. Cerro Verde has appealed these decisions and currently has three cases pending before the Peruvian Tax Tribunal. Cerro Verde is challenging these royalties because it believes its stability agreement provides an exemption for all minerals extracted from its mining concession, irrespective of the method used for processing those minerals. Although we believe our interpretation of the stability agreement is correct, if Cerro Verde is ultimately found responsible for these assessments, it will also be liable for interest, which accrues at rates that range from approximately 7 to 18 percent based on the year accrued and the currency in which the amounts would be payable. At December 31, 2011, the aggregate amount of the assessments, including interest and penalties, totaled $190 million. SUNAT may continue to assess mining royalties annually until this matter is resolved by the Peruvian Tax Tribunal.

Because our Grasberg minerals district is our most significant operating asset, our business may continue to be adversely affected by political, economic and social uncertainties and security risks in Indonesia.

Indonesia has faced political and social uncertainties, including separatist movements and civil and religious strife in a number of provinces. In particular, several separatist groups are opposing Indonesian rule over the province of Papua, where our Grasberg minerals district is located, and have sought political independence for the province. In response, Indonesia enacted regional autonomy laws, which became effective January 1, 2001. The manner in which those laws are being implemented and the degree of political and economic autonomy that they may bring to individual provinces, including Papua, are uncertain and are ongoing issues in Indonesian politics. In Papua, there have been sporadic attacks on civilians by separatists and sporadic but highly publicized conflicts between separatists and the Indonesian military. Social, economic and political instability in Papua could materially and adversely affect us if it results in damage to our property or interruption of our activities.

Maintaining a good working relationship with the Indonesian government is important to us because our mining operations there are among Indonesia's most significant business enterprises and are conducted pursuant to a COW with the Indonesian government. Partially because of their significance to Indonesia's economy, the

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environmentally sensitive area in which they are located, and the number of people employed, our operations are occasionally the subject of criticism in the Indonesian press and in political debates, and have been the target of protests and occasional violence.

Between July 2009 and February 2012, there were 32 shooting incidents in and around the Grasberg minerals district, including along the road leading to our mining and milling operations, which resulted in 15 fatalities and 56 injuries. Victims included PT Freeport Indonesia employees, contractors, members of law enforcement and civilians. The identity of the perpetrators is unknown as is the motivation for the shootings. The investigation of these matters is continuing. We have taken precautionary measures, including using secured convoys on the road. The Indonesian government has responded with additional security forces and expressed a commitment to protect the safety of the community and our operations. Prolonged limitations on access to the road could adversely affect operations at the mine. The safety of our workforce is a critical concern, and PT Freeport Indonesia is working cooperatively with the Government of Indonesia to address security issues.

During 2011, PT Freeport Indonesia was adversely affected by labor disruptions, including an eight-day work stoppage in July 2011 and an approximate three-month strike that concluded in December 2011. The strike involved civil unrest, transportation blockades, sabotage of important operating facilities and violence. Although a new labor agreement was reached in mid-December 2011, we are experiencing work interruptions in connection with our efforts to resume normal operations at PT Freeport Indonesia. PT Freeport Indonesia is complying with the terms of the new labor agreement with its union. Certain of the returning workers have engaged in acts of violence and intimidation against workers and supervisory personnel who did not participate in the strike. On February 23, 2012, the union indicated that it will engage in a work stoppage and we temporarily suspended operations to protect our employees and assets following the incidents of intimidation and threats within the workforce. We are working with union officials and government authorities to resolve the ongoing issues. Refer to Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” for further discussion.

Large numbers of illegal miners have continued to operate along the river used to transport the tailings from the mill to the lowlands in PT Freeport Indonesia's government-approved tailings management area. The illegal miners have periodically clashed with police who have attempted to move them away from our facilities. In 2006, the illegal miners temporarily blocked the road leading to the Grasberg mine and mill in protest, and PT Freeport Indonesia temporarily suspended mining and milling operations as a precautionary measure.

We cannot predict whether additional incidents will occur that could disrupt or suspend our Indonesian operations. If additional violence or other disruptive incidents occur, it could adversely affect our business and profitability in ways that we cannot predict at this time.

We do not expect to mine all of our ore reserves in Indonesia before the initial term of our COW expires.

PT Freeport Indonesia is entitled to mine in Indonesia under its COW with the Government of Indonesia. The initial term of the current COW expires in 2021, but can be extended for two 10-year periods subject to Indonesian government approval, which pursuant to the COW cannot be withheld or delayed unreasonably. Our proven and probable ore reserves in Indonesia reflect estimates of minerals that can be recovered through the end of 2041 and our current mine plan has been developed, and our operations are based on the assumption that we will receive the two 10-year extensions. As a result, we will not mine all of these ore reserves during the initial term of the current COW, and there can be no assurance that the Indonesian government will approve the extensions. Prior to the end of 2021, we expect to mine 31 percent of aggregate proven and probable recoverable ore at December 31, 2011, representing 37 percent of PT Freeport Indonesia's share of recoverable copper reserves and 49 percent of its share of recoverable gold reserves.

In 2009, Indonesia enacted a new mining law, which will operate under a licensing system as opposed to the contract of work system that applies to PT Freeport Indonesia. In 2011 and 2010, the Government of Indonesia promulgated regulations under the 2009 mining law and certain provisions address existing contracts of work. The laws and regulations provide that contracts of work will continue to be honored until their expiration. However, the regulations attempt to apply certain provisions of the new law to existing contracts and may seek to apply the licensing system to any extension periods of contracts of work, even though our COW provides for two 10-year extension periods subject to Indonesian government approval, which pursuant to the COW cannot be withheld or delayed unreasonably. In February 2012, a new regulation was adopted that would require mining companies in Indonesia to process all minerals domestically and possibly ban export of concentrates and other unrefined minerals. There are specific provisions included in PT Freeport Indonesia's existing COW that define its rights to

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export product and the obligation to develop domestic smelting capacity if commercially feasible, or to contract with other domestic smelters on a market basis. In connection with the obligations under its COW, in 1995, PT Freeport Indonesia constructed the only copper smelter and refinery in Indonesia, which is owned and operated by PT Smelting.

Our COWs in Indonesia are subject to termination if we do not comply with our contractual obligations, and if a dispute arises, we may have to submit to the jurisdiction of a foreign court or arbitration panel.

PT Freeport Indonesia's COW and other COWs in which we have an interest were entered into under Indonesia's 1967 Foreign Capital Investment Law, which provides guarantees of remittance rights and protection against nationalization. Our COWs can be terminated by the Government of Indonesia if we do not satisfy our contractual obligations, which include the payment of royalties and taxes to the government and the satisfaction of certain mining, environmental, safety and health requirements.

Certain forestry laws and designations as well as prevailing environmental laws and regulations may conflict with or overlap with the mining rights established under our COW. Although our COW grants to PT Freeport Indonesia the unencumbered right to operate in accordance with the COW, certain government agencies could seek to impose additional restrictions on PT Freeport Indonesia that could affect exploration and operating requirements.

At times, certain government officials and others in Indonesia have questioned the validity of contracts entered into by the Government of Indonesia prior to May 1998 (i.e., during the Suharto regime, which lasted over 30 years), including PT Freeport Indonesia's COW, which was signed in December 1991. We cannot provide assurance that the validity of, or our compliance with, the COWs will not be challenged for political or other reasons. PT Freeport Indonesia's COW and our other COWs require that disputes with the Indonesian government be submitted to international arbitration. Accordingly, if a dispute arises under the COWs, we face the risk of having to submit to the jurisdiction of a foreign court or arbitration panel, and if we prevail in such a dispute, we will face the additional risk of having to enforce the judgment of a foreign court or arbitration panel against Indonesia within its own territory.

Indonesian government officials have periodically undertaken reviews regarding our compliance with Indonesian environmental laws and regulations and the terms of the COWs. In January 2012, the President of Indonesia issued a decree calling for the creation of a team to evaluate contracts of work for adjustment to the 2009 Mining Law, and accordingly, to take steps to assess and negotiate size of work areas, government revenues, and domestic processing of minerals. The team includes 14 cabinet-level members representing 13 formal government institutions led by the Coordinating Minister of Economy and the Minister of Energy and Mineral Resources, with the Director General of Mineral and Coal as the Secretary. The team's assignment runs through December 2013 and the group is expected to provide progress reports to the President every six months. We intend to continue to work cooperatively with the Government of Indonesia to complete this review and to seek extension of the COW beyond 2021, as provided under the terms of the COW. The COW can only be modified by mutual agreement between PT Freeport Indonesia and the Government of Indonesia.

Any suspension of required activities under our COWs requires the consent of the Indonesian government.

Our COWs permit us to suspend certain contractually required activities, including exploration, for a period of one year by making a written request to the Indonesian government. These requests are subject to the approval of the Indonesian government and are renewable annually. If we do not request a suspension or are denied a suspension, then we are required to continue our activities under the COW or potentially be declared in default. Moreover, if a suspension continues for more than one year for reasons other than force majeure and the Indonesian government has not approved such continuation, then the government would be entitled to declare a default under the COW.

We previously suspended our field exploration activities outside of the Block A area of PT Freeport Indonesia's COW because of safety and security issues and regulatory uncertainty relating to a possible conflict between our mining and exploration rights in certain forest areas and an Indonesian Forestry law enacted in 1999 prohibiting open-pit mining in forest preservation areas. In 2001, we requested and received from the Government of Indonesia, formal temporary suspensions of our obligations under the COWs in all areas outside of Block A. Recent Indonesian legislation permits open-pit mining in the Block B area of PT Freeport Indonesia's COW, subject to certain requirements. Following an assessment of these requirements and a review of security issues, in 2007 we resumed exploration activities in certain prospective COW areas outside of Block A.

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The Tenke Fungurume minerals district is located in the Katanga province of the DRC, and may be adversely affected by political, economic and social instability in the DRC.

During 2009, we completed construction activities and commenced copper production at the Tenke Fungurume mine (the Tenke mine) located in the DRC. Since gaining independence in 1960, the DRC has undergone outbreaks of violence, changes in national leadership and financial crisis. These factors heighten the risk of abrupt changes in the national policy toward foreign investors, which in turn could result in unilateral modification of concessions or contracts, increased taxation, denial of permits or permit renewals or expropriation of assets. As part of a review of all mining contracts by the Ministry of Mines (the Ministry) in the DRC, in February 2008, we received notification that the Ministry wished to renegotiate several material provisions of Tenke Fungurume Mining S.A.R.L.'s (TFM) mining concessions. In October 2010, the Government of the DRC concluded its review of TFM's existing mining contracts and confirmed that they are in good standing. 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 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 receiving the required government approval of the modification to TFM's bylaws that reflect the agreement with the Government of the DRC, our effective ownership interest in the project will be reduced to 56.0 percent prospectively, compared to our current ownership interest of 57.75 percent.

In November 2011, the DRC held a general presidential election. On December 16, 2011, incumbent President Joseph Kabila was declared the winner of that election by the DRC Supreme Court. There has been widespread international and local criticism of the election and episodes of protests, some of which were accompanied by acts of violence.

In July 2009, TFM was advised that the Minister of Justice in the DRC authorized an inquiry regarding the alleged misappropriation of public funds in connection with securing labor and immigration authorizations and the payment of associated fees for the Tenke Fungurume project. Several government officials and three TFM employees were arrested. In October 2009, the three TFM employees were tried and acquitted. One government official, the head of immigration in the Katanga province, was sentenced to five years imprisonment on charges of embezzlement. The office of the Attorney General of the DRC filed a notice of appeal of the judgment, and the matter is pending at the Appellate Court.

In July 2009, TFM entered into a settlement agreement with DRC tax authorities in connection with an administrative audit regarding the payment of fees for work permits and visas for its foreign workers and subcontractors, including short-term workers. Pursuant to the agreement, which covers the period from January 2007 to the date of the settlement, TFM paid approximately $16 million in fees and penalties. The procedures associated with obtaining labor and immigration authorizations for short-term workers on a timely basis are not clearly established in the DRC, and TFM continues to work proactively and cooperatively with the government authorities to establish approved procedures for doing so consistent with its mining convention and local law. In connection with this matter, we notified the U.S. government enforcement authorities about our internal investigation of the immigration work permit and visa matter and the associated criminal case. We have received and responded to requests from U.S. government authorities related to the matter and to other requests for information about our compliance program.

Political, economic and social risks that are generally outside of our control and could adversely affect our business include:

• Political risks associated with the establishment and re-election of the present government;

• Cancellation or renegotiation of mining contracts by the government;

• Legal and regulatory uncertainties, governmental corruption and bribery;

• Royalty and tax increases or claims by governmental entities, including retroactive claims;

• Security risks due to the remote location in the southern DRC and violence in the northeastern provinces of the DRC;

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• Risk of loss of property due to expropriation or nationalization of property; and

• Risk of loss due to civil strife, acts of war, guerrilla activities, insurrection and terrorism.

Accordingly, the Tenke Fungurume minerals district and its future development projects may be substantially affected by factors beyond our control, any of which could adversely affect our operating results, interrupt our operations or result in a loss of all or part of our investment in the DRC.

Terrorist attacks and violence near our operations and throughout the world and the potential for additional future terrorist acts and violence have created economic and political uncertainties that could materially and adversely affect our business.

In July 2009, two suicide bombers set off explosions inside of the JW Marriott and Ritz-Carlton hotels in Jakarta, Indonesia, that killed nine people and injured 53 others. Two of our Indonesian-based executives were injured in the incident.

In July 2009, a small group of individuals created a disturbance on the road leading to our mining and milling operations at our Grasberg minerals district and vandalized vehicles and small buildings. There were no injuries. For more information about a series of shooting incidents near our Grasberg minerals district, refer to the risk factor “Because our Grasberg minerals district is our most significant operating asset, our business may continue to be adversely affected by political, economic and social uncertainties in Indonesia.”

In August 2002, three people were killed and 11 others were wounded in an ambush by a group of unidentified assailants on the road near Tembagapura, the mining town where the majority of PT Freeport Indonesia's personnel reside. The assailants shot at several vehicles transporting international contract teachers from our school in Tembagapura, their family members and other contractors to PT Freeport Indonesia. The U.S. Federal Bureau of Investigation (FBI) investigated the incident, which resulted in the U.S. indictment of an alleged operational commander of the Free Papua Movement/National Freedom Force. In January 2006, Indonesian police, accompanied by FBI agents, arrested the alleged operational commander and 11 other Papuans. In November 2006, verdicts and sentencing were announced for seven of those accused in the August 2002 shooting, including a life sentence for the confessed leader of the attack.

In October 2002, a bombing killed 202 people in the Indonesian province of Bali, which is 1,500 miles west of our mining and milling operations. Indonesian authorities arrested 35 people in connection with this bombing and 29 of those arrested have been tried and convicted. In August 2003, 12 people were killed and over 100 were injured by a car bomb detonated outside of the JW Marriott Hotel in Jakarta, Indonesia. In September 2004, 11 people were killed and over 200 injured by a car bomb detonated in front of the Australian embassy in Jakarta. In October 2005, three suicide bombers killed 19 people and wounded over 100 in Bali. The same international terrorist organizations are suspected in each of these incidents. In November 2005, Indonesian police raided a house in East Java that resulted in the death of other accused terrorists linked to the bombings discussed above. Our mining and milling operations were not interrupted by these incidents, but PT Freeport Indonesia's corporate office in Jakarta had to relocate for several months following the bombing in front of the Australian embassy. In addition to the Bali, JW Marriott Hotel and Australian embassy bombings, there have been anti-American demonstrations in certain sections of Indonesia reportedly led by radical Islamic activists.

No assurance can be given that additional terrorist incidents and acts of violence will not occur. If there were to be additional terrorist incidents or acts of violence, particularly at or near our operations, there could be no assurance that the occurrence of such events would not have a material adverse impact on our business and results of operations.

Operational risks

Our business is subject to operational risks that could adversely affect our business.

Mines by their nature are subject to many operational risks, some of which are outside of our control. These operational risks, which could adversely affect our business, operating results and cash flows, include the following:

• Earthquakes, floods and other natural disasters;

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• The occurrence of unusual weather or operating conditions and other force majeure events;

• The failure of equipment or processes to operate in accordance with specifications, design or expectations;

• Accidents;

• Wall failures and rock slides in our open-pit mines, and structural collapses in our underground mines;

• Problems associated with the construction and management of large impoundments containing tailings or other viscous or semi-solid materials, some of which also contain mineral and chemical contaminants, such as structural failures or leakages;

• Interruption of energy supply;

• Lower than expected ore grades or recovery rates;

• Metallurgical and other processing problems;

• Unanticipated ground and water conditions;

• Adverse claims to water rights, adverse outcomes of pending water adjudications and shortages of water to which we have rights;

• Adjacent land ownership or usage that results in constraints on current or future mine operations;

• Delays in the receipt of or failure to receive necessary government authorizations, approvals or permits;

• Delays in transportation and disruptions of supply routes;

• The inability to obtain satisfactory insurance coverage.

The failure to adequately manage these risks could result in significant personal injury, loss of life, property damage and damage to the environment, both in and around our areas of operations, as well as damage to production facilities and delays in or curtailments of production.

Labor unrest and activism could disrupt our operations and may adversely affect our business, financial condition, results of operations and prospects.

As further described in Items 1 and 2. “Business and Properties,” we are party to labor agreements with various unions that represent employees at our operations. Labor agreements are negotiated on a periodic basis, and the risk exists that labor agreements may not be renewed on reasonably satisfactory terms to us or at all. We cannot predict what issues may be raised by the collective bargaining units representing our employees and, if raised, whether negotiations concerning those issues will be concluded successfully. Our production and sales volumes could be significantly reduced and our business, financial condition and results of operations adversely affected by significant reductions in productivity or protracted work stoppages at one or more of our operations. Additionally, if we enter into a new labor agreement with any union that significantly increases our labor costs relative to our competitors, our ability to compete may be materially and adversely affected.

During 2011, PT Freeport Indonesia was adversely affected by labor disruptions, including an eight-day work stoppage in July 2011 and an approximate three-month strike that concluded in December 2011. The strike involved civil unrest, transportation blockades, sabotage of important operating facilities and violence. In mid-December 2011, the financial terms of a new two-year labor agreement for PT Freeport Indonesia were reached and the parties agreed that future wage negotiations would be based on living costs and the competitiveness of wages within Indonesia. Although a new labor agreement has been reached, we are experiencing work interruptions in connection with our efforts to resume normal operations at PT Freeport Indonesia. PT Freeport Indonesia is complying with the terms of the new labor agreement with its union. Certain of the returning workers have engaged in acts of violence and intimidation against workers and supervisory personnel who did not participate in the strike. On February 23, 2012, the union indicated that it will engage in a work stoppage and we temporarily

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suspended operations to protect our employees and assets following the incidents of intimidation and threats within the workforce. We are working with union officials and government authorities to resolve the ongoing issues. Refer to Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” for further discussion.

In fourth-quarter 2011, there was an approximate two-month labor strike at Cerro Verde during the negotiation of a new labor agreement. The strike did not have a significant impact on production, and a new three-year agreement with the union was reached in late December 2011.

If we do not successfully negotiate new collective bargaining agreements with our union workers, we may incur prolonged strikes and other work stoppages at our mining operations, which could adversely affect our business, financial condition and results of operations.

Our mining production depends on the availability of sufficient water supplies.

Our operations require significant quantities of water for mining, ore processing and related support facilities. Our operations in North and South America are in areas where water is scarce and competition among users for continuing access to water is significant. Continuous production at our mines depends on our ability to maintain our water rights and claims.

At our North America operations, our water rights give us only the right to use public waters for a statutorily defined beneficial use at a designated location. In Arizona, we are a participant in two active general stream adjudications in which, for over 30 years, the state of Arizona has been attempting to quantify and prioritize surface water claims for two of the state's largest river systems that affect four of our operating mines (Morenci, Safford, Sierrita and Miami). The legal precedent set in these proceedings may also affect our Bagdad mine. Groundwater has historically been treated separately from surface water under Arizona law, which has generally allowed land owners to pump at will, subject to the doctrine of reasonable use. However, court decisions in recent years have concluded that if groundwater pumping produces or affects surface water, then such pumping requires surface water rights and is subject to the general stream adjudications. The effort to define the boundaries between groundwater and surface water is currently the focus of one of those adjudications.

In Colorado, our surface water and groundwater rights are subject to adjudication and we are involved in legal proceedings to resolve disputes regarding priority of administration of rights, including priority of some of our rights for the Climax molybdenum mine. In New Mexico, our surface water and groundwater rights are fully licensed or have been fully adjudicated.

Water for our Cerro Verde mining operation comes from renewable sources through a series of storage reservoirs on the Rio Chili watershed that collect water primarily from seasonal precipitation. Due to occasional drought conditions and the possibility that climate change will reduce precipitation levels, temporary supply shortages are possible that could affect our current and planned Cerro Verde operations. Cerro Verde has been conducting water studies to assess opportunities for additional supplies to support current operations and potential future expansion projects. In 2011, Cerro Verde reached an agreement with the Regional Government of Arequipa, the National Government, Servicio de Agua Potable y Alcantarillado de Arequipa S.A. (SEDAPAR) and other local institutions to allow Cerro Verde to finance the engineering and construction of a wastewater treatment plant, should it proceed with plans for a large-scale concentrator expansion. Once Cerro Verde obtains a license for the treated water, it would be used to supplement its existing water supplies to support the potential concentrator expansion.

Water for our El Abra mining operation comes from the continued pumping of groundwater from the Salar de Ascotán aquifer. In 2010, El Abra obtained regulatory approval, subject to certain conditions, for the continued pumping of groundwater from the Salar de Ascotán aquifer for its sulfide processing plant, which began operations in 2011. We believe that El Abra has sufficient water rights to support current operations, however, a change to the sulfide ore project, such as increased production or mill processing, would require additional water beyond our sulfide groundwater pumping, which is permitted through 2021. El Abra is also conducting studies to assess the feasibility of constructing a desalination plant near the Pacific Ocean to treat seawater for possible increased sulfide ore production or mill processing.

Water for our Candelaria and Ojos del Salado mining operations is drawn from the Copiapó River aquifer. Because of rapid depletion of this aquifer in recent years, Candelaria is expanding its sources of water supply. During 2010, we completed construction of a pipeline to convey reclaimed water from a nearby water treatment facility to our

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Candelaria mine. We have also completed engineering and began construction for a desalination plant near the Pacific Ocean that will supply Candelaria's longer term water needs. The plant is expected to be completed in early 2013.

Although we believe each operation has sufficient water rights and claims to cover current operational demands, we cannot predict the potential outcome of pending or future legal proceedings on our water rights, claims and uses. The loss of some or all water rights for any of our mines, or physical shortages of water to which we have rights, could require us to curtail or close mining operations and could prevent us from pursuing expansion opportunities.

Increased production costs could reduce our profitability and cash flow.

Our copper mining operations require significant energy, principally diesel, electricity, coal and natural gas. For the year 2011, energy represented approximately 21 percent of our consolidated copper production costs. An inability to procure sufficient energy at reasonable prices could adversely affect our profits, cash flow and growth opportunities.

Our consolidated copper production costs are also affected by the prices of commodities we consume or use in our operations, such as sulphuric acid, grinding media, steel, reagents, liners, tires, explosives and diluents. The prices of such commodities are influenced by supply and demand trends affecting the mining industry in general and other factors outside our control and such prices are at times subject to volatile movements. Increases in the cost of these commodities could make our operations less profitable. Increases in the costs of commodities that we consume or use may also significantly affect the capital costs of new projects.

In addition to the usual risks encountered in the mining industry, our Indonesia operations involve additional risks because they are located on unusually difficult terrain in a very remote area.

The Grasberg minerals district is located in steep mountainous terrain in a remote area of Indonesia. Because of these conditions, we have had to overcome special engineering difficulties and develop extensive infrastructure facilities. In addition, the area receives considerable rainfall, which has led to periodic floods and mudslides. The mine site is also in an active seismic area and has experienced earth tremors from time to time. Our insurance may not sufficiently cover an unexpected natural or operating disaster.

In October 2003, a slippage of material occurred in a section of the Grasberg open pit, resulting in eight fatalities. In December 2003, a debris flow involving a relatively small amount of loose material occurred in the same section of the open pit resulting in only minor property damage. The events caused us to alter our short-term mine sequencing plans; normal production activities resumed in second-quarter 2004.

In March 2006, a mud/topsoil slide involving approximately 75,000 metric tons of material occurred from a mountain ridge above service facilities supporting PT Freeport Indonesia's mining facilities. Three contract workers were fatally injured in the event. The material damaged a mess hall and an adjacent area. As a result of investigations by PT Freeport Indonesia and the Indonesian Department of Energy and Mineral Resources, we conducted geotechnical studies to identify and address any potential hazards to workers and facilities from slides. The existing early warning system for potential slides, based upon rainfall and other factors, has also been expanded.

In September 2008, a small scale failure encompassing approximately 75,000 metric tons of material occurred at our Grasberg open pit. There were no injuries or property damage. The event caused a delay in our access to the high-grade section of the open pit and, as a result, a portion of the metal expected to be mined in the second half of 2008 was deferred to future periods.

In April 2011, two PT Freeport Indonesia employees died in an accident when a portion of the Deep Ore Zone (DOZ) mine experienced an uncontrolled muck flow. The area was temporarily shut down during the investigation of the accident.

No assurance can be given that similar events will not occur in the future.

In addition to the usual risks encountered in the mining industry, our Africa mining operation involves additional risks because it is located in a remote area of the DRC.

The Tenke Fungurume minerals district is located in a remote area of the DRC and is subject to additional challenges, including:

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• Severely limited infrastructure, including road, bridge and rail access that is in disrepair and receives minimal maintenance;

• Limited and possibly unreliable energy supply from antiquated equipment and from power distribution corridors that are not maintained;

• Challenges in obtaining experienced personnel;

• Security risks; and

• Limited health care in an area plagued by disease and other potential endemic health issues, including malaria and cholera.

Additionally, due to limited rail access, we currently truck a significant portion of the production from the Tenke mine approximately 1,900 miles to ports in South Africa. The Tenke Fungurume minerals district and its future development may be substantially affected by factors beyond our control, which could adversely affect their contribution to our operating results and increase the cost of future development.

The volume and grade of ore reserves that we recover and our rate of production may be more or less than anticipated.

Our ore reserve amounts are determined in accordance with Industry Guide 7 as required by the Securities Exchange Age of 1934, and are estimates of the mineral deposits that can be economically and legally extracted or produced at the time of the reserve determination. The determination of reserves involves numerous uncertainties with respect to the ultimate geology of the ore bodies, including quantities, grades and recovery rates, and estimates may change as new data becomes available. Estimating the quantity and grade of reserves requires us to determine the size, shape and depth or our ore bodies by analyzing geological data, such as samplings of drill holes, tunnels and other underground workings. In addition to the geology of our mines, assumptions are required to determine the economic feasibility of mining these reserves, including estimates of future commodity prices and demand, the mining methods we use and the related costs incurred to develop and mine our reserves. A sustained decrease in commodity prices may result in a reduction in economically recoverable ore reserves. These factors may result in variations in the volumes of mineral reserves that we report from period to period.

There are also uncertainties inherent in estimating quantities of ore reserves and copper recovered from mill and leach stockpiles. The quantity of copper delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade contained in the material delivered to the mill and leach stockpiles. Processes and recovery rates are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. Accordingly, the volume and grade of ore reserves recovered, rates of production and copper recovered from stockpiles may be less than anticipated.

We must continually replace reserves depleted by production. Our exploration activities may not result in additional discoveries.

Our ability to replenish our ore reserves is important to our long-term viability. Produced ore reserves must be replaced by further delineation of existing ore bodies or by locating new deposits in order to maintain production levels over the long term. Exploration is highly speculative in nature. Our exploration projects involve many risks, require substantial expenditures and may not result in the discovery of sufficient additional mineral deposits that can be mined profitably. Once a site with mineralization is discovered, it may take several years from the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish recoverable proven and probable reserves and to construct mining and processing facilities. As a result, there is no assurance that current or future exploration programs will be successful. There is a risk that depletion of reserves will not be offset by discoveries or acquisitions.

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Development projects are inherently risky and may require more capital than anticipated, which could adversely affect our business.

There are many risks and uncertainties inherent in all development projects. The economic feasibility of development projects is based on many factors, including the accuracy of estimated reserves, metallurgical recoveries, capital and operating costs and estimated future prices of the relevant minerals. The capital expenditures and time required to develop new mines or other projects are considerable, and changes in costs or construction schedules can adversely affect project economics. Moreover, underground mining is generally more expensive than surface mining as a result of higher capital costs, including costs for modern mining equipment and construction of extensive ventilation systems. Therefore, it is possible that actual costs and economic returns may differ materially from our estimates. Refer to Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of our current development projects.

New development projects have no operating history upon which to base estimates of future cash flow. These development projects also require the successful completion of feasibility studies, acquisition of governmental permits, acquisition of land, power and water, and ensuring that appropriate community infrastructure is developed by third parties to support such projects. It is possible that we could fail to obtain the government approvals necessary for the operation of a project, in which case, the project may not proceed, either on its original timing or at all. It is not unusual for new mining operations to experience unexpected problems during the start-up phase, resulting in delays in producing revenue and increases in capital expenditures.

The development of underground mines is subject to additional risks, including the following:

• Unanticipated geologic, geotechnical and hydrogeologic conditions;

• Challenges related to hiring and training personnel required for underground mining activities;

• Larger than expected dilution of ore associated with block caving and stoping mining methods; and

• Unanticipated delays in the development of major access and supporting infrastructure due to engineering changes, late delivery of critical components and longer than planned construction periods.

Some of these risks could result in delays to production startup and a loss or reduction in minable tons. There can be no assurance that the occurrence of such events or conditions would not have a material adverse impact on our business and results of operations.

Environmental risks

Our domestic and international operations are subject to complex and evolving environmental laws and regulations, and compliance with environmental and regulatory requirements involves significant costs.

Our mining operations and exploration activities, both in the U.S. and elsewhere, are subject to extensive laws and regulations governing exploration, development, production, occupational health, mine safety, toxic substances, waste disposal, protection and remediation of the environment, protection of endangered and protected species, and other related matters. Compliance with these laws and regulations imposes substantial costs, which we expect will continue to increase over time because of increased regulatory oversight, adoption of increasingly stringent environmental standards, and increased demand for remediation services leading to shortages of equipment, supplies and labor, as well as other factors. Recent examples of these trends include EPA's June 2010, promulgation of a new sulphur dioxide ambient air standard and EPA's efforts to curtail the exemption of mining operations from waste management regulation under the Federal Resource Conservation and Recovery Act. These and other such actions could have a significant impact on our operational compliance and closure costs.

In addition to compliance with environmental regulation at our operating sites, we incur significant costs for remediating environmental conditions on properties that have not been operated in many years.

Freeport-McMoRan Corporation (FMC, formerly Phelps Dodge Corporation), and many of its affiliates and predecessor companies have been involved in mining, milling, and manufacturing in the U.S. for more than a century. Activities that occurred in the late 19th century and the 20th century prior to the advent of modern environmental laws were not subject to environmental regulation and were conducted before American industrial

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companies understood the long-term effects of their operations on the surrounding environment. With the passage of CERCLA in 1980, companies like FMC became legally responsible for environmental remediation on properties previously owned or operated by them, irrespective of when the damage to the environment occurred or who caused it. That liability is often shared on a joint and several basis with all other owners and operators, meaning that each owner or operator of the property is fully responsible for the clean-up, although in many cases some or all of the other historical owners or operators no longer exist, do not have the financial ability to respond or cannot be found. As a result, because of our acquisition of FMC in 2007, many of the subsidiary companies we now own are responsible for a wide variety of environmental remediation projects throughout the U.S., and we expect to spend substantial sums annually for many years to address these remediation issues. We are also subject to claims where the release of hazardous substances is alleged to have damaged natural resources. At December 31, 2011, we had more than 100 active remediation projects in the U.S. in 27 states.

At December 31, 2011, we had $1.5 billion recorded in our consolidated balance sheet for environmental obligations attributed to CERCLA or analogous state programs and for estimated future costs associated with environmental matters at closed facilities or closed portions of certain operating facilities. Our environmental obligation estimates are primarily based upon:

• Our knowledge and beliefs about complex scientific and historical facts and circumstances that in many cases involve events that occurred many decades ago;

• Our beliefs and assumptions regarding the nature, extent and duration of remediation activities that we will be required to undertake and the estimated costs of those remediation activities, which are subject to varying interpretations; and

• Our beliefs regarding the requirements that are imposed on us by existing laws and regulations and, in some cases, the expected clarification of uncertain regulatory requirements that could materially affect our environmental obligation estimates.

Significant adjustments to these estimates are likely to occur in the future as additional information becomes available. The actual environmental costs ultimately may exceed our current and future accruals for these costs, and any such changes could be material.

Refer to Note 13 for further discussion of our environmental obligations.

During 2011, we incurred environmental capital expenditures and other environmental costs (including our joint venture partners' shares) to comply with applicable environmental laws and regulations that affect our operations of $387 million, compared with $372 million in 2010 and $289 million in 2009. For 2012, we expect to incur approximately $636 million of aggregate environmental capital expenditures and other environmental costs. The timing and amounts of estimated payments could change as a result of changes in regulatory requirements, changes in scope and costs of reclamation activities, and as actual spending occurs.

An adverse ruling in one or more pending legal proceedings involving environmental matters could have a material adverse effect on us.

As described in Note 13, we are a defendant in numerous, and in some cases significant, litigation matters involving alleged environmental contamination, alleged environmental toxic torts and complex interpretations of environmental regulations. An adverse ruling in one or more of those matters could have a material adverse effect on our results of operations, financial condition and cash flow.

Our Indonesia mining operations create difficult and costly environmental challenges, and future changes in environmental laws, or unanticipated environmental impacts from those operations, could require us to incur increased costs.

Mining operations on the scale of our Indonesia operations involve significant environmental risks and challenges. Our primary challenge is to dispose of the large amount of crushed and ground rock material, called tailings, that results from the process by which we physically separate the copper-, gold- and silver-bearing materials from the ore that we mine. Our tailings management plan, which has been approved by the Indonesian government, uses the river system near our mine to transport the tailings to an engineered area in the lowlands where the tailings and natural sediments are managed in a deposition area. Lateral levees have been constructed to help contain the

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footprint of the tailings and to limit their impact in the lowlands.

Another major environmental challenge is managing overburden, which is the rock that must be moved aside in the mining process to reach the ore. In the presence of air, water and naturally occurring bacteria, some overburden can generate acid rock drainage, or acidic water containing dissolved metals which, if not properly managed, can adversely affect the environment.

From time to time, certain Indonesian government officials have raised questions with respect to our tailings and overburden management plans, including a suggestion that we implement a pipeline system rather than our river transport system for tailings management and disposition. Because our Indonesia mining operations are remotely located in steep mountainous terrain and in an active seismic area, a pipeline system would be costly, difficult to construct and maintain, and more prone to catastrophic failure, and could therefore involve significant potentially adverse environmental issues. Based on our own studies and others conducted by third parties, we do not believe that a pipeline system is necessary or practical.

In connection with obtaining our environmental approvals from the Indonesian government, we committed to perform a one-time environmental risk assessment on the impacts of our tailings management plan. We completed this extensive environmental risk assessment with more than 90 scientific studies conducted over four years and submitted it to the Indonesian government in December 2002. We developed the risk assessment study using internationally recognized methods with input from an independent review panel, which included representatives from the Indonesian government, academia and non-governmental organizations. The risks identified during this process were in line with our impact projections of the tailings management program contained in our environmental approval documents.

Since 2005, PT Freeport Indonesia has participated in the Government of Indonesia's PROPER (Program for Pollution Control, Evaluation and Rating) program. In November 2011, the Indonesian Ministry of Environment announced the latest results of its PROPER environmental management audit, but did not provide a rating for PT Freeport Indonesia because of the strike and security conditions that existed during 2011.  In 2010, the Indonesia Ministry of Environment issued a Blue rating acknowledging PT Freeport Indonesia's environmental management practices as being in compliance with the laws and regulations in Indonesia.

Mine closure regulations impose substantial costs on our operations.

Our U.S. operations are subject to various federal and state permitting requirements that include mine closure and mined-land reclamation obligations. These requirements are complex and vary depending upon the jurisdiction. The laws govern the determination of the scope and cost of the closure and reclamation obligations and the amount and forms of financial assurance sufficient to allow a third party to meet the obligations of those plans if we are unable to do so. In general, our U.S. mines are required to review estimated closure and reclamation costs on either a periodic basis or at the time of significant permit modifications and post increasing amounts of financial assurance as required. It is uncertain how potential EPA requirements for financial assurance will affect the timing of periodic closure cost reviews or the scope of closure activities.

Our international mines are also subject to various mine closure and mined-land reclamation laws. In July 2011, the Chilean senate passed legislation relating to mine closure, which establishes new requirements for closure plans and becomes effective in November 2012. As a result, our Chilean operations will be required to update closure plans and provide financial assurance for these obligations. We cannot predict at this time the costs of these closure plans or the levels or forms of financial assurance that may be required.

At December 31, 2011, we had asset retirement obligations (AROs) of $921 million recorded in our consolidated balance sheet. ARO cost estimates may increase or decrease significantly in the future as a result of changes in closure or financial assurance regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. Refer to Note 13 for further discussion.

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Regulation of greenhouse gas emissions and climate change issues may increase our costs and adversely affect our operations and markets.

Many scientists believe that emissions from the combustion of carbon-based fuels contribute to greenhouse effects and, therefore, potentially contribute to climate change. In 2011, our worldwide total greenhouse gas emissions, measured as carbon dioxide equivalent emissions, were approximately 10 million metric tons, divided between direct (54 percent) and indirect (46 percent) emissions. Most of our direct emissions are from fuel combustion in haul trucks, followed by the combustion of fuels to provide energy for roasting, smelting and other processes. Indirect emissions are generally the emissions of outside providers from whom we purchase electricity for use in our operations. Approximately 56 percent of our direct emissions are in Indonesia, 28 percent in North America and 10 percent in South America. Approximately 58 percent of our indirect emissions are in North America and 40 percent in South America.

A number of governments have introduced or are contemplating regulatory initiatives designed to control and reduce greenhouse gas emissions. In the U.S. several of these regulatory changes are being challenged at both the federal and state levels. In September 2009, the EPA issued final regulations requiring monitoring and reporting of greenhouse gas emissions in specified circumstances. Those regulations became effective in 2010. Our Miami smelter and El Paso refinery have reported their emissions under this program. In June 2010, the EPA issued final regulations under the Clean Air Act for the control of greenhouse gases from new large stationary sources and major modifications to existing large stationary sources. Certain of our operations, including the Miami smelter, could be materially affected by these regulations, as these regulations and anticipated EPA regulations covering large fossil fuel fired power plants may materially increase energy costs at our operations. Several states have initiated action on their own or as part of regional organizations, such as the Western Climate Initiative, to limit greenhouse gas emissions. The U.S. may also become a party to international agreements to reduce greenhouse gas emissions, which could lead to new regulations affecting our U.S. operations. The December 1997 Kyoto Protocol established greenhouse gas emission targets for developed countries that ratified the Protocol. Although the U.S. has not ratified the Kyoto Protocol, which expires in December 2012, the U.S. continues to participate in global climate summits that may lead to an agreement in the future.

Since 2006, we have participated in the Carbon Disclosure Project, which is a voluntary initiative that promotes standardized reporting of greenhouse gas emissions and reduction efforts. In 2009, we formed a multi-departmental greenhouse gas task force to pursue ways to improve the energy efficiency of our operations and reduce greenhouse gas emissions, including evaluating potential reductions in emissions from our haul trucks. However, because of longer and steeper mining hauls as our open pits expand and deepen, and increases in use of electricity as we increase production capacity, we expect increases in our total greenhouse gas emissions.

From a medium and long-term perspective, we are likely to experience increased costs relating to our greenhouse gas emissions as a result of regulatory initiatives in the U.S. and other countries in which we operate. In addition, the cost of electricity that we purchase from others may increase if our suppliers incur increased costs from the regulation of their greenhouse gas emissions. We cannot predict the magnitude of any increased costs at this time, given the wide scope of potential regulatory changes in the many countries in which we operate.

The potential physical impacts of climate change on our operations are highly uncertain, and would vary by operation based on particular geographic circumstances. These may include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperatures. These effects may adversely impact the cost, production and financial performance of our operations.

Our operating, inactive and historical U.S. mining sites and facilities may be subject to future regulation of radioactive materials that are commonly associated with, or result from, our mining operations.

Federal and state agencies have considered proposing new regulations to characterize, regulate and remediate potential workplace exposures and environmental impacts of radioactive materials commonly associated with mining operations. For example, the EPA could promulgate rules to regulate technologically enhanced naturally occurring radioactive materials (TENORM) and their impacts at mining operations. In addition, several states are promulgating groundwater quality compliance and remediation standards for radioactive materials, including uranium. Radioactive materials can be associated with copper mineral deposits, including both our current and discontinued operations. Accordingly, our copper operations may generate, concentrate or release radioactive materials that may subject our operations to new and increased regulation. The impact of such future regulation on our operating, closure, reclamation, and remediation costs is uncertain.

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Other risks

If market prices for our commodities decline, the carrying values of inventories and long-lived assets may be impaired, which could require charges to operating income that could be material.

Declines in the market price of copper, among other factors, could cause us to record lower of cost or market (LCM) inventory adjustments and could also result in a write-down of the carrying value of long-lived assets, which would potentially have a material adverse impact on our results of operations and stockholders' equity, but would have no effect on cash flows.

During fourth-quarter 2008, we concluded that the then-current economic environment and significant declines in copper and molybdenum prices represented significant adverse changes in our business requiring us to evaluate our long-lived assets and goodwill for impairment. As a result, we recorded significant impairment and LCM inventory charges. Refer to Item 6. "Selected Financial Data" for a summary of these charges.

Unanticipated litigation or negative developments in pending litigation could have a material adverse effect on our results of operations and financial condition.

We are a party to the litigation described in Note 13 and in Item 3. “Legal Proceedings” and a number of other litigation matters, including asbestos exposure cases, disputes over the allocation of environmental remediation obligations at Superfund and other sites, disputes over water rights and disputes with regulatory authorities. The outcome of litigation is inherently uncertain and adverse developments or outcomes can result in significant monetary damages, penalties or injunctive relief against us, limitations on our property rights, or regulatory interpretations that increase our operating costs. If any of these disputes results in a substantial monetary judgment against us or an adverse legal interpretation is settled on unfavorable terms, or otherwise affects our operations, it could have a material adverse effect on our operating results and financial condition.

We depend on our senior management team and other key employees, and the loss of any of these employees could adversely affect our business.

Our success depends in part on our ability to attract, retain and motivate senior management and other key employees. Achieving this objective may be difficult because of many factors, including fluctuations in global economic and industry conditions, competitors' hiring practices, cost reduction activities, and the effectiveness of our compensation programs. Competition for qualified personnel can be very intense. We must continue to recruit, retain and motivate senior management and other key employees to maintain our current business and support our future projects. A loss of such personnel could prevent us from capitalizing on business opportunities, and our operating results could be adversely affected.

Our holding company structure may impact your ability to receive dividends.

We are a holding company with no material assets other than the capital stock of our subsidiaries. As a result, our ability to repay our indebtedness and pay dividends is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, loan, debt repayment or otherwise. Our subsidiaries do not have any obligation to make funds available to us to repay our indebtedness or pay dividends. Dividends from subsidiaries that are not wholly owned are shared with other equity owners. In addition, cash at our international operations is subject to foreign withholding taxes upon repatriation into the U.S.

In addition, our subsidiaries may not be able to, or be permitted to, make distributions to enable us to repay our indebtedness or pay dividends. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. Our rights to participate in any distribution of our subsidiaries' assets upon their liquidation, reorganization or insolvency would generally be subject to the prior claims of the subsidiaries' creditors, including any trade creditors.

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Anti-takeover provisions in our charter documents and Delaware law may make an acquisition of us more difficult.

Anti-takeover provisions in our charter documents and Delaware law may make an acquisition of us more difficult. These provisions:

• Authorize our board of directors to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our capital stock and could include terms that may deter an acquisition of us;

• Establish advance notice requirements for nominations to the board of directors or for proposals that can be presented at stockholder meetings;

• Limit removal of directors for cause only;

• Limit who may call stockholder meetings; and

• Require the approval of the holders of two thirds of our outstanding common stock to enter into certain business combination transactions, subject to certain exceptions, including if the consideration to be received by our common stockholders in the transaction is deemed to be a fair price.

These provisions may discourage potential takeover attempts, discourage bids for our common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, our common stock. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by our board of directors.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders from consummating a merger with, or acquisition of, us.

These provisions may deter an acquisition of us that might otherwise be attractive to stockholders.

Item 1B.  Unresolved Staff Comments.

Not applicable.

Item 3. Legal Proceedings.

We are involved in numerous 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 Freeport-McMoRan Corporation (FMC - formerly Phelps Dodge Corporation) and its affiliates. We are also involved periodically in other reviews, investigations and proceedings by government agencies, some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Management does not believe, based on currently available information, that the outcome of any legal proceeding 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. Below is a discussion of our water rights legal proceedings. Refer to Note 13 for discussion of our other legal proceedings.

Water Rights

Our operations in the western United States (U.S.) require water for mining, ore processing and related support facilities. Continuous operation of our mines is dependent on our ability to maintain our water rights and claims and the continuing physical availability of the water supplies. In the arid western U.S., water rights are often contested, and disputes over water rights are generally time-consuming, expensive and not necessarily dispositive unless they resolve actual and potential claims. The loss of a water right or continued use of a currently available water supply, in whole or in part, could have a material adverse effect on our mining operations.

Each western state has its own set of complex laws governing the withdrawal and use of groundwater and surface water, which are the sources of water supply for our operations. In Arizona, a landowner has the right to pump

57

groundwater beneath his property and put it to reasonable and beneficial use. Surface water in Arizona is subject to the doctrine of prior appropriation (first in time, first in right) and permits a holder of water rights to use surface water for a statutorily defined beneficial use at a designated location. In Arizona, potential claims are difficult to resolve, because it is difficult to identify and join all potentially interested parties in a single legal proceeding. Global efforts to settle contested water rights in an entire watershed, which are referred to as “adjudications,” are complex, multi-party judicial proceedings that can take decades to complete, but are designed to resolve all actual and potential claims. Two water rights adjudications have been initiated in Arizona in order to quantify and prioritize all surface water claims in two of the state's river systems that could impact four of our operating mines (Morenci, Safford, Sierrita and Miami). Any precedents set in these legal proceedings may also affect our Bagdad mine. These adjudications have been under way for many years, and we cannot predict when they will be concluded or how the many conflicting claims will be resolved.

In Re the General Adjudication of All Rights to Use Water in the Little Colorado Water System and Sources, Apache County, Superior Court, No. 6417, filed on or about February 17, 1978. The principal parties, in addition to us, include: the state of Arizona; the Salt River Project; the Arizona Public Service Company; the Navajo Nation, the Hopi Indian Tribe; the San Juan Southern Paiute Tribe; and the U.S. on behalf of those tribes, on its own behalf, and on behalf of the White Mountain Apache Tribe.

In Re The General Adjudication of All Rights to Use Water in the Gila River System and Sources,

Maricopa County, Superior Court, Cause Nos. W-1 (Salt), W-2 (Verde), W-3 (Upper Gila), and W-4 (San Pedro). This case was originally initiated in 1974 with the filing of a petition with the Arizona State Land Department and was consolidated and transferred to the Maricopa County Superior Court in 1981. The principal parties, in addition to us, include: the state of Arizona; the Gila Valley Irrigation District; the Franklin Irrigation District; the San Carlos Irrigation and Drainage District; the Salt River Project; the San Carlos Apache Tribe; the Gila River Indian Community (GRIC); and the U.S. on behalf of those Tribes, on its own behalf, and on behalf of the White Mountain Apache Tribe, the Fort McDowell Mohave-Apache Indian Community, the Salt River Pima-Maricopa Indian Community, and the Payson Community of Yavapai Apache Indians.

The last significant decision of the Maricopa County Superior Court in the Gila River adjudication was issued in 2005 and directed the Arizona Department of Water Resources (ADWR) to prepare detailed recommendations regarding the delineation of the “sub-flow” zone of the San Pedro River basin, a tributary of the Gila River, which is the subsurface area adjacent to the river where the court may find that it is connected to the surface water such that pumping may reduce surface flows.  Although we have minimal interests in the San Pedro River basin, a decision that re-characterizes groundwater in that basin as surface water will set a precedent for other river systems in Arizona that could have material implications for many commercial, industrial, municipal and agricultural users of groundwater, including our Arizona operations.

ADWR's recommendations were objected to by numerous parties on both sides of the issue, and a three-day hearing was held in late January 2012, at which various parties provided testimony and oral argument regarding the strengths and weaknesses of ADWR's technical approach to characterizing underground flows as groundwater or surface water. Given the legal and technical complexity of this adjudication, its long history, and its long-term legal and political implications, it is difficult to predict the timing or the outcome of this issue or of the overall adjudication.

Prior to January 1, 1983, various Indian tribes filed suits in the U.S. District Court in Arizona claiming superior rights to water being used by many other water users, including us, and claiming damages for prior use in derogation of their allegedly superior rights. These federal proceedings have been stayed pending the Arizona Superior Court adjudications.

In 1998, we and several other parties entered into a water rights settlement agreement with GRIC, one of the largest claimants in the adjudication, that was later included in a comprehensive water rights settlement under the Arizona Water Settlements Act of 2004. The GRIC settlement is subject to contingencies, and the comprehensive settlement has been challenged by other parties. If we are unable to resolve the contingencies in the GRIC settlement and defeat the third-party challenges, our water rights in the Gila River watershed could be diminished, and our operations at Morenci, Safford, Sierrita and Miami could be adversely affected.

United States v. Gila Valley Irrigation District, United States District Court, District of Arizona, was initiated in 1925 by the U.S. to settle conflicting claims to water rights in portions of the Gila River watershed. A decree settling the claims of various parties was entered in 1935, after we were dismissed from the case without prejudice. In 1988, the GRIC intervened, challenging uses of water in the Gila River watershed, which may affect our ability to divert

58

water from Eagle Creek, Chase Creek or the San Francisco River for operation of our Morenci mine, pursuant to decreed rights and an agreement between us and the Gila Valley Irrigation District. Our Morenci operations also purchased farm lands with water rights in 1997, 1998 and 2008 that could be affected by the outcome of this proceeding. Impairment of our water claims in the Gila River watershed could adversely affect the operations of our Morenci and Safford mines.

Item 4. Mine Safety Disclosures.

The safety and health of all employees is our 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.

Our objective is zero work place injuries and occupational illnesses. We measure progress toward achieving our objective against regularly established benchmarks, including measuring company-wide Total Recordable Incident Rates (TRIR). During 2011, our TRIR (including contractors) was 0.61 per 200,000 man-hours worked, compared to the preliminary metal mining sector industry average reported by the U.S. Mine Safety and Health Administration (MSHA) for 2011 of 2.29 per 200,000 man-hours worked. Our TRIR (including contractors) was 0.65 per 200,000 man-hours worked in 2010 and 0.74 per 200,000 man-hours worked in 2009, compared to MSHA’s metal mining sector industry average of 2.53 per 200,000 man-hours worked in 2010 and 2.61 per 200,000 man-hours worked in 2009.

Refer to Exhibit 95.1 for mine safety disclosures required in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Executive Officers of the Registrant.

Certain information as of February 15, 2012, about our executive officers is set forth in the following table and accompanying text:

Name	Age	Position or Office
James R. Moffett	73	Chairman of the Board
Richard C. Adkerson	65	Director, President and Chief Executive Officer
Michael J. Arnold	59	Executive Vice President and Chief Administrative Officer
Kathleen L. Quirk	48	Executive Vice President, Chief Financial Officer and Treasurer

James R. Moffett has served as Chairman of the Board since May 1992. Mr. Moffett previously served as the Chief Executive Officer from July 1995 until December 2003. He has also served as Co-Chairman of the Board of McMoRan Exploration Co. (MMR) since September 1998, and President and Chief Executive Officer since May 2010.

Richard C. Adkerson has served as President since January 2008 and also from April 1997 to March 2007, Chief Executive Officer since December 2003 and a director since October 2006. Mr. Adkerson previously served as Chief Financial Officer from October 2000 to December 2003. Mr. Adkerson has also served as Co-Chairman of the Board of MMR since September 1998.

Michael J. Arnold has served as Executive Vice President since March 2007 andChief Administrative Officer since December 2003.

Kathleen L. Quirk has served as Executive Vice President since March 2007, Chief Financial Officer since December 2003 and Treasurer since February 2000. Ms. Quirk previously served as Senior Vice President from December 2003 to March 2007. Ms. Quirk has also served as the Senior Vice President of MMR since April 2002 and as Treasurer since January 2000.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Unregistered Sales of Equity Securities

None.

Common Stock

Our common shares trade on the New York Stock Exchange (NYSE) under the symbol “FCX.” The FCX share price is reported daily in the financial press under “FMCG” in most listings of NYSE securities. The table below shows the NYSE composite tape common share price ranges during 2011 and 2010:

	2011		2010
	High	Low	High	Low
First Quarter	$61.35	$46.20	$45.28	$33.02
Second Quarter	58.75	46.06	44.15	29.12
Third Quarter	56.78	30.37	43.96	28.36
Fourth Quarter	43.50	28.85	60.39	43.19

At February 15, 2012, there were 16,432 holders of record of our common stock.

Common Stock Dividends

After suspending dividends in late 2008, the Board of Directors (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). The Board authorized increases in the cash dividend to an annual rate of $0.60 per share ($0.15 per share quarterly) in April 2010, and $1.00 per share ($0.25 per share quarterly) in October 2010. The Board also authorized supplemental common stock dividends of $0.50 per share paid in December 2010 and June 2011. Below is a summary of common stock cash dividends paid in 2011 and 2010:

	2011
	Per Share Amount	Record Date	Payment Date
First Quarter	$0.25	01/15/2011	02/01/2011
Second Quarter	0.25	04/15/2011	05/01/2011
Supplemental Dividend	0.50	05/15/2011	06/01/2011
Third Quarter	0.25	07/15/2011	08/01/2011
Fourth Quarter	0.25	10/15/2011	11/01/2011

	2010
	Per Share Amount	Record Date	Payment Date
First Quarter	$0.075	01/15/2010	02/01/2010
Second Quarter	0.075	04/15/2010	05/01/2010
Third Quarter	0.15	07/15/2010	08/01/2010
Fourth Quarter	0.15	10/15/2010	11/01/2010
Supplemental Dividend	0.50	12/20/2010	12/30/2010

In February 2012, the Board authorized an increase in the cash dividend on our common stock to an annual rate of $1.25 per share ($0.3125 per share quarterly). Dividends are paid quarterly as declared by the Board with the initial quarterly dividend of $0.3125 per share expected to be paid in May 2012. 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.

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Issuer Purchases of Equity Securities

The following table sets forth information with respect to shares of FCX common stock purchased by us during the three months ended December 31, 2011:

Period	(a) Total Number of Shares Purchaseda	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programsb	(d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programsb
October 1-31, 2011	—	$	—	—	23,685,500
November 1-30, 2011	—	—		—	23,685,500
December 1-31, 2011	—	—		—	23,685,500
Total	—	—		—	23,685,500

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

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

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Item 6. Selected Financial Data.

FREEPORT-McMoRan COPPER & GOLD INC.

SELECTED FINANCIAL AND OPERATING DATA

	Years Ended December 31,
	2011			2010			2009			2008				2007		a
FCX CONSOLIDATED FINANCIAL DATA	(In Millions, Except Per Share Amounts)
Revenues	$	20,880		$	18,982		$	15,040		$	17,796			$	16,939	b
Operating income (loss)	9,140		c	9,068			6,503		d,e	(12,710		)	d,e,f	6,555		b,f
Income (loss) from continuing operations	5,747			5,544			3,534			(10,450		)		3,733
Net income (loss)	5,747			5,544			3,534			(10,450		)		3,779
Net income (loss) attributable to FCX common stockholders	4,560		c,g,h	4,273		h	2,527		d,e,h	(11,341		)	d,e,f,h	2,769		b,f,h
Basic net income (loss) per share attributable to FCX common stockholders:
Continuing operations	$	4.81		$	4.67		$	3.05		$	(14.86	)		$	4.01
Discontinued operations	—			—			—			—				0.05
Basic net income (loss)	$	4.81		$	4.67		$	3.05		$	(14.86	)		$	4.06
Basic weighted-average common shares outstanding	947			915			829			763				682
Diluted net income (loss) per share attributable to FCX common stockholders:
Continuing operations	$	4.78		$	4.57		$	2.93		$	(14.86	)		$	3.70
Discontinued operations	—			—			—			—				0.05
Diluted net income (loss)	$	4.78	c,g,h	$	4.57	h	$	2.93	d,e,h	$	(14.86	)	d,e,f,h	$	3.75	b,f,h
Diluted weighted-average common shares outstanding	955			949			938			763				794
Dividends declared per share of common stock	$	1.50		$	1.125		$	0.075		$	0.6875			$	0.6875
At December 31:
Cash and cash equivalents	$	4,822		$	3,738		$	2,656		$	872			$	1,626
Property, plant, equipment and development costs, net	18,449			16,785			16,195			16,002				25,715
Goodwill	—			—			—			—				6,105
Total assets	32,070			29,386			25,996			23,353				40,661
Total debt, including current portion	3,537			4,755			6,346			7,351				7,211
Total FCX stockholders’ equity	15,642			12,504			9,119			5,773				18,234

The selected consolidated financial data shown above is derived from our audited consolidated financial statements. These historical results are not necessarily indicative of results that you can expect for any future period. You should read this data in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and Notes thereto contained in this annual report.

a. Includes the results of Freeport-McMoRan Corporation (FMC, formerly Phelps Dodge Corporation) beginning March 20, 2007.

b. Includes charges totaling $175 million ($106 million to net income attributable to common stockholders or $0.13 per share) for mark-to-market accounting adjustments on the 2007 copper price protection program assumed in the acquisition of FMC.

c. Includes charges totaling $116 million ($50 million to net income attributable to common stock, or $0.05 per share) primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

d. Includes charges totaling $23 million ($18 million to net income attributable to common stockholders or $0.02 per share) associated with restructuring charges in 2009 and $17.0 billion ($12.7 billion to net loss attributable to common stockholders or $16.60 per share) associated with impairment and restructuring charges in 2008.

e. Includes charges for lower of cost or market inventory adjustments totaling $19 million ($15 million to net income attributable to common stockholders or $0.02 per share) in 2009 and $782 million ($479 million to net loss attributable to common stockholders or $0.63 per share) in 2008.

f. Includes purchase accounting impacts related to the acquisition of FMC totaling $1.0 billion ($622 million to net loss attributable to common stockholders or $0.82 per share) in 2008 and $1.3 billion ($793 million to net income attributable to common stockholders or $1.00 per share) in 2007.

g. Includes additional taxes of $49 million ($0.05 per share) associated with Peru's new mining tax and royalty regime.

h. Includes net losses on early extinguishment and conversion of debt totaling $60 million ($0.06 per share) in 2011, $71 million ($0.07 per share) in 2010, $43 million ($0.04 per share) in 2009, $5 million ($0.01 per share) in 2008, and $132 million ($0.17 per share) in 2007; 2008 also includes charges totaling $22 million ($0.03 per share) associated with privately negotiated transactions to induce conversion of a portion of our 5½% Convertible Perpetual Preferred Stock into FCX common stock.

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FREEPORT-McMoRan COPPER & GOLD INC.

SELECTED FINANCIAL AND OPERATING DATA (Continued)

For comparative purposes, operating data shown below for the year ended December 31, 2007, combines our historical data with FMC pre-acquisition data. As the pre-acquisition operating data represent the results of these operations under FMC management, such combined data is not necessarily indicative of what past results would have been under FCX management or of future operating results.

	Years Ended December 31,
	2011		2010		2009		2008		2007		a
FCX CONSOLIDATED MINING OPERATING DATA
Copper (recoverable)
Production (millions of pounds)	3,691		3,908		4,103		4,030		3,884
Production (thousands of metric tons)	1,674		1,773		1,861		1,828		1,762
Sales, excluding purchases (millions of pounds)	3,698		3,896		4,111		4,066		3,862
Sales, excluding purchases (thousands of metric tons)	1,678		1,767		1,865		1,844		1,752
Average realized price per pound	$	3.86	$	3.59	$	2.60	$	2.69	$	3.22	b
Gold (thousands of recoverable ounces)
Production	1,383		1,886		2,664		1,291		2,329
Sales, excluding purchases	1,378		1,863		2,639		1,314		2,320
Average realized price per ounce	$	1,583	$	1,271	$	993	$	861	$	682
Molybdenum (millions of recoverable pounds)
Production	83		72		54		73		70
Sales, excluding purchases	79		67		58		71		69
Average realized price per pound	$	16.98	$	16.47	$	12.36	$	30.55	$	25.87
NORTH AMERICA COPPER MINES
Operating Data, Net of Joint Venture Interest
Copper (recoverable)
Production (millions of pounds)	1,258		1,067		1,147		1,430		1,320
Production (thousands of metric tons)	571		484		520		649		599
Sales, excluding purchases (millions of pounds)	1,247		1,085		1,187		1,434		1,332
Sales, excluding purchases (thousands of metric tons)	566		492		538		650		604
Average realized price per pound	$	3.99	$	3.42	$	2.38	$	3.07	$	3.10	b
Molybdenum (millions of recoverable pounds)
Production	35		25		25		30		30
100% Operating Data
Solution extraction/electrowinning (SX/EW) operations
Leach ore placed in stockpiles (metric tons per day)	888,300		648,800		589,400		1,095,200		798,200
Average copper ore grade (percent)	0.24		0.24		0.29		0.22		0.23
Copper production (millions of recoverable pounds)	801		746		859		943		940
Mill operations
Ore milled (metric tons per day)	222,800		189,200		169,900		249,600		223,800
Average ore grade (percent):
Copper	0.38		0.32		0.33		0.40		0.35
Molybdenum	0.03		0.03		0.02		0.02		0.02
Copper recovery rate (percent)	83.1		83.0		86.0		82.9		84.5
Production (millions of recoverable pounds):
Copper	549		398		364		599		501
Molybdenum	35		25		25		30		30
SOUTH AMERICA MINING
Copper (recoverable)
Production (millions of pounds)	1,306		1,354		1,390		1,506		1,413
Production (thousands of metric tons)	592		614		631		683		641
Sales (millions of pounds)	1,322		1,335		1,394		1,521		1,399
Sales (thousands of metric tons)	600		606		632		690		635
Average realized price per pound	$	3.77	$	3.68	$	2.70	$	2.57	$	3.25
Gold (thousands of recoverable ounces)
Production	101		93		92		114		116
Sales	101		93		90		116		114
Average realized price per ounce	$	1,580	$	1,263	$	982	$	853	$	683
Molybdenum (millions of recoverable pounds)
Production	10		7		2		3		1
SX/EW operations
Leach ore placed in stockpiles (metric tons per day)	245,200		268,800		258,200		279,700		289,100
Average copper ore grade (percent)	0.50		0.41		0.45		0.45		0.43
Copper production (millions of recoverable pounds)	439		504		565		560		569

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	Years Ended December 31,
	2011		2010		2009		2008		2007		a
SOUTH AMERICA MINING (continued)
Mill operations
Ore milled (metric tons per day)	189,200		188,800		181,300		181,400		167,900
Average ore grade:
Copper (percent)	0.66		0.65		0.66		0.75		0.74
Gold (grams per metric ton)	0.12		0.10		0.10		0.13		0.13
Molybdenum (percent)	0.02		0.02		0.02		0.02		0.02
Copper recovery rate (percent)	89.6		90.0		88.9		89.2		87.1
Production (recoverable):
Copper (millions of pounds)	867		850		825		946		844
Gold (thousands of ounces)	101		93		92		114		116
Molybdenum (millions of pounds)	10		7		2		3		1
INDONESIA MINING
Operating Data, Net of Joint Venture Interest
Copper (recoverable)
Production (millions of pounds)	846		1,222		1,412		1,094		1,151
Production (thousands of metric tons)	384		554		640		496		522
Sales (millions of pounds)	846		1,214		1,400		1,111		1,131
Sales (thousands of metric tons)	384		551		635		504		513
Average realized price per pound	$	3.85	$	3.69	$	2.65	$	2.36	$	3.32
Gold (thousands of recoverable ounces)
Production	1,272		1,786		2,568		1,163		2,198
Sales	1,270		1,765		2,543		1,182		2,185
Average realized price per ounce	$	1,583	$	1,271	$	994	$	861	$	681
100% Operating Data
Ore milled (metric tons per day)	166,100		230,200		238,300		192,900		212,600
Average ore grade:
Copper (percent)	0.79		0.85		0.98		0.83		0.82
Gold (grams per metric ton)	0.93		0.90		1.30		0.66		1.24
Recovery rates (percent):
Copper	88.3		88.9		90.6		90.1		90.5
Gold	81.2		81.7		83.7		79.9		86.2
Production (recoverable):
Copper (millions of pounds)	882		1,330		1,641		1,109		1,211
Gold (thousands of ounces)	1,444		1,964		2,984		1,163		2,608
AFRICA MININGc
Copper (recoverable)
Production (millions of pounds)	281		265		154		N/A		N/A
Production (thousands of metric tons)	127		120		70		N/A		N/A
Sales (millions of pounds)	283		262		130		N/A		N/A
Sales (thousands of metric tons)	128		119		59		N/A		N/A
Average realized price per pound	$	3.74	$	3.45	$	2.85	N/A		N/A
Cobalt (millions of contained pounds)
Production	25		20		N/A		N/A		N/A
Sales	25		20		N/A		N/A		N/A
Average realized price per pound	$	9.99	$	10.95	N/A		N/A		N/A
Ore milled (metric tons per day)	11,100		10,300		7,300		N/A		N/A
Average ore grade (percent):
Copper	3.41		3.51		3.69		N/A		N/A
Cobalt	0.40		0.40		N/A		N/A		N/A
Copper recovery rate (percent)	92.5		91.4		92.1		N/A		N/A
MOLYBDENUM OPERATIONS
Molybdenum sales, excluding purchases (millions of pounds)d	79		67		58		71		69
Average realized price per pound	$	16.98	$	16.47	$	12.36	$	30.55	$	25.87
Henderson molybdenum mine
Ore milled (metric tons per day)	22,300		22,900		14,900		24,100		24,000
Average molybdenum ore grade (percent)	0.24		0.25		0.25		0.23		0.23
Molybdenum production (millions of recoverable pounds)	38		40		27		40		39

a. For comparative purposes, operating data for the year ended December 31, 2007 combines our historical data with FMC pre-acquisition data. As the pre-acquisition data represents the results of these operations under FMC management, such combined data is not necessarily indicative of what past results would have been under FCX management or of future operating results.

b. Before charges for hedging losses related to copper price protection programs, amounts were $3.27 per pound (FCX consolidated) and $3.25 per pound (North America copper mines).

c. Results for 2009 represent mining operations that began production in March 2009.

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

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Ratio of Earnings to Fixed Charges

For the ratio of earnings to fixed charges calculation, earnings consist of income (loss) from continuing operations before income taxes, noncontrolling interests in consolidated subsidiaries, equity in affiliated companies’ net earnings, cumulative effect of accounting changes and fixed charges. Fixed charges include interest and that portion of rent deemed representative of interest. For the ratio of earnings to fixed charges and preferred stock dividends calculation, we assumed that our preferred stock dividend requirements were equal to the pre-tax earnings that would be required to cover those dividend requirements. We computed those pre-tax earnings using the effective tax rate for each year. Our ratio of earnings to fixed charges was as follows for the years presented:

	Years Ended December 31,
	2011	2010	2009	2008	2007
Ratio of earnings to fixed charges	20.7x	16.3x	9.3x	-a	9.9x
Ratio of earnings to fixed charges
and preferred stock dividends	20.7x	13.9x	6.1x	-b	6.6x

a. As a result of the loss recorded in 2008, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $13.4 billion to achieve coverage of 1:1 in 2008.

b. As a result of the loss recorded in 2008, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $13.8 billion to achieve coverage of 1:1 in 2008.

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Items 7. and 7A.  Management's Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk.

OVERVIEW

In Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, “we,” “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries. The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). 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 and Quantitative and Qualitative Disclosures About Market Risk all references to earnings or losses per share are on a diluted basis, unless otherwise noted.

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.

We have significant reserves, resources and future development opportunities within our portfolio of assets. At December 31, 2011, our estimated consolidated recoverable proven and probable reserves totaled 119.7 billion pounds of copper, 33.9 million ounces of gold and 3.42 billion pounds of molybdenum, which were determined using long-term average prices of $2.00 per pound for copper, $750 per ounce for gold and $10 per pound for molybdenum. We have added significant reserves in recent years and drilling activities conducted at our existing mines during 2011 indicated the potential for significant reserve additions in future periods. Refer to “Critical Accounting Estimates – Mineral Reserves” for further discussion.

During 2011, 34 percent of our consolidated copper production was from North America, 35 percent from South America, 23 percent from Indonesia and 8 percent from Africa. More specifically, copper production from the Grasberg, Morenci and Cerro Verde mines totaled 55 percent of our consolidated copper production in 2011. We also produce gold, primarily at the Grasberg minerals district in Indonesia, which accounted for 92 percent of our consolidated gold production for 2011. For 2011, 46 percent of our consolidated molybdenum production was from the Henderson molybdenum mine, 42 percent was produced at certain of our North America copper mines and 12 percent was produced at our Cerro Verde mine. Refer to “Operations” for further discussion of our mining operations.

We have increased production at several of our copper mines and are undertaking major development projects, including the development of the underground ore bodies at Grasberg, an expansion at Tenke Fungurume and a concentrator expansion at Cerro Verde. Studies are also under way to evaluate a major mill project at El Abra and various mill projects to process significant sulfide ore in North America. The advancement of these studies is designed to position us to invest in production growth within our existing portfolio of assets. Refer to “Operations” for further discussion of our current operating and development activities.

Our results for the year 2011, compared with 2010, primarily reflected higher realized copper and gold prices, partially offset by lower copper and gold sales volumes (refer to “Consolidated Results” for further discussion of our consolidated financial results for the years ended December 31, 2011, 2010 and 2009).

Our 2011 results also reflect the impact of labor disruptions at PT Freeport Indonesia. PT Freeport Indonesia's milling operations were temporarily suspended during fourth-quarter 2011 because of damage to concentrate and fuel pipelines resulting from civil unrest that occurred during the strike by union workers. The financial terms of a new two-year labor agreement for PT Freeport Indonesia's workers were reached in mid-December 2011. Repairs to the damaged pipelines are substantially complete, and PT Freeport Indonesia has begun ramping up production. PT Freeport Indonesia is working cooperatively with the Government of Indonesia to address security issues. Maintaining security is a requirement of returning to normal operations. Although a new labor agreement has been reached, we are experiencing work interruptions in connection with our efforts to resume normal operations at PT Freeport Indonesia. PT Freeport Indonesia is complying with the terms of the new labor agreement with its union. Certain of the returning workers have engaged in acts of violence and intimidation against workers and supervisory

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personnel who did not participate in the strike. On February 23, 2012, the union indicated that it will engage in a work stoppage and we temporarily suspended operations to protect our employees and assets following the incidents of intimidation and threats within the workforce. We are working with union officials and government authorities to resolve the ongoing issues. The work interruptions and temporary suspension of operations at PT Freeport Indonesia may impact our ability to achieve projected sales volumes, unit net cash costs and operating cash flows in 2012. PT Freeport Indonesia's projected sales volumes of 930 million pounds of copper and 1.1 million ounces of gold for the year 2012 (which includes 210 million pounds of copper and 400 thousand ounces of gold in first-quarter 2012) are under review. Refer to "Consolidated Results" and "Operations - Indonesia Mining" for further discussion of the impacts from the labor disruptions.

At December 31, 2011, we had $4.8 billion in consolidated cash and $3.5 billion in long-term debt. During 2011, we repaid $1.2 billion in debt, including the April 2011 redemption of $1.1 billion of outstanding 8.25% Senior Notes. In February 2012, we sold $3.0 billion in senior notes in three tranches and announced our intent to redeem the remaining $3.0 billion of our 8.375% Senior Notes. We expect to record a loss on early extinguishment of debt of $168 million ($147 million to net income attributable to common stockholders) in first-quarter 2012 in connection with the redemption of our 8.375% Senior Notes. Refer to "Capital Resources and Liquidity - Financing Activities" and to Notes 9 and 20 for further discussion of these transactions.

During 2011 we paid common stock dividends totaling $1.4 billion, which included $474 million in supplemental dividends. In February 2012, our Board of Directors authorized an increase in the cash dividend on our common stock to an annual rate of $1.25 per share ($0.3125 per share quarterly). Refer to "Capital Resources and Liquidity - Financing Activities" for further discussion.

At current copper prices we expect to produce substantial operating cash flows in 2012, and plan to focus on using our cash to invest in our development projects and return cash to shareholders through common stock dividends and/or share repurchases.

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. We will continue to adjust our operating strategy as market conditions change. Our financial results can vary as a result of fluctuations in market prices for copper, 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.  Following are our projected consolidated sales volumes for 2012 and actual consolidated sales volumes for 2011:

	2012		2011
	(Projected)		(Actual)
Copper (millions of recoverable pounds):
North America copper mines	1,320		1,247
South America mining	1,275		1,322
Indonesia mining	930		846
Africa mining	290		283
	3,815		3,698
Gold (thousands of recoverable ounces):
Indonesia mining	1,135		1,270
South America mining	100		101
North America copper mines	N/A	a	7
	1,235		1,378
Molybdenum (millions of recoverable pounds)b	80		79

a. Gold sales volumes are not projected for our North America copper mines.

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

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Our projected 2012 copper sales volumes are expected to be higher, compared with 2011, primarily because of higher production from North America and Indonesia, partly offset by slightly lower production in South America. Gold sales in 2012 are projected to be lower than 2011 sales because of mine sequencing in Indonesia. Molybdenum sales in 2012 are expected to be similar to 2011, with higher production from primary molybdenum mines, offset by lower production from our North and South America copper mines. The achievement of projected 2012 sales volumes depends on a number of factors, including the timing of restoring normal operations at Grasberg following the extended disruption in 2011 and because of recent work interruptions and the temporary suspension of operations, achievement of targeted mining rates, the successful operation of production facilities, the impact of weather conditions and other factors.

Unit Net Cash Costs.  Assuming average prices of $1,600 per ounce of gold and $13 per pound of molybdenum for 2012, and achievement of current projected 2012 sales volume and cost estimates, we estimate our consolidated unit net cash costs (net of by-product credits) for our copper mining operations would average approximately $1.38 per pound in 2012. Consolidated unit net cash costs in 2012 are expected to be higher than consolidated unit net cash costs of $1.01 per pound of copper in 2011 because of higher labor, energy and other inputs, and lower by-product credits, partly offset by higher copper volumes. Quarterly unit net cash costs vary with fluctuations in sales volumes and average realized prices for gold and molybdenum.The impact of price changes in 2012 on consolidated unit net cash costs would approximate $0.015 per pound for each $50 per ounce change in the average price of gold and $0.02 for each $2 per pound change in the average price of molybdenum. 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 2012, and assuming average prices of $3.50 per pound of copper, $1,600 per ounce of gold and $13 per pound of molybdenum in 2012, consolidated operating cash flows are estimated to approximate $4.7 billion in 2012, net of an estimated $0.8 billion for working capital requirements. Projected operating cash flows for the year 2012 also reflect estimated taxes of $2.1 billion (refer to “Consolidated Results – Provision for Income Taxes” for discussion of our projected annual consolidated effective tax rate for 2012). The impact of price changes in 2012 on operating cash flows would approximate $300 million for each $0.10 per pound change in the average price of copper, $50 million for each $50 per ounce change in the average price of gold and $90 million for each $2 per pound change in the average price of molybdenum.

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COPPER, GOLD AND MOLYBDENUM MARKETS

World prices for copper, gold and molybdenum can fluctuate significantly. During the period from January 2002 through January 2012, the London Metal Exchange (LME) spot copper price varied from a low of $0.64 per pound in 2002 to a record high of $4.60 per pound in February 2011; the London gold price fluctuated from a low of $278 per ounce in 2002 to a record high of $1,895 per ounce in September 2011; and the Metals Week Molybdenum Dealer Oxide weekly average price ranged from a low of $2.40 per pound in 2002 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 Form 10-K for the year ended December 31, 2011.

*  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 2002 through January 2012. 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 low of $1.26 per pound in December 2008. Copper prices have since improved from the 2008 lows, attributable to a combination of strong demand from emerging markets and limitations on available supply. During 2011, LME spot copper prices ranged from $3.08 per pound to $4.60 per pound, averaged $4.00 per pound and closed at $3.43 per pound on December 30, 2011. Combined LME and COMEX inventories rose somewhat in 2011, compared to year-end 2010 levels, primarily as a result of reduced Chinese imports.

We believe the underlying fundamentals of the copper business remain positive, supported by the significant role of copper in the global economy, 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 (which represented approximately 40 percent of global consumption in 2011), 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 $3.81 per pound on February 15, 2012.

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This graph presents London PM gold prices from January 2002 through January 2012. During 2011, gold prices were volatile ranging from $1,319 per ounce to a record high of $1,895 per ounce, averaging $1,572 per ounce and closing at $1,575 per ounce on December 30, 2011. We believe the outlook for gold remains positive, supported by continued macroeconomic uncertainty and elevated sovereign debt levels. Gold prices closed at $1,726 per ounce on February 15, 2012.

This graph presents the Metals Week Molybdenum Dealer Oxide weekly average price from January 2002 through January 2012. 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

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improved economic conditions and resulting demand increases. During 2011, the weekly average price of molybdenum ranged from $12.70 per pound to $17.88 per pound, averaged $15.49 per pound and was $13.35 per pound on December 30, 2011. The Metals Week Molybdenum Dealer Oxide weekly average price was $14.50 per pound on February 15, 2012.

CRITICAL ACCOUNTING ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States (U.S.). The preparation of these statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on historical experience and on assumptions that we consider reasonable under the circumstances; however, reported results could differ from those based on the current estimates under different assumptions or conditions. The areas requiring the use of management’s estimates are also discussed in Note 1 under the subheading “Use of Estimates.” Management has reviewed the following discussion of its development and selection of critical accounting estimates with the Audit Committee of our Board of Directors.

Mineral Reserves. Recoverable proven and probable reserves are the part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The determination of reserves involves numerous uncertainties with respect to the ultimate geology of the ore bodies, including quantities, grades and recovery rates. Estimating the quantity and grade of reserves requires us to determine the size, shape and depth of our ore bodies by analyzing geological data, such as samplings of drill holes, tunnels and other underground workings. In addition to the geology of our mines, assumptions are required to determine the economic feasibility of mining these reserves, including estimates of future commodity prices and demand, the mining methods we use and the related costs incurred to develop and mine our reserves. Our estimates of recoverable proven and probable reserves are prepared by and are the responsibility of our employees. A majority of these estimates have been reviewed and verified by independent experts in mining, geology and reserve determination.

At December 31, 2011, our consolidated recoverable proven and probable reserves included 119.7 billion pounds of copper, 33.9 million ounces of gold and 3.42 billion pounds of molybdenum, which were determined using long-

term average prices of $2.00 per pound for copper, $750 per ounce for gold and $10.00 per pound for molybdenum. The following table summarizes changes in our estimated consolidated recoverable proven and probable copper, gold and molybdenum reserves during 2011 and 2010:

	Copper (billion pounds)		Gold (million ounces)	Molybdenum (billion pounds)
Consolidated reserves at December 31, 2009	104.2		37.2	2.59
Net additions/revisions	20.2		0.2	0.87
Production	(3.9	)	(1.9)	(0.07)
Consolidated reserves at December 31, 2010	120.5		35.5	3.39
Net additions/revisions	2.9		(0.2)	0.11
Production	(3.7	)	(1.4)	(0.08)
Consolidated reserves at December 31, 2011	119.7		33.9	3.42

Refer to Note 18 for further information regarding estimated recoverable proven and probable reserves.

As discussed in Note 1, we depreciate our life-of-mine mining and milling assets and values assigned to proven and probable reserves using the unit-of-production (UOP) method based on our estimated recoverable proven and probable reserves, and also have other assets that are depreciated on a straight-line basis over their estimated useful lives. Because the economic assumptions used to estimate reserves change from period to period and additional geological data is generated during the course of operations, estimates of reserves may change, which could have a significant impact on our results of operations, including changes to prospective depreciation rates and asset carrying values. Based on projected copper sales volumes for 2012, if estimated copper reserves at our mines were 10 percent higher at December 31, 2011, we estimate that our annual depreciation, depletion and amortization expense for 2012 would decrease by $38 million ($20 million to net income attributable to common stockholders), and a 10 percent decrease in copper reserves would increase depreciation, depletion and amortization expense by $46 million ($24 million to net income attributable to common stockholders). We perform

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annual assessments of our existing assets in connection with the review of mine operating and development plans. If it is determined that assigned asset lives do not reflect the expected remaining period of benefit, any change could affect prospective depreciation rates.

As discussed below and in Note 1, we review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amount of such assets may not be recoverable, and changes to our estimates of recoverable proven and probable reserves could have an impact on our assessment of asset recoverability.

Recoverable Copper. We record, as inventory, applicable costs for copper contained in mill and leach stockpiles that are expected to be processed in the future based on proven processing technologies. Mill and leach stockpiles are evaluated periodically to ensure that they are stated at the lower of cost or market. Accounting for recoverable copper from mill and leach stockpiles represents a critical accounting estimate because (i) it is generally impracticable to determine copper contained in mill and leach stockpiles by physical count, which requires management to employ reasonable estimation methods and (ii) recovery rates from leach stockpiles can vary significantly. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade contained in the material delivered to the mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production-scale process), historical trends and other factors,

including mineralogy of the ore and rock type. Ultimate recovery of copper contained in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including type of copper recovery, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 70 percent of the copper ultimately recoverable may be extracted during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes. At December 31, 2011, estimated consolidated recoverable copper was 3.1 billion pounds in leach stockpiles (with a carrying value of $2.4 billion) and 1.3 billion pounds in mill stockpiles (with a carrying value of $604 million).

Environmental Obligations. Our mining, exploration, production and historical operating activities are subject to stringent laws and regulations governing the protection of the environment, and compliance with those laws requires significant expenditures. Environmental expenditures for closed facilities and closed portions of operating facilities are expensed or capitalized depending upon their future economic benefits. The guidance provided by U.S. GAAP requires that liabilities for contingencies be recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Refer to Note 1 for discussion of our accounting policy for environmental expenditures.

Accounting for environmental obligations represents a critical accounting estimate because changes to environmental laws and regulations and/or circumstances affecting our operations could result in significant changes to our estimates, which could have a significant impact on our results of operations. We review changes in facts and circumstances associated with our environmental and reclamation obligations at least quarterly. Judgments and estimates are based upon available facts, existing technology, presently enacted laws and regulations, remediation experience, whether or not we are a potentially responsible party (PRP), the ability of other PRPs to pay their allocated portions and take into consideration reasonably possible outcomes. Our cost estimates can change substantially as additional information becomes available regarding the nature or extent of site contamination, updated cost assumptions (including increases and decreases to cost estimates and changes in the anticipated scope and timing of remediation activities), required remediation methods and actions by or against governmental agencies or private parties.

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At December 31, 2011, environmental obligations recorded in our consolidated balance sheets totaled approximately $1.5 billion, which reflect obligations for environmental liabilities attributed to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or analogous state programs and for estimated future costs associated with environmental matters at closed facilities and closed portions of certain operating facilities.

Following is a summary of changes in our estimated environmental obligations for the years ended December 31 (in millions):

	2011			2010			2009
Balance at beginning of year	$	1,422		$	1,464		$	1,401
Accretion expensea	88			97			102
Additions	132			19			40
Reductions	(68		)	—			(3		)
Spending	(121		)	(158		)	(76		)
Balance at end of year	$	1,453		$	1,422		$	1,464

a. Represents accretion of the fair value of environmental obligations assumed in the acquisition of Freeport-McMoRan Corporation (FMC, formerly Phelps Dodge Corporation), which were determined on a discounted cash flow basis.

Refer to Note 13 for further discussion of environmental obligations.

Reclamation and Closure Costs. Reclamation is an ongoing activity that occurs throughout the life of a mine. We record the fair value of our estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period incurred. Fair value is measured as the present value of cash flow estimates after considering inflation and then applying a market risk premium. Our cost estimates are reflected on a third-party cost basis and comply with our legal obligation to retire tangible long-lived assets in the period incurred. These cost estimates may differ from financial assurance cost estimates for reclamation activities because of a variety of factors, including obtaining updated cost estimates for reclamation activities, the timing of reclamation activities, changes in scope and the exclusion of certain costs not considered reclamation and closure costs. Refer to Note 1 for further discussion of our accounting policy for reclamation and closure costs.

Generally, ARO activities are specified by regulations or in permits issued by the relevant governing authority, and management judgment is required to estimate the extent and timing of expenditures based on life-of-mine planning. Accounting for reclamation and closure costs represents a critical accounting estimate because (i) we will not incur most of these costs for a number of years, requiring us to make estimates over a long period, (ii) reclamation and closure laws and regulations could change in the future and/or circumstances affecting our operations could change, either of which could result in significant changes to our current plans, (iii) calculating the fair value of our AROs requires management to estimate projected cash flows, make long-term assumptions about inflation rates, determine our credit-adjusted, risk-free interest rates and determine market risk premiums that are appropriate for our operations and (iv) given the magnitude of our estimated reclamation and closure costs, changes in any or all of these estimates could have a significant impact on our results of operations.

At least annually, we review our ARO estimates for changes in the projected timing of certain reclamation costs, changes in cost estimates and additional AROs incurred during the period. Following is a summary of changes in our AROs for the years ended December 31 (in millions):

	2011				2010				2009
Balance at beginning of year	$	856			$	731			$	712
Liabilities incurred	9				5				12
Revisions to cash flow estimates	48			a	105			a	(17		)
Accretion expense	58				54				52
Spending	(49		)		(38		)		(28		)
Foreign currency translation adjustment	(1		)		(1		)		—
Balance at end of year	$	921			$	856			$	731

a. During 2011 and 2010 the revisions to cash flow estimates primarily related to increased costs of near-term closure activities at our Chino mine. Additionally, accelerated timing of closure activities at the Chino mine resulted in revisions to cash flow estimates during 2010.

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Refer to Note 13 for further discussion of reclamation and closure costs.

Deferred Taxes. In preparing our annual consolidated financial statements, we estimate the actual amount of taxes currently payable or receivable as well as deferred tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in income in the period in which such changes are enacted.

A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related benefits will not be realized. In determining the amount of the valuation allowance, we consider estimated future taxable income as well as feasible tax planning strategies in each jurisdiction. If we determine that we will not realize all or a portion of our deferred tax assets, we will increase our valuation allowance. Conversely, if we determine that we will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced.

Our valuation allowances totaled $2.4 billion at December 31, 2011, and $2.2 billion at December 31, 2010, and covered all of our U.S. foreign tax credit carryforwards, and a portion of our foreign net operating loss carryforwards, U.S. state net operating loss carryforwards and U.S. minimum tax credit carryforwards. These valuation allowances include $80 million at December 31, 2011, and $59 million at December 31, 2010, for tax benefits that, if recognized, would be credited directly to other comprehensive income. The $167 million increase in the valuation allowance during 2011 was primarily the result of an increase in foreign tax credit carryforwards, partially offset by a decrease in minimum tax credit carryforwards.

Refer to Note 12 for further discussion.

Impairment of Assets. We evaluate our long-lived assets (to be held and used) for impairment when events or changes in circumstances indicate that the related carrying amount of such assets may not be recoverable. In evaluating our long-lived assets for recoverability, estimates of after-tax undiscounted future cash flows of our individual mining operations are used, with impairment losses measured by reference to fair value. As quoted market prices are unavailable for our individual mining operations, fair value is determined through the use of discounted estimated future cash flows. The estimated cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations are derived from current business plans, which are developed using near-term price forecasts reflective of the current price environment and management's projections for long-term average metal prices. In addition to near and long-term metal price assumptions, other key assumptions include commodity-based and other input costs; proven and probable reserves, including the timing and cost to develop and produce the reserves; and the use of appropriate escalation and discount rates.

Because the cash flows used to assess recoverability of our long-lived assets and measure fair value of our mining operations require us to make several estimates and assumptions that are subject to risk and uncertainty, changes in these estimates and assumptions could result in the impairment of our long-lived asset values. Events that could result in impairment of our long-lived assets include, but are not limited to, decreases in future metal prices, decreases in estimated recoverable proven and probable reserves and any event that might otherwise have a material adverse effect on mine site production levels or costs.

We did not record asset impairment charges during the three years ended December 31, 2011.

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CONSOLIDATED RESULTS

	Years Ended December 31,
	2011			2010			2009
Financial Data (in millions, except per share amounts)
Revenuesa,b	$	20,880		$	18,982		$	15,040
Operating incomeb,c	9,140		d	9,068			6,503
Net income attributable to FCX common stockholders	4,560		d,e,f	4,273		e	2,527		e
Diluted net income per share attributable to FCX
common stockholders	$	4.78	d,e,f	$	4.57	e	$	2.93	e
Diluted weighted-average common shares outstanding	955			949			938
Mining Operating Data
Copper (recoverable)
Production (millions of pounds)	3,691			3,908			4,103
Sales, excluding purchases (millions of pounds)	3,698			3,896			4,111
Average realized price per pound	$	3.86		$	3.59		$	2.60
Site production and delivery costs per poundg	$	1.72		$	1.40		$	1.12
Unit net cash costs per poundg	$	1.01		$	0.79		$	0.55
Gold (recoverable)
Production (thousands of ounces)	1,383			1,886			2,664
Sales, excluding purchases (thousands of ounces)	1,378			1,863			2,639
Average realized price per ounce	$	1,583		$	1,271		$	993
Molybdenum (recoverable)
Production (millions of pounds)	83			72			54
Sales, excluding purchases (millions of pounds)	79			67			58
Average realized price per pound	$	16.98		$	16.47		$	12.36

a. Includes the impact of adjustments to provisionally priced concentrate and cathode sales recognized in prior years. Refer to “Revenues” and “Disclosures About Market Risks – Commodity Price Risk” for further discussion.

b. Refer to Note 17 for a summary of revenues and operating income by business segment.

c. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to "Operations - Atlantic Copper Smelting & Refining" for a summary of net impacts from changes in these deferrals.

d. Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

e. Includes net losses on early extinguishment and conversions of debt totaling $60 million ($0.06 per share) in 2011 associated with the redemption of our $1.1 billion outstanding 8.25% Senior Notes and open-market purchases of Senior Notes, $71 million ($0.07 per share) in 2010 associated with the redemption of our $1.0 billion Senior Floating Rate Notes and open-market purchases of Senior Notes, and $43 million ($0.04 per share) in 2009 associated with the redemption and open-market purchases of Senior Notes. Refer to Note 9 for further discussion.

f. Includes additional taxes of $49 million ($0.05 per share) associated with Peru's new mining tax and royalty regime. Refer to "Provision for Income Taxes" for further discussion.

g. 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. The 2009 period excludes the results of Africa mining as start-up activities were still under way. 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.”

Revenues

Consolidated revenues totaled $20.9 billion in 2011, compared with $19.0 billion in 2010 and $15.0 billion in 2009, and include the sale of copper concentrates, copper cathodes, copper rod, gold, molybdenum and other metals by our North and South America copper 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. Our mining revenues for 2011 include sales of copper (78 percent), gold (12 percent) and molybdenum (6 percent).

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Following is a summary of year-to-year changes in our consolidated revenues (in millions):

	2011			2010
Consolidated revenues – prior year	$	18,982		$	15,040
Higher (lower) price realizations from mining operations:
Copper	999			3,779
Gold	430			517
Molybdenum	39			273
Silver	121			44
Cobalt	(24		)	—
(Lower) higher sales volumes from mining operations:
Copper	(711		)	(563		)
Gold	(616		)	(771		)
Molybdenum	206			105
Silver	27			(15		)
Cobalt	59			195
Unfavorable impacts of net adjustments for prior year
provisionally priced sales	(4		)	(155		)
Higher purchased copper, net of lower purchased molybdenum	258			188
Higher Atlantic Copper revenues	493			599
Other, including intercompany eliminations	621			(254		)
Consolidated revenues – current year	$	20,880		$	18,982

Price Realizations

Our consolidated revenues can vary significantly as a result of fluctuations in the market prices of copper, gold, molybdenum, silver and cobalt. Realized copper prices averaged $3.86 per pound in 2011, $3.59 per pound in 2010 and $2.60 per pound in 2009. Realized gold prices averaged $1,583 per ounce in 2011, $1,271 per ounce in 2010 and $993 per ounce in 2009. Realized molybdenum prices averaged $16.98 per pound in 2011, $16.47 per pound in 2010 and $12.36 per pound in 2009.

Sales Volumes

2011 Compared with 2010. Consolidated sales volumes totaled 3.7 billion pounds of copper, 1.4 million ounces of gold and 79 million pounds of molybdenum in 2011, compared with 3.9 billion pounds of copper, 1.9 million ounces of gold and 67 million pounds of molybdenum in 2010. Lower consolidated copper sales volumes in 2011 primarily reflect lower sales volumes in Indonesia, partly offset by higher sales volumes in North America. Lower consolidated gold sales volumes in 2011 primarily reflect lower Grasberg production. Sales of copper and gold in 2011 were adversely affected by labor disruptions and the temporary suspension of milling operations at PT Freeport Indonesia from damage to the concentrate and fuel pipelines. The estimated impact of the labor and pipeline disruptions totaled 235 million pounds of copper and 275 thousand ounces of gold in 2011. Higher consolidated molybdenum sales volumes in 2011 primarily reflected improved demand. Refer to “Operations” for further discussion of sales volumes at our operating divisions.

2010 Compared with 2009. Consolidated sales volumes totaled 3.9 billion pounds of copper, 1.9 million ounces of gold and 67 million pounds of molybdenum in 2010, compared with 4.1 billion pounds of copper, 2.6 million ounces of gold and 58 million pounds of molybdenum in 2009. Lower consolidated copper sales volumes in 2010 primarily resulted from lower ore grades at Grasberg and lower volumes at our North America copper mines, partly offset by additional volumes provided by our Tenke mine in Africa. Lower consolidated gold sales volumes in 2010 primarily reflected lower ore grades at Grasberg from planned mine sequencing. Higher consolidated molybdenum sales volumes in 2010 reflected improved demand.

Provisionally Priced Sales

Substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot copper prices (refer to “Disclosures About Market Risks – Commodity Price Risk” for further discussion). Adjustments to the December 31, 2010, provisionally priced copper sales resulted in unfavorable impacts to consolidated revenues of $12 million ($5 million to net income attributable to common stockholders or $0.01 per share) in 2011. Adjustments to the December 31, 2009, provisionally priced copper sales resulted in unfavorable impacts to consolidated revenues of $24 million ($10 million to net income attributable to common stockholders or $0.01 per share) in 2010. Adjustments to the December 31, 2008, provisionally priced copper sales

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resulted in favorable impacts to consolidated revenues of $132 million ($61 million to net income attributable to common stockholders or $0.07 per share) in 2009.

The year 2011 also reflected unfavorable impacts of $13 million from adjustments to December 31, 2010, provisionally priced gold sales.

Purchased Copper and Molybdenum

From time to time we purchase copper cathode for processing by our Rod & Refining segment when production from our North America copper mines does not meet customer demand. The increases in purchased copper in 2011 and 2010, compared with prior years, resulted from higher customer demand and higher copper prices. We also purchase molybdenum concentrates when customer demand requires it. Partly offsetting increases in purchased copper were decreases in purchased molybdenum in 2011 and 2010, compared with prior years.

Atlantic Copper Revenues

The increases in Atlantic Copper’s revenues in 2011 and 2010, compared with prior years, primarily reflected higher copper and gold revenues associated with higher copper and gold prices.

Production and Delivery Costs

2011 Compared with 2010

Consolidated production and delivery costs totaled $9.9 billion in 2011, compared with $8.3 billion in 2010. Higher production and delivery costs for 2011 primarily reflect increased mining and milling activities in North America, higher input costs at our mining operations, higher costs of concentrate purchases at Atlantic Copper associated with higher copper and gold prices and higher costs of copper cathode purchases in North America associated with higher copper prices.

Consolidated unit site production and delivery costs for our copper mining operations averaged $1.72 per pound of copper in 2011, compared with $1.40 per pound of copper in 2010. Higher site production and delivery costs in 2011 primarily reflected lower copper sales volumes in Indonesia and increased mining and input costs in North and South America and Africa. Consolidated unit net cash costs in 2011 also included $116 million ($0.03 per pound) primarily related to bonuses for new labor agreements and other employee costs in Indonesia and South America.  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. Energy costs approximated 21 percent of our consolidated copper production costs in 2011, and included purchases of approximately 225 million gallons of diesel fuel; 6,475 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); 650 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. For 2012, we estimate energy costs will approximate 23 percent of our consolidated copper production costs.

2010 Compared with 2009

Consolidated production and delivery costs totaled $8.3 billion in 2010, compared with $7.0 billion in 2009. Higher production and delivery costs for 2010 primarily reflect higher input costs at our mining operations and higher costs of concentrate purchases at Atlantic Copper associated with higher copper prices.

Depreciation, Depletion and Amortization

Consolidated depreciation, depletion and amortization expense totaled $1.0 billion in 2011, 2010 and 2009. Depreciation will vary under the UOP method as a result of increases and decreases in sales volumes and the related UOP rates at our mining operations.

Selling, General and Administrative Expenses

Consolidated selling, general and administrative expenses totaled $415 million in 2011, $381 million in 2010 and $321 million in 2009. Higher selling, general and administrative expenses in 2011, compared with 2010, primarily reflected higher charitable contributions. Approximately half of the increase in selling, general and administrative expenses in 2010, compared with 2009, reflected higher stock-based compensation and other incentive compensation costs related to improved financial performance.

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Exploration and Research Expenses

Consolidated exploration and research expenses totaled $271 million in 2011, $143 million in 2010 and $90 million in 2009. 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. 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 continue to indicate the potential for expanded sulfide production.

For 2012, exploration and research expenditures are being increased to an estimated $330 million, including approximately $275 million for exploration. Exploration activities will continue to focus primarily on the potential for future reserve additions in our existing minerals districts.

Environmental Obligations and Shutdown Costs

Environmental obligations costs reflect net revisions to our long-term environmental obligations, which will vary from period to period because of changes to environmental laws and regulations and/or circumstances affecting our operations and could result in significant changes in our estimates (refer to "Critical Accounting Estimates - Environmental Obligations" for further discussion). Shutdown costs include care and maintenance costs and any litigation, remediation, or related expenditures associated with closed facilities or operations.

Environmental obligations and shutdown costs totaled $134 million in 2011, $19 million in 2010 and $106 million in 2009 (which also included net restructuring charges of $23 million in 2009). Refer to Note 13 for further discussion of environmental obligations and litigation matters associated with closed facilities or operations.

Interest Expense, Net

Consolidated interest expense (before capitalization) totaled $421 million in 2011, $528 million in 2010 and $664 million in 2009. Lower interest expense primarily reflected the impact of debt repayments during 2011, 2010 and 2009 (refer to Note 9 for discussion of debt repayments).

Capitalized interest is primarily related to our development projects and totaled $109 million in 2011, $66 million in 2010 and $78 million in 2009. Refer to "Operations" for further discussion of current development projects.

Losses on Early Extinguishment of Debt

During 2011, we recorded losses on early extinguishment of debt totaling $68 million ($60 million to net income attributable to common stockholders or $0.06 per share) associated with the redemption of our 8.25% Senior Notes, the revolving credit facilities that were replaced in March 2011 and open-market purchases of our 9.50% Senior Notes.

During 2010, we recorded losses on early extinguishment of debt totaling $81 million ($71 million to net income attributable to common stockholders or $0.07 per share) associated with the redemption of our Senior Floating Rate Notes and open-market purchases of our 8.25%, 8.375% and 9.50% Senior Notes.

During 2009, we recorded losses on early extinguishment of debt totaling $48 million ($43 million to net income attributable to common stockholders or $0.04 per share) associated with the redemption of our 6.875% Senior Notes and open-market purchases of our 8.25%, 8.375% and 8¾% Senior Notes.

Refer to Note 9 for further discussion of these transactions.

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Provision for Income Taxes

Following is a summary of the approximate amounts in the calculation of our consolidated provision for income taxes for 2011 and 2010 (in millions, except percentages):

	Year Ended December 31, 2011							Year Ended December 31, 2010
	Incomea		Effective Tax Rate	Income Tax Provision				Income (Loss)a			Effective Tax Rate	Income Tax (Provision) Benefit
U.S.	$	2,112	23%	$	(478	)		$	1,307		19%	$	(244	)
South America	3,017		36%	(1,075		)	b	2,995			33%	(999		)
Indonesia	2,923		43%	(1,256		)		4,069			42%	(1,709		)
Africa	357		34%	(120		)		395			30%	(118		)
Eliminations and other	409		N/A	(158		)		(254		)	N/A	87
Consolidated FCX	$	8,818	35%	$	(3,087	)		$	8,512		35%	$	(2,983	)

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

b. On September 29, 2011, Peru enacted its new mining tax and royalty regime. Under the new regime, companies that do not have stability agreements will be subject to a revised royalty and a special mining tax. Cerro Verde operates under a stability agreement and therefore, is not subject to the revised royalty and special mining tax until its stability agreement expires on December 31, 2013. The Peruvian government has also created a special mining burden that companies with stability agreements can elect to pay. The special mining burden is levied on profits and is based on a sliding scale of 4 to 13 percent, with a maximum effective rate of 8.79 percent. Cerro Verde will elect to pay this special mining burden during the remaining term of its stability agreement. As a result, Cerro Verde recognized additional current and deferred tax expense of $53 million ($49 million net of noncontrolling interests) in 2011. The deferred portion of this accrual relates primarily to the assets recorded in connection with the 2007 acquisition of FMC.

Our estimated consolidated effective tax rate for 2012 will vary with commodity price changes and the mix of income from international and U.S. operations. Assuming average prices of $3.50 per pound for copper, $1,600 per ounce for gold, $13 per pound for molybdenum and current sales volume and cost estimates, we estimate our annual consolidated effective tax rate will approximate 34 percent.

Following is a summary of the approximate amounts in the calculation of our consolidated provision for income taxes for 2009 (in millions, except percentages):

	Year Ended December 31, 2009
	Income (Loss)a			Effective Tax Rate		Income Tax (Provision) Benefit
U.S.	$	98		36%		$	(35	)	b
South America	2,010			32%		(650		)
Indonesia	4,000			42%		(1,697		)
Africa	(60		)	25%		15
Eliminations and other	(232		)	N/A		60
Consolidated FCX	$	5,816		40%	c	$	(2,307	)

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

b. Includes a favorable adjustment totaling $43 million resulting from completion of a review of U.S. deferred income tax accounts.

c. The difference between our consolidated effective income tax rate of 40 percent and the U.S. federal statutory rate of 35 percent primarily was attributable to the high proportion of income earned in Indonesia, which was taxed at an effective tax rate of 42 percent.

Refer to Note 12 for further discussion of income taxes.

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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 concentrate is also produced by certain of our North America copper mines (primarily Sierrita, Bagdad and Morenci). 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. During 2011 and 2010, we increased production at our North America copper mines, which had been curtailed in late 2008 because of weak market conditions. Further discussion of the development projects at our North America copper mines is presented below. We also have a number of opportunities to invest in additional production capacity at several of our North America copper mines. Exploration results in recent years indicate the potential for additional sulfide development in North America.

Morenci Mine Ramp-up and Mill Restart. During second-quarter 2011, we completed the ramp up of Morenci's mining rates to 635,000 metric tons of ore per day and milling rates to approximately 50,000 metric tons of ore per day, resulting in increased copper production of approximately 125 million pounds of copper per year.

We are advancing a feasibility study to expand mining and milling capacity at Morenci to process additional sulfide ore identified through exploratory drilling. This project, which would require significant investment, would increase milling rates from the current level of 50,000 metric tons of ore per day to approximately 115,000 metric tons of ore per day and target incremental annual copper production of approximately 225 million pounds. Completion of the feasibility study is expected in the first half of 2012.

Chino Restart. During 2011, mining and milling activities were restarted at the Chino mine. Production at Chino, which totaled 69 million pounds of copper in 2011, is expected to increase to approximately 200 million pounds of copper per year by 2014. Costs for the project associated with equipment and mill refurbishment are expected to approximate $175 million. Project costs of $105 million have been incurred as of December 31, 2011.

Miami Restart. The ramp up of mining activities at the Miami mine is complete. Production at Miami totaled 66 million pounds of copper in 2011, and is expected to be similar in 2012.

Safford Sulphur Burner. During 2011, we completed construction of the $150 million sulphur burner project at the Safford mine, which is providing 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 2012.

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Operating Data. Following is summary operating data for the North America copper mines for the years ended December 31.

	2011		2010		2009
Operating Data, Net of Joint Venture Interest
Copper (millions of recoverable pounds)
Production	1,258		1,067		1,147
Sales, excluding purchases	1,247		1,085		1,187
Average realized price per pound	$	3.99	$	3.42	$	2.38
Molybdenum (millions of recoverable pounds)
Productiona	35		25		25
100% Operating Data
SX/EW operations
Leach ore placed in stockpiles (metric tons per day)	888,300		648,800		589,400
Average copper ore grade (percent)	0.24		0.24		0.29
Copper production (millions of recoverable pounds)	801		746		859
Mill operations
Ore milled (metric tons per day)	222,800		189,200		169,900
Average ore grade (percent):
Copper	0.38		0.32		0.33
Molybdenum	0.03		0.03		0.02
Copper recovery rate (percent)	83.1		83.0		86.0
Production (millions of recoverable pounds):
Copper	549		398		364
Molybdenum	35		25		25

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

2011 Compared with 2010

Copper sales volumes from our North America copper mines increased to 1.2 billion pounds in 2011, compared with 1.1 billion pounds in 2010, primarily reflecting increased production at the Morenci, Miami and Chino mines.

Copper sales volumes from our North America copper mines are expected to approximate 1.3 billion pounds in 2012. Molybdenum production from our North America copper mines is expected to approximate 30 million pounds in 2012.

2010 Compared with 2009

Copper sales volumes from our North America copper mines decreased to 1.1 billion pounds in 2010, compared with 1.2 billion pounds in 2009, primarily because of anticipated lower ore grades at Safford and Sierrita, lower mill throughput because of unscheduled crusher maintenance at Bagdad and mill maintenance at Sierrita.

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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 mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper and Molybdenum

The following tables summarize unit net cash costs and gross profit per pound at the North America copper mines for the years ended December 31. 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.

	2011									2010
	By-			Co-Product Method						By-			Co-Product Method
	Product Method			Copper			Molyb- denuma			Product Method			Copper			Molyb- denuma
Revenues, excluding adjustments	$	3.99		$	3.99		$	15.72		$	3.42		$	3.42		$	15.60
Site production and delivery, before net noncash
and other costs shown below	1.78			1.60			6.86			1.50			1.35			7.95
By-product creditsa	(0.48		)	—			—			(0.35		)	—			—
Treatment charges	0.11			0.10			—			0.09			0.09			—
Unit net cash costs	1.41			1.70			6.86			1.24			1.44			7.95
Depreciation, depletion and amortization	0.21			0.20			0.39			0.24			0.22			0.54
Noncash and other costs, net	0.07			0.07			0.05			0.12			0.12			0.01
Total unit costs	1.69			1.97			7.30			1.60			1.78			8.50
Revenue adjustments	—			—			—			—			—			—
Idle facility and other non-inventoriable costs	(0.06		)	(0.06		)	(0.04		)	(0.08		)	(0.08		)	(0.02		)
Gross profit per pound	$	2.24		$	1.96		$	8.38		$	1.74		$	1.56		$	7.08
Copper sales (millions of recoverable pounds)	1,244			1,244						1,082			1,082
Molybdenum sales (millions of recoverable pounds)b							35									25

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

b. Reflects molybdenum produced by certain of our North America copper mines.

Unit net cash costs (net of by-product credits) for our North America copper mines increased to $1.41 per pound of copper in 2011, compared with $1.24 per pound in 2010, primarily reflecting higher site production and delivery costs ($0.28 per pound) resulting from increased mining and milling activities and higher input costs. Partly offsetting higher site production and delivery costs were higher molybdenum credits ($0.13 per pound) primarily resulting from higher molybdenum volumes.

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. During 2011, average unit net cash costs for the North America copper mines ranged from a net cost of $0.41 per pound to $1.97 per pound at the individual mines and averaged $1.41 per pound. Assuming achievement of current sales volume and cost estimates and an average price of $13 per pound of molybdenum for 2012, we estimate that average unit net cash costs (net of by-product credits) for our North America copper mines would approximate $1.67 per pound of copper in 2012. North America's average unit net cash costs for 2012 would change by approximately $0.04 per pound for each $2 per pound change in the average price of molybdenum during 2012. Higher projected unit net cash costs in 2012, compared with 2011, primarily reflect higher mining and milling rates and lower by-product credits associated with lower molybdenum grades and prices, partly offset by higher projected copper volumes.

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	2010									2009
	By-			Co-Product Method						By-			Co-Product Method
	Product Method			Copper			Molyb- denuma			Product Method			Copper			Molyb- denuma
Revenues, excluding adjustments	$	3.42		$	3.42		$	15.60		$	2.38		$	2.38		$	10.96
Site production and delivery, before net noncash
and other costs shown below	1.50			1.35			7.95			1.25			1.15			5.67
By-product creditsa	(0.35		)	—			—			(0.23		)	—			—
Treatment charges	0.09			0.09			—			0.09			0.09			—
Unit net cash costs	1.24			1.44			7.95			1.11			1.24			5.67
Depreciation, depletion and amortization	0.24			0.22			0.54			0.22			0.21			0.40
Noncash and other costs, net	0.12			0.12			0.01			0.11			0.11			0.07
Total unit costs	1.60			1.78			8.50			1.44			1.56			6.14
Revenue adjustments	—			—			—			0.08			0.08			—
Idle facility and other non-inventoriable costs	(0.08		)	(0.08		)	(0.02		)	(0.08		)	(0.08		)	—
Gross profit per pound	$	1.74		$	1.56		$	7.08		$	0.94		$	0.82		$	4.82
Copper sales (millions of recoverable pounds)	1,082			1,082						1,185			1,185
Molybdenum sales (millions of recoverable pounds)b							25									25

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

b. Reflects molybdenum produced by certain of our North America copper mines.

Unit net cash costs (net of by-product credits) for our North America copper mines increased to $1.24 per pound of copper in 2010, compared with $1.11 per pound in 2009, primarily reflecting higher site production and delivery costs ($0.25 per pound) associated with higher input costs and increased mining and milling activities at certain mines. Partly offsetting these higher costs were higher molybdenum credits ($0.12 per pound) primarily resulting from higher molybdenum prices.

Some of our U.S. copper rod customers request a fixed market price instead of the COMEX average price in the month of shipment. We hedge this price exposure in a manner that allows us to receive market prices in the month of shipment while the customer pays the fixed price they requested. Because these contracts previously did not meet the criteria to qualify for hedge accounting, revenue adjustments in 2009 reflected unrealized gains on these copper derivative contracts (refer to Note 15 for further discussion).

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. Production from our South America mines is sold as copper concentrate or copper cathode under long-term contracts. Our South America mines ship a portion of their copper concentrate inventories to Atlantic Copper, an affiliated smelter. In addition to copper, the Cerro Verde mine also produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines also produce gold and silver.

Operating and Development Activities.

El Abra Sulfide. During 2011, we commenced production from El Abra's newly commissioned stacking and leaching facilities to transition from production of oxide to sulfide ores. Production from the sulfide ore will approximate 300 million pounds of copper per year, replacing the depleting oxide copper production. The aggregate capital investment for this project is expected to total $725 million through 2015, of which approximately $580 million is for the initial phase of the project that is expected to be completed in first-quarter 2012. Project costs of $513 million have been incurred as of December 31, 2011 ($152 million during 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. Exploration results at El Abra indicate the potential for a significant sulfide resource. Exploration activities are continuing.

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Cerro Verde Expansion. At Cerro Verde, plans for a large-scale concentrator expansion continue to be advanced. The approximate $4 billion project would expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper and 15 million pounds of molybdenum beginning in 2016. An environmental impact assessment was filed in fourth-quarter 2011.

An agreement has been reached with the Regional Government of Arequipa, the National Government, Servicio de Agua Potable y Alcantarillado de Arequipa S. A (SEDAPAR) and other local institutions to allow Cerro Verde to finance the engineering and construction of a wastewater treatment plant for Arequipa, should Cerro Verde proceed with the expansion. Once Cerro Verde obtains a license for the treated water, it would be used to supplement existing water supplies to support the potential concentrator expansion.

Candelaria Water. As part of our overall strategy to supply water to the Candelaria mine, we completed construction of a pipeline to bring water from a nearby water treatment facility. In addition, we have completed engineering and began construction for a desalination plant that will supply Candelaria’s longer term water needs. The plant is expected to be completed in early 2013 at a capital investment of approximately $300 million. Project costs of $126 million have been incurred as of December 31, 2011 ($120 million during 2011).

Other Matters. In fourth-quarter 2011, there was an approximate two-month labor strike at Cerro Verde during the negotiation of a new labor agreement. The strike did not have a significant impact on production, and a new three-year agreement with the union was reached in late December 2011. Also during fourth-quarter 2011, El Abra negotiated a new four-year labor agreement with its union, which will replace the agreement scheduled to expire in July 2012. In December 2011, bonuses totaling $50 million were paid to employees at Cerro Verde and El Abra pursuant to the new labor agreements.

Operating Data. Following is summary operating data for the South America mining operations for the years ended December 31.

	2011		2010		2009
Copper (millions of recoverable pounds)
Production	1,306		1,354		1,390
Sales	1,322		1,335		1,394
Average realized price per pound	$	3.77	$	3.68	$	2.70
Gold (thousands of recoverable ounces)
Production	101		93		92
Sales	101		93		90
Average realized price per ounce	$	1,580	$	1,263	$	982
Molybdenum (millions of recoverable pounds)
Productiona	10		7		2
SX/EW operations
Leach ore placed in stockpiles (metric tons per day)	245,200		268,800		258,200
Average copper ore grade (percent)	0.50		0.41		0.45
Copper production (millions of recoverable pounds)	439		504		565
Mill operations
Ore milled (metric tons per day)	189,200		188,800		181,300
Average ore grade:
Copper (percent)	0.66		0.65		0.66
Gold (grams per metric ton)	0.12		0.10		0.10
Molybdenum (percent)	0.02		0.02		0.02
Copper recovery rate (percent)	89.6		90.0		88.9
Production (recoverable):
Copper (millions of pounds)	867		850		825
Gold (thousands of ounces)	101		93		92
Molybdenum (millions of pounds)	10		7		2

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

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2011 Compared with 2010

Copper sales volumes from our South America mining operations totaled 1.3 billion pounds in 2011 and 2010, primarily reflecting lower mining rates at El Abra as it transitions from oxide to sulfide ores, partially offset by higher ore grades at Candelaria.

Consolidated sales volumes from our South America mines are expected to approximate 1.3 billion pounds of copper and 100 thousand ounces of gold in 2012, slightly lower than 2011 sales. Lower projected ore grades at Cerro Verde and Candelaria in 2012 are expected to be partly offset by higher production at El Abra. Molybdenum production from Cerro Verde is expected to approximate 10 million pounds in 2012.

2010 Compared with 2009

Copper sales volumes from our South America mining operations decreased to 1.3 billion pounds in 2010, compared with 1.4 billion in 2009, primarily reflecting anticipated lower ore grades at El Abra.

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 mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper

The following tables summarize unit net cash costs and gross profit per pound at our South America mining operations for the years ended December 31. These tables reflect unit net cash costs per pound of copper under the by-product and co-product methods as our 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.

	2011							2010
	By-Product Method				Co-Product Method			By-Product Method			Co-Product Method
Revenues, excluding adjustments	$	3.77			$	3.77		$	3.68		$	3.68
Site production and delivery, before net noncash
and other costs shown below	1.38			a	1.27			1.21			1.14
By-product credits	(0.35		)		—			(0.21		)	—
Treatment charges	0.17				0.17			0.15			0.15
Unit net cash costs	1.20				1.44			1.15			1.29
Depreciation, depletion and amortization	0.20				0.18			0.19			0.18
Noncash and other costs, net	0.02				0.02			0.01			0.01
Total unit costs	1.42				1.64			1.35			1.48
Revenue adjustments, primarily for pricing on
prior period open sales	0.01				—			(0.01		)	(0.01		)
Other non-inventoriable costs	(0.04		)		(0.03		)	(0.04		)	(0.04		)
Gross profit per pound	$	2.32			$	2.10		$	2.28		$	2.15
Copper sales (millions of recoverable pounds)	1,322				1,322			1,335			1,335

a. Includes impacts of $50 million ($0.04 per pound) associated with bonuses paid at Cerro Verde and El Abra pursuant to the new labor agreements.

Unit net cash costs (net of by-product credits) for our South America mining operations increased to $1.20 per pound of copper in 2011, compared with $1.15 per pound in 2010, primarily reflecting higher site production and delivery costs ($0.17 per pound) associated with higher input costs and the impact of bonuses paid pursuant to new labor agreements, partially offset by higher gold, molybdenum and silver credits ($0.14 per pound).

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Our South America mines have varying cost structures because of differences in ore grades and characteristics, processing costs, by-products and other factors. During 2011, unit net cash costs for the South America mines ranged from $0.93 per pound to $1.67 per pound at the individual mines and averaged $1.20 per pound. Assuming achievement of current sales volume and cost estimates and average prices of $1,600 per ounce of gold and $13 per pound of molybdenum in 2012, we estimate that average unit net cash costs (net of by-product credits) for our South America mining operations would approximate $1.41 per pound of copper in 2012. Higher projected unit net cash costs in 2012, compared with 2011, primarily reflect increases in input costs, including labor and energy, lower by-product credits and slightly lower projected volumes.

	2010						2009
	By-Product Method			Co-Product Method			By-Product Method			Co-Product Method
Revenues, excluding adjustments	$	3.68		$	3.68		$	2.70		$	2.70
Site production and delivery, before net noncash
and other costs shown below	1.21			1.14			1.08			1.02
By-product credits	(0.21		)	—			(0.11		)	—
Treatment charges	0.15			0.15			0.15			0.15
Unit net cash costs	1.15			1.29			1.12			1.17
Depreciation, depletion and amortization	0.19			0.18			0.20			0.19
Noncash and other costs, net	0.01			0.01			0.02			0.02
Total unit costs	1.35			1.48			1.34			1.38
Revenue adjustments, primarily for pricing on
prior period open sales	(0.01		)	(0.01		)	0.08			0.08
Other non-inventoriable costs	(0.04		)	(0.04		)	(0.02		)	(0.02		)
Gross profit per pound	$	2.28		$	2.15		$	1.42		$	1.38
Copper sales (millions of recoverable pounds)	1,335			1,335			1,394			1,394

Unit net cash costs (net of by-product credits) for our South America mining operations increased to $1.15 per pound of copper in 2010, compared with $1.12 per pound in 2009, primarily reflecting higher site production and delivery costs ($0.13 per pound) associated with higher input costs and the impact of higher copper prices on profit sharing programs. Partly offsetting higher site production and delivery costs were higher molybdenum, gold and silver credits ($0.10 per pound) associated with higher molybdenum volumes and prices and higher gold prices.

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 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 - refer to Note 2 for further discussion), and the remainder to other customers.

Refer to Note 2 for further discussion of our joint ventures with Rio Tinto plc and to Note 14 for further discussion of PT Freeport Indonesia's Contract of Work with the Government of Indonesia. Refer to "Risk Factors" contained in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2011, for discussion of risks associated with operations in Indonesia.

Development Activities. We have several projects in progress in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground ore bodies located beneath and nearby the Grasberg open pit. In aggregate, these underground ore bodies are expected to ramp up to approximately 240,000 metric tons of ore per day following the currently anticipated transition from the Grasberg open pit in 2016. Over the next five years, aggregate capital spending on these projects is expected to average $700 million per year ($550 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.

Common Infrastructure and Underground Mines. 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 was completed to the Big Gossan terminal and the Big Gossan mine has been brought into production. We have also advanced development of both the DMLZ and Grasberg spurs, and have completed the tunneling required to reach these underground ore bodies.

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. 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.

Aggregate mine development capital for the Grasberg Block Cave mine and associated Common Infrastructure is expected to approximate $4.2 billion (incurred from 2008 to 2021), with PT Freeport Indonesia’s share totaling approximately $3.8 billion. Aggregate project costs totaling $569 million have been incurred through December 31, 2011 ($309 million during 2011).

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 mid-2013 (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 $550 million, with PT Freeport Indonesia’s share totaling approximately $518 million. Aggregate project costs of $494 million have been incurred through December 31, 2011 ($50 million during 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 mine. 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 2011. Aggregate mine development capital costs for the DMLZ are expected to approximate $2.2 billion (incurred from 2009 to 2020), with PT Freeport Indonesia’s share totaling approximately $1.3 billion. Aggregate project costs totaling $269 million have been incurred through December 31, 2011 ($166 million during 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. During 2011, PT Freeport Indonesia was adversely affected by labor disruptions, including the eight-day work stoppage in July 2011 and the approximate three-month strike that concluded in December 2011. Additionally, PT Freeport Indonesia's milling operations were temporarily suspended during fourth-quarter 2011 because of damage to concentrate and fuel pipelines resulting from civil unrest that occurred during the strike. Repairs to the damaged pipelines are substantially complete, and PT Freeport Indonesia has begun ramping up production. PT Freeport Indonesia is working cooperatively with the Government of Indonesia to address security issues. Maintaining security is a requirement of returning to normal operations. Although a new labor agreement has been reached, we are experiencing work interruptions in connection with our efforts to resume normal operations at PT Freeport Indonesia. PT Freeport Indonesia is complying with the terms of the new labor agreement with its union. Certain of the returning workers have engaged in acts of violence and intimidation against workers and supervisory personnel who did not participate in the strike. On February 23, 2012, the union indicated that it will engage in a work stoppage and we temporarily suspended operations to protect our employees and assets following the incidents of intimidation and threats within the workforce. We are working with union officials and government authorities to resolve the ongoing issues. The work interruptions and temporary suspension of

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operations at PT Freeport Indonesia may impact our ability to achieve projected sales volumes, unit net cash costs and operating cash flows in 2012.

In mid-December 2011, the financial terms of a new two-year labor agreement for PT Freeport Indonesia were reached. Pursuant to the terms, PT Freeport Indonesia agreed to increase base wages by 24 percent in the first year and 13 percent in the second year (equivalent to a 40 percent increase over two-years on a compound basis). PT Freeport Indonesia also paid a bonus equivalent to three months of base wages and agreed to provide other benefits, including enhancements to housing allowances, educational assistance and retirement savings plans. The parties also agreed that future wage negotiations would be based on living costs and the competitiveness of wages within Indonesia. The impact of the terms agreed to in PT Freeport Indonesia's new labor agreement, including the bonuses and other strike-related employee costs, totaled approximately $66 million for 2011.

Between July 2009 and February 2012, there were 32 shooting incidents in and around the Grasberg minerals district, including along the road leading to our mining and milling operations, which resulted in 15 fatalities and 56 injuries. The investigation of these matters is continuing. We have taken precautionary measures, including limiting use of the road to secured convoys. The Indonesian government has responded with additional security forces and expressed a commitment to protect the safety of the community and our operations. Prolonged limitations on access to the road could adversely affect operations at the mine. The safety of our workforce is a critical concern, and PT Freeport Indonesia is working cooperatively with the Government of Indonesia to address security issues.

Operating Data. Following is summary operating data for our Indonesia mining operations for the years ended December 31.

	2011		2010		2009
Operating Data, Net of Joint Venture Interest
Copper (millions of recoverable pounds)
Production	846		1,222		1,412
Sales	846		1,214		1,400
Average realized price per pound	$	3.85	$	3.69	$	2.65
Gold (thousands of recoverable ounces)
Production	1,272		1,786		2,568
Sales	1,270		1,765		2,543
Average realized price per ounce	$	1,583	$	1,271	$	994
100% Operating Data
Ore milled (metric tons per day):a
Grasberg open pit	112,900		149,800		166,300
DOZ underground mine	51,700		79,600		72,000
Big Gossan underground mine	1,500		800		—
Total	166,100		230,200		238,300
Average ore grade:
Copper (percent)	0.79		0.85		0.98
Gold (grams per metric ton)	0.93		0.90		1.30
Recovery rates (percent):
Copper	88.3		88.9		90.6
Gold	81.2		81.7		83.7
Production (recoverable):
Copper (millions of pounds)	882		1,330		1,641
Gold (thousands of ounces)	1,444		1,964		2,984

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

2011 Compared with 2010

Sales volumes from our Indonesia mining operations declined to 846 million pounds of copper and 1.3 million ounces of gold in 2011, compared with 1.2 billion pounds of copper and 1.8 million ounces of gold in 2010. Lower copper and gold sales volumes in 2011 primarily reflect the impact of labor-related disruptions and the temporary

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suspension of milling operations in fourth-quarter 2011 because of damage to the concentrate and fuel pipelines. The estimated impact of the labor and pipeline disruptions (net to PT Freeport Indonesia), including the eight-day strike in July 2011, totaled approximately 235 million pounds of copper and approximately 275 thousand ounces of gold.

At the Grasberg open pit, the sequencing of mining areas with varying ore grades also causes fluctuations in the timing of ore production resulting in varying quarterly and annual sales of copper and gold. Consolidated sales volumes from our Indonesia mining operations are expected to approximate 930 million pounds of copper and 1.1 million ounces of gold for 2012. Gold sales in 2012 are projected to be lower than in 2011 because of mining in a lower grade section of the Grasberg open pit in 2012. Indonesia's projected sales volumes for the year 2012 (which includes 210 million pounds of copper and 400 thousand ounces of gold in first-quarter 2012) are under review. The achievement of projected 2012 sales volumes depends on a number of factors, including the timing of restoring full operations at Grasberg following the extended disruption in 2011 and because of recent work interruptions and the temporary suspension of operations.

2010 Compared with 2009

Sales volumes from our Indonesia mining operations decreased to 1.2 billion pounds of copper and 1.8 million ounces of gold in 2010, compared with 1.4 billion pounds of copper and 2.5 million ounces of gold in 2009. Lower copper and gold sales volumes in 2010 primarily reflected mining in a lower grade section of the Grasberg open pit during the first half of 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 mining companies, although our measure may not be comparable to similarly titled measures reported by other companies.

Gross Profit per Pound of Copper/per Ounce of Gold

The following tables summarize 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 years ended December 31. 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 (credits) per pound to production and delivery costs applicable to sales reported in our consolidated financial statements.

	2011										2010
	By-				Co-Product Method						By-			Co-Product Method
	Product Method				Copper			Gold			Product Method			Copper			Gold
Revenues, excluding adjustments	$	3.85			$	3.85		$	1,583		$	3.69		$	3.69		$	1,271
Site production and delivery, before net noncash
and other costs shown below	2.21			a	1.34			551			1.53			1.01			347
Gold and silver credits	(2.47		)		—			—			(1.92		)	—			—
Treatment charges	0.19				0.11			46			0.22			0.15			50
Royalty on metals	0.16				0.10			41			0.13			0.08			29
Unit net cash costs (credits)	0.09				1.55			638			(0.04		)	1.24			426
Depreciation and amortization	0.25				0.16			63			0.21			0.14			48
Noncash and other costs, net	0.04				0.02			10			0.04			0.02			9
Total unit costs	0.38				1.73			711			0.21			1.40			483
Revenue adjustments, primarily for pricing on
prior period open sales	(0.01		)		(0.01		)	(13		)	(0.01		)	(0.01		)	1
Gross profit per pound/ounce	$	3.46			$	2.11		$	859		$	3.47		$	2.28		$	789
Copper sales (millions of recoverable pounds)	846				846						1,214			1,214
Gold sales (thousands of recoverable ounces)								1,270									1,765

a. Includes impacts of $66 million ($0.08 per pound) associated with bonuses and other strike-related costs.

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Unit net cash costs (net of gold and silver credits) for our Indonesia mining operations averaged $0.09 per pound of copper in 2011, compared with a net credit of $0.04 per pound in 2010. Higher unit net cash costs primarily reflected higher site production and delivery costs ($0.68 per pound) primarily from lower copper sales volumes and the impact of bonuses and other strike-related costs, partially offset by higher gold and silver credits ($0.55 per pound).

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 $1,600 per ounce for 2012, we estimate that average unit net cash costs for Indonesia (net of gold and silver credits) would approximate $0.98 per pound of copper for the year 2012. Indonesia's unit net cash costs for 2012 would change by $0.06 per pound for each $50 per ounce change in the average price of gold during 2012. Higher projected unit net cash costs in 2012, compared with 2011, primarily reflect higher input costs, including labor and energy, and lower by-product credits, partly offset by higher projected copper volumes. Quarterly unit net cash costs are expected to vary significantly with variations in quarterly metal sales volumes.

	2010								2009
	By-			Co-Product Method					By-			Co-Product Method
	Product Method			Copper			Gold		Product Method			Copper		Gold
Revenues, excluding adjustments	$	3.69		$	3.69		$	1,271	$	2.65		$	2.65	$	994
Site production and delivery, before net noncash
and other costs shown below	1.53			1.01			347		1.05			0.62		232
Gold and silver credits	(1.92		)	—			—		(1.86		)	—		—
Treatment charges	0.22			0.15			50		0.22			0.13		49
Royalty on metals	0.13			0.08			29		0.10			0.06		23
Unit net cash (credits) costs	(0.04		)	1.24			426		(0.49		)	0.81		304
Depreciation and amortization	0.21			0.14			48		0.20			0.11		43
Noncash and other costs, net	0.04			0.02			9		0.03			0.02		6
Total unit costs (credits)	0.21			1.40			483		(0.26		)	0.94		353
Revenue adjustments, primarily for pricing on
prior period open sales	(0.01		)	(0.01		)	1		0.04			0.04		2
Gross profit per pound/ounce	$	3.47		$	2.28		$	789	$	2.95		$	1.75	$	643
Copper sales (millions of recoverable pounds)	1,214			1,214					1,400			1,400
Gold sales (thousands of recoverable ounces)							1,765							2,543

Unit net cash costs (net of gold and silver credits) increased to a net credit of $0.04 per pound of copper in 2010, compared with a net credit of $0.49 per pound in 2009, reflecting higher site production and delivery costs ($0.48 per pound) primarily associated with lower copper sales volumes, higher input costs (including materials, labor and energy), higher maintenance and support costs and higher cost sharing under joint venture arrangements. Partly offsetting higher site production and delivery costs were higher gold and silver credits ($0.06 per pound) associated with higher gold prices.

Africa Mining

Africa mining consists of 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. All Africa mining operations are conducted by Tenke Fungurume Mining S.A.R.L. (TFM).

In October 2010, the Government of the DRC concluded its review of TFM’s existing mining contracts and confirmed that they are in good standing. 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 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 receiving the required government approval of the modifications to TFM's bylaws that reflect the agreement with the Government of the DRC, our effective ownership interest in the project will be reduced to 56.0 percent prospectively, compared to our current ownership interest of 57.75 percent.

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Operating and Development Activities. Our initial investment in the project approximated $2 billion, and we have received loan repayments of approximately $700 million through December 31, 2011.

The milling facilities at Tenke, which were designed to process ore at a rate of 8,000 metric tons of ore per day, continue to perform above capacity, with throughput averaging 11,100 metric tons of ore per day in 2011. Mining rates have been increased to enable additional copper production from the initial project capacity of 250 million pounds of copper per year to ramp up to approximately 290 million pounds of copper per year.

We are undertaking a second phase of the project, which would include optimizing the current plant and increasing capacity. As part of the second phase, we are expanding the mill rate to 14,000 metric tons of ore per day and are constructing related processing facilities that would target the addition of approximately 150 million pounds of copper per year. The approximate $850 million project, which includes mill upgrades, additional mining equipment and a new tank house and sulphuric acid plant expansion, is targeted for completion in 2013. The second phase of the project will be funded with cash generated from operations, and where additional funds are required, we will fund 70 percent and Lundin Mining Corporation will fund 30 percent.

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. 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 years ended December 31.

	2011		2010		2009		a
Copper (millions of recoverable pounds)
Production	281		265		154
Sales	283		262		130
Average realized price per poundb	$	3.74	$	3.45	$	2.85
Cobalt (millions of recoverable pounds)
Production	25		20		N/A		c
Sales	25		20		N/A		c
Average realized price per pound	$	9.99	$	10.95	N/A		c
Ore milled (metric tons per day)	11,100		10,300		7,300
Average ore grade (percent):
Copper	3.41		3.51		3.69
Cobalt	0.40		0.40		N/A		c
Copper recovery rate (percent)	92.5		91.4		92.1

a. Results for 2009 represent mining operations that began production in March 2009.

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

c. Comparative results for the 2009 periods have not been included as start-up activities were still under way.

2011 Compared with 2010

Copper sales volumes from our Africa mining operations increased to 283 million pounds of copper in 2011, compared with 262 million pounds of copper in 2010, primarily reflecting higher production in 2011.

Consolidated sales volumes from our Africa mining operations are expected to approximate 290 million pounds of copper and 25 million pounds of cobalt in 2012.

2010 Compared with 2009

Copper sales volumes from our Africa mining operations increased to 262 million pounds of copper in 2010, compared with 130 million pounds of copper in 2009, reflecting higher operating rates and a full year of production in 2010.

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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 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 the years ended December 31. Comparative information for the 2009 period has not been included as start-up activities were still under way. 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 to production and delivery costs applicable to sales reported in our consolidated financial statements.

	2011									2010
	By-Product			Co-Product Method						By-Product			Co-Product Method
	Method			Copper			Cobalt			Method			Copper			Cobalt
Revenues, excluding adjustmentsa	$	3.74		$	3.74		$	9.99		$	3.45		$	3.45		$	10.95
Site production and delivery, before net noncash
and other costs shown below	1.57			1.39			5.58			1.40			1.23			5.78
Cobalt creditsb	(0.58		)	—			—			(0.58		)	—			—
Royalty on metals	0.08			0.07			0.16			0.08			0.06			0.19
Unit net cash costs	1.07			1.46			5.74			0.90			1.29			5.97
Depreciation, depletion and amortization	0.50			0.42			0.78			0.49			0.41			1.03
Noncash and other costs, net	0.16			0.14			0.25			0.11			0.10			0.23
Total unit costs	1.73			2.02			6.77			1.50			1.80			7.23
Revenue adjustments, primarily for pricing on
prior period open sales	—			—			0.06			—			—			0.18
Other non-inventoriable costs	(0.04		)	(0.04		)	(0.07		)	(0.08		)	(0.07		)	(0.16		)
Gross profit per pound	$	1.97		$	1.68		$	3.21		$	1.87		$	1.58		$	3.74
Copper sales (millions of recoverable pounds)	283			283						262			262
Cobalt sales (millions of contained pounds)							25									20

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 our Africa mining operations of $1.07 per pound of copper in 2011 were higher than unit net cash costs of $0.90 per pound of copper in 2010 reflecting higher site production and delivery costs ($0.17 per pound) mostly associated with increased mining and milling activity and higher input costs.

Assuming achievement of current sales volume and cost estimates and an average cobalt price of $12 per pound for 2012, we estimate that average unit net cash costs (net of cobalt credits) would approximate $1.13 per pound of copper in 2012. Higher projected unit net cash costs in 2012, compared with 2011, primarily reflect lower cobalt credits, partly offset by higher projected copper volumes. Africa's unit net cash costs for 2012 would change by $0.11 per pound for each $2 per pound change in the average price of cobalt during 2012.

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Molybdenum

We 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. Our molybdenum operations 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-added molybdenum chemical products. The Molybdenum operations also include the wholly owned Climax molybdenum mine in Colorado (refer to further discussion below); 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 substantially complete, and we plan to commence production during 2012. Production from the Climax mine is expected to ramp up to a rate of 20 million pounds of molybdenum per year during 2013 and, depending on market conditions, may be increased to 30 million pounds of molybdenum per year. We intend to operate our Climax and Henderson molybdenum mines in a flexible manner to meet market requirements. The cost of the initial phase of the project, most of which have been incurred (including $388 million in 2011), approximates $700 million.

Operating Data. Following is summary operating data for the Molybdenum operations for the years ended December 31.

	2011		2010		2009
Molybdenum (millions of recoverable pounds)
Productiona	38		40		27
Sales, excluding purchasesb	79		67		58
Average realized price per pound	$	16.98	$	16.47	$	12.36
Henderson molybdenum mine
Ore milled (metric tons per day)	22,300		22,900		14,900
Average molybdenum ore grade (percent)	0.24		0.25		0.25
Molybdenum production (millions of recoverable pounds)	38		40		27

a. Reflects production at the Henderson molybdenum mine.

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

2011 Compared with 2010

Consolidated molybdenum sales volumes increased to 79 million pounds in 2011, compared with 67 million pounds for 2010, primarily reflecting improved demand. For the year 2012, we expect molybdenum sales volumes to approximate 80 million pounds, of which approximately 40 million pounds represents production from our North and South America copper mines.

2010 Compared with 2009

As a result of improved market conditions, Henderson operated at approximately 90 percent capacity during 2010, compared with 60 percent capacity during most of 2009. Molybdenum sales volumes increased to 67 million pounds in 2010, compared with 58 million pounds in 2009, reflecting improved demand in the chemicals sector.

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 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 years ended December 31. 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.

	2011		2010		2009
Revenues, excluding adjustments	$	16.42	$	15.89	$	12.78
Site production and delivery, before net noncash
and other costs shown below	5.46		4.82		5.43
Treatment charges and other	0.88		1.08		1.09
Unit net cash costs	6.34		5.90		6.52
Depreciation, depletion and amortization	0.96		0.83		0.98
Noncash and other costs, net	0.04		0.03		0.04
Total unit costs	7.34		6.76		7.54
Gross profit per pounda	$	9.08	$	9.13	$	5.24
Molybdenum sales (millions of recoverable pounds)b	38		40		27

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 $6.34 per pound of molybdenum in 2011, $5.90 per pound in 2010 and $6.52 per pound in 2009. Henderson's unit net cash costs in 2011 primarily reflect lower volumes and higher input costs, including labor and materials. Henderson’s unit net cash costs in 2010 benefited from higher production volumes, partly offset by higher mining costs.

Assuming achievement of current sales volume and cost estimates, we estimate unit net cash costs for Henderson would approximate $7.00 per pound of molybdenum in 2012.

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. During 2011, Atlantic Copper purchased approximately 17 percent of its concentrate requirements from our Indonesia mining operation and approximately 30 percent from our South America mining operations. Through this form of downstream integration, we are assured placement of a significant portion of our concentrate production.

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, PT Freeport Indonesia's 25 percent owned smelter and refinery. 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 largely integrated with our Miami smelter located in Arizona).

In May 2011, Atlantic Copper successfully completed a scheduled 26-day maintenance turnaround, which had a $30 million impact on production and delivery costs in 2011. Atlantic Copper's major maintenance turnarounds typically occur approximately every eight years, with short-term maintenance turnarounds in the interim.

Atlantic Copper had operating losses of $69 million in 2011, $37 million in 2010, and $56 million in 2009. The decline in Atlantic Copper’s operating results in 2011, compared with 2010, primarily reflects the impact of the May 2011 scheduled maintenance turnaround, lower gold credits and currency exchange rate impacts. Atlantic Copper's operating results in 2010, compared with 2009, primarily reflected higher sulphuric acid and gold revenues associated with higher prices.

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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 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 concentrate inventories at Atlantic Copper and PT Smelting to be recognized in future periods’ net income after taxes and noncontrolling interests totaled $42 million at December 31, 2011. Changes in these deferrals attributable to variability in intercompany volumes resulted in a net increase to net income attributable to common stockholders of $139 million ($0.15 per share) in 2011, compared with net reductions of $67 million ($0.07 per share) in 2010 and net additions of $21 million ($0.02 per share) in 2009. Quarterly variations in ore grades, the timing of intercompany shipments and changes in product prices will result in variability in our net deferred profits and quarterly earnings. Additionally, as PT Freeport Indonesia's operations return to full operating rates, we expect to defer a significant amount of PT Freeport Indonesia's profit on intercompany sales until sales to third parties occur.

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 favorable copper and gold prices have enabled us to enhance our financial and liquidity position, reduce debt and pay cash dividends to shareholders, while pursuing 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.

Cash and Cash Equivalents

At December 31, 2011, we had consolidated cash and cash equivalents of $4.8 billion. The following table reflects the U.S. and international components of consolidated cash and cash equivalents at December 31, 2011 and 2010 (in billions):

	2011			2010
Cash at domestic companiesa	$	2.4		$	1.9
Cash at international operations	2.4			1.8
Total consolidated cash and cash equivalents	4.8			3.7
Less: Noncontrolling interests’ share	(0.8		)	(0.4		)
Cash, net of noncontrolling interests’ share	4.0			3.3
Less: Withholding taxes and other	(0.1		)	(0.2		)
Net cash available	$	3.9		$	3.1

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

Cash held at our international operations is generally used to support our foreign operations' capital expenditures, operating expenses, working capital or other cash needs. At December 31, 2011, management believed that sufficient liquidity was available in the U.S. With the exception of TFM, we have not elected to permanently reinvest earnings from our foreign subsidiaries, and we have recorded deferred tax liabilities for foreign earnings that are available to be repatriated to the U.S. From time to time, our foreign subsidiaries distribute earnings to the U.S. through dividends which are subject to applicable withholding taxes and noncontrolling interests' share.

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. During 2011, we generated operating cash flows totaling $6.6 billion, net of $461 million for working capital uses. Operating cash flows in 2010 totaled $6.3 billion, net of $834 million for working capital uses. Operating cash flows in 2009 totaled $4.4 billion, net of $770 million for working capital uses, which included approximately $600 million related to settlement of final pricing with customers on 2008 provisionally priced copper sales. Higher operating cash flows for 2011 and 2010, compared with prior years, primarily reflected higher copper and gold price realizations.

Based on current mine plans and subject to future copper, gold and molybdenum prices, we expect estimated operating cash flows for the year 2012 plus available cash to be greater than our budgeted capital expenditures, expected debt payments, dividends, noncontrolling interest distributions and other cash requirements. Refer to “Outlook” for further discussion of projected 2012 operating cash flows.

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Investing Activities

Capital Expenditures. Capital expenditures, including capitalized interest, totaled $2.5 billion in 2011 (including $1.4 billion for major projects), $1.4 billion in 2010 (including $0.7 billion for major projects) and $1.6 billion in 2009 (including $1.0 billion for major projects and the Twin Buttes property acquisition). The increase in capital expenditures in 2011, compared with 2010, primarily reflected higher capital spending for construction on the Climax molybdenum mine, the underground development projects at Grasberg and the expansion at Tenke. The decrease in capital expenditures in 2010, compared with 2009, primarily reflected lower capital spending for the initial Tenke development project for which construction activities were substantially complete by mid-2009, partly offset by higher spending associated with underground development projects at Grasberg and the sulfide ore project at El Abra.

Capital expenditures for the year 2012 are expected to approximate $4.0 billion (including $2.4 billion for major projects), primarily associated with underground development activities at Grasberg, the expansion at Tenke Fungurume and the concentrator expansion at Cerro Verde. 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.

Investment in McMoRan Exploration Co. (MMR). In December 2010, we completed the purchase of 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million. Dividends received in 2011 were recorded as a return of investment because of MMR's reported losses. Refer to Note 6 for further discussion. 

Financing Activities

Debt and Equity Transactions. Total debt approximated $3.5 billion at December 31, 2011, $4.8 billion at December 31, 2010, and $6.3 billion at December 31, 2009.

During 2011, we redeemed the remaining $1.1 billion of our outstanding 8.25% Senior Notes. In addition, we made open-market purchases of $35 million of our 9.5% Senior Notes and repaid the remaining $84 million of our 8.75% Senior Notes. During 2010, we redeemed all of our $1 billion Senior Floating Rate Notes, and also made open-market purchases of $565 million of our senior notes. During 2009, we redeemed $340 million of our 6.875% Senior Notes, and also made open-market purchases of $387 million of our senior notes. Refer to Note 9 for further discussion of these debt repayment transactions.

Since January 1, 2009, we have repaid approximately $3.8 billion of our outstanding debt resulting in estimated annual interest savings of $260 million based on current interest rates.

In February 2012, we sold $3.0 billion in senior notes in three tranches and announced our intent to redeem the remaining $3.0 billion of our 8.375% Senior Notes (refer to Note 20 for further discussion). We estimate annual interest savings associated with the refinancing to approximate $160 million.

On March 30, 2011, we entered into a new senior unsecured 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 December 31, 2011, we had no borrowings and $44 million of letters of credit issued under the facilities, resulting in availability of approximately $1.5 billion ($956 million of which could be used for additional letters of credit). The revolving credit facility contains covenants that are typical for investment-grade companies, including limitations on liens and subsidiary debt. The credit facility also includes financial ratios governing maximum total leverage and minimum interest coverage.

In February 2009, we completed a public offering of 53.6 million shares of our common stock at an average price of $14.00 per share, which generated gross proceeds of $750 million (net proceeds of approximately $740 million after fees and expenses), which were used for general corporate purposes.

We have an open-market share purchase program for up to 30 million shares, of which 23.7 million shares remain available. There have been no purchases since 2008. 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.

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Dividends. Common stock dividends paid totaled $1.4 billion in 2011 and $885 million in 2010. There were no common stock dividends paid in 2009.

After suspending dividends 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). The Board authorized increases in the annual cash dividend to an annual rate of $0.60 per share ($0.15 per share quarterly) in April 2010 and $1.00 per share ($0.25 per share quarterly) in October 2010. The Board also authorized supplemental common stock dividends of $0.50 per share paid in December 2010 and June 2011.

In February 2012, the Board authorized an increase in the cash dividend on our common stock to an annual rate of $1.25 per share ($0.3125 per share quarterly). Dividends are paid quarterly as declared by the Board with the initial quarterly dividend of $0.3125 per share expected to be paid in May 2012. The declaration of dividends is at the discretion of the Board and will depend 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. Based on outstanding common shares of 948 million at December 31, 2011, and the current dividend rate, our estimated regular common stock dividend for 2012 approximates $1.1 billion.

During 2010, our 6¾% Mandatory Convertible Preferred Stock converted into 78.9 million shares of our common stock, and in 2009, we redeemed our 5½% Convertible Perpetual Preferred Stock in exchange for 35.8 million shares of our common stock (refer to Note 11 for further discussion). As a result of these transactions, we no longer have requirements to pay preferred stock dividends. Preferred stock dividends paid totaled $95 million in 2010 representing dividends on our 6¾% Mandatory Convertible Preferred Stock and $229 million in 2009 representing dividends on our 5½% Convertible Perpetual Preferred Stock and 6¾% Mandatory Convertible Preferred Stock.

Cash dividends and distributions paid to noncontrolling interests totaled $391 million in 2011, $816 million in 2010 and $535 million in 2009, reflecting dividends and distributions paid to the noncontrolling interest owners of PT Freeport Indonesia and our South America mines.

CONTRACTUAL OBLIGATIONS

We have contractual and other long-term obligations, including debt maturities, which we expect to fund with available cash, projected operating cash flows, availability under our revolving credit facilities or future financing transactions, if necessary. A summary of these various obligations at December 31, 2011, follows (in millions):

	Total		2012		2013 to 2014		2015 to 2016		Thereafter
Reclamation and environmental obligationsa	$	4,975	$	236	$	360	$	272	$	4,107
Debt maturities	3,537		4		—		—		3,533
Scheduled interest payment obligationsb	1,974		285		571		572		546
Take-or-pay contractsc	2,085		1,338		397		113		237
Operating lease obligations	200		24		33		27		116
Atlantic Copper obligation to insurance companyd	49		9		18		19		3
PT Freeport Indonesia mine closure and reclamation funde	17		2		1		1		13
Totalf	$	12,837	$	1,898	$	1,380	$	1,004	$	8,555

a. Represents estimated cash payments, on an undiscounted and unescalated basis, associated with reclamation and environmental activities. The timing and the amount of these payments could change as a result of changes in regulatory requirements, changes in scope and costs of reclamation activities and as actual spending occurs. Refer to Note 13 for additional discussion of environmental and reclamation matters.

b. Scheduled interest payment obligations were calculated using stated coupon rates for fixed-rate debt and interest rates applicable at December 31, 2011, for variable-rate debt. As discussed in Note 20, in February 2012, we sold $3.0 billion in Senior Notes and announced our intent to redeem the remaining $3.0 billion of our 8.375% Senior Notes. We estimate annual interest savings associated with the refinancing to approximate $160 million.

c. Represents contractual obligations for purchases of goods or services that are defined by us as agreements that are enforceable and legally binding and that specify all significant terms. Take-or-pay contracts primarily comprise the procurement of copper concentrates and cathodes ($1.1 billion), electricity ($338 million), transportation services ($293 million) and oxygen ($128 million). Some of our take-or-pay contracts are settled based on the prevailing market rate for the service or commodity purchased, and in some cases, the amount of the actual obligation may change over time because of market conditions. Obligations for copper concentrates and cathodes provide for deliveries of specified volumes, at market-based prices, primarily to Atlantic Copper and the North America copper mines. Electricity obligations are primarily for

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contractual minimum demand at the South America and Tenke mines. Transportation obligations are primarily for South America contracted ocean freight and for North America rail freight. Oxygen obligations provide for deliveries of specified volumes, at fixed prices, primarily to Atlantic Copper.

d. In August 2002, Atlantic Copper complied with Spanish legislation by agreeing to fund 7.2 million euros annually for 15 years to an approved insurance company for an estimated 72 million euro contractual obligation to supplement amounts paid to certain retired employees. Atlantic Copper had $39 million recorded for this obligation at December 31, 2011.

e. Represents PT Freeport Indonesia’s commitments to contribute amounts to a cash fund designed to accumulate at least $100 million, including interest, by the end of our Indonesia mining activities to be used for mine closure and reclamation.

f. This table excludes certain other obligations in our consolidated balance sheets, including estimated funding for pension obligations as the funding may vary from year-to-year based on changes in the fair value of plan assets and actuarial assumptions, and accrued liabilities totaling $128 million that relate to unrecognized tax benefits where the timing of settlement is not determinable. This table also excludes purchase orders for the purchase of inventory and other goods and services, as purchase orders typically represent authorizations to purchase rather than binding agreements.

In addition to our debt maturities and other contractual obligations, we have other commitments, which we expect to fund with available cash, projected operating cash flows, available credit facilities or future financing transactions, if necessary. These include (i) PT Freeport Indonesia’s commitment to provide one percent of its annual revenue for the development of the local people in its area of operations through the Freeport Partnership Fund for Community Development, (ii) TFM's commitment to provide 0.3 percent of its annual revenue for the development of the local people in its area of operations and (iii) other commercial commitments, including standby letters of credit, surety bonds and guarantees. Refer to Notes 13 and 14 for further discussion.

CONTINGENCIES

Environmental

The cost of complying with environmental laws is a fundamental and substantial cost of our business. At December 31, 2011, we had $1.5 billion recorded in our consolidated balance sheets for environmental obligations attributed to CERCLA or analogous state programs and for estimated future costs associated with environmental matters at closed facilities and closed portions of certain operating facilities. Refer to Note 13 for further information about environmental regulation, including significant environmental matters.

During 2011, we incurred environmental capital expenditures and other environmental costs (including our joint venture partners’ shares) of $387 million for programs to comply with applicable environmental laws and regulations that affect our operations, compared to $372 million in 2010 and $289 million in 2009. The increase in environmental costs in 2011 and 2010, compared with 2009, primarily related to the settlement of environmental legal matters (see Note 13 for further discussion). For 2012, we expect to incur approximately $636 million of aggregate environmental capital expenditures and other environmental costs, which are part of our overall 2012 operating budget. The increase compared with 2011 primarily relates to higher spending for ongoing environmental remediation activities and higher environmental capital expenditures. The timing and amount of estimated payments could change as a result of changes in regulatory requirements, changes in scope and costs of reclamation activities, and as actual spending occurs.

Asset Retirement Obligations

We recognize AROs as liabilities when incurred, with the initial measurement at fair value. These liabilities, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to income. Reclamation costs for future disturbances are recorded as an ARO in the period of disturbance. Our cost estimates are reflected on a third-party cost basis and comply with our legal obligation to retire tangible, long-lived assets. At December 31, 2011, we had $921 million recorded in our consolidated balance sheets for AROs. Spending on AROs totaled $49 million in 2011, $38 million in 2010 and $28 million in 2009. For 2012, we expect to incur approximately $31 million for aggregate ARO payments. Refer to Note 13 for further discussion of reclamation and closure costs.

Litigation and Other Contingencies

Refer to Note 13 for further discussion of contingencies associated with legal proceedings and other matters.

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DISCLOSURES ABOUT MARKET RISKS

Commodity Price Risk

Our consolidated revenues 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. Our financial results can vary significantly as a result of fluctuations in the market prices of copper, gold, molybdenum, silver and cobalt. 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. Refer to “Outlook” for further discussion of projected sales volumes, unit net cash costs and operating cash flows for 2012.

For 2011, 51 percent of our mined copper was sold in concentrate, 26 percent as cathodes and 23 percent as rod (principally from our North America copper mines). Substantially all of our copper concentrate and cathode sales contracts provide final copper pricing in a specified future month (generally one to four months from the shipment date) based primarily on quoted LME monthly average spot copper 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 provisionally 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 adjustments 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.

At December 31, 2010, we had provisionally priced copper sales at our copper mining operations, primarily South America and Indonesia, totaling 417 million pounds of copper (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 unfavorably impacted consolidated revenues by $12 million ($5 million to net income attributable to common stockholders or $0.01 per share) in 2011, compared with adjustments to the December 31, 2009, provisionally priced copper sales that unfavorably impacted consolidated revenues by $24 million ($10 million to net income attributable to common stockholders or $0.01 per share) in 2010, and adjustments to the December 31, 2008, provisionally priced copper sales that favorably impacted consolidated revenues by $132 million ($61 million to net income attributable to common stockholders or $0.07 per share) in 2009.

At December 31, 2011, we had provisionally priced copper sales at our copper mining operations, primarily South America and Indonesia, totaling 252 million pounds of copper (net of intercompany sales and noncontrolling interests) recorded at an average price of $3.44 per pound, subject to final pricing over the next several months. We estimate that each $0.05 change in the price realized from the December 31, 2011, provisional price recorded would have a net impact on our 2012 consolidated revenues of approximately $18 million ($9 million to net income attributable to common stockholders). The LME spot copper price closed at $3.81 per pound on February 15, 2012.

On limited past occasions, in response to market conditions, we have entered into copper and gold price protection contracts for a portion of our expected future mine production to mitigate the risk of adverse price fluctuations. We do not currently intend to enter into similar hedging programs in the future.

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Foreign Currency Exchange Risk

The functional currency for most of our operations is the U.S. dollar. All of our revenues and a significant portion of our costs are denominated in U.S. dollars; however, some costs and certain asset and liability accounts are denominated in local currencies, including the Indonesian rupiah, Australian dollar, Chilean peso, Peruvian nuevo sol, euro and South African rand. Generally, our results are positively affected when the U.S. dollar strengthens in relation to those foreign currencies and adversely affected when the U.S. dollar weakens in relation to those foreign currencies. Following is a summary of estimated annual payments and the impact of changes in foreign currency rates on our annual operating costs:

	Exchange Rate per $1 at December 31,			Estimated Annual Payments			10% Change in Exchange Rate (in millions)b
	2011	2010	2009	(in local currency)	(in millions)a		Increase			Decrease
Indonesia
Rupiah	9,060	8,990	9,420	3.9 trillion	$	430	$	(39	)	$	48
Australian dollar	0.98	0.98	1.12	250 million	$	255	$	(23	)	$	28
South America
Chilean peso	519	468	506	260 billion	$	501	$	(46	)	$	56
Peruvian nuevo sol	2.70	2.81	2.89	360 million	$	134	$	(12	)	$	15
Atlantic Copper
Euro	0.77	0.75	0.69	130 million	$	168	$	(15	)	$	19
Africa
South African rand	8.12	6.65	7.42	840 million	$	103	$	(9	)	$	11

a. Based on December 31, 2011, exchange rates.

b. Reflects the estimated impact on annual operating costs assuming a 10 percent increase or decrease in the exchange rate reported at December 31, 2011.

Interest Rate Risk

At December 31, 2011, we had total debt of $3.5 billion, of which approximately 5 percent was variable-rate debt with interest rates based on LIBOR or the Euro Interbank Offered Rate (EURIBOR). The table below presents average interest rates for our scheduled maturities of principal for our outstanding debt and the related fair values at December 31, 2011 (in millions, except percentages):

	2012				2013				2014				2015		2016		Thereafter			Fair Value
Fixed-rate debt	$	—		a	$	—		a	$	—		a	$	—	$	—	$	3,372		$	3,632
Average interest rate	7.2		%		6.7		%		6.7		%		N/A		N/A		8.3		%	8.3		%
Variable-rate debt	$	4			$	—			$	—			$	—	$	—	$	161		$	165
Average interest rate	—		%	b	N/A				N/A				N/A		N/A		4.3		%	4.2		%

a. Less than $1 million.

b. Less than 0.01%.

NEW ACCOUNTING STANDARDS

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

OFF-BALANCE SHEET ARRANGEMENTS

Refer to Note 14 for discussion of off-balance sheet arrangements.

100

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 measure 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 and other metals, (iii) it is not possible to specifically assign all of our costs to revenues from the copper, gold, molybdenum 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 these 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.

101

North America Copper Mines Product Revenues and Production Costs

Year Ended December 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Molybdenuma			Otherb		Total
Revenues, excluding adjustments	$	4,968		$	4,968		$	546		$	111	$	5,625
Site production and delivery, before net noncash
and other costs shown below	2,213			1,987			238			46		2,271
By-product creditsa	(599		)	—			—			—		—
Treatment charges	138			132			—			6		138
Net cash costs	1,752			2,119			238			52		2,409
Depreciation, depletion and amortization	264			247			13			4		264
Noncash and other costs, net	84			81			2			1		84
Total costs	2,100			2,447			253			57		2,757
Revenue adjustments	(1		)	(1		)	—			—		(1		)
Idle facility and other non-inventoriable costs	(82		)	(80		)	(2		)	—		(82		)
Gross profit	$	2,785		$	2,440		$	291		$	54	$	2,785
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	5,625		$	2,271		$	264
Treatment charges	N/A			138			N/A
Net noncash and other costs	N/A			84			N/A
Revenue adjustments	(1		)	N/A			N/A
Idle facility and other non-inventoriable costs	N/A			82			N/A
Eliminations and other	9			54			15
North America copper mines	5,633			2,629			279
South America mining	5,258			1,905			258
Indonesia mining	5,046			1,902			215
Africa mining	1,289			591			140
Molybdenum	1,424			1,036			60
Rod & Refining	5,549			5,527			8
Atlantic Copper Smelting & Refining	2,984			2,991			40
Corporate, other & eliminations	(6,303		)	(6,683		)	22
As reported in FCX’s consolidated financial statements	$	20,880		$	9,898		$	1,022

a. Molybdenum 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.

102

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

Year Ended December 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Molybdenuma			Otherb		Total
Revenues, excluding adjustments	$	3,702		$	3,702		$	383		$	58	$	4,143
Site production and delivery, before net noncash
and other costs shown below	1,621			1,456			195			29		1,680
By-product creditsa	(382		)	—			—			—		—
Treatment charges	105			102			—			3		105
Net cash costs	1,344			1,558			195			32		1,785
Depreciation, depletion and amortization	256			241			13			2		256
Noncash and other costs, net	131			131			—			—		131
Total costs	1,731			1,930			208			34		2,172
Revenue adjustments	(2		)	(2		)	—			—		(2		)
Idle facility and other non-inventoriable costs	(87		)	(86		)	(1		)	—		(87		)
Gross profit	$	1,882		$	1,684		$	174		$	24	$	1,882
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	4,143		$	1,680		$	256
Treatment charges	N/A			105			N/A
Net noncash and other costs	N/A			131			N/A
Revenue adjustments	(2		)	N/A			N/A
Idle facility and other non-inventoriable costs	N/A			87			N/A
Eliminations and other	32			49			17
North America copper mines	4,173			2,052			273
South America mining	4,991			1,678			250
Indonesia mining	6,377			1,904			257
Africa mining	1,106			488			128
Molybdenum	1,205			784			51
Rod & Refining	4,470			4,442			8
Atlantic Copper Smelting & Refining	2,491			2,470			38
Corporate, other & eliminations	(5,831		)	(5,483		)	31
As reported in FCX’s consolidated financial statements	$	18,982		$	8,335		$	1,036

a. Molybdenum 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.

103

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

Year Ended December 31, 2009
(In millions)	By-Product			Co-Product Method
	Method			Copper				Molybdenuma		Otherb		Total
Revenues, excluding adjustments	$	2,823		$	2,823			$	274	$	45	$	3,142
Site production and delivery, before net noncash
and other costs shown below	1,483			1,364				142		22		1,528
By-product creditsa	(274		)	—				—		—		—
Treatment charges	102			100				—		2		102
Net cash costs	1,311			1,464				142		24		1,630
Depreciation, depletion and amortization	264			251				10		3		264
Noncash and other costs, net	129			127				2		—		129
Total costs	1,704			1,842				154		27		2,023
Revenue adjustments	92			92				—		—		92
Idle facility and other non-inventoriable costs	(100		)	(100		)		—		—		(100		)
Gross profit	$	1,111		$	973			$	120	$	18	$	1,111
Reconciliation to Amounts Reported
								Depreciation,
				Production				Depletion and
	Revenues			and Delivery				Amortization
Totals presented above	$	3,142		$	1,528			$	264
Treatment charges	N/A			102				N/A
Net noncash and other costs	N/A			129				N/A
Revenue adjustments	92			N/A				N/A
Idle facility and other non-inventoriable costs	N/A			100				N/A
Eliminations and other	30			52				16
North America copper mines	3,264			1,911				280
South America mining	3,839			1,563				275
Indonesia mining	5,908			1,505				275
Africa mining	389			315				66
Molybdenum	847			660			c	49
Rod & Refining	3,356			3,336				8
Atlantic Copper Smelting & Refining	1,892			1,895				36
Corporate, other & eliminations	(4,455		)	(4,179		)		25
As reported in FCX’s consolidated financial statements	$	15,040		$	7,006		c	$	1,014

a. Molybdenum 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.

c. Includes lower of cost or market (LCM) molybdenum inventory adjustments of $19 million.

104

South America Mining Product Revenues and Production Costs

Year Ended December 31, 2011
(In millions)	By-Product				Co-Product Method
	Method				Copper			Other				Total
Revenues, excluding adjustments	$	4,989			$	4,989		$	477		a	$	5,466
Site production and delivery, before net noncash
and other costs shown below	1,826			b	1,679			172				1,851
By-product credits	(452		)		—			—				—
Treatment charges	219				219			—				219
Net cash costs	1,593				1,898			172				2,070
Depreciation, depletion and amortization	258				242			16				258
Noncash and other costs, net	23				21			2				23
Total costs	1,874				2,161			190				2,351
Revenue adjustments, primarily for pricing on prior
period open sales	15				(4		)	19				15
Other non-inventoriable costs	(59		)		(54		)	(5		)		(59		)
Gross profit	$	3,071			$	2,770		$	301			$	3,071
Reconciliation to Amounts Reported
								Depreciation,
					Production			Depletion and
	Revenues				and Delivery			Amortization
Totals presented above	$	5,466			$	1,851		$	258
Treatment charges	(219		)		N/A			N/A
Net noncash and other costs	N/A				23			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	15				N/A			N/A
Other non-inventoriable costs	N/A				59			N/A
Eliminations and other	(4		)		(28		)	—
South America mining	5,258				1,905			258
North America copper mines	5,633				2,629			279
Indonesia mining	5,046				1,902			215
Africa mining	1,289				591			140
Molybdenum	1,424				1,036			60
Rod & Refining	5,549				5,527			8
Atlantic Copper Smelting & Refining	2,984				2,991			40
Corporate, other & eliminations	(6,303		)		(6,683		)	22
As reported in FCX’s consolidated financial statements	$	20,880			$	9,898		$	1,022

a. Includes gold sales of 101 thousand ounces ($1,580 per ounce average realized price) and silver sales of 3.2 million ounces ($36.81 per ounce average realized price); also includes molybdenum sales of 10 million pounds ($13.78 per pound average realized price), which reflects molybdenum produced by Cerro Verde at market-based pricing.

b. Includes $50 million for bonuses paid at Cerro Verde and El Abra pursuant to the new labor agreements.

105

South America Mining Product Revenues and Production Costs (continued)

Year Ended December 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Other				Total
Revenues, excluding adjustments	$	4,911		$	4,911		$	299		a	$	5,210
Site production and delivery, before net noncash
and other costs shown below	1,613			1,521			110				1,631
By-product credits	(281		)	—			—				—
Treatment charges	207			207			—				207
Net cash costs	1,539			1,728			110				1,838
Depreciation, depletion and amortization	249			237			12				249
Noncash and other costs, net	19			18			1				19
Total costs	1,807			1,983			123				2,106
Revenue adjustments, primarily for pricing on prior
period open sales	(14		)	(14		)	—				(14		)
Other non-inventoriable costs	(44		)	(40		)	(4		)		(44		)
Gross profit	$	3,046		$	2,874		$	172			$	3,046
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	5,210		$	1,631		$	249
Treatment charges	(207		)	N/A			N/A
Net noncash and other costs	N/A			19			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	(14		)	N/A			N/A
Other non-inventoriable costs	N/A			44			N/A
Eliminations and other	2			(16		)	1
South America mining	4,991			1,678			250
North America copper mines	4,173			2,052			273
Indonesia mining	6,377			1,904			257
Africa mining	1,106			488			128
Molybdenum	1,205			784			51
Rod & Refining	4,470			4,442			8
Atlantic Copper Smelting & Refining	2,491			2,470			38
Corporate, other & eliminations	(5,831		)	(5,483		)	31
As reported in FCX’s consolidated financial statements	$	18,982		$	8,335		$	1,036

a. Includes gold sales of 93 thousand ounces ($1,263 per ounce average realized price) and silver sales of 2.7 million ounces ($20.53 per ounce average realized price); also includes molybdenum sales of 7 million pounds ($14.12 per pound average realized price), which reflects molybdenum produced by Cerro Verde at market-based pricing.

106

South America Mining Product Revenues and Production Costs (continued)

Year Ended December 31, 2009
(In millions)	By-Product			Co-Product Method
	Method			Copper				Other				Total
Revenues, excluding adjustments	$	3,768		$	3,768			$	167		a	$	3,935
Site production and delivery, before net noncash
and other costs shown below	1,512			1,429				91				1,520
By-product credits	(159		)	—				—				—
Treatment charges	206			206				—				206
Net cash costs	1,559			1,635				91				1,726
Depreciation, depletion and amortization	275			267				8				275
Noncash and other costs, net	28			28				—				28
Total costs	1,862			1,930				99				2,029
Revenue adjustments, primarily for pricing on prior
period open sales	109			109				—				109
Other non-inventoriable costs	(31		)	(26		)		(5		)		(31		)
Gross profit	$	1,984		$	1,921			$	63			$	1,984
Reconciliation to Amounts Reported
								Depreciation,
				Production				Depletion and
	Revenues			and Delivery				Amortization
Totals presented above	$	3,935		$	1,520			$	275
Treatment charges	(206		)	N/A				N/A
Net noncash and other costs	N/A			28				N/A
Revenue adjustments, primarily for pricing on prior
period open sales	109			N/A				N/A
Other non-inventoriable costs	N/A			31				N/A
Eliminations and other	1			(16		)		—
South America mining	3,839			1,563				275
North America copper mines	3,264			1,911				280
Indonesia mining	5,908			1,505				275
Africa mining	389			315				66
Molybdenum	847			660			b	49
Rod & Refining	3,356			3,336				8
Atlantic Copper Smelting & Refining	1,892			1,895				36
Corporate, other & eliminations	(4,455		)	(4,179		)		25
As reported in FCX’s consolidated financial statements	$	15,040		$	7,006		b	$	1,014

a. Includes gold sales of 90 thousand ounces ($982 per ounce average realized price) and silver sales of 3.0 million ounces ($14.88 per ounce average realized price); also includes molybdenum sales of 2 million pounds ($7.74 per pound average realized price), which reflects molybdenum produced by Cerro Verde at market-based pricing.

b. Includes LCM molybdenum inventory adjustments of $19 million.

107

Indonesia Mining Product Revenues and Production Costs

Year Ended December 31, 2011
(In millions)	By-Product				Co-Product Method
	Method				Copper			Gold			Silver			Total
Revenues, excluding adjustments	$	3,261			$	3,261		$	2,011		$	97	a	$	5,369
Site production and delivery, before net noncash
and other costs shown below	1,869			b	1,135			700			34			1,869
Gold and silver credits	(2,090		)		—			—			—			—
Treatment charges	156				95			58			3			156
Royalty on metals	137				83			52			2			137
Net cash costs	72				1,313			810			39			2,162
Depreciation and amortization	215				131			80			4			215
Noncash and other costs, net	33				20			12			1			33
Total costs	320				1,464			902			44			2,410
Revenue adjustments, primarily for pricing on prior
period open sales	(12		)		(12		)	(18		)	—			(30		)
Gross profit	$	2,929			$	1,785		$	1,091		$	53		$	2,929
Reconciliation to Amounts Reported
								Depreciation,
					Production			Depletion and
	Revenues				and Delivery			Amortization
Totals presented above	$	5,369			$	1,869		$	215
Treatment charges	(156		)		N/A			N/A
Royalty on metals	(137		)		N/A			N/A
Net noncash and other costs	N/A				33			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	(30		)		N/A			N/A
Indonesia mining	5,046				1,902			215
North America copper mines	5,633				2,629			279
South America mining	5,258				1,905			258
Africa mining	1,289				591			140
Molybdenum	1,424				1,036			60
Rod & Refining	5,549				5,527			8
Atlantic Copper Smelting & Refining	2,984				2,991			40
Corporate, other & eliminations	(6,303		)		(6,683		)	22
As reported in FCX’s consolidated financial statements	$	20,880			$	9,898		$	1,022

a. Includes silver sales of 2.7 million ounces ($36.18 per ounce average realized price).

b. Includes $66 million associated with bonuses and other strike-related costs.

108

Indonesia Mining Product Revenues and Production Costs (continued)

Year Ended December 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Gold		Silver			Total
Revenues, excluding adjustments	$	4,475		$	4,475		$	2,243	$	90	a	$	6,808
Site production and delivery, before net noncash
and other costs shown below	1,856			1,220			612		24			1,856
Gold and silver credits	(2,334		)	—			—		—			—
Treatment charges	270			178			89		3			270
Royalty on metals	156			102			51		3			156
Net cash (credits) costs	(52		)	1,500			752		30			2,282
Depreciation and amortization	257			169			85		3			257
Noncash and other costs, net	48			31			16		1			48
Total costs	253			1,700			853		34			2,587
Revenue adjustments, primarily for pricing on prior
period open sales	(6		)	(6		)	1		—			(5		)
Gross profit	$	4,216		$	2,769		$	1,391	$	56		$	4,216
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	6,808		$	1,856		$	257
Treatment charges	(270		)	N/A			N/A
Royalty on metals	(156		)	N/A			N/A
Net noncash and other costs	N/A			48			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	(5		)	N/A			N/A
Indonesia mining	6,377			1,904			257
North America copper mines	4,173			2,052			273
South America mining	4,991			1,678			250
Africa mining	1,106			488			128
Molybdenum	1,205			784			51
Rod & Refining	4,470			4,442			8
Atlantic Copper Smelting & Refining	2,491			2,470			38
Corporate, other & eliminations	(5,831		)	(5,483		)	31
As reported in FCX’s consolidated financial statements	$	18,982		$	8,335		$	1,036

a. Includes silver sales of 4.1 million ounces ($21.99 per ounce average realized price).

109

Indonesia Mining Product Revenues and Production Costs (continued)

Year Ended December 31, 2009
(In millions)	By-Product			Co-Product Method
	Method			Copper				Gold		Silver			Total
Revenues, excluding adjustments	$	3,708		$	3,708			$	2,527	$	73	a	$	6,308
Site production and delivery, before net noncash
and other costs shown below	1,468			862				589		17			1,468
Gold and silver credits	(2,606		)	—				—		—			—
Treatment charges	312			183				125		4			312
Royalty on metals	147			86				59		2			147
Net cash (credits) costs	(679		)	1,131				773		23			1,927
Depreciation and amortization	275			162				110		3			275
Noncash and other costs, net	37			22				15		—			37
Total (credits) costs	(367		)	1,315				898		26			2,239
Revenue adjustments, primarily for pricing on prior
period open sales	53			53				5		1			59
Gross profit	$	4,128		$	2,446			$	1,634	$	48		$	4,128
Reconciliation to Amounts Reported
								Depreciation,
				Production				Depletion and
	Revenues			and Delivery				Amortization
Totals presented above	$	6,308		$	1,468			$	275
Treatment charges	(312		)	N/A				N/A
Royalty on metals	(147		)	N/A				N/A
Net noncash and other costs	N/A			37				N/A
Revenue adjustments, primarily for pricing on prior
period open sales	59			N/A				N/A
Indonesia mining	5,908			1,505				275
North America copper mines	3,264			1,911				280
South America mining	3,839			1,563				275
Africa mining	389			315				66
Molybdenum	847			660			b	49
Rod & Refining	3,356			3,336				8
Atlantic Copper Smelting & Refining	1,892			1,895				36
Corporate, other & eliminations	(4,455		)	(4,179		)		25
As reported in FCX’s consolidated financial statements	$	15,040		$	7,006		b	$	1,014

a. Includes silver sales of 4.9 million ounces ($14.94 per ounce average realized price).

b. Includes LCM molybdenum inventory adjustments of $19 million.

110

Africa Mining Product Revenues and Production Costs

Year Ended December 31, 2011
(In millions)	By-Product			Co-Product Method
	Method			Copper			Cobalt			Total
Revenues, excluding adjustmentsa	$	1,059		$	1,059		$	253		$	1,312
Site production and delivery, before net noncash
and other costs shown below	444			393			141			534
Cobalt creditsb	(165		)	—			—			—
Royalty on metals	24			20			4			24
Net cash costs	303			413			145			558
Depreciation, depletion and amortization	140			120			20			140
Noncash and other costs, net	45			39			6			45
Total costs	488			572			171			743
Revenue adjustments, primarily for pricing on prior
period open sales	(1		)	(1		)	2			1
Other non-inventoriable costs	(12		)	(10		)	(2		)	(12		)
Gross profit	$	558		$	476		$	82		$	558
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,312		$	534		$	140
Royalty on metals	(24		)	N/A			N/A
Net noncash and other costs	N/A			45			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	1			N/A			N/A
Other non-inventoriable costs	N/A			12			N/A
Africa mining	1,289			591			140
North America copper mines	5,633			2,629			279
South America mining	5,258			1,905			258
Indonesia mining	5,046			1,902			215
Molybdenum	1,424			1,036			60
Rod & Refining	5,549			5,527			8
Atlantic Copper Smelting & Refining	2,984			2,991			40
Corporate, other & eliminations	(6,303		)	(6,683		)	22
As reported in FCX’s consolidated financial statements	$	20,880		$	9,898		$	1,022

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

b. Net of cobalt downstream processing and freight costs.

111

Africa Mining Product Revenues and Production Costs (continued)

Year Ended December 31, 2010
(In millions)	By-Product			Co-Product Method
	Method			Copper			Cobalt			Total
Revenues, excluding adjustmentsa	$	904		$	904		$	218		$	1,122
Site production and delivery, before net noncash
and other costs shown below	366			323			115			438
Cobalt creditsb	(150		)	—			—			—
Royalty on metals	20			16			4			20
Net cash costs	236			339			119			458
Depreciation, depletion and amortization	128			107			21			128
Noncash and other costs, net	30			26			4			30
Total costs	394			472			144			616
Revenue adjustments, primarily for pricing on prior
period open sales	—			—			4			4
Other non-inventoriable costs	(20		)	(17		)	(3		)	(20		)
Gross profit	$	490		$	415		$	75		$	490
Reconciliation to Amounts Reported
							Depreciation,
				Production			Depletion and
	Revenues			and Delivery			Amortization
Totals presented above	$	1,122		$	438		$	128
Royalty on metals	(20		)	N/A			N/A
Net noncash and other costs	N/A			30			N/A
Revenue adjustments, primarily for pricing on prior
period open sales	4			N/A			N/A
Other non-inventoriable costs	N/A			20			N/A
Africa mining	1,106			488			128
North America copper mines	4,173			2,052			273
South America mining	4,991			1,678			250
Indonesia mining	6,377			1,904			257
Molybdenum	1,205			784			51
Rod & Refining	4,470			4,442			8
Atlantic Copper Smelting & Refining	2,491			2,470			38
Corporate, other & eliminations	(5,831		)	(5,483		)	31
As reported in FCX’s consolidated financial statements	$	18,982		$	8,335		$	1,036

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

b. Net of cobalt downstream processing and freight costs.

112

Henderson Molybdenum Mine Product Revenues and Production Costs

	Years Ended December 31,
(In millions)	2011			2010				2009		a
Revenues, excluding adjustments	$	628		$	637			$	347
Site production and delivery, before net noncash
and other costs shown below	209			193				148
Treatment charges and other	33			43				30
Net cash costs	242			236				178
Depreciation, depletion and amortization	37			34				26
Noncash and other costs, net	2			1				1
Total costs	281			271				205
Gross profitb	$	347		$	366			$	142
Reconciliation to Amounts Reported				Production				Depreciation,
				and				Depletion and
Year Ended December 31, 2011	Revenues			Delivery				Amortization
Totals presented above	$	628		$	209			$	37
Treatment charges and other	(33		)	N/A				N/A
Net noncash and other costs	N/A			2				N/A
Henderson mine	595			211				37
Other molybdenum operations and eliminationsc	829			825				23
Molybdenum	1,424			1,036				60
North America copper mines	5,633			2,629				279
South America mining	5,258			1,905				258
Indonesia mining	5,046			1,902				215
Africa mining	1,289			591				140
Rod & Refining	5,549			5,527				8
Atlantic Copper Smelting & Refining	2,984			2,991				40
Corporate, other & eliminations	(6,303		)	(6,683		)		22
As reported in FCX’s consolidated financial statements	$	20,880		$	9,898			$	1,022
Year Ended December 31, 2010
Totals presented above	$	637		$	193			$	34
Treatment charges and other	(43		)	N/A				N/A
Net noncash and other costs	N/A			1				N/A
Henderson mine	594			194				34
Other molybdenum operations and eliminationsc	611			590				17
Molybdenum	1,205			784				51
North America copper mines	4,173			2,052				273
South America mining	4,991			1,678				250
Indonesia mining	6,377			1,904				257
Africa mining	1,106			488				128
Rod & Refining	4,470			4,442				8
Atlantic Copper Smelting & Refining	2,491			2,470				38
Corporate, other & eliminations	(5,831		)	(5,483		)		31
As reported in FCX’s consolidated financial statements	$	18,982		$	8,335			$	1,036
Year Ended December 31, 2009
Totals presented above	$	347		$	148			$	26
Treatment charges and other	(30		)	N/A				N/A
Net noncash and other costs	N/A			1				N/A
Henderson mine	317			149				26
Other molybdenum operations and eliminationsc	530			511			d	23
Molybdenum	847			660				49
North America copper mines	3,264			1,911				280
South America mining	3,839			1,563				275
Indonesia mining	5,908			1,505				275
Africa mining	389			315				66
Rod & Refining	3,356			3,336				8
Atlantic Copper Smelting & Refining	1,892			1,895				36
Corporate, other & eliminations	(4,455		)	(4,179		)		25
As reported in FCX’s consolidated financial statements	$	15,040		$	7,006		d	$	1,014

113

a. Revenues and costs were adjusted to include freight and downstream conversion costs in net cash costs; gross profit was not affected by these adjustments.

b. 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.

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

d. Includes LCM molybdenum inventory adjustments of $19 million.

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, reserve estimates, 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 of Directors and will depend on our financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.

We caution readers that forward-looking 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 DRC, weather- and climate-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, 2011, 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 more frequently than quarterly 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.

114

Item 8. Financial Statements and Supplementary Data.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Freeport-McMoRan Copper & Gold Inc.’s (the Company’s) management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, 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 and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of the end of the fiscal year covered by this annual report on Form 10-K. In making this assessment, our management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our management’s assessment, management concluded that, as of December 31, 2011, our Company’s internal control over financial reporting is effective based on the COSO criteria.

Ernst & Young LLP, an independent registered public accounting firm, who audited the Company’s consolidated financial statements included in this Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting, which is included herein.

/s/ Richard C. Adkerson	/s/ Kathleen L. Quirk
Richard C. Adkerson	Kathleen L. Quirk
President and Chief Executive Officer	Executive Vice President,
	Chief Financial Officer and Treasurer

115

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF

FREEPORT-McMoRan COPPER & GOLD INC.

We have audited Freeport-McMoRan Copper & Gold Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established inInternal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Freeport-McMoRan Copper & Gold Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Freeport-McMoRan Copper & Gold Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Freeport-McMoRan Copper & Gold Inc. as of December 31, 2011 and 2010 and the related consolidated statements of income, equity and cash flows for each of the three years in the period ended December 31, 2011, and our report dated February 27, 2012 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Phoenix, Arizona

February 27, 2012

116

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF

FREEPORT-McMoRan COPPER & GOLD INC.

We have audited the accompanying consolidated balance sheets of Freeport-McMoRan Copper & Gold Inc. as of December 31, 2011 and 2010, and the related consolidated statements of income, equity and cash flows for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Freeport-McMoRan Copper & Gold Inc. at December 31, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Freeport-McMoRan Copper & Gold Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2012 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Phoenix, Arizona

February 27, 2012

117

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF INCOME

	Years Ended December 31,
	2011			2010			2009
	(In Millions, Except Per Share Amounts)
Revenues	$	20,880		$	18,982		$	15,040
Cost of sales:
Production and delivery	9,898			8,335			7,006
Depreciation, depletion and amortization	1,022			1,036			1,014
Total cost of sales	10,920			9,371			8,020
Selling, general and administrative expenses	415			381			321
Exploration and research expenses	271			143			90
Environmental obligations and shutdown costs	134			19			106
Total costs and expenses	11,740			9,914			8,537
Operating income	9,140			9,068			6,503
Interest expense, net	(312		)	(462		)	(586		)
Losses on early extinguishment of debt	(68		)	(81		)	(48		)
Other income (expense), net	58			(13		)	(53		)
Income before income taxes and equity in affiliated
companies’ net earnings	8,818			8,512			5,816
Provision for income taxes	(3,087		)	(2,983		)	(2,307		)
Equity in affiliated companies’ net earnings	16			15			25
Net income	5,747			5,544			3,534
Net income attributable to noncontrolling interests	(1,187		)	(1,208		)	(785		)
Preferred dividends	—			(63		)	(222		)
Net income attributable to FCX common stockholders	$	4,560		$	4,273		$	2,527
Net income per share attributable to FCX common stockholders:
Basic	$	4.81		$	4.67		$	3.05
Diluted	$	4.78		$	4.57		$	2.93
Weighted-average common shares outstanding:
Basic	947			915			829
Diluted	955			949			938
Dividends declared per share of common stock	$	1.50		$	1.125		$	0.075

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

118

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2011			2010			2009
	(In Millions)
Cash flow from operating activities:
Net income	$	5,747		$	5,544		$	3,534
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, depletion and amortization	1,022			1,036			1,014
Stock-based compensation	117			121			102
Charges for reclamation and environmental obligations,
including accretion	208			167			191
Payments of reclamation and environmental obligations	(170		)	(196		)	(104		)
Losses on early extinguishment of debt	68			81			48
Deferred income taxes	523			286			135
Increase in long-term mill and leach stockpiles	(262		)	(103		)	(96		)
Changes in other assets and liabilities	(76		)	79			201
Other, net	(96		)	92			142
(Increases) decreases in working capital:
Accounts receivable	1,246			(680		)	(962		)
Inventories	(431		)	(593		)	(159		)
Other current assets	(57		)	(24		)	87
Accounts payable and accrued liabilities	(387		)	331			(438		)
Accrued income and other taxes	(832		)	132			702
Net cash provided by operating activities	6,620			6,273			4,397
Cash flow from investing activities:
Capital expenditures:
North America copper mines	(495		)	(233		)	(345		)
South America	(603		)	(470		)	(164		)
Indonesia	(648		)	(436		)	(266		)
Africa	(193		)	(100		)	(659		)
Molybdenum	(461		)	(89		)	(82		)
Other	(134		)	(84		)	(71		)
Investment in McMoRan Exploration Co.	25			(500		)	—
Other, net	(26		)	43			(14		)
Net cash used in investing activities	(2,535		)	(1,869		)	(1,601		)
Cash flow from financing activities:
Repayments of debt	(1,313		)	(1,724		)	(1,380		)
Proceeds from debt	48			70			330
Cash dividends and distributions paid:
Common stock	(1,423		)	(885		)	—
Preferred stock	—			(95		)	(229		)
Noncontrolling interests	(391		)	(816		)	(535		)
Net proceeds from sale of common stock	—			—			740
Contributions from noncontrolling interests	62			28			57
Net proceeds from stock-based awards	3			81			6
Excess tax benefit from stock-based awards	23			19			3
Other, net	(10		)	—			(4		)
Net cash used in financing activities	(3,001		)	(3,322		)	(1,012		)
Net increase in cash and cash equivalents	1,084			1,082			1,784
Cash and cash equivalents at beginning of year	3,738			2,656			872
Cash and cash equivalents at end of year	$	4,822		$	3,738		$	2,656

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

119

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2011			2010
	(In Millions, Except Par Values)
ASSETS
Current assets:
Cash and cash equivalents	$	4,822		$	3,738
Trade accounts receivables	892			2,132
Other accounts receivable	250			293
Inventories:
Materials and supplies, net	1,354			1,169
Product	1,226			1,316
Mill and leach stockpiles	1,289			949
Other current assets	214			254
Total current assets	10,047			9,851
Property, plant, equipment and development costs, net	18,449			16,785
Long-term mill and leach stockpiles	1,686			1,425
Long-term receivables	675			200
Intangible assets, net	325			328
Other assets	888			797
Total assets	$	32,070		$	29,386
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,252		$	2,441
Dividends payable	240			240
Current portion of reclamation and environmental obligations	236			207
Accrued income taxes	163			648
Rio Tinto's share of joint venture cash flows	45			132
Current portion of debt	4			95
Total current liabilities	2,940			3,763
Long-term debt, less current portion	3,533			4,660
Deferred income taxes	3,255			2,873
Reclamation and environmental obligations, less current portion	2,138			2,071
Other liabilities	1,651			1,459
Total liabilities	13,517			14,826
Equity:
FCX stockholders’ equity:
Common stock, par value $0.10, 1,071 shares and 1,067 shares
issued, respectively	107			107
Capital in excess of par value	19,007			18,751
Retained earnings (accumulated deficit)	546			(2,590		)
Accumulated other comprehensive loss	(465		)	(323		)
Common stock held in treasury – 123 shares and 122 shares, respectively,
at cost	(3,553		)	(3,441		)
Total FCX stockholders’ equity	15,642			12,504
Noncontrolling interests	2,911			2,056
Total equity	18,553			14,560
Total liabilities and equity	$	32,070		$	29,386

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

120

FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF EQUITY

	FCX Stockholders’ Equity
	Convertible Perpetual Preferred Stock					Mandatory Convertible Preferred Stock			Common Stock					Retained Earnings(Accumu-lated Deficit)			Accumu- lated Other Compre-hensive Income(Loss)			Common Stock Held in Treasury				Total FCX Stock- holders’ Equity
	Number of Shares		At Par Value			Number of Shares	At Par Value		Number of Shares	At Par Value		Capital in Excess of Par Value								Number of Shares	At Cost						Non- controlling Interests			Total Equity
	(In Millions)
Balance at January 1, 2009	1		$	832		29	$	2,875	889	$	89	$	13,951	$	(8,267	)	$	(305	)	121	$	(3,402	)	$	5,773		$	1,328		$	7,101
Conversions and redemptions of 5½%
Convertible Perpetual Preferred Stock	(1	)	(832		)	—	—		36	4		827		—			—			—	—			(1		)	—			(1		)
Sale of common stock	—		—			—	—		53	5		735		—			—			—	—			740			—			740
Exercised and issued stock-based awards	—		—			—	—		3	—		18		—			—			—	—			18			—			18
Stock-based compensation	—		—			—	—		—	—		100		—			—			—	—			100			—			100
Tax benefit for stock-based awards	—		—			—	—		—	—		6		—			—			—	—			6			—			6
Tender of shares for stock-based awards	—		—			—	—		—	—		—		—			—			1	(11		)	(11		)	—			(11		)
Dividends on common stock	—		—			—	—		—	—		—		(65		)	—			—	—			(65		)	—			(65		)
Dividends on preferred stock	—		—			—	—		—	—		—		(222		)	—			—	—			(222		)	—			(222		)
Distributions to noncontrolling interests	—		—			—	—		—	—		—		—			—			—	—			—			(535		)	(535		)
Contributions from noncontrolling interests	—		—			—	—		—	—		—		—			—			—	—			—			59			59
Comprehensive income:
Net income	—		—			—	—		—	—		—		2,749			—			—	—			2,749			785			3,534
Other comprehensive income,
net of taxes:
Unrealized gains on securities	—		—			—	—		—	—		—		—			3			—	—			3			—			3
Translation adjustment	—		—			—	—		—	—		—		—			3			—	—			3			—			3
Defined benefit plans:
Net gain during period, net of
taxes of $51 million	—		—			—	—		—	—		—		—			8			—	—			8			1			9
Amortization of unrecognized amounts	—		—			—	—		—	—		—		—			18			—	—			18			—			18
Other comprehensive income	—		—			—	—		—	—		—		—			32			—	—			32			1			33
Total comprehensive income	—		—			—	—		—	—		—		—			—			—	—			2,781			786			3,567
Balance at December 31, 2009	—		$	—		29	$	2,875	981	$	98	$	15,637	$	(5,805	)	$	(273	)	122	$	(3,413	)	$	9,119		$	1,638		$	10,757

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FREEPORT-McMoRan COPPER & GOLD INC.

CONSOLIDATED STATEMENTS OF EQUITY

(continued)

	FCX Stockholders’ Equity
	Convertible Perpetual Preferred Stock			Mandatory Convertible Preferred Stock					Common Stock					Retained Earnings(Accumu-lated Deficit)			Accumu- lated Other Compre-hensive Income(Loss)			Common Stock Held in Treasury				Total FCX Stock- holders’ Equity
	Number of Shares	At Par Value		Number of Shares		At Par Value			Number of Shares	At Par Value		Capital in Excess of Par Value								Number of Shares	At Cost						Non- controlling Interests			Total Equity
	(In Millions)
Balance at December 31, 2009	—	$	—	29		$	2,875		981	$	98	$	15,637	$	(5,805	)	$	(273	)	122	$	(3,413	)	$	9,119		$	1,638		$	10,757
Conversions of 6¾% Mandatory
Convertible Preferred Stock	—	—		(29	)	(2,875		)	79	8		2,867		—			—			—	—			—			—			—
Conversions of 7% Convertible Senior Notes	—	—		—		—			—	—		1		—			—			—	—			1						1
Exercised and issued stock-based awards	—	—		—		—			7	1		109		—			—			—	—			110			—			110
Stock-based compensation	—	—		—		—			—	—		129		—			—			—	—			129			—			129
Tax benefit for stock-based awards	—	—		—		—			—	—		8		—			—			—	—			8			—			8
Tender of shares for stock-based awards	—	—		—		—			—	—		—		—			—			—	(28		)	(28		)	—			(28		)
Dividends on common stock	—	—		—		—			—	—		—		(1,058		)	—			—	—			(1,058		)	—			(1,058		)
Dividends on preferred stock	—	—		—		—			—	—		—		(63		)	—			—	—			(63		)	—			(63		)
Distributions to noncontrolling interests	—	—		—		—			—	—		—		—			—			—	—			—			(816		)	(816		)
Contributions from noncontrolling interests	—	—		—		—			—	—		—		—			—			—	—			—			28			28
Comprehensive income:
Net income	—	—		—		—			—	—		—		4,336			—			—	—			4,336			1,208			5,544
Other comprehensive income (loss),
net of taxes:
Unrealized gains on securities	—	—		—		—			—	—		—		—			2			—	—			2			—			2
Defined benefit plans:
Net loss during period, net of
taxes of $19 million	—	—		—		—			—	—		—		—			(67		)	—	—			(67		)	(2		)	(69		)
Amortization of unrecognized amounts	—	—		—		—			—	—		—		—			15			—	—			15			—			15
Other comprehensive loss	—	—		—		—			—	—		—		—			(50		)	—	—			(50		)	(2		)	(52		)
Total comprehensive income	—	—		—		—			—	—		—		—			—			—	—			4,286			1,206			5,492
Balance at December 31, 2010	—	$	—	—		$	—		1,067	$	107	$	18,751	$	(2,590	)	$	(323	)	122	$	(3,441	)	$	12,504		$	2,056		$	14,560

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CONSOLIDATED STATEMENTS OF EQUITY

(continued)

	FCX Stockholders’ Equity
	Convertible Perpetual Preferred Stock			Mandatory Convertible Preferred Stock			Common Stock					Retained Earnings(Accumu-lated Deficit)			Accumu- lated Other Compre-hensive Income(Loss)			Common Stock Held in Treasury				Total FCX Stock- holders’ Equity
	Number of Shares	At Par Value		Number of Shares	At Par Value		Number of Shares	At Par Value		Capital in Excess of Par Value								Number of Shares	At Cost						Non- controlling Interests			Total 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	—	—		—	—		4	—		48		—			—			—	—			48			—			48
Stock-based compensation	—	—		—	—		—	—		117		—			—			—	—			117			—			117
Tax benefit for stock-based awards	—	—		—	—		—	—		24		—			—			—	—			24			—			24
Tender of shares for stock-based awards	—	—		—	—		—	—		67		—			—			1	(112		)	(45		)	—			(45		)
Dividends on common stock	—	—		—	—		—	—		—		(1,424		)	—			—	—			(1,424		)	—			(1,424		)
Distributions to noncontrolling interests	—	—		—	—		—	—		—		—			—			—	—			—			(391		)	(391		)
Contributions from noncontrolling interests	—	—		—	—		—	—		—		—			—			—	—			—			62			62
Comprehensive income:
Net income	—	—		—	—		—	—		—		4,560			—			—	—			4,560			1,187			5,747
Other comprehensive income (loss),
net of taxes:
Unrealized losses on securities	—	—		—	—		—	—		—		—			(1		)	—	—			(1		)	—			(1		)
Translation adjustment	—	—		—	—		—	—		—		—			(2		)	—	—			(2		)	—			(2		)
Defined benefit plans:
Net loss during period, net of
taxes of $61 million	—	—		—	—		—	—		—		—			(154		)	—	—			(154		)	(3		)	(157		)
Amortization of unrecognized amounts	—	—		—	—		—	—		—		—			15			—	—			15			—			15
Other comprehensive loss	—	—		—	—		—	—		—		—			(142		)	—	—			(142		)	(3		)	(145		)
Total comprehensive income	—	—		—	—		—	—		—		—			—			—	—			4,418			1,184			5,602
Balance at December 31, 2011	—	$	—	—	$	—	1,071	$	107	$	19,007	$	546		$	(465	)	123	$	(3,553	)	$	15,642		$	2,911		$	18,553

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

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FREEPORT-McMoRan COPPER & GOLD INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation.  The consolidated financial statements of Freeport-McMoRan Copper & Gold Inc. (FCX) include the accounts of those subsidiaries where FCX directly or indirectly has more than 50 percent of the voting rights and has the right to control significant management decisions. The most significant entities that FCX consolidates include its 90.64 percent-owned subsidiary PT Freeport Indonesia, and its wholly owned subsidiaries, Freeport-McMoRan Corporation (FMC - formerly Phelps Dodge Corporation) and Atlantic Copper, S.L. (Atlantic Copper). FCX’s unincorporated joint ventures with Rio Tinto plc (Rio Tinto) and Sumitomo Metal Mining Arizona, Inc. (Sumitomo) are reflected using the proportionate consolidation method (refer to Note 2 for further discussion). All significant intercompany transactions have been eliminated. Dollar amounts in tables are stated in millions, except per share amounts.

Investments in unconsolidated companies owned 20 percent or more are recorded using the equity method. Investments in companies owned less than 20 percent, and for which FCX does not exercise significant influence, are carried at cost.

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.

Use of Estimates.  The preparation of FCX’s financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation, depletion and amortization; reclamation and closure costs; environmental obligations; estimates of recoverable copper in mill and leach stockpiles; pension, postretirement, postemployment and other employee benefits; deferred taxes and valuation allowances; reserves for contingencies and litigation; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from those estimates.

Foreign Currencies.  For foreign subsidiaries whose functional currency is the U.S. dollar, monetary assets and liabilities denominated in the local currency are translated at current exchange rates, and non-monetary assets and liabilities, such as inventories, property, plant, equipment and development costs, are translated at historical rates. Gains and losses resulting from translation of such account balances are included in operating results, as are gains and losses from foreign currency transactions.

For foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated at current exchange rates, while revenues and expenses are translated at average rates in effect for the period. The related translation gains and losses are included in accumulated other comprehensive income (loss) within equity.

Cash Equivalents.  Highly liquid investments purchased with maturities of three months or less are considered cash equivalents.

Inventories.  The largest components of inventories include finished goods (primarily concentrates and cathodes) at mining operations, concentrates and work-in-process at Atlantic Copper’s smelting and refining operations, and materials and supplies inventories (refer to Note 3 for further discussion). Inventories of materials and supplies, as well as salable products, are stated at the lower of weighted-average cost or market. Costs of finished goods and work-in-process (i.e., not materials and supplies) inventories include labor and benefits, supplies, energy, depreciation, depletion, amortization, site overhead costs and other necessary costs associated with the extraction and processing of ore, including, depending on the process, mining, haulage, milling, concentrating, smelting, leaching, solution extraction, refining, roasting and chemical processing. Corporate general and administrative costs are not included in inventory costs.

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Work-in-Process. In-process inventories represent materials that are currently in the process of being converted to a salable product. Conversion processes for mining operations vary depending on the nature of the copper ore and the specific mining operation. For sulfide ores, processing includes milling and concentrating and results in the production of copper and molybdenum concentrates or, alternatively, copper cathode by concentrate leaching. For oxide ores and certain secondary sulfide ores, processing includes leaching of stockpiles, solution extraction and electrowinning (SX/EW) and results in the production of copper cathodes. In-process material is measured based on assays of the material included in these processes and projected recoveries. In-process inventories are valued based on the costs incurred to various points in the process, including depreciation relating to associated process facilities. For Atlantic Copper, in-process inventories represent copper concentrates at various stages of conversion into anodes and cathodes. Atlantic Copper’s in-process inventories are valued at the weighted-average cost of the material fed to the smelting and refining process plus in-process conversion costs.

Finished Goods. Finished goods include salable products (e.g., copper and molybdenum concentrates, copper anodes, copper cathodes, copper rod, copper wire, molybdenum oxide, high-purity molybdenum chemicals and other metallurgical products). Finished goods are valued based on the weighted-average cost of source material plus applicable conversion costs relating to associated process facilities.

Mill and Leach Stockpiles.  Mill and leach stockpiles are stated at the lower of weighted-average cost or market. Both mill and leach stockpiles generally contain lower grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles, recovery is through milling, concentrating, smelting and refining or, alternatively, by concentrate leaching. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve contained copper and deliver it in solution to extraction processing facilities. The recorded cost of mill and leach stockpiles includes mining and haulage costs incurred to deliver ore to stockpiles, depreciation, depletion, amortization and site overhead costs.

Because it is generally impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade of the material delivered to mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production-scale process), historical trends and other factors, including mineralogy of the ore and rock type. Ultimate recovery of copper contained in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including type of copper recovery, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 70 percent of the copper ultimately recoverable may be extracted during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes.

Property, Plant, Equipment and Development Costs.  Property, plant, equipment and development costs are carried at cost. Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources at development or production stage properties, are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred resulting from mine pre-production activities undertaken to gain access to proven and probable reserves including shafts, adits, drifts, ramps, permanent excavations, infrastructure and removal of overburden. Additionally, interest expense allocable to the cost of developing mining properties and to constructing new facilities is capitalized until assets are ready for their intended use.

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Expenditures for replacements and improvements are capitalized. Costs related to periodic scheduled maintenance (i.e., turnarounds) are expensed as incurred. Depreciation for mining and milling life-of-mine assets, infrastructure and other common costs is determined using the unit-of-production method based on total estimated recoverable proven and probable copper reserves (for primary copper mines) and proven and probable molybdenum reserves (for primary molybdenum mines). Development costs and acquisition costs for proven and probable reserves that relate to a specific ore body are depreciated using the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. Depreciation, depletion and amortization using the unit-of-production method is recorded upon extraction of the recoverable copper or molybdenum from the ore body, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over estimated useful lives of up to 30 years for buildings and three to 20 years for machinery and equipment, and mobile equipment.

Included in property, plant, equipment and development costs is value beyond proven and probable reserves (VBPP) primarily resulting from FCX’s acquisition of FMC in 2007. The concept of VBPP has been interpreted differently by different mining companies. FCX’s VBPP is attributable to (i) mineralized material, which includes measured and indicated amounts, that FCX believes could be brought into production with the establishment or modification of required permits and should market conditions and technical assessments warrant, (ii) inferred mineral resources and (iii) exploration potential, as further defined below.

Mineralized material is a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support reported tonnage and average grade of minerals. Such a deposit does not qualify as proven and probable reserves until legal and economic feasibility are confirmed based upon a comprehensive evaluation of development costs, unit costs, grades, recoveries and other material factors. Inferred mineral resources are that part of a mineral resource for which the overall tonnages, grades and mineral contents can be estimated with a reasonable level of confidence based on geological evidence and apparent geological and grade continuity after applying economic parameters. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource. Exploration potential is the estimated value of potential mineral deposits that FCX has the legal right to access. The value assigned to exploration potential was determined by interpreting the known exploration information and exploration results, including geological data and/or geological information, that were available as of the acquisition date.

Carrying amounts assigned to VBPP are not charged to expense until the VBPP becomes associated with additional proven and probable reserves and the reserves are produced or the VBPP is determined to be impaired. Additions to proven and probable reserves for properties with VBPP will carry with them the value assigned to VBPP at the date acquired, less any impairment amounts.

Intangible Assets and Liabilities.  FCX recorded intangible assets and liabilities primarily as a result of the acquisition of FMC. Indefinite-lived intangibles primarily include water rights. Definite-lived intangibles include favorable and unfavorable contracts (primarily related to treatment and refining contract rates, power contracts and tire contracts), royalty payments, patents and process technology. The fair value of identifiable intangible assets was estimated based principally upon comparable market transactions and discounted future cash flow projections. The ranges for estimated useful lives are 1 to 10 years for treatment and refining, power and tire contracts; 1 to 12 years for royalty payments; and principally 10 to 20 years for patents and process technology. All indefinite-lived intangible assets are subject to impairment testing at least annually, unless events occur or circumstances change between annual tests that would more likely than not reduce the indefinite-lived intangible asset’s fair value below its carrying value.

Asset Impairment.  FCX reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long-lived assets, other than indefinite-lived intangible assets, are evaluated for impairment under the two-step model. An impairment is considered to exist if total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Once it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques, such as estimated future cash flows.

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In evaluating mining operations’ long-lived assets for recoverability, estimates of after-tax undiscounted future cash flows of FCX’s individual mining operations are used, with impairment losses measured by reference to fair value. As quoted market prices are unavailable for FCX’s individual mining operations, fair value is determined through the use of discounted estimated future cash flows. Estimated cash flows used to assess recoverability of long-lived assets and measure the fair value of FCX’s mining operations are derived from current business plans, which are developed using near-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. Estimates of future cash flows include near and long-term metal price assumptions; estimates of commodity-based and other input costs; proven and probable reserve estimates, including any costs to develop the reserves and the timing of producing the reserves; and the use of appropriate current escalation and discount rates.

Deferred Mining Costs.  Stripping costs (i.e., the costs of removing overburden and waste material to access mineral deposits) incurred during the production phase of a mine are considered variable production costs and are included as a component of inventory produced during the period in which stripping costs are incurred. Major development expenditures, including stripping costs to prepare unique and identifiable areas outside the current mining area for future production that are considered to be pre-production mine development, are capitalized and amortized on the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. However, where a second or subsequent pit or major expansion is considered to be a continuation of existing mining activities, stripping costs are accounted for as a current production cost and a component of the associated inventory.

Environmental Expenditures. Environmental expenditures are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. For closed facilities and closed portions of operating facilities with environmental obligations, the related obligation is accrued when a decision to close a facility, or a portion of a facility, is made by management and the environmental obligation is considered to be probable. Environmental obligations attributed to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or analogous state programs are considered probable when a claim is asserted, or is probable of assertion, and FCX, or any of its subsidiaries, have been associated with the site. Other environmental remediation obligations are considered probable based on specific facts and circumstances. FCX’s estimates of these costs are based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, remediation experience, whether or not FCX is a potentially responsible party (PRP) and the ability of other PRPs to pay their allocated portions. With the exception of those obligations assumed in the acquisition of FMC that were recorded at estimated fair values (refer to Note 13 for further discussion), environmental obligations are recorded on an undiscounted basis. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Possible recoveries of some of these costs from other parties are not recognized in the consolidated financial statements until they become probable. Legal costs associated with environmental remediation (such as fees to outside law firms for work relating to determining the extent and type of remedial actions and the allocation of costs among PRPs) are included as part of the estimated obligation. Environmental obligations assumed in the acquisition of FMC, which were initially estimated on a discounted basis, are accreted to full value over time through charges to interest expense. Adjustments arising from changes in amounts and timing of estimated costs and settlements may result in increases and decreases in these obligations and are calculated on a discounted basis if they were initially estimated on a discounted basis. Unless these adjustments qualify for capitalization, changes in environmental obligations are charged to operating income when they occur.

Asset Retirement Obligations.  FCX records the fair value of estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period incurred. Retirement obligations associated with long-lived assets are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of sales. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Reclamation costs for future disturbances are recognized as an ARO and as a related ARC in the period of the disturbance. FCX’s AROs consist primarily of costs associated with mine reclamation and closure activities. These activities, which are site specific, generally include costs for earthwork, revegetation, water treatment and demolition (refer to Note 13 for further discussion).

127

Litigation Contingencies.  At least quarterly, FCX assesses the likelihood of any adverse judgments or outcomes related to legal matters (including pending or threatened litigation matters), as well as ranges of potential losses. A determination of the amount of the reserve required, if any, for litigation contingencies is made after analysis of known issues. FCX records reserves related to legal matters for which it believes it is probable that a loss has been incurred and the range of such loss can be reasonably estimated. If an amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued, otherwise, the minimum amount in the range is accrued. With respect to other matters, for which management has concluded that a loss is only reasonably possible or remote, or not reasonably estimable, no liability has been recorded. For losses assessed as reasonably possible, FCX discloses the nature of the contingency and an estimate of the possible loss or range of loss or states that such an estimate cannot be made. Costs incurred to defend claims are expensed as incurred.

Litigation is inherently unpredictable and it is difficult to project the outcome of particular matters with reasonable certainty; therefore, the actual amount of any loss could differ from the litigation contingencies reflected in FCX's consolidated financial statements. Refer to Note 13 for further discussion of FCX's litigation contingencies.

Income Taxes.  FCX accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates (refer to Note 12 for further discussion). When appropriate, FCX evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. The effect on deferred income tax assets and liabilities of a change in tax rates or laws is recognized in income in the period in which such changes are enacted.

FCX accounts for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FCX’s policy associated with uncertain tax positions is to record accrued interest in interest expense and accrued penalties in other income and expenses rather than in the provision for income taxes (refer to Note 12 for further discussion).

With the exception of FCX’s operations in the Democratic Republic of Congo (DRC), income taxes are provided on the earnings of FCX’s material foreign subsidiaries under the assumption that these earnings will be distributed. FCX has determined that undistributed earnings related to its DRC operations are reinvested indefinitely or have been allocated toward specifically identifiable needs of the local operations. FCX has not provided for other differences between the book and tax carrying amounts of these investments as FCX considers its ownership position to be permanent in duration and quantification of the related deferred tax liability is not practicable.

Derivative Instruments.  FCX and its subsidiaries have entered into derivative contracts to manage certain risks resulting from fluctuations in commodity prices (primarily copper and gold), foreign currency exchange rates and interest rates by creating offsetting market exposures. Every derivative instrument (including certain derivative instruments embedded in other contracts) is recorded in the balance sheet as either an asset or liability measured at its fair value. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. Refer to Note 15 for a summary of FCX’s outstanding derivative instruments at December 31, 2011, and a discussion of FCX’s risk management strategies for those designated as hedges.

Revenue Recognition.  FCX sells its products pursuant to sales contracts entered into with its customers. Revenue for all FCX’s products is recognized when title and risk of loss pass to the customer and when collectibility is reasonably assured. The passing of title and risk of loss to the customer are based on terms of the sales contract, generally upon shipment or delivery of product.

Revenues from FCX’s concentrate and cathode sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Revenues from concentrate sales are recorded net of treatment and all refining charges (including price participation, if applicable, as discussed below) and the impact of derivative contracts. Moreover, because a portion of the metals contained in copper concentrates is unrecoverable as a result of the smelting process, FCX’s revenues from concentrate sales are also recorded net of allowances based on the quantity and value of these unrecoverable metals. These allowances are a negotiated term of FCX’s contracts and vary by customer. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed or, in certain cases, vary with the price of copper (referred to as price participation).

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Under the long-established structure of sales agreements prevalent in the industry, copper contained in concentrates and cathodes is generally provisionally priced at the time of shipment. The provisional prices are finalized in a specified future month (generally one to four months from the shipment date) based on quoted monthly average spot copper prices on the London Metal Exchange (LME) or the New York Mercantile Exchange (COMEX). FCX receives market prices based on prices in the specified future month, which results in price fluctuations recorded to revenues until the date of settlement. FCX records revenues and invoices customers at the time of shipment based on then-current LME or COMEX prices, which results in an embedded derivative (i.e., a pricing mechanism that is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrates or cathodes at the then-current LME or COMEX price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since these contracts do not allow for net settlement and always result in physical delivery. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the period-end forward prices, until the date of final pricing. At December 31, 2011, FCX had outstanding provisionally priced copper sales from its copper mining operations of 252 million pounds of copper (net of noncontrolling interests), priced at an average of $3.44 per pound, subject to final pricing over the first several months of 2012 pursuant to the terms of the sales contracts.

Gold sales are priced according to individual contract terms, generally the average London Bullion Market Association price for a specified month near the month of shipment.

Substantially all of FCX’s 2011 molybdenum sales were priced based on prices published in Metals Week, Ryan’s Notes or Metal Bulletin, plus conversion premiums for products that undergo additional processing, such as ferromolybdenum and molybdenum chemical products. The majority of these sales use the average price of the previous month quoted by the applicable publication. FCX’s remaining molybdenum sales generally have pricing that is either based on a fixed price or adjusts within certain price ranges.

PT Freeport Indonesia concentrate sales and Tenke Fungurume Mining S.A.R.L. (TFM) metal sales are subject to certain royalties, which are recorded as a reduction to revenues (refer to Note 14 for further discussion).

Stock-Based Compensation. Compensation costs for share-based payments to employees, including stock options, are measured at fair value and charged to expense over the requisite service period for awards that are expected to vest. The fair value of stock options is determined using the Black-Scholes-Merton option valuation model. The fair value for restricted stock units is based on FCX's stock price on the date of grant or an appropriate valuation model. The fair value for cash-settled stock appreciation rights (SARs) is the intrinsic value on the reporting or exercise date. FCX estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date of the awards if actual forfeitures differ from those estimates. FCX has elected to recognize compensation costs for stock option awards that vest over several years on a straight-line basis over the vesting period. Refer to Note 11 for further discussion.

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Earnings Per Share.  FCX’s basic net income per share of common stock was calculated by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding during the year. A reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share for the years ended December 31 follows:

	2011				2010			2009
Net income	$	5,747			$	5,544		$	3,534
Net income attributable to noncontrolling interests	(1,187		)		(1,208		)	(785		)
Preferred dividends	—				(63		)	(222		)
Net income attributable to FCX common stockholders	4,560				4,273			2,527
Plus income impact of assumed conversion of:
6¾% Mandatory Convertible Preferred Stocka	—				63			194
5½% Convertible Perpetual Preferred Stockb	—				—			28
Diluted net income attributable to FCX common
stockholders	$	4,560			$	4,336		$	2,749
Weighted-average shares of common stock outstanding	947				915			829
Add stock issuable upon conversion, exercise or vesting of
(refer to Note 11):
6¾% Mandatory Convertible Preferred Stocka	—				26			79
5½% Convertible Perpetual Preferred Stockb	—				—			25
Dilutive stock options	7			c	6			3
Restricted stock units	1				2			2
Weighted-average shares of common stock outstanding for
purposes of calculating diluted net income per share	955				949			938
Diluted net income per share attributable to FCX
common stockholders	$	4.78			$	4.57		$	2.93

a. All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.

b. In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.

c. Potential additional shares of common stock that were anti-dilutive totaled approximately two million.

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the year are excluded from the computation of diluted net income per share of common stock. Approximately 4 million stock options with a weighted-average exercise price of $53.91 were excluded in 2011; approximately 10 million stock options with a weighted-average exercise price of $38.56 were excluded in 2010; and approximately 13 million stock options with a weighted-average exercise price of $36.27 were excluded in 2009.

New Accounting Standards.  In May 2011, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) in connection with guidance for fair value measurements and disclosures. This ASU clarifies the FASB's intent on current guidance, modifies and changes certain guidance and principles, and expands disclosures concerning Level 3 fair value measurements in the fair value hierarchy (including quantitative information about significant unobservable inputs within Level 3 of the fair value hierarchy). In addition, this ASU requires disclosure of the fair value hierarchy for assets and liabilities not measured at fair value in the statement of financial position, but whose fair value is required to be disclosed. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early application is not permitted.

In June 2011, FASB issued an ASU in connection with guidance on the presentation of comprehensive income. The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. This ASU requires an entity to present the components of net income and other comprehensive income and total comprehensive income (includes net income) either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of equity, but does not change the items that must be reported in other comprehensive income. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early adoption is permitted. FCX has determined it will present comprehensive income as a separate statement beginning in the first quarter of 2012. In December 2011, FASB deferred the effective date for the requirement in this ASU for presenting

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reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements.

Reclassifications. For comparative purposes, the prior year balance sheet amounts for work-in-process product inventories was reclassified to current mill and leach stockpiles to conform with the current year presentation.

NOTE 2.  OWNERSHIP IN SUBSIDIARIES, JOINT VENTURES AND INVESTMENT IN PT SMELTING

Ownership in Subsidiaries.  FMC is a fully integrated producer of copper and molybdenum, with mines in North America, South America and the Tenke Fungurume minerals district in the DRC, and copper and molybdenum conversion facilities. At December 31, 2011, FMC’s operating copper mines in North America were Morenci, Sierrita, Bagdad, Safford and Miami located in Arizona, and Tyrone and Chino located in New Mexico. FCX has an 85 percent interest in Morenci (refer to “Joint Ventures – Sumitomo”) and owns 100 percent of the other North America copper mines. FMC also owns 100 percent of the Henderson molybdenum mine and the Climax molybdenum mine (construction activities are substantially complete with plans to commence production in 2012), which are located in Colorado. At December 31, 2011, operating copper mines in South America were Cerro Verde (53.56 percent owned) located in Peru, and El Abra (51 percent owned), Candelaria (80 percent owned) and Ojos del Salado (80 percent owned) located in Chile. In addition to copper and molybdenum, certain FMC mines produce other minerals, such as gold, silver and rhenium. At December 31, 2011, FMC owned an effective 57.75 percent interest in the Tenke Fungurume minerals district in the DRC (refer to Note 14 for discussion of the future change in ownership interest). In addition to copper, the Tenke Fungurume minerals district also produces cobalt hydroxide. At December 31, 2011, FMC’s net assets totaled $14.9 billion and its accumulated deficit totaled $13.1 billion. FCX had $109 million in loans outstanding to FMC at December 31, 2011.

FCX’s direct ownership in PT Freeport Indonesia totals 81.28 percent. PT Indocopper Investama, an Indonesian company, owns 9.36 percent of PT Freeport Indonesia and FCX owns 100 percent of PT Indocopper Investama. At December 31, 2011, PT Freeport Indonesia’s net assets totaled $3.2 billion and its retained earnings totaled $3.1 billion. As of December 31, 2011, FCX had no loans outstanding to PT Freeport Indonesia.

FCX owns 100 percent of the outstanding Atlantic Copper common stock. At December 31, 2011, Atlantic Copper’s net liabilities totaled $43 million and its accumulated deficit totaled $437 million. FCX had $586 million in loans outstanding to Atlantic Copper at December 31, 2011.

FCX owns an 85.71 percent interest in PT Puncakjaya Power (Puncakjaya Power), the owner of assets supplying power to PT Freeport Indonesia’s operations, including the 3x65 megawatt coal-fired power facilities. PT Freeport Indonesia purchases power from Puncakjaya Power under infrastructure asset financing arrangements. At December 31, 2011, FCX did not have any loans outstanding to Puncakjaya Power, PT Freeport Indonesia had infrastructure asset financing obligations payable to Puncakjaya Power totaling $81 million, and Puncakjaya Power had a receivable from PT Freeport Indonesia for $106 million, including Rio Tinto’s share. FCX consolidates PT Freeport Indonesia and Puncakjaya Power. FCX’s consolidated balance sheets reflect receivables of $23 million ($3 million in other accounts receivable and $20 million in long-term receivables) at December 31, 2011, and $25 million ($2 million in other accounts receivable and $23 million in long-term receivables) at December 31, 2010, for Rio Tinto’s share of Puncakjaya Power’s receivable from PT Freeport Indonesia as provided for in FCX’s joint venture agreement with Rio Tinto.

Joint Ventures.  FCX has the following unincorporated joint ventures with third parties.

Rio Tinto. FCX and Rio Tinto have established certain unincorporated joint ventures. Under the joint venture arrangements, Rio Tinto has a 40 percent interest in PT Freeport Indonesia’s Contract of Work and the option to participate in 40 percent of any other future exploration projects in Papua, Indonesia.

Pursuant to the joint venture agreement, Rio Tinto has a 40 percent interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver through 2021 in Block A of PT Freeport Indonesia’s Contract of Work, and, after 2021, a 40 percent interest in all production from Block A. All of PT Freeport Indonesia’s proven and probable reserves and its mining operations are located in the Block A area. Operating, nonexpansion capital and administrative costs are shared proportionately between PT Freeport Indonesia and Rio Tinto based on the ratio of (i) the incremental revenues from production from PT Freeport Indonesia’s most recent expansion completed in 1998 to (ii) total revenues from production from Block A, including production from PT Freeport Indonesia’s previously existing reserves. PT Freeport Indonesia will continue to receive 100 percent of the cash flow from specified annual amounts of copper, gold and silver through 2021 calculated by reference to its

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proven and probable reserves as of December 31, 1994, and 60 percent of all remaining cash flow. The agreement provides for adjustments to the specified annual amounts of copper, gold and silver attributable 100 percent to PT Freeport Indonesia upon the occurrence of certain events that cause an interruption in production to occur, including events such as the labor disruptions and the temporary suspension of milling operations at PT Freeport Indonesia from damage to the concentrate and fuel pipelines that occurred in 2011. As a result of the labor and pipeline disruptions, the 2011 specified amounts, before smelter recoveries, attributable 100 percent to PT Freeport Indonesia were reduced by approximately 228 million pounds for copper and approximately 224 thousand ounces for gold, which will be offset by identical increases in future periods. The payable to Rio Tinto for its share of joint venture cash flows was $45 million at December 31, 2011, and $132 million at December 31, 2010.

Under the joint venture arrangements, Rio Tinto funded $100 million in 1996 for approved exploration costs in the areas covered by Contracts of Work held by FCX subsidiaries. Agreed-upon exploration costs in the joint venture areas are shared 60 percent by FCX and 40 percent by Rio Tinto. Since September 2008, Rio Tinto is no longer participating in exploration joint ventures in the PT Nabire Bakti Mining and PT Irja Eastern Minerals Contract of Work areas in Indonesia. As a result, as long as Rio Tinto continues not to fund these exploration projects, FCX has the option to fund 100 percent of future exploration costs in these areas and Rio Tinto's interest in these areas will decline over time in accordance with the joint venture agreement. Rio Tinto has the option to resume participation in PT Irja Eastern Minerals on a monthly basis and in PT Nabire Bakti Mining on an annual basis. Rio Tinto continues to participate in exploration joint ventures in PT Freeport Indonesia's Contract of Work areas.

Sumitomo. FCX owns an 85 percent undivided interest in Morenci via an unincorporated joint venture. The remaining 15 percent is owned by Sumitomo, a jointly owned subsidiary of Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation. Each partner takes in kind its share of Morenci’s production. FMC purchased 67 million pounds of Morenci’s copper cathode from Sumitomo for $268 million during 2011, 66 million pounds for $223 million during 2010 and 75 million pounds for $175 million during 2009. FCX had a receivable from Sumitomo of $12 million at December 31, 2011, and $8 million at December 31, 2010.

Investment in PT Smelting.  PT Smelting, an Indonesian company, operates a smelter and refinery in Gresik, Indonesia. During 2006, PT Smelting completed an expansion of its production capacity to 275,000 metric tons of copper per year from 250,000 metric tons. PT Freeport Indonesia owns 25 percent of the outstanding PT Smelting common stock.

PT Freeport Indonesia’s contract with PT Smelting provides for the supply of 100 percent of the copper concentrate requirements necessary for PT Smelting to produce 205,000 metric tons of copper annually (essentially the smelter’s original design capacity) on a priority basis. For the first 15 years of PT Smelting’s commercial operations, beginning December 1998, PT Freeport Indonesia agreed that the combined treatment and refining charges would approximate market rates, but will not fall below specified minimum rates. The minimum rate, applicable to the period April 27, 2008, to April 27, 2014, is determined annually and must be sufficient to cover PT Smelting’s annual cash operating costs (net of credits and including costs of debt service) for 205,000 metric tons of copper. The maximum rate is $0.30 per pound. PT Freeport Indonesia also sells copper concentrate to PT Smelting at market rates, which are not subject to a minimum or maximum rate, for quantities in excess of 205,000 metric tons of copper annually.

FCX’s investment in PT Smelting (net of PT Freeport Indonesia's share of profits on sales to PT Smelting still in PT Smelting's inventory totaling $2 million at December 31, 2011, and $113 million at December 31, 2010) totaled $125 million at December 31, 2011, and $11 million at December 31, 2010. PT Smelting had project-specific debt, nonrecourse to PT Freeport Indonesia, totaling $320 million at December 31, 2011, and $180 million at December 31, 2010. PT Freeport Indonesia had a trade receivable from PT Smelting totaling $116 million at December 31, 2011, and $455 million at December 31, 2010.

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NOTE 3.  INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow:

	December 31,
	2011		2010
Mining Operations:a
Raw materials	$	1	$	1
Finished goodsb	769		704
Atlantic Copper:
Raw materials (concentrates)	260		336
Work-in-process	187		266
Finished goods	9		9
Total product inventories	1,226		1,316
Total materials and supplies, netc	1,354		1,169
Total inventories	$	2,580	$	2,485

a. FCX's mining operations also have work-in-process inventories (i.e., mill and leach stockpiles), which have been summarized below.

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

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

A summary of mill and leach stockpiles follows:

	December 31, 2011
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	40	$	11	$	18	$	—	$	69
Leach stockpiles	963		216		—		41		1,220
Total current mill and leach
stockpiles	$	1,003	$	227	$	18	$	41	$	1,289
Long-term:a
Mill stockpiles	$	—	$	535	$	—	$	—	$	535
Leach stockpiles	718		284		—		149		1,151
Total long-term mill and leach
stockpiles	$	718	$	819	$	—	$	149	$	1,686

	December 31, 2010
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	15	$	29	$	24	$	—	$	68
Leach stockpiles	749		98		—		34		881
Total current mill and leach
stockpiles	$	764	$	127	$	24	$	34	$	949
Long-term:a
Mill stockpiles	$	—	$	470	$	—	$	—	$	470
Leach stockpiles	622		250		—		83		955
Total long-term mill and leach
stockpiles	$	622	$	720	$	—	$	83	$	1,425

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

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NOTE 4.  PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET

The components of net property, plant, equipment and development costs follow:

	December 31,
	2011			2010
Proven and probable reserves	$	4,572		$	4,503
VBPP	1,071			1,100
Development and other	3,447			3,188
Buildings and infrastructure	3,151			2,815
Machinery and equipment	8,171			7,523
Mobile equipment	2,859			2,365
Construction in progress	2,704			1,885
Property, plant, equipment and
development costs	25,975			23,379
Accumulated depreciation, depletion and
amortization	(7,526		)	(6,594		)
Property, plant, equipment and
development costs, net	$	18,449		$	16,785

FCX recorded $2.2 billion for VBPP in connection with the FMC acquisition in 2007 and transferred to proven and probable reserves $23 million during 2011, $197 million during 2010 and $542 million prior to 2010. Cumulative impairments of VBPP total $477 million, of which $6 million was recorded in 2011, and none in 2010 and 2009.

FCX capitalized interest totaling $109 million in 2011, $66 million in 2010 and $78 million in 2009. Capitalized interest primarily related to the development projects at the Climax, Cerro Verde and Candelaria mines, and in the Grasberg minerals district in Indonesia in 2011; at the Climax and El Abra mines in 2010; and at the Tenke Fungurume mine in 2009.

NOTE 5.  INTANGIBLE ASSETS AND LIABILITIES

The components of intangible assets and intangible liabilities (included in other liabilities) follow:

	December 31, 2011
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	239	$	—		$	239
Patents and process technology	48		(14		)	34
Royalty payments	37		(21		)	16
Power contracts	25		(18		)	7
Other intangibles	38		(9		)	29
Total intangible assets	$	387	$	(62	)	$	325
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(30	)	$	22

	December 31, 2010
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	245	$	—		$	245
Patents and process technology	48		(11		)	37
Royalty payments	37		(18		)	19
Power contracts	25		(17		)	8
Other intangibles	25		(6		)	19
Total intangible assets	$	380	$	(52	)	$	328
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(25	)	$	27

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FCX performs its annual impairment testing of indefinite-lived intangible assets in the fourth quarter of each year. No material impairments were recorded during the three-year period ended December 31, 2011.

Amortization of intangible assets recognized in production and delivery costs was $10 million in 2011 and 2010, and $16 million in 2009. Amortization of intangible liabilities recognized in revenues was $5 million in 2011, $4 million in 2010 and $6 million in 2009. The estimated net amortization expense for the next five years is considered to be immaterial.

NOTE 6.  LONG-TERM RECEIVABLES AND OTHER ASSETS

The components of long-term receivables follow:

	December 31,
	2011		2010
Income taxes	$	295	$	—
Loan to a DRC public electric utility	138		110
Disputed tax assessments (refer to Note 13)	109		—
Loan to La Générale des Carrières et des Mines (related party)	30		—
Other	103		90
Total long-term receivables	$	675	$	200

The components of other assets follow:

	December 31,
	2011		2010
Cost-method investments:
McMoRan Exploration Co. (MMR)a	$	475	$	500
Other	2		3
Equity-method investments:
PT Smeltingb	125		11
Other	47		43
Trust assetsc, d	152		140
Debt issue costs	40		58
Available-for-sale securities	9		28
Other	38		14
Total other assets	$	888	$	797

a. In December 2010, FCX purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million.The Preferred Stock is initially convertible into 62.5 shares of MMR common stock per share of Preferred Stock (an aggregate of 31.25 million shares of MMR common stock), at an initial conversion price of $16 per share of MMR common stock. Dividends received are recorded as a return of investment because of MMR's reported losses. Several of FCX’s directors and executive officers also serve as directors or executive officers of MMR.

b. Amounts are reduced by unrecognized profits on sales from PT Freeport Indonesia to PT Smelting totaling $2 million at December 31, 2011, and $113 million at December 31, 2010.

c. Includes $151 million in 2011 and $137 million in 2010 of legally restricted funds for AROs at the Chino, Tyrone and Cobre mines (refer to Note 13 for further discussion).

d. The current portion, which is included in other current assets, totaled $8 million at December 31, 2010, and none at December 31, 2011.

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NOTE 7.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Additional information regarding accounts payable and accrued liabilities follows:

	December 31,
	2011		2010
Accounts payable	$	1,353	$	1,272
Salaries, wages and other compensation	257		244
Pension, postretirement, postemployment and other
employee benefitsa	180		156
Current deferred tax liability	103		61
Other accrued taxes	92		152
Accrued interestb	69		92
Deferred revenue	69		180
Community development programs	19		148
Other	110		136
Total accounts payable and accrued liabilities	$	2,252	$	2,441

a. Refer to Note 8 for long-term portion and Note 10 for further discussion.

b. Third-party interest paid, net of capitalized interest, was $284 million in 2011, $421 million in 2010 and $504 million in 2009.

NOTE 8. OTHER LIABILITIES

Additional information regarding other liabilities follows:

	December 31,
	2011		2010
Pension, postretirement, postemployment and other
employment benefitsa	$	1,277	$	1,074
Reserve for uncertain tax benefits	128		133
Insurance claim reserve	50		58
Atlantic Copper contractual obligation to
insurance company (refer to Note 10)	39		48
Other	157		146
Total other liabilities	$	1,651	$	1,459

a.  Refer to Note 7 for short-term portion and Note 10 for further discussion.

NOTE 9.  DEBT

The components of debt follow:

	December 31,
	2011			2010
Revolving Credit Facility	$	—		$	—
Senior Notes:
8.375% Senior Notes due 2017	3,011			3,011
8.25% Senior Notes due 2015	—			1,079
9½% Senior Notes due 2031	131			175
61/8% Senior Notes due 2034	115			115
71/8% Debentures due 2027	115			115
8¾% Senior Notes due 2011	—			85
Other (including equipment capital leases and
short-term borrowings)	165			175
Total debt	3,537			4,755
Less current portion of debt	(4		)	(95		)
Long-term debt	$	3,533		$	4,660

Revolving Credit Facility.  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. FCX recognized a loss on early extinguishment of debt totaling $7 million ($6 million to net income attributable to FCX common stockholders or $0.01 per diluted share) during 2011 associated with these transactions. The new revolving credit facility is available until March 30, 2016, in an aggregate principal amount of $1.5 billion, with $500

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million available to PT Freeport Indonesia. At December 31, 2011, FCX had no borrowings and $44 million of letters of credit issued under the revolving credit facility, resulting in availability of approximately $1.5 billion, of which $956 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 1.75 percent, subject to an increase or decrease in the interest rate margin based on the credit ratings assigned to FCX's senior unsecured debt by Standard & Poor’s Rating Services and Moody’s Investors Service.

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.

Senior Notes.  In March 2007, in connection with financing FCX’s acquisition of FMC, FCX sold $3.5 billion of 8.375% Senior Notes due April 2017, $1.5 billion of 8.25% Senior Notes due April 2015 and $1.0 billion of Senior Floating Rate Notes due April 2015 for total net proceeds of $5.9 billion. Interest on the 8.375% Senior Notes is payable semiannually on April 1 and October 1. The 8.25% Senior Notes and the Senior Floating Rate Notes have been fully redeemed as further discussed below. The 8.375% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to the redemption date, and afterwards at stated redemption prices initially starting at 104.188 percent for 12 months beginning on April 1, 2012.

During 2009, FCX purchased in open-market transactions $203 million of the 8.25% Senior Notes for $218 million and $160 million of the 8.375% Senior Notes for $172 million. These open-market purchases resulted in losses on early extinguishment of debt totaling $33 million ($29 million to net income attributable to FCX common stockholders or $0.03 per diluted share). During 2010, FCX purchased in open-market transactions $218 million of the 8.25% Senior Notes for $237 million and $329 million of the 8.375% Senior Notes for $358 million, which resulted in losses on early extinguishment of debt totaling $55 million ($48 million to net income attributable to FCX common stockholders or $0.05 per diluted share). On April 1, 2010, FCX redeemed all of its $1 billion of outstanding Senior Floating Rates Notes for which holders received 101 percent of the principal amount together with accrued and unpaid interest. As a result of this redemption, FCX recorded a loss on early extinguishment of debt totaling $22 million ($20 million to net income attributable to FCX common stockholders or $0.02 per diluted share) during 2010. On April 1, 2011, FCX redeemed all its remaining $1.1 billion of outstanding 8.25% Senior Notes for which holders received 104.125 percent of the principal amount together with accrued and unpaid interest. As a result of this redemption, FCX recorded a loss on early extinguishment of debt totaling $55 million ($49 million to net income attributable to FCX common stockholders of $0.05 per diluted share) during 2011.

The 9½% Senior Notes due June 2031 bear interest payable semiannually on June 1 and December 1. These notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these senior notes with a stated value of $197 million, which was increased by $43 million to reflect the fair market value of these obligations at the acquisition date. The increase in value is being amortized over the term of the notes and recorded as a reduction of interest expense. In 2008, FCX purchased in an open-market transaction $33 million of these senior notes for $46 million and recorded losses on early extinguishment of debt totaling $6 million ($5 million to net loss attributable to FCX common stockholders or $0.01 per diluted share). In 2010, FCX purchased in an open-market transaction $18 million of these senior notes for $26 million and recorded losses on early extinguishment of debt totaling $4 million ($3 million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). In 2011, FCX purchased in an open-market transaction $35 million of these senior notes for $49 million and recorded losses on early extinguishment of debt totaling $6 million ($5 million million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). At December 31, 2011, the outstanding principal amount of these senior notes was $107 million.

The 6¹/8 % Senior Notes due March 2034 bear interest payable semiannually on March 15 and September 15. These notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these senior notes with a stated value of $150 million, which was reduced by $11 million to reflect the fair market value of these obligations at the acquisition date. The decrease in value is being amortized over the term of the notes and recorded as additional interest expense. During 2007, FCX purchased in an open-market transaction $26 million of these notes. At December 31, 2011, the outstanding principal amount of these senior notes was $124 million.

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The 7¹/8 % Debentures due November 2027 bear interest payable semiannually on May 1 and November 1. The debentures are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these debentures with a stated and fair value of $115 million. At December 31, 2011, the outstanding principal amount of these debentures was $115 million.

In March 2007, in connection with the acquisition of FMC, FCX assumed the 8¾% Senior Notes due June 2011 with a stated value of $109 million, which was increased by $11 million to reflect the fair market value of these obligations at the acquisition date. The increase in value was amortized over the term of the notes and recorded as a reduction of interest expense. In 2009, FCX purchased in an open-market transaction $24 million of these senior notes for $26 million and recorded losses on early extinguishment of debt totaling $1 million ($1 million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). On the maturity date in June 2011, FCX paid the outstanding principal amount of $84 million on these senior notes.

In February 2004, FCX sold $350 million of 6.875% Senior Notes due February 2014 for net proceeds of $344 million. During 2004, FCX purchased in open-market transactions $10 million of its 6.875% Senior Notes. On August 20, 2009, FCX redeemed the remaining $340 million of these notes for $352 million or a redemption price of 103.439 percent of the principal amount (plus accrued and unpaid interest) and recorded losses on early extinguishment of debt totaling $14 million ($13 million to net income attributable to FCX common stockholders or $0.01 per diluted share).

All of FCX’s senior notes are unsecured.

In February 2012, FCX issued $3.0 billion in senior notes in three tranches (see Note 20 for further discussion).

Restrictive Covenants. FCX's credit facility and senior notes contain certain restrictive covenants. The credit facility includes covenants that are typical for investment-grade companies, including limitations on liens and subsidiary debt. The credit facility also includes financial ratios governing maximum total leverage and minimum interest coverage. If the rating is downgraded below investment grade by both Standard & Poor's Rating Services and Moody's Investors Service, these covenants would become effective. The 8.375% Senior Notes and other senior notes contain limitations on liens that are generally typical for investment-grade companies.

Maturities.  Maturities of debt instruments based on the amounts and terms outstanding at December 31, 2011, total $4 million in 2012, less than $1 million in 2013, none for the years 2014 through 2016, and $3.5 billion thereafter.

NOTE 10.  EMPLOYEE BENEFITS

Pension Plans.  Following is a discussion of FCX’s pension plans.

FMC Plans. FMC has trusteed, non-contributory pension plans covering substantially all of its U.S. employees and some employees of its international subsidiaries hired before 2007. The applicable FMC plan design determines the manner in which benefits are calculated for any particular group of employees. For certain of these plans, benefits are calculated based on final average monthly compensation and years of service. In the case of other plans, benefits are calculated based on a fixed amount for each year of service. Participants in the FMC plans generally vest in their accrued benefits after five years of service. Non-bargained FMC employees hired after December 31, 2006, are not eligible to participate in the FMC U.S. pension plan.

FCX’s funding policy for these plans provides that contributions to pension trusts shall be at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, for U.S. plans; or, in the case of international plans, the minimum legal requirements that may be applicable in the various countries. Additional contributions also may be made from time to time.

FCX’s policy for determining asset-mix targets for the Freeport-McMoRan Corporation Defined Benefit Master Trust (Master Trust) includes the periodic development of asset/liability studies to determine expected long-term rates of return and expected risk for various investment portfolios. FCX’s retirement plan administration and investment committee considers these studies in the formal establishment of asset-mix targets. FCX’s investment objective emphasizes the need to maintain a well-diversified investment program through both the allocation of the Master Trust assets among asset classes and the selection of investment managers whose various styles are fundamentally complementary to one another and serve to achieve satisfactory rates of return. Diversification, by asset class and by investment manager, is FCX’s principal means of reducing volatility and exercising prudent

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investment judgment. FCX’s present target asset allocation approximates 54 percent equity investments (43 percent global equities, 7 percent emerging markets equities and 4 percent U.S. equities), 35 percent fixed income (18 percent U.S. fixed income, 5 percent international fixed income, 5 percent high yield, 4 percent treasury inflation-protection securities and 3 percent emerging markets fixed income) and 11 percent alternative investments (5 percent private equity, 3 percent private real estate and 3 percent real estate investment trusts).

The expected rate of return on plan assets is evaluated at least annually, taking into consideration asset allocation, historical returns on the types of assets held in the Master Trust and the current economic environment. Based on these factors, FCX expects the pension assets will earn an average of 7.5 percent per annum during the 10 years beginning January 1, 2012. The 7.5 percent estimation was based on a passive return on a compound basis of 7.0 percent and a premium for active management of 0.5 percent reflecting the target asset allocation and current investment array.

For estimation purposes, FCX assumes the long-term asset mix for these plans generally will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension income or expense, the funded status of the plans and the need for future cash contributions. A lower-than-expected return on assets also would decrease plan assets and increase the amount of recorded pension expense in future years. When calculating the expected return on plan assets, FCX uses the market value of assets.

Among the assumptions used to estimate the benefit obligation is a discount rate used to calculate the present value of expected future benefit payments for service to date. The discount rate assumption for FCX’s U.S. plans is designed to reflect yields on high-quality, fixed-income investments for a given duration. The determination of the discount rate for these plans is based on expected future benefit payments for service to date together with the Mercer Pension Discount Curve. The Mercer Pension Discount Curve consists of spot (i.e., zero coupon) interest rates at one-half year increments for each of the next 30 years and is developed based on pricing and yield information for high-quality corporate bonds. Prior to December 31, 2010, FCX determined its discount rate based on expected future benefit payments for service to date together with the Citigroup Pension Discount Curve. Changes in the discount rate are reflected in FCX’s benefit obligation and, therefore, in future pension costs.

Other FCX Plans. In February 2004, FCX established an unfunded Supplemental Executive Retirement Plan (SERP) for its two most senior executive officers. The SERP provides for retirement benefits payable in the form of a joint and survivor annuity or an equivalent lump sum. The annuity will equal a percentage of the executive’s highest average compensation for any consecutive three-year period during the five years immediately preceding the earlier of the executive’s retirement or completion of 25 years of credited service. The SERP benefit will be reduced by the value of all benefits paid or due under any defined benefit or defined contribution plan sponsored by FM Services Company, FCX’s wholly owned subsidiary, FCX or its predecessor, but not including accounts funded exclusively by deductions from participant’s pay. FCX also has an unfunded pension plan for its directors and an excess benefits plan for its executives, both of which no longer accrue benefits.

PT Freeport Indonesia Plan. PT Freeport Indonesia has a defined benefit pension plan denominated in Indonesian rupiah covering substantially all of its Indonesian national employees. PT Freeport Indonesia funds the plan and invests the assets in accordance with Indonesian pension guidelines. The pension obligation was valued at an exchange rate of 9,060 rupiah to one U.S. dollar on December 31, 2011, and 8,990 rupiah to one U.S. dollar on December 31, 2010. Indonesian labor laws enacted in 2003 require that companies provide a minimum level of benefits to employees upon employment termination based on the reason for termination and the employee’s years of service. PT Freeport Indonesia’s pension benefit disclosures include benefits related to this law. PT Freeport Indonesia’s expected rate of return on plan assets is evaluated at least annually, taking into consideration its historical yield and the long-range estimated return for the plan based on the asset mix. Based on these factors, PT Freeport Indonesia expects pension assets will earn an average of 8.5 percent per annum.

Atlantic Copper Plan. Atlantic Copper has a contractual obligation denominated in euros to supplement amounts paid to certain retired Spanish national employees. As required by Spanish law, beginning in August 2002, Atlantic Copper began funding 7.2 million euros ($9 million based on a December 31, 2011, exchange rate of $1.29 per euro) annually for 15 years to an approved insurance company for its estimated 72 million euro contractual obligation to the retired employees. The insurance company invests the plan assets in accordance with Spanish regulations, and Atlantic Copper has no control over these investments.

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Plan Information. FCX uses a measurement date of December 31 for its plans. In some plans, the plan assets exceed the accumulated benefit obligations, while in the remainder, the accumulated benefit obligations exceed the plan assets. Information for those plans where the accumulated benefit obligations exceed the plan assets follows:

	December 31,
	2011		2010
Projected benefit obligation	$	2,055	$	1,662
Accumulated benefit obligation	1,874		1,581
Fair value of plan assets	1,261		1,122

Information on the FCX (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia and Atlantic Copper plans as of December 31 follows:

	FCX						PT Freeport Indonesia						Atlantic Copper
	2011			2010			2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning
of year	$	1,598		$	1,472		$	135		$	80		$	71		$	79
Service cost	24			26			13			8			—			—
Interest cost	83			82			11			8			3			3
Actuarial losses	172			104			55			41			—			—
Foreign exchange losses (gains)	(1		)	(1		)	(1		)	4			(1		)	(4		)
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Benefit obligation at end of year	1,791			1,598			206			135			65			71
Change in plan assets:
Fair value of plan assets at
beginning of year	1,112			1,067			97			78			23			21
Actual return on plan assets	88			126			9			13			—			—
Employer contributionsa	26			5			9			8			11			9
Foreign exchange gains (losses)	—			(1		)	(1		)	4			—			—
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Fair value of plan assets at end
of year	1,141			1,112			107			97			26			23
Funded status	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)
Accumulated benefit obligation	$	1,701		$	1,517		$	115		$	68		$	65		$	71
Weighted-average assumptions
used to determine benefit obligations:
Discount rateb	4.60		%	5.40		%	7.00		%	8.50		%	6.77		%	6.77		%
Rate of compensation increasec	3.75		%	3.75		%	8.00		%	8.00		%	NA			NA
Balance sheet classification of
funded status:
Other assets	$	6		$	6		$	—		$	—		$	—		$	—
Accounts payable and
accrued liabilities	(4		)	(4		)	—			—			—			—
Other liabilities	(652		)	(488		)	(99		)	(38		)	(39		)	(48		)
Total	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)

a. Employer contributions for 2012 are expected to approximate $97 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar) and $9 million for the Atlantic Copper plan (based on a December 31, 2011, exchange rate of $1.29 per euro).

b. The discount rate shown in 2011 and 2010 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2011 and 2010 was 4.00 percent.

c. The rate of compensation increase shown for the FCX plans only relates to the FMC plans. The rate of compensation

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increase shown for the PT Freeport Indonesia plan relates to the years after 2012. For the PT Freeport Indonesia plan, the rate of compensation increase for 2012 ranges from 10 percent to 13 percent.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans (FMC’s plans; and FCX’s SERP, director and excess benefits plans) for the years ended December 31 follows:

	2011			2010			2009
Weighted-average assumptions:
Discount rate:
FCX SERP	4.00		%	4.00		%	4.00		%
FMC plans	5.40		%	5.80		%	6.10		%
Expected return on plan assetsa	8.00		%	8.50		%	8.50		%
Rate of compensation increasea	3.75		%	4.25		%	4.25		%
Service cost	$	24		$	26		$	26
Interest cost	83			82			85
Expected return on plan assets	(86		)	(87		)	(73		)
Amortization of prior service cost	(1		)	(1		)	—
Amortization of net actuarial losses	19			22			26
Curtailments and special retirement
benefits	—			—			(4		)
Net periodic benefit cost	$	39		$	42		$	60

a. The assumptions shown only relate to the FMC plans.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT Freeport Indonesia’s and Atlantic Copper’s pension plans for the years ended December 31 follows:

	PT Freeport Indonesia
	2011			2010			2009
Weighted-average assumptions:
Discount rate	8.50		%	10.50		%	12.00		%
Expected return on plan assets	9.25		%	8.25		%	10.00		%
Rate of compensation increase	8.00		%	8.00		%	8.00		%
Service cost	$	13		$	8		$	5
Interest cost	11			8			7
Expected return on plan assets	(9		)	(7		)	(5		)
Amortization of prior service cost	1			1			1
Amortization of net actuarial loss	3			—			1
Net periodic benefit cost	$	19		$	10		$	9

	Atlantic Copper
	2011			2010			2009
Weighted-average assumption:
Discount rate	6.77		%	6.77		%	6.77		%
Interest cost	$	3		$	3		$	4
Amortization of net actuarial loss	1			1			1
Net periodic benefit cost	$	4		$	4		$	5

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Included in accumulated other comprehensive income (loss) are the following amounts that have not been recognized in net periodic pension cost: unrecognized prior service credits of $2 million ($1 million net of tax and noncontrolling interests) and unrecognized actuarial losses of $642 million ($390 million net of tax and noncontrolling interests) at December 31, 2011; and unrecognized prior service credits of $2 million ($1 million net of tax and noncontrolling interests) and unrecognized actuarial losses of $440 million ($267 million net of tax and

noncontrolling interests) at December 31, 2010. The amounts expected to be recognized in net periodic pension cost for 2012 are less than $1 million for prior service credits and $40 million ($25 million net of tax and noncontrolling interests) for actuarial losses.

FCX does not expect to have any plan assets returned to it in 2012.

Plan assets are classified within 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), then to significant observable inputs (Level 2) and the lowest priority to significant unobservable inputs (Level 3). For further discussion of the different levels of the fair value hierarchy, refer to Note 16.

A summary of the fair value hierarchy for pension plan assets associated with the FCX plans follows:

	Fair Value at December 31, 2011
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	408		$	—	$	408	$	—
U.S. real estate securities	52			—		52		—
U.S. small-cap equity	45			—		45		—
Real estate property	35			—		—		35
Short-term investments	22			—		22		—
Open-ended mutual funds:
Government bonds	50			50		—		—
Emerging markets equity	36			36		—		—
Corporate bonds	22			22		—		—
Mutual funds:
Foreign bonds	43			43		—		—
Emerging markets bond	32			32		—		—
Emerging markets equity	24			24		—		—
Fixed income:
Government bonds	233			—		233		—
Corporate bonds	73			—		73		—
Private equity investments	50			—		—		50
Other investments	23			—		23		—
Total investments	1,148			$	207	$	856	$	85
Cash and receivables	6
Payables	(13		)
Total pension plan net assets	$	1,141

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	Fair Value at December 31, 2010
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
U.S. large-cap equity	$	134		$	—	$	134	$	—
U.S. small-cap equitya	101			—		101		—
International equity	71			—		71		—
U.S. real estate securitiesa	47			—		47		—
Real estate property	28			—		—		28
Short-term investmentsa	19			—		19		—
Open-ended mutual funds:
Emerging markets equity	46			46		—		—
Government bonds	38			38		—		—
Corporate bonds	30			30		—		—
Mutual funds:
Foreign bonds	38			38		—		—
Emerging markets bond	30			30		—		—
Emerging markets equity	29			29		—		—
Equity securities:
U.S. large-cap equity	161			161		—		—
International equity	57			57		—		—
Fixed income:
Government bonds	147			—		147		—
Corporate bonds	74			—		74		—
Private equity investments	46			—		—		46
Other investments	28			1		27		—
Total investments	1,124			$	430	$	620	$	74
Cash and receivables	81
Payables	(93		)
Total pension plan net assets	$	1,112

a. At the end of 2011, FCX reevaluated its level determinations, including those reported at December 31, 2010. While the majority of the underlying investments consists of publicly traded securities with actively quoted market values, the reported fair value of the investment vehicle containing these securities is based on net asset values that are not published publicly; therefore, FCX concluded these investments are more appropriately classified within Level 2 of the fair value hierarchy.

Following is a description of the pension plan asset categories and the valuation techniques used to measure fair value. There have been no changes in the techniques used at December 31, 2011.

Commingled/collective funds are managed by several fund managers and are valued at the net asset value per unit of the fund. For most of these funds, the majority of the underlying assets are actively traded equity securities; however, the unit level is considered to be at the fund level and, as such, are classified within Level 2 (except the real estate property funds) of the fair value hierarchy. These funds require less than a month's notice for redemptions. Real estate property funds are valued at net realizable value using information from independent appraisal firms, who have knowledge and expertise about the current market values of real property in the same vicinity as the investments and, as such, are classified within Level 3 of the fair value hierarchy. Redemptions of the real estate property funds are allowed once per quarter, subject to available cash.

Open-ended mutual funds are managed by registered investment companies and are valued at the daily published net asset value of shares/units held. Because redemptions and purchases of shares/units occur at the net asset value without any adjustments to the published net asset value that is provided on an ongoing basis (active-market criteria is met), these investments are classified within Level 1 of the fair value hierarchy.

Mutual funds and 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.

Fixed income investments include government and corporate bonds held directly by us or through commingled funds. Fixed income securities are valued using a bid evaluation or a mid evaluation and, as such, are classified within Level 2 of the fair value hierarchy. A bid evaluation is an estimated price at which a dealer would pay for a

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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.

Private equity investments are valued at net realizable value using information from general partners and, as such, are classified within Level 3 of the fair value hierarchy because of the inherent restrictions on redemptions that may affect the ability to sell the investments at their net asset value in the near term.

A summary of changes in the fair value of FCX’s Level 3 pension plan assets for the years ended December 31, follows:

	Private Equity Investments			Real Estate Property		Total
Balance at January 1, 2010	$	40		$	25	$	65
Actual return on plan assets:
Realized gains	—			2		2
Net unrealized gains related to
assets still held at the end of the year	2			1		3
Purchases	7			—		7
Settlements, net	(3		)	—		(3		)
Balance at December 31, 2010	46			28		74
Actual return on plan assets:
Realized gains (losses)	(2		)	2		—
Net unrealized gains related to
assets still held at the end of the year	5			5		10
Purchases	5			—		5
Settlements, net	(4		)	—		(4		)
Balance at December 31, 2011	$	50		$	35	$	85

A summary of the fair value hierarchy for pension plan assets associated with the PT Freeport Indonesia plan follows:

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	22		22		—		—
Total investments	51		$	51	$	—	$	—
Cash and receivablesa	56
Total pension plan net assets	$	107

	Fair Value at December 31, 2010
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	19		19		—		—
Total investments	48		$	48	$	—	$	—
Cash and receivablesa	49
Total pension plan net assets	$	97

a. Cash consists primarily of short-term time deposits.

Following is a description of the valuation techniques used for pension plan assets measured at fair value associated with the PT Freeport Indonesia plan. There have been no changes in the techniques used at December 31, 2011.

Common stocks and government bonds are valued at the closing price reported on the active market on which the individual securities are traded.

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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 the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Atlantic Copper’s plan is administered by a third-party insurance company, and Atlantic Copper is not provided asset allocations.

The expected benefit payments for FCX’s (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia’s and Atlantic Copper’s pension plans follows:

	FCX		PT Freeport Indonesiaa		Atlantic Copperb
2012	$	88	$	16	$	7
2013	88		11		7
2014	90		11		7
2015	91		13		7
2016	94		14		7
2017 through 2021	515		123		36

a. Based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar.

b. Based on a December 31, 2011, exchange rate of $1.29 per euro.

Postretirement and Other Benefits.  FCX also provides postretirement medical and life insurance benefits for certain U.S. employees and, in some cases, employees of certain international subsidiaries. These postretirement benefits vary among plans, and many plans require contributions from retirees. The expected cost of providing such postretirement benefits is accrued during the years employees render service.

The discount rate for FCX’s postretirement medical and life insurance benefit plans was determined on the same basis as FCX’s pension plans.

Information on the postretirement benefit plans as of December 31 follows:

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	240		$	265
Service cost	1			1
Interest cost	11			13
Actuarial gains	(7		)	(13		)
Benefits paid, net of employee and partner contributions,
and Medicare Part D subsidy	(22		)	(26		)
Benefit obligation at end of year	223			240
Change in plan assets:
Fair value of plan assets at beginning of year	—			—
Employer and partner contributions	25			30
Employee contributions	12			11
Benefits paid	(37		)	(41		)
Fair value of plan assets at end of year	—			—
Funded status	$	(223	)	$	(240	)
Discount rate assumption	4.20		%	4.90		%
Balance sheet classification of funded status:
Accounts payable and accrued liabilities	$	(23	)	$	(26	)
Other liabilities	(200		)	(214		)
Total	$	(223	)	$	(240	)

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Included in accumulated other comprehensive income (loss) are amounts not recognized in net periodic benefit cost for unrecognized actuarial losses of $4 million ($3 million net of tax and noncontrolling interests) at December 31, 2011, and $3 million ($2 million net of tax and noncontrolling interests) at December 31, 2010. No amount is expected to be recognized in net periodic benefit cost in 2012 for unrecognized actuarial losses.

Expected benefit payments for these plans total $23 million for 2012, $21 million for 2013, $20 million for 2014, $19 million for 2015, $18 million for 2016 and $82 million for 2017 through 2021.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s postretirement benefits for the years ended December 31 follow:

	2011			2010			2009
Weighted-average assumptions:
Discount rate	4.90		%	5.20		%	6.30		%
Service cost	$	1		$	1		$	1
Interest cost	11			13			15
Curtailments and special retirement benefits	—			—			(1		)
Net periodic benefit cost	$	12		$	14		$	15

The assumed medical-care trend rates at December 31 follow:

	2011		2010
Medical-care cost trend rate assumed for
the next year	8.00	%	8.25	%
Rate to which the cost trend rate is assumed
to decline (the ultimate trend rate)	4.50	%	4.75	%
Year that the rate reaches the ultimate trend rate	2026		2025

The effect of a one-percent increase or decrease in the medical-care cost trend rates assumed for postretirement medical benefits would result in increases or decreases of less than $1 million in the aggregate service and interest cost components; for the postretirement benefit obligation, the effect of a one-percent increase is approximately $8 million and the effect of a one-percent decrease is approximately $7 million.

FCX has a number of postemployment plans covering severance, long-term disability income, continuation of health and life insurance coverage for disabled employees or other welfare benefits. The accumulated postemployment benefit consisted of a current portion of $7 million (included in accounts payable and accrued liabilities) and a long-term portion of $57 million (included in other liabilities) at December 31, 2011, and a current portion of $8 million (included in accounts payable and accrued liabilities) and a long-term portion of $53 million (included in other liabilities) at December 31, 2010.

FCX also sponsors savings plans for the majority of its U.S. employees. The plans allow employees to contribute a portion of their pre-tax income in accordance with specified guidelines. These savings plans are principally qualified 401(k) plans for all U.S. salaried and non-bargained hourly employees. In these plans, participants exercise control and direct the investment of their contributions and account balances among various investment options. FCX matches a percentage of employee pre-tax deferral contributions up to certain limits, which vary by plan.

During 2000, FCX and FM Services Company enhanced their primary savings plan for substantially all their employees following their decision to terminate their defined benefit pension plans. Subsequent to the enhancement, FCX and FM Services Company contribute amounts to individual accounts totaling either 4 percent or 10 percent of each employee’s pay, depending on a combination of each employee’s age and years of service as of June 30, 2000. For employees whose eligible compensation exceeds certain levels, FCX provides an unfunded defined contribution plan. The balance of this liability totaled $56 million on December 31, 2011, and $49 million on December 31, 2010.

FMC had a defined contribution plan for its eligible employees hired on or after January 1, 2007, which was merged into the FCX savings plan effective January 1, 2009. Subsequent to January 1, 2009, FMC contributes enhanced amounts for its eligible employees hired on or after January 1, 2007, totaling 4 percent of each eligible employee’s

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earnings, regardless of years of service. However, most eligible FMC employees who were receiving more than 4 percent of their eligible earnings under the previous FMC defined contribution plan will continue to receive this higher percentage of their eligible earnings.

The costs charged to operations for employee savings plans and defined contribution plans totaled $35 million in 2011, $36 million in 2010 and $30 million in 2009.

FCX has other employee benefit plans, certain of which are related to FCX’s financial results, which are recognized in operating costs.

NOTE 11.  STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock.  FCX’s authorized shares of capital stock total 1.85 billion shares, consisting of 1.8 billion shares of common stock and 50 million shares of preferred stock.

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. Common shareholders of record at the close of business on January 15, 2011, received one additional share of common stock for every share they owned as of that date. The additional shares were issued on February 1, 2011, and increased the number of shares outstanding to approximately 945 million from approximately 472 million. The par value of FCX’s common stock remains at $0.10 per share. FCX’s common stock began trading on a post-split basis on February 2, 2011. All references to shares of common stock and per share amounts have been retroactively adjusted to reflect the two-for-one stock split, unless otherwise noted.

In February 2009, FCX completed a public offering of 53.6 million shares of FCX common stock at an average price of $14.00 per share, which generated gross proceeds of $750 million (net proceeds of approximately $740 million).

In July 2008, FCX’s Board of Directors approved an increase in the open-market share purchase program for up to 30 million shares. During 2008, on a pre-split basis, FCX acquired 6.3 million shares for $500 million ($79.15 per share average) and 23.7 million shares remain available under this program. During September 2008, because of the financial turmoil and the decline in copper and molybdenum prices, FCX suspended its purchases of shares under its open-market share purchase program. The timing of future purchases of FCX’s common stock is dependent on many factors, including FCX’s operating results, cash flows and financial position; copper, molybdenum and gold prices; the price of FCX’s common stock; and general economic and market conditions.

In December 2008, FCX’s Board of Directors suspended the cash dividend on FCX’s common stock; accordingly, there were no common stock dividends paid in 2009. In October 2009, FCX’s Board of Directors reinstated a cash dividend on FCX’s common stock at an annual rate of $0.30 per share beginning in 2010. FCX’s Board of Directors authorized an increase in the cash dividend on FCX’s common stock to an annual rate of $0.60 per share in April 2010 and then to an annual rate of $1.00 per share in October 2010. In December 2010, FCX's Board of Directors declared a supplemental common stock dividend of $0.50 per share, which was paid on December 30, 2010, to common shareholders of record at the close of business on December 20, 2010. In April 2011, FCX's Board of Directors declared a supplemental common stock dividend $0.50 per share, which was paid on June 1, 2011, to common shareholders of record at the close of business on May 15, 2011. On December 28, 2011, FCX declared a regular quarterly dividend of $0.25 per share, which was paid on February 1, 2012, to common shareholders of record at the close of business on January 13, 2012. The Board of Directors will continue to review FCX’s financial policy on an ongoing basis.

Preferred Stock.  On March 28, 2007, FCX sold 28.75 million shares of 6¾% Mandatory Convertible Preferred Stock, with a liquidation preference of $100 per share, for net proceeds of $2.8 billion. The 6¾% Mandatory Convertible Preferred Stock were automatically converted on May 1, 2010, into shares of FCX common stock. The conversion rate was adjustable upon the occurrence of certain events, including the payment in any quarter of common stock dividends exceeding $0.15625 per share, and, for shares converted on May 1, 2010, depended on the applicable average market price of FCX’s common stock over the 20-trading-day period ending on the third trading day prior to May 1, 2010. Holders could elect to convert at any time prior to May 1, 2010, at a conversion rate equal to 2.7432 shares of FCX common stock. During 2010, a total of 28,749,560 outstanding shares of FCX’s 6¾% Mandatory Convertible Preferred Stock were converted into 78.9 million shares of FCX common stock (conversion rate equal to 2.7432 shares of FCX common stock).

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In March 2004, FCX sold 1.1 million shares of 5½% Convertible Perpetual Preferred Stock for net proceeds of $1.1 billion. The conversion rate was adjustable upon the occurrence of certain events, including the payment in any quarter of common stock dividends exceeding $0.10 per share. As a result of the quarterly and supplemental common stock dividends paid through August 31, 2009, each share of preferred stock was convertible into 43.061 shares of FCX common stock, equivalent to a conversion price of approximately $23.22 per common share. In December 2008, through privately negotiated transactions, FCX induced conversion of 268,331 shares of its 5½% Convertible Perpetual Preferred Stock with a liquidation preference of $268 million into 11.5 million shares of FCX common stock. To induce conversion of these shares, FCX issued to the holders an additional 2.0 million shares of FCX common stock valued at $22 million, which was recorded as losses on induced conversions in the consolidated statements of operations. In September 2009, FCX called for redemption the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock. Of the 831,554 shares outstanding at the time of the call, 830,529 shares were converted into 35.8 million shares of FCX common stock, and the remaining 1,025 shares were redeemed for approximately $1 million in cash.

Stock Award Plans.  FCX currently has awards outstanding under its stock-based compensation plans, including two FMC plans resulting from the acquisition. As of December 31, 2011, only two of the plans, both of which are stockholder approved (which are discussed below), have awards available for grant.

The 2003 Stock Incentive Plan (the 2003 Plan) provides for the issuance of stock options, SARs, restricted stock, restricted stock units and other stock-based awards. The 2003 Plan allows FCX to grant awards for up to 16 million common shares to eligible participants. In 2006, FCX’s stockholders approved the 2006 Stock Incentive Plan (the 2006 Plan), and FCX’s stockholders approved amendments to the plan in 2007 primarily to increase the number of shares available for grants and in 2010 to permit grants to outside directors. The 2006 Plan provides for the issuance of stock options, SARs, restricted stock, restricted stock units and other stock-based awards for up to 74 million common shares. As of December 31, 2011, shares available for grant totaled 37.2 million under the 2006 Plan and less than 500 shares under the 2003 Plan.

In connection with the FMC acquisition, former FMC stock options and restricted stock awards were converted into 1,613,190 FCX stock options and 174,782 FCX restricted stock awards, which retain the terms by which they were originally granted under FMC’s plans. The stock options carry a maximum term of 10 years with 1,344,268 stock options vested upon the acquisition of FMC and 268,922 stock options that vested ratably over a three-year period or the period until the participant became retirement-eligible, whichever was shorter. Restricted stock awards generally became fully vested in five years, with a majority of these shares having graded-vesting features in which 25 percent of the shares would vest on the third and fourth anniversaries of the award and the remaining 50 percent in the fifth year. In February 2010, the former FMC restricted stock agreements were amended to accelerate the vesting period of the restricted stock awards that were converted upon the acquisition of FMC; therefore, these restricted stock awards (excluding the cash portion that resulted from the conversion of these restricted stock awards at the time of the acquisition) became fully vested. The fair value of the restricted stock awards was determined based on the quoted market price at the time of the acquisition.

Stock-Based Compensation Cost. Compensation cost charged against earnings for stock-based awards for the years ended December 31 follows:

	2011			2010			2009
Stock options awarded to employees (including directors)	$	84		$	84		$	67
Stock options awarded to nonemployees	1			5			5
Restricted stock units awarded to employees
(including directors)	32			30			29
Restricted stock awards to employees	—			1			2
SARs	(2		)	2			4
Total stock-based compensation costa	115			122			107
Tax benefit	(42		)	(45		)	(41		)
Noncontrolling interests’ share	(4		)	(3		)	(3		)
Impact on net income	$	69		$	74		$	63

a. Amounts are before Rio Tinto’s share of the cost of employee exercises of in-the-money stock options, which decreased consolidated selling, general and administrative expenses by $3 million in 2011, $4 million in 2010 and $2 million in 2009.

FCX did not capitalize any stock-based compensation costs to property, plant, equipment and development costs during the years ended December 31, 2011, 2010 and 2009.

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Options and SARs. Stock options and SARs granted under the plans generally expire 10 years after the date of grant and vest in 25 percent annual increments beginning one year from the date of grant. The plans and award agreements provide that participants will receive the following year’s vesting after retirement and provide for accelerated vesting if there is a change in control (as defined in the plans). Therefore, FCX accelerates one year of amortization for retirement-eligible employees.

A summary of options outstanding as of December 31, 2011, including 69,672 SARs, and changes during the year ended December 31, 2011, follows:

	Number of Options		Weighted- Average Option Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	26,930,444		$	30.22
Granted	4,230,500		55.43
Exercised	(3,044,174	)	21.88
Expired/Forfeited	(149,625	)	37.61
Balance at December 31	27,967,145		34.90		6.9	$	152
Vested and exercisable at December 31	13,560,645		$	33.10	5.7	$	65

Summaries of options outstanding, including SARs, and changes during the years ended December 31 follow:

	2010				2009
	Number of Options		Weighted- Average Option Price		Number of Options		Weighted- Average Option Price
Balance at January 1	24,921,594		$	27.59	19,705,894		$	32.49
Granted	8,303,000		36.15		7,302,000		12.94
Exercised	(6,081,650	)	27.54		(1,571,874	)	20.15
Expired/Forfeited	(212,500	)	30.29		(514,426	)	30.29
Balance at December 31	26,930,444		30.22		24,921,594		27.59

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Expected volatility is based on implied volatilities from traded options on FCX’s common stock and historical volatility of FCX’s common stock. FCX uses historical data to estimate future option exercises, forfeitures and expected life of the options. When appropriate, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected dividend rate is calculated using the annual dividend (excludes supplemental dividends) at the date of grant. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option at the grant date. The weighted-average assumptions used to value stock option awards during the years ended December 31 follow:

	2011		2010		2009
Expected volatility	50.9	%	51.9	%	70.6	%
Expected life of options (in years)	4.34		4.61		4.37
Expected dividend rate	1.8	%	0.8	%	—	%
Risk-free interest rate	1.6	%	2.2	%	1.5	%

The weighted-average grant-date fair value of options granted was $20.58 per option during 2011, $15.33 per option during 2010 and $7.14 per option during 2009. The total intrinsic value of options exercised was $101 million during 2011, $129 million during 2010 and $24 million during 2009. The total fair value of options vested was $89 million during 2011, $61 million during 2010 and $70 million during 2009. As of December 31, 2011, FCX had $101 million of total unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted-average period of 1.5 years.

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The following table includes amounts related to exercises of stock options and SARs and vesting of restricted stock units and restricted stock awards during the years ended December 31:

	2011		2010		2009
FCX shares tendered to pay the exercise price
and/or the minimum required taxesa	936,811		934,099		542,786
Cash received from stock option exercises	$	48	$	109	$	18
Actual tax benefit realized for tax deductions	45		50		21
Amounts FCX paid for employee taxes	45		28		12
Amounts FCX paid for exercised SARs	1		1		1

a. Under terms of the related plans, upon exercise of stock options and vesting of restricted stock units and restricted stock awards, employees may tender FCX shares to FCX to pay the exercise price and/or the minimum required taxes.

Restricted Stock Units. FCX has an annual incentive plan for its executive officers that requires a portion of each executive officer's annual bonus be paid in restricted stock units. The maximum annual incentive award pool is a percentage of FCX’s consolidated operating cash flows adjusted for working capital for the preceding year and funding of the pool is subject to a performance condition. Grants of restricted stock units before 2012 vest ratably over three years and provide that the FCX executive officers will receive the following year’s vesting upon retirement provided the performance condition is met. The fair value of these restricted stock unit grants was estimated based on projected operating cash flows for the applicable year and was charged to expense ratably over three years, beginning with the year during which the cash flows were generated as performance of services commenced in the calendar year preceding the date of grant. In February 2012, the terms of restricted stock unit awards under the annual incentive plan were revised. Beginning with 2012 grants, the level of restricted stock units granted will continue to be based on FCX's consolidated operating cash flows adjusted for working capital for the preceding year, but the award will vest after three years subject to FCX attaining a five-year average return on investment (a performance condition defined in the award agreement) of at least six percent. The awards will also be subject to a 20 percent reduction if FCX performs below a group of its peers as defined in the award agreement. The fair value of the awards is estimated using an appropriate valuation model. The awards continue to vest after the recipients retirement or death; therefore, since all of FCX's executive officers are retirement eligible, FCX charges the cost of these awards to expense in the year the cash flows are generated as performance of services is only required in the calendar year preceding the date of grant.

FCX also granted other restricted stock units that vest over a period of up to five years. The plans and award agreements provide for accelerated vesting of all restricted stock units if there is a change of control (as defined in the plans) and provide that participants will receive the following year’s vesting after retirement (except for the restricted stock units with five year vesting that do not allow acceleration because of retirement). Dividends and interest on restricted stock units accrue and are paid upon the award’s vesting.

FCX grants restricted stock units to its directors. The restricted stock units vest over four years. The fair value of the restricted stock units is amortized over the four-year vesting period or the period until the director becomes retirement-eligible, whichever is shorter. Upon a director’s retirement, all of their unvested restricted stock units immediately vest. For retirement-eligible directors, the fair value of restricted stock units is recognized in earnings on the date of grant.

A summary of outstanding restricted stock units as of December 31, 2011, and activity during the year ended December 31, 2011, follows:

	Number of Restricted Stock Units		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	2,140,914
Granted	381,636
Vested	(1,257,274	)
Forfeited	—
Balance at December 31	1,265,276		1.4	$	47

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The total grant-date fair value of restricted stock units granted during the year ended December 31, 2011, was $21 million. The total intrinsic value of restricted stock units vested was $69 million during 2011, $50 million during 2010 and $22 million during 2009. As of December 31, 2011, FCX had $2 million of total unrecognized compensation cost related to unvested restricted stock units expected to be recognized over a weighted-average period of less than one year.

NOTE 12.  INCOME TAXES

Geographic sources of income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 consist of the following:

	2011		2010		2009
United States	$	2,112	$	1,307	$	98
Foreign	6,706		7,205		5,718
Total	$	8,818	$	8,512	$	5,816

FCX’s provision for income taxes for the years ended December 31 consists of the following:

	2011			2010			2009
Current income taxes:
Federal	$	394		$	207		$	19
State	21			27			7
Foreign	1,948			2,500			2,172
Total current	2,363			2,734			2,198
Deferred income taxes (benefits):
Federal	82			20			(70		)
State	(19		)	(10		)	79
Foreign	661			239			100
Total deferred	724			249			109
Provision for income taxes	$	3,087		$	2,983		$	2,307

A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:

	2011					2010					2009
	Amount			Percent		Amount			Percent		Amount			Percent
U.S. federal statutory tax rate	$	3,086		35	%	$	2,979		35	%	$	2,036		35	%
Foreign tax credit limitation	163			2		93			1		112			2
Percentage depletion	(283		)	(3	)	(263		)	(3	)	(168		)	(3	)
Withholding taxes	170			2		174			2		228			4
Valuation allowance on minimum
tax credits	(47		)	(1	)	18			—		104			2
State income taxes	—			—		17			—		(2		)	—
Other items, net	(2		)	—		(35		)	—		(3		)	—
Provision for income taxes	$	3,087		35	%	$	2,983		35	%	$	2,307		40	%

FCX paid federal, state, local and foreign income taxes totaling $3.4 billion in 2011, $2.6 billion in 2010 and $1.6 billion in 2009. FCX received refunds of federal, state, local and foreign income taxes of $15 million in 2011, $26 million in 2010 and $193 million in 2009.

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The components of deferred taxes follow:

	December 31,
	2011			2010
Deferred tax assets:
Foreign tax credits	$	2,011		$	1,837
Net operating loss carryforwards	356			442
Minimum tax credits	406			413
Accrued expenses	962			931
Employee benefit plans	245			215
Inventory	161			164
Other	276			224
Deferred tax assets	4,417			4,226
Valuation allowances	(2,393		)	(2,226		)
Net deferred tax assets	2,024			2,000
Deferred tax liabilities:
Property, plant, equipment and development costs	(4,227		)	(3,874		)
Undistributed earnings	(1,010		)	(917		)
Other	(72		)	(28		)
Total deferred tax liabilities	(5,309		)	(4,819		)
Net deferred tax liabilities	$	(3,285	)	$	(2,819	)

At December 31, 2011, FCX had U.S. foreign tax credit carryforwards of $2.0 billion that will expire between 2012 and 2021, and U.S. minimum tax credits carryforwards of $406 million that can be carried forward indefinitely, but may be used only to the extent that regular tax exceeds the alternative minimum tax in any given year.

At December 31, 2011, FCX had (i) DRC net operating loss carryforwards of $560 million that can be carried forward indefinitely, (ii) U.S. net state operating loss carryforwards of $468 million million that expire between 2012 and 2031, and (iii) Spanish net operating loss carryforwards of $541 million that expire between 2012 and 2026.

On the basis of available information at December 31, 2011, FCX has provided valuation allowances for certain of its deferred tax assets where FCX believes it is more likely than not that some portion or all of such assets will not be realized. Valuation allowances totaled $2.4 billion at December 31, 2011, and $2.2 billion at December 31, 2010, and covered all of FCX’s U.S. foreign tax credit carryforwards, and a portion of its foreign net operating loss carryforwards, U.S. state net operating loss carryforwards and U.S. minimum tax credit carryforwards. These valuation allowances include $80 million at December 31, 2011, and $59 million at December 31, 2010, for tax benefits that, if recognized, would be credited directly to other comprehensive income.

The $167 million increase in the valuation allowance during 2011 was primarily a result of an increase in foreign tax credit carryforwards, partly offset by a decrease in minimum tax credit carryforwards.

In December 2011, the U.S. Treasury Department issued temporary and proposed regulations on the treatment of amounts paid for repair and maintenance costs of fixed assets. These regulations generally apply to tax years beginning on or after January 1, 2012. Transition rules providing procedural guidance are anticipated to be published during 2012. FCX is currently evaluating the impact of the new regulations on its operating results; however, this evaluation will not be completed until the additional procedural guidance is issued. Neither the regulations nor the additional procedural guidance are expected to have a material impact on FCX's results of operations or financial condition.

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In September 2011, Peru enacted a new mining tax and royalty regime. Under the new regime, companies that do not have stability agreements will be subject to a revised royalty and a special mining tax. Cerro Verde operates under a stability agreement and, therefore, is not subject to the revised royalty and special mining tax until its stability agreement expires on December 31, 2013. The Peruvian government has also created a special mining burden that companies with stability agreements can elect to pay. The special mining burden is levied on profits and is based on a sliding scale of 4 to 13 percent, with a maximum effective tax rate of 8.79 percent. Cerro Verde will elect to pay this special mining burden during the remaining term of its stability agreement. As a result, FCX recognized additional current and deferred tax expense of $53 million ($49 million net of noncontrolling interests) for the year 2011. The deferred portion of this accrual relates primarily to the assets recorded in connection with the 2007 acquisition of FMC.

In October 2010, the Chilean legislature approved an increase in mining royalty taxes to help fund earthquake reconstruction activities, education and health programs. Mining royalty taxes at FCX’s El Abra and Candelaria mines were stabilized through 2017 at a rate of 4 percent. However, under the legislation, FCX opted to transfer from its stabilized rate to the sliding scale of 4 to 9 percent (depending on a defined operational margin) for the years 2010 through 2012 and will return to its 4 percent rate for the years 2013 through 2017. Beginning in 2018 and through 2023, rates will move to a sliding scale of 5 to 14 percent.

A summary of the activities associated with FCX’s reserve for unrecognized tax benefits, interest and penalties follows:

	Unrecognized Tax Benefits			Interest			Penalties
Balance at January 1, 2010	$	253		$	34		$	—
Additions:
Prior year tax positions	9			*			*
Current year tax positions	24			*			*
Interest and penalties	—			2			—
Decreases:
Prior year tax positions	(26		)	*			*
Current year tax positions	—			*			*
Lapse of statute of limitations	(60		)	*			*
Interest and penalties	—			(3		)	—
Balance at December 31, 2010	200			33			—
Additions:
Prior year tax positions	25			*			*
Current year tax positions	16			*			*
Interest and penalties	—			7			—
Decreases:
Prior year tax positions	(34		)	*			*
Current year tax positions	(8		)	*			*
Lapse of statute of limitations	(53		)	*			*
Interest and penalties	—			(6		)	—
Balance at December 31, 2011	$	146		$	34		$	—

* Amounts not allocated.

The reserve for unrecognized tax benefits of $146 million at December 31, 2011, includes $101 million ($25 million net of income tax benefits) that, if recognized, would reduce FCX’s provision for income taxes.

The net decrease in FCX's reserve for unrecognized tax benefits primarily results from expiration of the applicable statute of limitations that occurred in connection with reaching final settlements with taxing authorities. There continues to be uncertainty related to the timing of settlements with taxing authorities, but if additional settlements are agreed upon during the year 2012, FCX could experience a change in its reserve for unrecognized tax benefits.  

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FCX or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years for FCX and its significant subsidiaries that remain subject to examination are as follows:

Jurisdiction	Years Under Examination	Additional Open Years
U.S. Federal	Short Year Ending December 31, 2007 2008-2010	2011
Indonesia	2005-2008	2009-2011
Peru	2007-2008	2002-2006, 2009-2011
Chile	2010	2011
Arizona	2003-2007	2008-2011
New Mexico	—	2003-2011

NOTE 13.  CONTINGENCIES

Environmental. FCX incurred environmental capital expenditures and other environmental costs (including joint venture partners’ share) to comply with applicable environmental laws and regulations that affect its operations totaling $387 million in 2011, $372 million in 2010 and $289 million in 2009.

FCX subsidiaries that operate in the U.S. are subject to various federal, state and local environmental laws and regulations that govern emissions of air pollutants; discharges of water pollutants; and generation, handling, storage and disposal of hazardous substances, hazardous wastes and other toxic materials. FCX subsidiaries that operate in the U.S. also are subject to potential liabilities arising under CERCLA or similar state laws that impose responsibility on persons who arranged for the disposal of hazardous substances, and on current and previous owners and operators of a facility for the cleanup of hazardous substances released from the facility into the environment, including damages to natural resources, irrespective of when the damage to the environment occurred or who caused it. That liability often is shared on a joint and several basis with all other owners and operators, meaning that each owner or operator of the property is fully responsible for the cleanup, although in many cases some or all of the other historical owners or operators no longer exist, do not have the financial ability to respond or cannot be found. As a result, because of FCX’s acquisition of FMC in 2007, many of the subsidiary companies FCX now owns are responsible for a wide variety of environmental remediation projects throughout the U.S. FCX expects to spend substantial sums annually for many years to address those remediation issues. Certain FCX subsidiaries have been advised by the U.S. Environmental Protection Agency (EPA), the Department of the Interior, the Department of Agriculture and several state agencies that, under CERCLA or similar state laws and regulations, they may be liable for costs of responding to environmental conditions at a number of sites that have been or are being investigated to determine whether releases of hazardous substances have occurred and, if so, to develop and implement remedial actions to address environmental concerns. As of December 31, 2011, FCX had more than 100 active remediation projects in the U.S. in 27 states. FCX is also subject to claims where the release of hazardous substances is alleged to have damaged natural resources.

A summary of changes in environmental obligations for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	1,422		$	1,464		$	1,401
Accretion expensea	88			97			102
Additions	132			19			40
Reductions	(68		)	—			(3		)
Spending	(121		)	(158		)	(76		)
Balance at end of year	1,453			1,422			1,464
Less current portion	(205		)	(138		)	(168		)
Long-term portion	$	1,248		$	1,284		$	1,296

a. Represents accretion of the fair value of environmental obligations assumed in the acquisition of FMC, which were determined on a discounted cash flow basis.

Estimated environmental cash payments (on an undiscounted and unescalated basis) total $205 million in 2012, $130 million in 2013, $80 million in 2014, $76 million in 2015, $43 million in 2016 and $1.8 billion thereafter. The amounts and timing of these estimated payments could change as a result of changes in regulatory requirements, changes in scope and costs of remediation activities, and as actual spending occurs.

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As a result of the acquisition of FMC, FCX was required to record FMC’s environmental obligations at fair value on the acquisition date in accordance with business combination accounting guidance. Significant adjustments to these obligations may occur in the future. New environmental obligations will be recorded as described in Note 1 under “Environmental Expenditures.” At December 31, 2011, FCX’s environmental obligations totaled $2.3 billion on an undiscounted and unescalated basis ($1.5 billion, which included environmental obligations assumed in the FMC acquisition at fair value), and FCX estimates it is reasonably possible that these obligations could range between $2.2 billion and $3.1 billion on an undiscounted and unescalated basis.

FCX believes that there may be potential claims for recovery from other third parties, including the U.S. government and other PRPs. These potential recoveries are not recognized unless realization is considered probable.

At December 31, 2011, the most significant environmental obligations were associated with the Pinal Creek site in Arizona; the Newtown Creek site in New York City; the Gilt Edge mine site in South Dakota; several historical smelter sites principally located in Arizona, Kansas, Oklahoma and Pennsylvania; and uranium mining sites in the western U.S. The recorded environmental obligations for these sites totaled $1.2 billion at December 31, 2011. A discussion of these sites follows.

Pinal Creek. The Pinal Creek site was listed under the Arizona Department of Environmental Quality’s (ADEQ) Water Quality Assurance Revolving Fund program in 1989 for contamination in the shallow alluvial aquifers within the Pinal Creek drainage near Miami, Arizona. Since that time, environmental remediation was performed by members of the Pinal Creek Group (PCG), consisting of FMC Miami, Inc. (Miami), a wholly owned subsidiary of FMC, and two other companies. In 1998, the District Court approved a Consent Decree between the PCG members and the state of Arizona resolving all matters related to an enforcement action contemplated by the state of Arizona against the PCG members with respect to groundwater contamination. The Consent Decree committed the PCG members to complete the remediation work outlined in the Consent Decree, and that work continues at this time and is expected to continue for many years in the future. Miami also was a party to litigation entitled Pinal Creek Group, et al. v. Newmont Mining Corporation, et al., United States District Court, District of Arizona, Case No. CIV 91-1764 PHX DAE (LOA), filed on May 1, 1991. Pursuant to a settlement in 2010, Miami paid $40 million to certain members of the PCG to settle the allocation of previously incurred costs, and agreed to take full responsibility for future groundwater remediation at the Pinal Creek site, with limited exceptions. The settlement did not result in a change to the obligation, which was estimated at fair value when assumed in the FMC acquisition. During 2011, the obligations was increased by $31 million to reflect changes in remediation capping designs that incorporate best practices for side slope regrading and cap thickness.

Newtown Creek. From the 1930s until 1964, Phelps Dodge Refining Corporation (PDRC), a subsidiary of FMC, operated a smelter, and from the 1930s until 1984, it operated a refinery on the banks of Newtown Creek (the creek), which is a 3.5-mile-long waterway that forms part of the boundary between Brooklyn and Queens in New York City. Heavy industrialization along the banks of the creek and discharges from the City of New York’s sewer system over more than a century resulted in significant environmental contamination of the waterway. The New York Attorney General previously notified several companies, including PDRC, about possible obligations to clean up contaminated sediments in the creek. In March and April 2010, EPA notified PDRC and five others that EPA considers them to be PRPs under CERCLA. The notified parties began working with EPA to identify other PRPs, and EPA proposed that the notified parties perform a Remedial Investigation/Feasibility Study (RI/FS) at their expense and reimburse EPA for its oversight costs. EPA is not expected to propose a remedy until after an RI/FS is completed, which is expected to take several years. On September 29, 2010, EPA designated the creek as a Superfund site. Effective July 18, 2011, PDRC and five other parties entered an Administrative Order on Consent to perform a RI/FS to assess the nature and extent of environmental contamination in the creek and identify potential remedial options. FCX's financial obligation for this matter was estimated at fair value when it was assumed in the FMC acquisition and is included in FCX's aggregate environmental obligations. The actual costs of fulfilling this remedial obligation and the allocation of costs among PRPs are uncertain and subject to change based on the results of the RI/FS, the remediation remedy ultimately selected by EPA and related allocation determinations. Depending on the overall cost and the portion allocated to PDRC, that share could be material to FCX.

Gilt Edge Mine Site. On July 12, 2010, FCX was notified by the U.S. Department of Justice, acting at the request of EPA, that it was preparing to file suit in federal court against two of its wholly owned subsidiaries (Cyprus Mines Corporation and Cyprus Amax Minerals Company) and several other parties to recover costs incurred or to be incurred by the U.S. in remediating hazardous substances at the Gilt Edge mine site in Lawrence County, South Dakota. The letter stated that the U.S. would assert that the Cyprus entities are jointly and severally liable with the other parties for all response costs incurred by the U.S. at this site under CERCLA. The letter asserted that the U.S.

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had incurred approximately $91 million in response costs and expected to incur significant additional response costs in the future.

In September 2011, FCX reached an agreement in principle to settle this matter, and is currently negotiating the terms of a proposed consent decree with the U.S. If a settlement is finalized that is consistent with the agreement in principle, the amount paid would be financially immaterial to FCX and less than the amount currently included for this matter in FCX's aggregate environmental obligations. If the settlement is not finalized and the U.S. government files suit, FCX intends to vigorously defend this matter.

Historical Smelter Sites. FMC and its predecessors at various times owned or operated copper and zinc smelters in several states, including Arizona, Kansas, Oklahoma and Pennsylvania. For some of these smelter sites, certain FCX subsidiaries have been advised by EPA or state agencies that they may be liable for costs of investigating and, if appropriate, remediating environmental conditions associated with the smelters. At other sites, certain FCX subsidiaries have entered into state voluntary remediation programs to investigate and, if appropriate, remediate site conditions associated with the smelters. The historical smelter sites are in various stages of assessment and remediation. The two most significant environmental obligations for historical smelter sites relate to Blackwell, Oklahoma, and Bisbee, Arizona. In 2011, FCX increased the environmental obligations for historical smelter sites, which were estimated at fair value when assumed in the FMC acquisition, by $36 million, primarily at the Blackwell, Oklahoma, site (refer to discussion below).

Blackwell. From 1916 to 1974, Blackwell Zinc Company, Inc. (BZC), an indirect subsidiary of FCX, owned and operated a zinc smelter in Blackwell, Oklahoma. In 1974, the smelter was demolished and the property deeded to the Blackwell Industrial Authority. Pursuant to an administrative order with the state of Oklahoma, BZC undertook remedial actions in Blackwell in 1996 and 1997, including sampling the nearby residential and commercial properties, and removing soils on properties that were found to have metal concentrations above state-established cleanup standards. From 1997 to 2003, BZC investigated the nature and extent of groundwater contamination potentially attributable to the former smelter and evaluated options for remedying such contamination. In 2003, the state of Oklahoma adopted a cleanup plan requiring the installation of a groundwater extraction and treatment system and the closure of domestic groundwater wells within the groundwater plume area. BZC completed the construction of a groundwater extraction and treatment system, with system startup and initial discharge of treated water occurring in October 2010.

In 2007, FCX, on behalf of BZC, commenced a voluntary community outreach program by inviting property owners in and around Blackwell to have their properties sampled for the presence of smelter-related contaminants, and offering to remediate properties whose soils were found to have metal concentrations above state-established

cleanup standards. As of January 1, 2012, residential yard cleanups associated with this outreach effort are essentially complete, although it is possible that additional property owners in the surrounding area could request sampling and remediation of their properties. All of these soil sampling and remediation activities are being coordinated with, and supervised by, the state of Oklahoma.

On April 14, 2008, a purported class action was filed against FCX and several of its direct and indirect subsidiaries, including BZC, entitled Coffey, et al., v. Freeport-McMoRan Copper & Gold, Inc., et al., Kay County, Oklahoma District Court, Case No. CJ-2008-68. The suit alleges that the operations of BZC’s zinc smelter in Blackwell, Oklahoma, from 1918 to 1974 resulted in contamination of soils and groundwater in Blackwell. The complaint seeks unspecified compensatory and injunctive relief and punitive damages on behalf of current property owners as of December 19, 2011, for alleged environmental contamination and other damages to real property. On December 19, 2011, the parties submitted a proposed class settlement to the court for approval, and the court entered a preliminary approval order. Because this is a class action, the settlement requires public notice, opportunity for class members to object or opt out, and a judicial fairness hearing, which is scheduled for March 22, 2012. There is some community opposition to the settlement, so it is possible that it will not be completed as agreed. If the settlement is approved, FCX will pay approximately $70 million (of which the relevant amount is included in environmental obligations and the remaining portion in accounts payable and accrued liabilities) for monetary payments to class members, additional environmental remediation of certain properties in the class area, class counsel's attorneys' fees and settlement administration expenses.

On December 7, 2009, 18 individuals filed a related suit, entitled Brown et al. v. Freeport-McMoRan Copper & Gold Inc., et al., Kay County, Oklahoma District Court, Case No. CJ-2009-213, alleging personal injuries resulting from exposure to lead and seeking compensatory and punitive damages. The case was settled in December 2011 for an immaterial amount.

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In January 2012, FCX was advised by representatives of Kay County, Oklahoma (the county where the BZC smelter was located), of plans to assert claims for damages against BZC for permitting large quantities of smelter waste to be used as road building and fill material throughout Kay County over a period of decades. Kay County claims that it will seek financial assistance for removing or covering much of the material and damages for the alleged public nuisance created by the presence of the material. FCX is in the process of assessing these claims.

Bisbee. From the 1880s until 1975, FMC and certain predecessor and subsidiary entities operated a copper mine near Bisbee, Arizona. A series of smelters operated in Bisbee from approximately 1879 through 1908. In 2000, FMC entered the Bisbee area into the Arizona Voluntary Remediation Program (VRP) administered by ADEQ. In 2008, FMC expanded the VRP project to include other communities near Bisbee and commenced a voluntary community outreach program inviting property owners to have soils at their properties sampled for the presence of smelter and mine-related metals. For property owners whose soils are found to have metal concentrations above ADEQ-established cleanup standards, FMC has offered to remove the impacted soils and replace them with clean soils. As a result, FCX increased its environmental obligation for Bisbee soil cleanup by $31 million in 2009. For those property owners that requested sampling, approximately 42 percent require some level of cleanup. As of December 31, 2011, approximately 30 percent of the currently known residential cleanups were completed.

Uranium Mining Sites. During a period between 1940 and the early 1970s, certain FMC predecessor entities were involved in uranium exploration and mining in the western U.S. Similar exploration and mining activities by other companies have caused environmental impacts that have warranted remediation, and EPA and local authorities are currently evaluating the need for significant cleanup activities in the region. To date, FMC has undertaken remediation at a limited number of sites associated with these predecessor entities. An initiative to gather additional information about sites in the region is ongoing, and information gathered under this initiative was submitted to EPA Region 9 during the second and third quarters of 2008 and the fourth quarter of 2009 in response to an information request by EPA regarding uranium mining activities on Navajo Nation properties. FCX utilized the results of FMC’s remediation experience, in combination with historical and updated information to initially estimate the fair value of uranium-related liabilities assumed in the FMC acquisition. During 2011, FCX decreased the environmental obligations estimate by $53 million, to reflect the remedial approaches and timing decisions from EPA and the Navajo Nation on sites that are associated with other parties. These obligations are included in FCX's aggregate environmental obligations.

Asset Retirement Obligations (AROs). FCX’s ARO cost estimates are reflected on a third-party cost basis and comply with FCX’s legal obligation to retire tangible, long-lived assets.

A summary of changes in FCX’s AROs for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	856		$	731		$	712
Liabilities incurred	9			5			12
Revisions to cash flow estimates	48			105			(17		)
Accretion expense	58			54			52
Spending	(49		)	(38		)	(28		)
Foreign currency translation adjustment	(1		)	(1		)	—
Balance at end of year	921			856			731
Less current portion	(31		)	(69		)	(46		)
Long-term portion	$	890		$	787		$	685

ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. ARO activities and expenditures generally are made over an extended period of time commencing near the end of the mine life; however, certain reclamation activities may be accelerated if legally required or if determined to be economically beneficial.

During 2011 and 2010, the revisions to cash flow estimates are primarily related to increased costs of near-term closure activities at the Chino mine in New Mexico. Additionally, accelerated timing of closure activities at the Chino mine resulted in revisions to cash flow estimates during 2010.

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Legal requirements in New Mexico, Arizona and Colorado require financial assurance to be provided for the estimated costs of reclamation and closure, including groundwater quality protection programs. FCX has satisfied financial assurance requirements by using a variety of mechanisms, such as performance guarantees, financial capability demonstrations, trust funds, surety bonds, letters of credit and collateral. The applicable regulations specify financial strength tests that are designed to confirm a company’s or guarantor’s financial capability to fund estimated reclamation and closure costs. The amount of financial assurance FCX is required to provide will vary with changes in laws, regulations and reclamation and closure requirements and cost estimates. At December 31, 2011, FCX’s financial assurance obligations associated with these closure and reclamation costs totaled $899 million, of which approximately $565 million was in the form of parent company guarantees and financial capability demonstrations. At December 31, 2011, FCX had trust assets totaling $151 million, which are legally restricted to fund a portion of its AROs for the Chino, Tyrone and Cobre mines as required by New Mexico regulatory authorities.

New Mexico Environmental and Reclamation Programs. FCX’s New Mexico operations are regulated under the New Mexico Water Quality Act and regulations adopted under that act by the Water Quality Control Commission (WQCC). The New Mexico Environment Department (NMED) has required each of these operations to submit closure plans for NMED’s approval. The closure plans must include measures to assure meeting groundwater quality standards following the closure of discharging facilities and to abate any groundwater or surface water contamination. In March 2009, the Tyrone operation appealed the WQCC Final Order, dated February 4, 2009, regarding location of the “places of withdrawal of water,” which provides the statutory basis for determining where groundwater quality standards must be met at FCX’s New Mexico mining sites. In December 2010, Tyrone entered into a settlement agreement with NMED that calls for a two-year stay of the appeal while NMED and the WQCC complete several administrative actions, including renewal of Tyrone’s closure permit consistent with the terms of the settlement, review and approval of a groundwater abatement plan and adoption of alternative abatement standards, and adoption of new groundwater discharge permit rules for copper mines. If the administrative actions are concluded consistent with the terms of the settlement agreement within the two-year period of the stay, then Tyrone will move to dismiss the appeal. Finalized closure plan requirements, including those resulting from the actions to be taken under the settlement agreement, could result in increases in the Tyrone, Chino and Cobre closure costs.

FCX’s New Mexico operations also are subject to regulation under the 1993 New Mexico Mining Act (the Mining Act) and the related rules that are administered by the Mining and Minerals Division (MMD) of the New Mexico Energy, Minerals and Natural Resources Department. Under the Mining Act, mines are required to obtain approval of plans describing the reclamation to be performed following cessation of mining operations. At December 31, 2011, FCX had accrued reclamation and closure costs of $424 million for its New Mexico operations. As stated above, additional accruals may be required based on the state’s review of FCX’s updated closure plans and any resulting permit conditions, and the amount of those accruals could be material.

Arizona Environmental and Reclamation Programs. FCX’s Arizona properties are subject to regulatory oversight in several areas. ADEQ has adopted regulations for its aquifer protection permit (APP) program that require permits for certain facilities, activities and structures used for mining, concentrating and smelting and require compliance with aquifer water quality standards at an applicable point of compliance well or location. The APP program also may require mitigation and discharge reduction or elimination of some discharges.

An application for an APP requires a description of a closure strategy that will meet applicable groundwater protection requirements following cessation of operations and an estimate of the cost to implement the closure strategy. An APP may specify closure requirements, which may include post-closure monitoring and maintenance. A more detailed closure plan must be submitted within 90 days after a permitted entity notifies ADEQ of its intent to cease operations. A permit applicant must demonstrate its financial ability to meet the closure costs estimated in the APP.

Portions of Arizona mining facilities that operated after January 1, 1986, also are subject to the Arizona Mined Land Reclamation Act (AMLRA). AMLRA requires reclamation to achieve stability and safety consistent with post-mining land use objectives specified in a reclamation plan. Reclamation plans must be approved by the State Mine Inspector and must include an estimate of the cost to perform the reclamation measures specified in the plan.

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During 2008 and 2009, FCX updated its closure approaches at the Sierrita, Tohono and Bagdad mines to address site-specific regulatory obligations; during 2010, FCX updated its closure approaches for certain facilities at the Bagdad and Morenci mines. During 2011, FCX updated its closure approaches for certain facilities at the Sierrita mine. FCX will continue to evaluate options for future reclamation and closure activities at its other operating and non-operating sites, which are likely to result in additional adjustments to FCX’s ARO liabilities. At December 31, 2011, FCX had accrued reclamation and closure costs of $220 million for its Arizona operations.

Chilean Reclamation and Closure Programs. In July 2011, the Chilean senate passed legislation regulating mine closure, which establishes new requirements for closure plans and becomes effective in November 2012. FCX's Chilean operations will be required to update closure plans and provide financial assurance for these obligations. FCX cannot predict at this time the cost of these closure plans or the levels or forms of financial assurance that may be required. At December 31, 2011, FCX had accrued reclamation and closure costs of $49 million for its Chilean operations.

PT Freeport Indonesia Reclamation and Closure Programs. The ultimate amount of reclamation and closure costs to be incurred at PT Freeport Indonesia’s operations will be determined based on applicable laws and regulations and PT Freeport Indonesia’s assessment of appropriate remedial activities in the circumstances, after consultation with governmental authorities, affected local residents and other affected parties and cannot currently be projected with precision. Estimates of the ultimate reclamation and closure costs PT Freeport Indonesia will incur in the future involve complex issues requiring integrated assessments over a period of many years and are subject to revision over time as more complete studies are performed. Some reclamation costs will be incurred during mining activities, while most closure costs and the remaining reclamation costs will be incurred at the end of mining activities, which are currently estimated to continue for approximately 30 years. At December 31, 2011, PT Freeport Indonesia had accrued reclamation and closure costs of $140 million and a long-term receivable for Rio Tinto’s share of the obligation of $14 million (included in long-term receivables).

In 1996, PT Freeport Indonesia began contributing to a cash fund ($15 million balance at December 31, 2011) designed to accumulate at least $100 million (including interest) by the end of its Indonesia mining activities. PT Freeport Indonesia plans to use this fund, including accrued interest, to pay mine closure and reclamation costs. Any costs in excess of the $100 million fund would be funded by operational cash flow or other sources.

In December 2010, the President of Indonesia issued a regulation regarding mine reclamation and closure, which requires a company to provide a mine closure guarantee in the form of a time deposit placed in a state-owned bank in Indonesia. In accordance with its Contract of Work, PT Freeport Indonesia is working with the Department of Energy and Mineral Resources to review these requirements, including discussion of other options for the mine closure guarantee. In December 2009, PT Freeport Indonesia submitted its revised mine closure plan to the Department of Energy and Mineral Resources for review and has addressed comments received during the course of this review process.

Litigation. FCX is involved in numerous legal proceedings that arise in the ordinary course of business or are associated with environmental issues arising from legacy operations conducted over the years by FMC and its affiliates as discussed in this note under “Environmental.” FCX is also involved periodically in other reviews, investigations and proceedings by government agencies, some of which may result in adverse judgments, settlements, fine, penalties, injunctions or other relief. Management does not believe, based on currently available information, that the outcome of any legal proceeding reported below will have a material adverse effect on FCX's financial condition, although individual outcomes could be material to FCX's operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period. Refer to Note 1 for further discussion of FCX's accounting policy for litigation contingencies.

Asbestos Claims.Since approximately 1990, FMC and various subsidiaries have been named as defendants in a large number of lawsuits that claim personal injury either from exposure to asbestos allegedly contained in electrical wire products produced or marketed many years ago or from asbestos contained in buildings and facilities located at properties owned or operated by FMC affiliates, or from alleged asbestos in talc products. Many of these suits involve a large number of codefendants. Based on litigation results to date and facts currently known, FCX believes there is a reasonable possibility that losses may have been incurred related to these matters; however, FCX also believes that the amounts of any such losses, individually or in the aggregate, are not material to its consolidated financial statements. There can be no assurance, however, that future developments will not alter this conclusion.

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Columbian Chemicals Company (Columbian) Claims. Columbian, formerly a subsidiary of FMC, has notified FCX of various indemnification claims arising out of the 2005 agreement pursuant to which Columbian was sold. The principal outstanding claims relate to (1) multiple mass tort suits pending against Columbian in West Virginia state court for alleged personal injury and property damage resulting from exposure to carbon black (the Carbon Black claims) and (2) an investigation being conducted by EPA of potential Clean Air Act violations during the period Columbian was owned by FMC (the Clean Air Act matter). Although FMC believes it is reasonably possible that a loss may be incurred, it believes that its indemnity obligations, if any, for both of these matters are subject to an aggregate cap under the 2005 agreement of approximately $110 million. Columbian disagrees with that position and asserts that FMC's liability for the Carbon Black claims is uncapped. FMC believes Columbian’s exposure, if any, for the Clean Air Act matter is below that aggregate limit, but FMC cannot estimate Columbian’s exposure for the Carbon Black claims. Columbian filed suit in New York state court in April 2010 (Columbian Chemicals Company and Columbian Chemicals Acquisition LLC v. Freeport-McMoRan Corporation f/k/a Phelps Dodge Corporation, County of New York, Supreme Court of the State of New York, Index No. 600999/2010), alleging, among other things, that the Carbon Black claims are the responsibility of FMC, and are not subject to the approximately $110 million cap. FMC is opposing that assertion. FMC intends to meet its obligations under the 2005 agreement, but will vigorously defend against any effort by Columbian to expansively interpret those obligations.

Cerro Verde Tax Proceeding. SUNAT, the Peruvian national tax authority, has assessed mining royalties on materials processed by the Cerro Verde concentrator that commenced operations in late 2006. These assessments cover the period October 2006 to December 2007 and the years 2008 and 2009. SUNAT has issued rulings denying Cerro Verde’s protest of the assessments. Cerro Verde has appealed these decisions and currently has three cases pending before the Peruvian Tax Tribunal. Cerro Verde is challenging these royalties because it believes its stability agreement provides an exemption for all minerals extracted from its mining concession, irrespective of the method used for processing those minerals. Although FCX believes its interpretation of the stability agreement is correct, if Cerro Verde is ultimately found responsible for these assessments, it will also be liable for interest, which accrues at rates that range from approximately 7 to 18 percent based on the year accrued and the currency in which the amounts would be payable. At December 31, 2011, the aggregate amount of the assessments, including interest and penalties, totaled $190 million. SUNAT may continue to assess mining royalties annually until this matter is resolved by the Peruvian Tax Tribunal.

Letters of Credit, Bank Guarantees and Surety Bonds.  Letters of credit and bank guarantees totaled $110 million at December 31, 2011, primarily for reclamation and environmental obligations, workers’ compensation insurance programs, tax and customs obligations, and other commercial obligations. In addition, FCX had surety bonds totaling $148 million at December 31, 2011, associated with reclamation and closure ($127 million – see discussion above), self-insurance bonds primarily for workers’ compensation ($19 million) and other bonds ($2 million).

Insurance.  FCX purchases a variety of insurance products to mitigate potential losses. The various insurance products typically have specified deductible amounts or self-insured retentions and policy limits. FCX generally is self-insured for U.S. workers’ compensation, but purchases excess insurance up to statutory limits. An actuarial analysis is performed twice a year for various FCX casualty programs, including workers’ compensation, to estimate required insurance reserves. Insurance reserves totaled $58 million at December 31, 2011, which consisted of a current portion of $8 million (included in accounts payable and accrued liabilities) and a long-term portion of $50 million (included in other liabilities).

Other. In October 2010, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $106 million and interest of $52 million related to various audit exceptions for 2005. In November 2011, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $22 million and interest of $10 million related to various audit exceptions in 2006. PT Freeport Indonesia has paid $109 million (which is included in long-term receivables) for these disputed tax assessments and filed objections to these assessments because it believes it has properly paid all taxes. PT Freeport Indonesia is working with the Indonesian tax authorities to resolve these matters and expects to receive additional assessments from the Indonesian tax authorities for their audit of its 2007 tax return.

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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 such taxes and related penalties under this view would be significant. PT Freeport Indonesia believes that, pursuant to the terms of its COW, it is only required to pay value added taxes on these types of goods imported after December 30, 2009. PT Freeport Indonesia has not received a formal assessment and is working with the applicable government authorities to resolve this matter.

NOTE 14.  COMMITMENTS AND GUARANTEES

Operating Leases.  FCX leases various types of properties, including offices and equipment. A summary of future minimum rentals under non-cancelable leases at December 31, 2011, follows:

2012	$	24
2013	18
2014	15
2015	15
2016	12
Thereafter	116
Total payments	$	200

Minimum payments under operating leases have not been reduced by aggregate minimum sublease rentals, which are minimal. Total aggregate rental expense under operating leases was $70 million in 2011, $64 million in 2010 and $74 million in 2009.

Contractual Obligations.  Based on applicable prices at December 31, 2011, FCX has unconditional purchase obligations of $2.1 billion, primarily comprising the procurement of copper concentrates and cathodes ($1.1 billion), electricity ($338 million), transportation services ($293 million) and oxygen ($128 million) that are essential to its operations worldwide. Some of FCX’s unconditional purchase obligations are settled based on the prevailing market rate for the service or commodity purchased. In some cases, the amount of the actual obligation may change over time because of market conditions. Obligations for copper concentrates and cathodes provide for deliveries of specified volumes, at market-based prices, to Atlantic Copper and the North America copper mines. Electricity obligations are primarily for contractual minimum demand at the South America and Tenke Fungurume mines. Transportation obligations are primarily for South America contracted ocean freight and for North America rail freight. Oxygen obligations provide for deliveries of specified volumes, at fixed prices, primarily to Atlantic Copper.

FCX’s future commitments associated with unconditional purchase obligations total $1.3 billion in 2012, $311 million in 2013, $86 million in 2014, $61 million in 2015, $52 million in 2016 and $237 million thereafter. During 2011, 2010 and 2009, FCX fulfilled its minimum contractual purchase obligations or negotiated settlements in those situations in which it terminated an agreement containing an unconditional obligation.

Mining Contracts.Indonesia. FCX is entitled to mine in Indonesia under the Contract of Work between PT Freeport Indonesia and the Government of Indonesia. The original Contract of Work was entered into in 1967 and was replaced with a new Contract of Work in 1991. The initial term of the current Contract of Work expires in 2021, but can be extended by PT Freeport Indonesia for two 10-year periods, subject to Indonesian government approval, which pursuant to the Contract of Work cannot be withheld or delayed unreasonably. Given the importance of contracts of work under the Indonesian legal system and PT Freeport Indonesia’s approximately 40 years of working with the Indonesian government, which included entering into the Contract of Work in 1991 well before the expiration of the 1967 Contract of Work, PT Freeport Indonesia fully expects that the government will approve the extensions as long as it continues to comply with the terms of the Contract of Work.

In July 2004, FCX received a request from the Indonesian Department of Energy and Mineral Resources that it offer to sell shares in PT Indocopper Investama to Indonesian nationals at fair market value. In response to this request and in view of the potential benefits of having additional Indonesian ownership in the operations, FCX agreed, at the time, to consider a potential sale of an interest in PT Indocopper Investama at fair market value. Neither its Contract of Work nor Indonesian law requires FCX to divest any portion of its ownership in PT Freeport Indonesia or PT Indocopper Investama. In May 2008, FCX signed a Memorandum of Understanding with the Papua provincial government (the Province) whereby the parties agreed to work cooperatively to determine the feasibility of an acquisition by the Province of the PT Indocopper Investama shares at market value.

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The copper royalty rate payable by PT Freeport Indonesia under its Contract of Work varies from 1.5 percent of copper net revenue at a copper price of $0.90 or less per pound to 3.5 percent at a copper price of $1.10 or more per pound. The Contract of Work royalty rate for gold and silver sales is at a fixed rate of 1.0 percent.

A large part of the mineral royalties under Government of Indonesia regulations is designated to the provinces from which the minerals are extracted. In connection with its fourth concentrator mill expansion completed in 1998, PT Freeport Indonesia agreed to pay the Government of Indonesia additional royalties (royalties not required by the Contract of Work) to provide further support to the local governments and the people of the Indonesian province of Papua. The additional royalties are paid on production exceeding specified annual amounts of copper, gold and silver expected to be generated when PT Freeport Indonesia’s milling facilities operate above 200,000 metric tons of ore per day. The additional royalty for copper equals the Contract of Work royalty rate, and for gold and silver equals twice the Contract of Work royalty rates. Therefore, PT Freeport Indonesia’s royalty rate on copper net revenues from production above the agreed levels is double the Contract of Work royalty rate, and the royalty rates on gold and silver sales from production above the agreed levels are triple the Contract of Work royalty rates.

The combined royalties, including the additional royalties that became effective January 1, 1999, totaled $137 million in 2011, $156 million in 2010 and $147 million in 2009.

In 2009, Indonesia enacted a new mining law, which will operate under a licensing system as opposed to the contract of work system that applies to PT Freeport Indonesia. In 2011 and 2010, the Government of Indonesia promulgated regulations under the 2009 mining law and certain provisions that address existing contracts of work. The laws and regulations provide that contracts of work will continue to be honored until their expiration. However, the regulations attempt to apply certain provisions of the new law to existing contracts of work and may seek to apply the licensing system to any extension periods of contract of work, even though PT Freeport Indonesia’s Contract of Work provides for two 10-year extension periods, subject to Indonesian government approval, which pursuant to the Contract of Work cannot be withheld or delayed unreasonably. In February 2012, a new regulation was adopted that would require mining companies in Indonesia to process all minerals domestically and possibly ban export of concentrates and other unrefined minerals. However, PT Freeport Indonesia's existing Contract of Work includes specific provisions that define PT Freeport Indonesia's rights to export product and obligate it to develop domestic smelting facilities, if commercially feasible, or to contract with other domestic smelters on a market basis. In connection with the obligations under its Contract of Work, in 1995, PT Freeport Indonesia constructed the only copper smelter and refinery in Indonesia (which is owned and operated by PT Smelting - refer to Note 2 for further discussion).

Indonesian government officials have periodically undertaken reviews regarding our compliance with Indonesian environmental laws and regulations and the terms of the Contracts of Work. In January 2012, the President of Indonesia issued a decree calling for the creation of a team to evaluate contracts of work for adjustment to the 2009 Mining Law, and accordingly, to take steps to assess and negotiate size of work areas, government revenues, and domestic processing of minerals. The team's assignment runs through December 2013 and the group is expected to provide progress reports to the President every six months. FCX intends to continue to work cooperatively with the Government of Indonesia to complete this review and to seek extension of the Contract of Work beyond 2021, as provided under the terms of the Contract of Work. The Contract of Work can only be modified by mutual agreement between PT Freeport Indonesia and the Government of Indonesia.

Africa. FCX is entitled to mine in the DRC under an Amended and Restated Mining Convention (ARMC) between TFM and the Government of the DRC. The original Mining Convention was entered into in 1996, was replaced with the ARMC in 2005 and further amended in 2011. The current ARMC will remain in effect for as long as the Tenke Fungurume concession is exploitable. The royalty rate payable by TFM under the ARMC is 2 percent of net revenue. These mining royalties totaled $24 million in 2011, $20 million in 2010 and $7 million in 2009.

In February 2008, the Ministry of Mines, Government of the DRC, sent a letter seeking comment on proposed material modifications to the mining contracts for the Tenke Fungurume concession, including the amount of

transfer payments payable to the government, the government’s percentage ownership and involvement in the management of the mine, regularization of certain matters under DRC law and the implementation of social plans. In October 2010, the Government of the DRC concluded its review of TFM’s existing mining contracts and confirmed that they are in good standing. TFM’s key fiscal terms, including a 30 percent income tax rate, a 2 percent mining royalty rate and a 1 percent export fee, will continue to apply and are consistent with the rates in the DRC’s current Mining Code. In connection with the review, TFM made several commitments, which have been reflected in amendments to its mining contracts, including (1) an increase in the ownership interest of La Générale

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des Carrières et des Mines (Gécamines), which is wholly owned by the government of the DRC, from 17.5 percent (non-dilutable) to 20.0 percent (non-dilutable), resulting in a decrease of FCX’s effective ownership interest from 57.75 percent to 56.0 percent and Lundin Mining Corporation’s effective ownership interest from 24.75 percent percent to 24.0 percent; (2) an additional royalty of $1.2 million for each 100,000 metric tons of proven and probable copper reserves above 2.5 million metric tons at the time new reserves are established by FCX; (3) additional payments totaling $30 million to be paid in six equal installments of $5 million upon reaching certain production milestones; (4) conversion of $50 million in intercompany loans to equity; (5) a payment of approximately $5 million for surface area fees and ongoing surface area fees of approximately $0.8 million annually; (6) incorporating clarifying language stating that TFM’s rights and obligations are governed by its ARMC; and (7) expanding Gécamines’ participation in TFM management. TFM has also reiterated its commitment to the use of local services and DRC employment. In connection with the modifications, the annual interest rate on advances from TFM shareholders increases from a rate of LIBOR plus 2 percent to LIBOR plus 6 percent. In December 2010, the addenda to TFM’s ARMC and Amended and Restated Shareholders’ Agreement were signed by the parties. 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. In addition, the change in FCX’s effective ownership interest in the Tenke Fungurume minerals district and the conversion of intercompany loans to equity will be effected after receiving the required government approval of the modifications to TFM’s bylaws that reflect the agreement with the Government of the DRC.

Community Development Programs.  FCX has adopted policies that govern its working relationships with the communities where it operates. These policies are designed to guide its practices and programs in a manner that respects basic human rights and the culture of the local people impacted by FCX’s operations. FCX continues to make significant expenditures on community development, education, training and cultural programs.

In 1996, PT Freeport Indonesia established the Freeport Partnership Fund for Community Development (Partnership Fund) through which PT Freeport Indonesia has made available funding and technical assistance to support community development initiatives in the area of health, education and economic development of the area. PT Freeport Indonesia has committed through 2016 to provide one percent of its annual revenue for the development of the local people in its area of operations through the Partnership Fund. PT Freeport Indonesia charged $50 million in 2011, $64 million in 2010 and $59 million in 2009 to cost of sales for this commitment.

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, which expired in 2010, was equal to 3.75 percent of after-tax profits, of which 2.75 percent was contributed to a local mining fund and 1.00 percent to a regional mining fund. The charge to cost of sales for these local mining fund contributions totaled $41 million in 2010 and $28 million in 2009. Cerro Verde's final contribution to these funds was made in early 2011.

TFM has committed to assist the communities living within its concession in the Katanga province of the DRC. TFM will contribute 0.3 percent of net sales revenue from production to a community development fund to assist the local communities with development of local infrastructure and related services, such as those pertaining to health, education and economic development. TFM charged $4 million in 2011, $3 million in 2010 and $1 million in 2009 to cost of sales for this commitment.

Guarantees.  FCX provides certain financial guarantees (including indirect guarantees of the indebtedness of others) and indemnities.

At its Morenci mine in Arizona, FCX has a venture agreement dated February 7, 1986, with Sumitomo, which includes a put and call option guarantee clause. FCX holds an 85 percent undivided interest in the Morenci complex. Under certain conditions defined in the venture agreement, Sumitomo has the right to sell its 15 percent share to FCX. Likewise, under certain conditions, FCX has the right to purchase Sumitomo’s share of the venture. At December 31, 2011, the maximum potential payment FCX is obligated to make to Sumitomo upon exercise of the put option (or FCX’s exercise of its call option) totaled approximately $123 million based on calculations defined in the venture agreement. At December 31, 2011, FCX had not recorded any liability in its consolidated financial statements in connection with this guarantee as FCX does not believe, based on information available, that it is probable that any amounts will be paid under this guarantee as the fair value of Sumitomo’s 15 percent share is in excess of the exercise price.

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Prior to its acquisition by FCX, FMC and its subsidiaries have, as part of merger, acquisition, divestiture and other transactions, from time to time, indemnified certain sellers, buyers or other parties related to the transaction from and against certain liabilities associated with conditions in existence (or claims associated with actions taken) prior to the closing date of the transaction. As part of these transactions, FMC indemnified the counterparty from and against certain excluded or retained liabilities existing at the time of sale that would otherwise have been transferred to the party at closing. These indemnity provisions generally now require FCX to indemnify the party against certain liabilities that may arise in the future from the pre-closing activities of FMC for assets sold or purchased. The indemnity classifications include environmental, tax and certain operating liabilities, claims or litigation existing at closing and various excluded liabilities or obligations. Most of these indemnity obligations arise from transactions that closed many years ago, and given the nature of these indemnity obligations, it is impossible to estimate the maximum potential exposure. Except as described in the following sentence, FCX does not consider any of such obligations as having a probable likelihood of payment that is reasonably estimable, and accordingly, has not recorded any obligations associated with these indemnities. With respect to FCX’s environmental indemnity obligations, any expected costs from these guarantees are accrued when potential environmental obligations are considered by management to be probable and the costs can be reasonably estimated.

NOTE 15.  FINANCIAL INSTRUMENTS

FCX does not purchase, hold or sell derivative financial instruments unless there is an existing asset or obligation or it anticipates a future activity that is likely to occur and will result in exposure to market risks that FCX intends to offset or mitigate. 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 financial derivative instruments are based on widely published market closing 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 December 31, 2011 and 2010, FCX had no price protection contracts relating to its mine production. A summary of FCX’s derivative contracts and programs follows.

Derivatives Designated as Hedging Instruments – Fair Value Hedges

Copper Futures and Swap Contracts. Some of FMC’s U.S. copper rod customers request a fixed market price instead of the 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 years ended December 31, 2011, resulting from hedge ineffectiveness. At December 31, 2011, FCX held copper futures and swap contracts that qualified for hedge accounting for 73 million pounds at an average contract price of $3.58 per pound, with maturities through April 2013.

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) for the years ended December 31 follows:

	2011			2010			2009
Unrealized gains (losses):
Derivative financial instruments	$	(28	)	$	7		$	11
Hedged item	28			(7		)	(11		)
Realized gains (losses):
Matured derivative financial instruments	(28		)	37			49

Derivatives Not Designated as Hedging Instruments

Embedded derivatives and derivative financial instruments that do not meet the criteria to qualify for hedge accounting are discussed below.

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Embedded Derivatives. As described in Note 1 under “Revenue Recognition,” certain FCX copper concentrate, copper cathode and gold sales contracts provide for provisional pricing primarily based on LME or COMEX prices (copper) and the London Bullion Market Association price (gold) 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 generally based on an average Metals Week Molybdenum Dealer Oxide price). 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), the 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.

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

	Open	Average Price Per Unit				Maturities
	Positions	Contract		Market		Through
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	388	$	3.55	$	3.44	June 2012
Gold (thousands of ounces)	52	1,676		1,576		February 2012
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	376	3.56		3.45		April 2012
Molybdenum (thousands of pounds)	33	11.80		11.78		January 2012

Copper Forward Contracts. Atlantic Copper 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 December 31, 2011, Atlantic Copper held net forward copper purchase contracts for 18 million pounds at an average contract price of $3.35 per pound, with maturities through March 2012.

In April 2009, FCX entered into copper forward sales contracts to lock in prices at an average of $1.86 per pound on 355 million pounds of PT Freeport Indonesia’s provisionally priced copper sales at March 31, 2009, which final priced from April 2009 through July 2009. These economic hedge transactions were intended to reduce short-term price volatility in earnings and cash flows. Gains and losses for these economic hedge transactions were recorded in revenues. FCX has not entered into additional forward sales contracts since April 2009 for its provisionally priced copper sales, but may enter into future transactions to lock in pricing on provisionally priced sales from time to time. However, FCX does not currently intend to change its long-standing policy of not hedging future copper production.

Copper Futures and Swap Contracts. In addition to the contracts discussed above that qualify for fair value hedge accounting, FCX also had similar contracts with some of FMC’s U.S. copper rod customers that did not qualify for hedge accounting because of certain terms in the sales contracts prior to 2010. Gains and losses for these economic hedge transactions were recorded in revenues.

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, for the years ended December 31 follows:

	2011			2010			2009
Embedded derivatives in provisional sales contractsa	$	(519	)	$	619		$	1,393
Embedded derivatives in provisional purchase contractsb	—			(2		)	(3		)
Copper forward contractsa	—			—			(104		)
Copper forward contractsb	(2		)	(30		)	2
Copper futures and swap contractsa	—			—			64

a. Amounts recorded in revenues.

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

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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:

	December 31,
	2011			2010
Derivatives designated as hedging instruments
Commodity contracts:
Copper futures and swap contracts:a
Asset positionb	$	3		$	18
Liability positionc	(13		)	—

Derivatives not designated as hedging instruments
Commodity contracts:
Embedded derivatives in provisional sales/purchases contracts:d
Asset position	$	72		$	357
Liability position	(82		)	(115		)
Copper forward contracts:
Asset positionb	2			—
Liability positionc	—			(10		)

a. FCX had paid $31 million to brokers at December 31, 2011, and $3 million at December 31, 2010, for margin requirements (recorded in other current assets). In addition, FCX held $3 million in margin funding from customers at December 31, 2011, and $8 million from brokers at December 31, 2010, associated with margin requirements (recorded in accounts payable and accrued liabilities).

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.

Foreign Currency Exchange Contracts.  As a global company, FCX transacts business in many countries and currencies. Foreign currency transactions of 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 December 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 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 December 31, 2011.

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 counterparties that meet certain requirements and periodically reviews the creditworthiness of these counterparties. FCX does not anticipate that any of the counterparties it deals with will default on their obligations. As of December 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, accounts receivable, trust assets, available-for-sale securities, accounts payable and accrued liabilities, dividends payable, Rio Tinto's share of joint venture cash flows and long-term debt. Refer to Note 16 for the fair values of these financial instruments.

Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and Accrued Liabilities, Dividends Payable and Rio Tinto's 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.

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Trust Assets and Available-for-Sale Securities. The financial statement amount represents the fair value of trust assets and available-for-sale securities (see Note 16 for further discussion of fair values).

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

NOTE 16.  FAIR VALUE MEASUREMENT

Fair value accounting guidance includes a 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).

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

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

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	4,007	$	4,007	$	—	$	—
Trust assets:
Government mortgage-backed securities	47		—		47		—
U.S. core fixed income fund	46		—		46		—
Government bonds and notes	21		—		21		—
Corporate bonds	19		—		19		—
Money market funds	9		9		—		—
Asset-backed securities	9		—		9		—
Municipal bonds	1		—		1		—
Total trust assets	152		9		143		—
Available-for-sale securities:
Equity securities	9		9		—		—
Money market funds	2		2		—		—
Total available-for-sale securities	11		11		—		—

Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	72			—			72			—
Copper futures and swap contracts	3			3			—			—
Copper forward contracts	2			1			1			—
Total derivative assets	77			4			73			—
Total assets	$	4,247		$	4,031		$	216		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	$	(82	)	$	—		$	(82	)	$	—
Copper futures and swap contracts	(13		)	(11		)	(2		)	—
Total derivative liabilities	$	(95	)	$	(11	)	$	(84	)	$	—

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	Fair Value at December 31, 2010
	Total			Level 1			Level 2			Level 3
Assets
Cash equivalents:
Money market funds	$	3,584		$	3,584		$	—		$	—
Trust assets:
U.S. core fixed income fund	42			—			42			—
Government mortgage-backed securities	35			—			35			—
Corporate bonds	23			—			23			—
Asset-backed securities	22			—			22			—
Money market funds	15			15			—			—
Government bonds and notes	10			—			10			—
Municipal bonds	1			—			1			—
Total trust assets	148			15			133			—
Available-for-sale securities:a
Equity securities	9			9			—			—
Money market funds	6			6			—			—
Total available-for-sale securities	15			15			—			—
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	357			—			357			—
Copper futures and swap contracts	18			18			—			—
Total derivative assets	375			18			357			—
Total assets	$	4,122		$	3,632		$	490		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	$	(115	)	$	—		$	(115	)	$	—
Copper forward contracts	(10		)	(1		)	(9		)	—
Total derivative liabilities	$	(125	)	$	(1	)	$	(124	)	$	—

a. Excluded were $19 million of time deposits.

b. At the end of 2011, FCX reevaluated its level determination for its embedded derivatives in provisional sales/purchases contracts, including those reported at December 31, 2010. Although the critical input in these measurements are quoted market prices for copper, gold and molybdenum, the contracts themselves are not traded on an exchange and, therefore, are more appropriately classified within Level 2 of the fair value hierarchy.

Valuation Techniques

Money market 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, U.S. core fixed income fund, corporate bonds and asset-backed securities) 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.

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FCX’s embedded derivatives on provisional copper concentrate, copper cathode and gold purchases and sales have critical inputs of quoted monthly LME or COMEX forward prices (copper) and the London Bullion Market Association forward price (gold) at each reporting date based on the month of maturity; however, FCX's contracts themselves are not traded on an exchange, as such, these derivatives are classified within Level 2 of the fair value hierarchy. FCX’s embedded derivatives on provisional molybdenum purchases have critical inputs based on the latest average weekly Metals Week Molybdenum Dealer Oxide prices; however, FCX's contracts themselves are not traded on an exchange, as such, these derivatives are classified within Level 2 of the fair value hierarchy.

FCX’s derivative financial instruments for copper futures and swap contracts and forward contracts that are traded on the respective exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted monthly COMEX or LME forward prices at each reporting date based on the month of maturity (refer to Note 15 for further discussion). Certain of these contracts are traded on the over-the-counter market and are classified as Level 2 of the fair value hierarchy.

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 December 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 as of December 31 follows:

	2011						2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalentsa	$	4,822		$	4,822		$	3,738		$	3,738
MMR cost investmentb	475			507			500			623
Net embedded derivatives included in accounts
receivable or payable	(10		)	(10		)	242			242
Trust assets (current and long-term)a, c	152			152			148			148
Available-for-sale securities (current and
long-term)a, c	11			11			34			34
Derivative assetsa, d	5			5			18			18
Derivative liabilitiesa, e	(13		)	(13		)	(10		)	(10		)
Debt (including amounts due within one year)f	(3,537		)	(3,797		)	(4,755		)	(5,146		)

a. Recorded at fair value.

b. Recorded at cost and included in other assets. At December 31, 2011, these securities were not actively trading; as such, fair value was based on a pricing simulation model using MMR's publicly traded common stock as the most significant observable input. At December 31, 2010, fair value was 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. Included in accounts payable and accrued liabilities.

f. Recorded at cost except for long-term debt acquired in the FMC 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.

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NOTE 17.  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. Further discussion of the reportable segments included in FCX’s primary operating divisions, as well as FCX’s other reportable segments – Rod & Refining and Atlantic Copper Smelting & Refining – follows. Refer to Note 2 for information on FCX’s ownership interests and Note 14 for discussion of PT Freeport Indonesia’s and TFM’s mining contracts.

North America Copper Mines.  FCX has seven operating copper mines in North America – Morenci, Sierrita, Bagdad, Safford and Miami in Arizona, and Tyrone and Chino in New Mexico. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations. A majority of the copper produced at the North America copper mines is cast into copper rod by FCX’s Rod & Refining operations. The North America copper mines include the Morenci copper mine as a reportable segment.

Morenci. The Morenci open-pit mine, located in southeastern Arizona, produces copper cathodes and copper concentrates. In addition, the Morenci mine produces molybdenum concentrates. The Morenci mine produced 42 percent of FCX’s North America copper during 2011.

Other Mines. Other mines include FCX’s other operating southwestern U.S. copper mines – Sierrita, Bagdad, Safford, Miami, Tyrone and Chino. In addition to copper, certain of these mines (primarily the Sierrita and Bagdad mines) produce molybdenum concentrates.

South America.  South America mining includes four operating copper mines – Cerro Verde in Peru, and Candelaria, Ojos del Salado and El Abra in Chile. These operations include open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. South America mining includes the Cerro Verde copper mine as a reportable segment.

Cerro Verde. The Cerro Verde open-pit copper mine, located near Arequipa, Peru, produces copper cathodes and copper concentrates. In addition to copper, the Cerro Verde mine produces molybdenum concentrates. The Cerro Verde mine produced 50 percent of FCX’s South America copper during 2011.

Other Mines. Other mines include FCX’s Chilean copper mines – Candelaria, Ojos del Salado and El Abra. In addition to copper, the Candelaria and Ojos del Salado mines produce gold and silver.

Indonesia.  Indonesia mining includes PT Freeport Indonesia’s Grasberg minerals district. PT Freeport Indonesia produces copper concentrates, which contain significant quantities of gold and silver.

Africa.  Africa mining includes the Tenke Fungurume minerals district. The Tenke Fungurume mine includes open-pit mining, leaching and SX/EW operations. In addition to copper, the Tenke Fungurume mine produces cobalt hydroxide. Copper cathode production commenced in March 2009.

Molybdenum.  The Molybdenum segment is 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 includes 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-added molybdenum chemical products. This segment also includes a sales company that purchases and sells molybdenum from the Henderson mine as well as from FCX’s North and South America copper mines that also produce molybdenum. This segment also includes FCX’s wholly owned Climax molybdenum mine in Colorado, for which construction activities are substantially complete and is planned to commence production during 2012.

In addition, at times this segment roasts and/or processes material on a toll basis. Toll arrangements require the tolling customer to deliver appropriate molybdenum-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

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Rod & Refining.  The Rod & Refining segment consists of copper conversion facilities located in North America, and includes a refinery, three rod mills and a specialty copper products facility. These operations process copper produced at FCX’s North America copper mines and purchased copper into copper cathode, rod and custom copper shapes. At times these operations refine copper and produce copper rod and shapes for customers on a toll basis. Toll arrangements require the tolling customer to deliver appropriate copper-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

Atlantic Copper Smelting & Refining.  Atlantic Copper, FCX’s wholly owned smelting unit in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. During 2011, Atlantic Copper purchased 17 percent of its concentrate requirements from PT Freeport Indonesia and 30 percent from the South America mines at market prices.

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. 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 division 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.

Product Revenue

FCX revenues attributable to the products it produced for the years ended December 31 follow:

	2011		2010		2009
Refined copper products	$	10,297	$	9,203	$	6,563
Copper in concentratesa	5,938		5,674		4,763
Gold	2,429		2,370		2,591
Molybdenum	1,348		1,143		792
Other	868		592		331
Total	$	20,880	$	18,982	$	15,040

a. Amounts are net of treatment and refining charges totaling $362 million for 2011, $413 million for 2010 and $429 million for 2009.

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Geographic Area

Information concerning financial data by geographic area follows:

	Years Ended December 31,
	2011		2010		2009
Revenues:a
United States	$	7,176	$	5,295	$	4,890
Japan	2,501		3,428		3,093
Indonesia	2,266		2,266		1,937
Spain	1,643		1,483		986
Switzerland	1,219		1,063		379
China	942		795		496
India	878		690		566
Chile	741		759		563
Korea	561		745		475
Others	2,953		2,458		1,655
Total	$	20,880	$	18,982	$	15,040

a. Revenues are attributed to countries based on the location of the customer.

	December 31,
	2011		2010		2009
Long-lived assets:a
United States	$	7,899	$	7,101	$	6,499
Indonesia	4,469		3,475		3,298
Democratic Republic of Congo	3,497		3,220		3,207
Peru	3,265		3,203		3,240
Chile	2,242		1,892		1,519
Spain	257		266		277
Others	68		48		50
Total	$	21,697	$	19,205	$	18,090

a. Long-lived assets exclude deferred tax assets and intangible assets.

Major Customers

Sales to PT Smelting totaled $2.3 billion in 2011 and 2010 (11 percent and 12 percent, respectively, of FCX’s consolidated revenues) and $1.9 billion (13 percent of FCX's consolidated revenues) in 2009. Refer to Note 2 for further discussion of FCX’s investment in PT Smelting.

Business Segments

Business segments data for the years ended December 31 are presented in the following tables.

172

Business Segments

	North America Copper Mines								South America						Indonesia			Africa
	Morenci		Other Mines			Total			Cerro Verde		Other Mines		Total		Grasberg			Tenke Fung-urume		Molyb- denum		Rod & Refining		Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2011
Revenues:
Unaffiliated customers	$	418	$	180		$	598		$	2,115	$	2,457	$	4,572	$	4,504	a	$	1,282	$	1,424	$	5,523	$	2,969		$	8		$	20,880
Intersegment	1,697		3,338			5,035			417		269		686		542			7		—		26		15			(6,311		)	—
Production and delivery	984		1,645			2,629			827		1,078		1,905		1,902			591		1,036		5,527		2,991			(6,683		)	9,898
Depreciation, depletion and amortization	116		163			279			135		123		258		215			140		60		8		40			22			1,022
Selling, general and administrative expenses	2		2			4			4		3		7		124			8		15		—		22			235			415
Exploration and research expenses	7		—			7			—		—		—		—			—		3		—		—			261			271
Environmental and shutdown expenses	4		(15		)	(11		)	—		—		—		—			—		—		1		—			144			134
Operating income (loss)	1,002		1,723			2,725			1,566		1,522		3,088		2,805			550		310		13		(69		)	(282		)	9,140
Interest expense, net	2		6			8			1		—		1		8			6		—		—		15			274			312
Provision for income taxes	—		—			—			553		522		1,075		1,256			120		—		—		—			636			3,087
Total assets at December 31, 2011	2,006		5,086			7,092			5,110		3,604		8,714		5,349			3,890		2,434		259		1,109			3,223			32,070
Capital expenditures	95		400			495			198		405		603		648			193		461		10		32			92			2,534
Year Ended December 31, 2010
Revenues:
Unaffiliated customers	$	59	$	52		$	111		$	1,957	$	2,449	$	4,406	$	5,230	a	$	1,106	$	1,205	$	4,444	$	2,473		$	7		$	18,982
Intersegment	1,465		2,597			4,062			453		132		585		1,147			—		—		26		18			(5,838		)	—
Production and delivery	691		1,361			2,052			705		973		1,678		1,904			488		784		4,442		2,470			(5,483		)	8,335
Depreciation, depletion and amortization	134		139			273			148		102		250		257			128		51		8		38			31			1,036
Selling, general and administrative expenses	—		—			—			—		—		—		117			—		11		—		20			233			381
Exploration and research expenses	—		—			—			—		—		—		—			—		2		—		—			141			143
Environmental and shutdown expenses	—		—			—			—		—		—		—			—		—		1		—			18			19
Operating income (loss)	699		1,149			1,848			1,557		1,506		3,063		4,099			490		357		19		(37		)	(771		)	9,068
Interest expense, net	4		10			14			—		—		—		—			5		—		—		10			433			462
Provision for income taxes	—		—			—			516		483		999		1,709			118		—		—		—			157			2,983
Total assets at December 31, 2010	1,940		4,477			6,417			4,272		3,263		7,535		6,048			3,640		1,897		311		1,317			2,221			29,386
Capital expenditures	47		186			233			106		364		470		436			100		89		7		28			49			1,412

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $2.3 billion in 2011 and 2010.

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	North America Copper Mines						South America						Indonesia				Africa
	Morenci		Other Mines		Total		Cerro Verde		Other Mines		Total		Grasberg				Tenke Fung-urume				Molyb- denum			Rod & Refining			Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2009
Revenues:
Unaffiliated customers	$	68	$	94	$	162	$	1,491	$	1,950	$	3,441	$	4,972		a	$	389			$	847		$	3,328		$	1,892		$	9		$	15,040
Intersegment	1,074		2,028		3,102		286		112		398		936				—				—			28			—			(4,464		)	—
Production and delivery	623		1,288		1,911		648		915		1,563		1,505				315			b	660			3,336			1,895			(4,179		)	7,006
Depreciation, depletion and amortization	142		138		280		153		122		275		275				66				49			8			36			25			1,014
Selling, general and administrative expenses	—		—		—		—		—		—		94				—				11			—			17			199			321
Exploration and research expenses	—		—		—		—		—		—		—				—				2			—			—			88			90
Environmental and shutdown expensesc	26		27		53		—		—		—		—				—				(1		)	(2		)	—			56			106
Operating income (loss)	351		669		1,020		976		1,025		2,001		4,034				8				126			14			(56		)	(644		)	6,503
Interest expense, net	3		12		15		—		2		2		(3		)		10				—			—			5			557			586
Provision for (benefit from) income taxes	—		—		—		313		337		650		1,697				(15		)		—			—			—			(25		)	2,307
Total assets at December 31, 2009	1,934		4,207		6,141		3,937		2,515		6,452		4,974				3,386				1,731			291			991			2,030			25,996
Capital expenditures	46		299		345		103		61		164		266				659				82			9			31			31			1,587

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $1.9 billion.

b. Includes charges totaling $50 million associated with Tenke Fungurume's project start-up costs.

c. Includes charges totaling $23 million associated with net restructuring charges, primarily at the Morenci mine.

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NOTE 18:  SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED)

Recoverable proven and probable reserves have been calculated as of December 31, 2011, in accordance with Industry Guide 7 as required by the Securities Exchange Act of 1934. FCX’s proven and probable reserves may not be comparable to similar information regarding mineral reserves disclosed in accordance with the guidance in other countries. Proven and probable reserves were determined by the use of mapping, drilling, sampling, assaying and evaluation methods generally applied in the mining industry, as more fully discussed below. The term “reserve,” as used in the reserve data presented here, means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “proven reserves” means reserves for which (i) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (ii) grade and/or quality are computed from the results of detailed sampling; and (iii) the sites for inspection, sampling and measurements are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well established. The term “probable reserves” means reserves for which quantity and grade are computed from information similar to that used for proven reserves but the sites for sampling are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

FCX’s reserve estimates are based on the latest available geological and geotechnical studies. FCX conducts ongoing studies of its ore bodies to optimize economic values and to manage risk. FCX revises its mine plans and estimates of proven and probable mineral reserves as required in accordance with the latest available studies.

Estimated recoverable proven and probable reserves at December 31, 2011, were determined using long-term average prices of $2.00 per pound for copper, $750 per ounce for gold, $10 per pound for molybdenum, $15 per ounce for silver and $10 per pound for cobalt, consistent with year-end 2010. For the three year period ended December 31, 2011, LME spot copper prices averaged $3.25 per pound, London PM gold prices averaged $1,245 per ounce and the weekly average price for molybdenum quoted by Metals Week averaged $14.06 per pound. The recoverable proven and probable reserves presented in the table below represent the estimated metal quantities from which FCX expects to be paid after application of estimated metallurgical recovery rates and smelter recovery rates, where applicable. Recoverable reserves are that part of a mineral deposit that FCX estimates can be economically and legally extracted or produced at the time of the reserve determination.

	Recoverable Proven and Probable Reserves
	December 31, 2011
	Coppera (billion pounds)	Gold (million ounces)	Molybdenum (billion pounds)
North America	40.6	0.4	2.71
South America	39.1	1.3	0.71
Indonesia	31.6	32.2	—
Africa	8.4	—	—
Consolidated basisb	119.7	33.9	3.42
Net equity interestc	96.1	30.6	3.09

a. Consolidated recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles.

b. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.86 billion pounds of cobalt at Tenke Fungurume and 330.3 million ounces of silver in Indonesia, South America and North America.

c. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke Fungurume and 272.1 million ounces of silver in Indonesia, South America and North America.

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	100% Basis
		Average Ore Grade Per Metric Ton					Recoverable Proven and Probable Reservesa
	Ore (million	Copper	Gold		Molybdenum		Copper (billion	Gold (million	Molybdenum (billion
Year-End	metric tons)	(%)	(grams)		(%)		pounds)	ounces)	pounds)
2007	12,224	0.51	0.20		0.01		110.4	54.1	2.04
2008	14,067	0.48	0.17		0.01		118.8	53.4	2.49
2009	13,807	0.49	0.17		0.01		120.9	49.8	2.60
2010	18,516	0.42	0.12		0.01		137.9	47.9	3.41
2011	17,739	0.43	0.12		0.01		136.7	46.1	3.43
By Area at December 31, 2011:
North America
Developed and producing:
Morenci	4,250	0.27	—		—	b	15.6	—	0.09
Bagdad	1,629	0.30	—	b	0.02		8.7	0.1	0.40
Safford	206	0.43	—		—		1.6	—	—
Sierrita	2,777	0.23	—	b	0.03		12.1	0.1	1.24
Tyrone	148	0.29	—		—		0.7	—	—
Chino	421	0.42	0.02		—	b	3.5	0.2	0.01
Miami	60	0.47	—		—		0.5	—	—
Henderson	121	—	—		0.17		—	—	0.40
Undeveloped:
Climax	187	—	—		0.16		—	—	0.58
Cobre	73	0.39	—		—		0.3	—	—
South America
Developed and producing:
Cerro Verde	3,977	0.39	—		0.01		30.2	—	0.71
El Abra	881	0.42	—		—		4.3	—	—
Candelaria	339	0.58	0.13		—		4.5	1.2	—
Ojos del Salado	6	1.00	0.25		—		0.1	0.1	—
Indonesia
Developed and producing:
Grasberg open pit	312	0.85	0.91		—		4.9	7.3	—
Deep Ore Zone	206	0.57	0.69		—		2.2	3.5	—
Big Gossan	56	2.18	0.97		—		2.4	1.2	—
Undeveloped:
Grasberg block cave	1,019	0.98	0.77		—		18.7	16.3	—
Kucing Liar	420	1.23	1.09		—		9.7	6.8	—
Deep Mill Level Zone	510	0.85	0.72		—		8.3	9.3	—
Africa
Developed and producing:
Tenke Fungurume	141	3.00	—		—		8.4	—	—
Total 100% basis	17,739						136.7	46.1	3.43
Consolidated basisc							119.7	33.9	3.42
FCX’s equity shared							96.1	30.6	3.09

a. Includes estimated recoverable metals contained in stockpiles.

b. Amounts not shown because of rounding.

c. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia.

d. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

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NOTE 19.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
2011
Revenues	$	5,709		$	5,814		$	5,195		$	4,162		$	20,880
Operating income	2,936			2,757			2,150			1,297		a	9,140		a
Net income	1,861			1,726			1,294		b	866			5,747		b
Net income attributable to noncontrolling
interests	362			358			241			226			1,187
Net income attributable to FCX common
stockholders	1,499		c	1,368		c	1,053		b	640		a	4,560		a,b,c
Basic net income per share attributable
to FCX common stockholders	1.58			1.44			1.11			0.67			4.81
Diluted net income per share attributable
to FCX common stockholders	1.57		c	1.43		c	1.10		b	0.67		a	4.78		a,b,c
2010
Revenues	$	4,363		$	3,864		$	5,152		$	5,603		$	18,982
Operating income	2,048			1,424			2,499			3,097			9,068
Net income	1,215			832			1,533			1,964			5,544
Net income attributable to noncontrolling
interests	270			168			355			415			1,208
Net income attributable to FCX common
stockholders	897		d	649		d	1,178			1,549		d	4,273		d
Basic net income per share attributable
to FCX common stockholders	1.04			0.71			1.25			1.64			4.67
Diluted net income per share attributable
to FCX common stockholders	1.00		d	0.70		d	1.24			1.63		d	4.57		d

All references to income or losses per share are on a diluted basis.

a. Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

b. Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

c. Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

d. Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

NOTE 20.  SUBSEQUENT EVENTS

On February 7, 2012, the Board of Directors authorized an increase in the cash dividend on FCX's common stock from an annual rate of $1.00 per share to $1.25 per share ($0.3125 per share quarterly), with the first quarterly dividend expected to be paid on May 1, 2012.

In February 2012, FCX sold $500 million of 1.40% Senior Notes due 2015, $500 million of 2.15% Senior Notes due 2017 and $2.0 billion of 3.55% Senior Notes due 2022 for total net proceeds of $2,971 million. Interest on the 1.40% Senior Notes is payable semiannually on February 13 and August 13 commencing on August 13, 2012. Interest on the 2.15% Senior Notes and the 3.55% Senior Notes is payable semiannually on March 1 and September 1 commencing on September 1, 2012. The unsecured senior notes rank equally with FCX's other existing and future unsecured and unsubordinated indebtedness. FCX intends to use the proceeds from this offering plus cash on hand to redeem the remaining $3.0 billion of its 8.375% Senior Notes due 2017.

177

On February 13, 2012, FCX announced its intent to redeem the remaining $3.0 billion of the 8.375% Senior Notes due 2017 on March 14, 2012. Holders will receive the principal amount together with the make-whole premium and accrued and unpaid interest to the redemption date. FCX expects to record a loss on early extinguishment of debt of approximately $168 million (approximately $147 million to net income attributable to FCX common stockholders) in the first quarter of 2012 in connection with this redemption.

FCX evaluated events after December 31, 2011, and through the date the 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 financial statements.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A.  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 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report on Form 10-K. 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 controls. During second-quarter 2011, we began a phased implementation of a new enterprise resource planning (ERP) information technology system to upgrade our information technology infrastructure and enhance operating efficiency and effectiveness. Implementation at our North America mining operations was substantiallty completed over the remainder of 2011, and we expect implementation of the ERP system to be completed at all of our operations over an approximate two-year period. During each phase of the implementation, an appropriate level of training of employees, testing of the system and monitoring of the financial results recorded in the system is conducted. Management has updated our system of internal control over financial reporting for the impacted operating business units.

With the exception of the ERP implementation described above, there has been no change in our internal control over financial reporting that occurred in the quarterly period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(c)           Management’s annual report on internal control over financial reporting and the report thereon of Ernst & Young LLP are included herein under Item 8. “Financial Statements and Supplemental Data.”

Item 9B.  Other Information.

Not applicable.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

The information set forth under the captions “Information About Director Nominees” and “Section 16(a) Beneficial Ownership Reporting Compliance” of our definitive proxy statement to be filed with the Securities and Exchange Commission (SEC), relating to our 2012 annual meeting of stockholders, is incorporated herein by reference. The information required by Item 10 regarding our executive officers appears in a separately captioned heading after Item 4 in Part I of this report.

Item 11.  Executive Compensation.

The information set forth under the captions “Director Compensation” and “Executive Officer Compensation” of our definitive proxy statement to be filed with the SEC, relating to our 2012 annual meeting of stockholders, is incorporated herein by reference.

178

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information set forth under the captions “Stock Ownership of Directors and Executive Officers” and “Stock Ownership of Certain Beneficial Owners” of our definitive proxy statement to be filed with the SEC, relating to our 2012 annual meeting of stockholders, is incorporated herein by reference.

Equity Compensation Plan Information

We have equity compensation plans pursuant to which our common stock may be issued to employees and non-employees as compensation pursuant to outstanding equity awards, including two plans that were assumed in connection with our acquisition of Phelps Dodge pursuant to which shares of restricted stock were previously issued.  Only the following two plans, both of which were previously approved by our stockholders, have shares available for future grant: the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan, which was amended and restated in 2007 and 2010.

The following table presents information regarding these equity compensation plans as of December 31, 2011:

	Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity compensation plans
approved by security holders	29,162,749	a	$	34.96	37,235,767	b
Equity compensation plans not
approved by security holders	—		—		—
Total	29,162,749	a	34.96		37,235,767	b

a. Includes shares issuable upon the vesting of 1,176,276 restricted stock units, and the termination of deferrals with respect to 89,000 restricted stock units that were vested as of December 31, 2011. These awards are not reflected in column (b) as they do not have an exercise price. The number of securities to be issued in column (a) does not include 69,672 outstanding stock appreciation rights, which are payable solely in cash.

b. As of December 31, 2011, there were 37,235,321 shares remaining available for future issuance under the 2006 Stock Incentive Plan, all of which could be issued pursuant to awards of stock options or stock appreciation rights, and only 12,580,800 of which could be issued pursuant to awards of restricted stock, restricted stock units or “Other Stock-Based Awards,” which awards are valued in whole or in part on the value of the shares of common stock. In addition, there were 446 shares remaining available for future issuance under the 2003 Stock Incentive Plan, all of which could be issued pursuant to awards of stock options, stock appreciation rights, restricted stock or “Other Stock-Based Awards.” 

Item 13.  Certain Relationships and Related Transactions, and Director Independence.

The information set forth under the caption “Certain Transactions” of our definitive proxy statement to be filed with the SEC, relating to our 2012 annual meeting of stockholders, is incorporated herein by reference.

Item 14.  Principal Accounting Fees and Services.

The information set forth under the caption “Independent Registered Public Accounting Firm” of our definitive proxy statement to be filed with the SEC, relating to our 2012 annual meeting of stockholders, is incorporated herein by reference.

179

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

(a)(1).                      Financial Statements.

The consolidated statements of income, cash flows and equity, and the consolidated balance sheets are included as part of Item 8. “Financial Statements and Supplementary Data.”

(a)(2).                      Financial Statement Schedules.

Reference is made to the Index to Financial Statements appearing on page F-1 hereof.

(a)(3).                      Exhibits.

Reference is made to the Exhibit Index beginning on page E-1 hereof.

180

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 27, 2012.

Freeport-McMoRan Copper & Gold Inc.

By:/s/ Richard C. Adkerson

Richard C. Adkerson

President, Chief Executive Officer

and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities indicated on February 27, 2012.

*	Chairman of the Board
James R. Moffett
*	Vice Chairman of the Board
B. M. Rankin, Jr.
/s/ Richard C. Adkerson	President, Chief Executive Officer and Director
Richard C. Adkerson	(Principal Executive Officer)
/s/ Kathleen L. Quirk	Executive Vice President, Chief Financial Officer and Treasurer
Kathleen L. Quirk	(Principal Financial Officer)
*	Vice President and Controller - Financial Reporting
C. Donald Whitmire, Jr.	(Principal Accounting Officer)
*	Director
Robert J. Allison, Jr.
*	Director
Robert A. Day
*	Director
Gerald J. Ford
*	Director
H. Devon Graham, Jr.

S - 1

*	Director
Charles C. Krulak
*	Director
Bobby Lee Lackey
*	Director
Jon C. Madonna
*	Director
Dustan E. McCoy
*	Director
Stephen H. Siegele
By:                 /s/ Richard C. Adkerson
Richard C. Adkerson
Attorney-in-Fact

S - 2

FREEPORT-McMoRan COPPER & GOLD INC.

INDEX TO FINANCIAL STATEMENTS

Our financial statements and the notes thereto, and the report of Ernst & Young LLP included in our 2011 annual report are incorporated herein by reference.

	Page
Report of Independent Registered Public Accounting Firm	F-1
Schedule II-Valuation and Qualifying Accounts	F-2

Schedules other than the one listed above have been omitted since they are either not required, not applicable or the required information is included in the financial statements or notes thereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF

  FREEPORT-McMoRan COPPER & GOLD INC.

We have audited the consolidated financial statements of Freeport-McMoRan Copper & Gold Inc. as of December 31, 2011 and 2010 and for each of the three years in the period ended December 31, 2011, and have issued our report thereon dated February 27, 2012. Our audits also included the financial statement schedule listed in the index above for this Form 10-K. The schedule listed in the index above is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Phoenix, Arizona

February 27, 2012

F - 1

  FREEPORT-McMoRan COPPER & GOLD INC.

  SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

  (In Millions)

Col. A	Col. B		Col. C					Col. D				Col. E
			Additions
	Balance at		Charged to		Charged to			Other				Balance at
	Beginning of		Costs and		Other			Add				End of
	Period		Expense		Accounts			(Deduct)				Period
Reserves and allowances deducted
from asset accounts:
Materials and supplies inventory allowances
2011	$	26	$	4	$	—		$	(4	)	a	$	26
2010	21		11		—			(6		)	a	26
2009	22		4		—			(5		)	a	21
Valuation allowance for
deferred tax assets
2011	$	2,226	$	146	$	21		$	—			$	2,393
2010	2,157		55		14			—				2,226
2009	1,763		366		28			—				2,157
Reserves for non-income taxes:
2011	$	73	$	12	$	(2	)	$	(10	)	b	$	73
2010	47		29		—			(3		)	b	73
2009	32		15		3			(3		)	b	47

a. Primarily represents write-offs of obsolete materials and supplies inventories.

b. Represents amounts paid or adjustments to reserves based on revised estimates.

F - 2

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-K	Form	File No.	Date Filed
2.1	Agreement and Plan of Merger dated as of November 18, 2006, by and among Freeport-McMoRan Copper & Gold Inc. (FCX), Phelps Dodge Corporation and Panther Acquisition Corporation.		8-K	333-139252	11/20/2006
3.1	Composite Certificate of Incorporation of FCX.		10-Q	001-11307-01	8/6/2010
3.2	Amended and Restated By-Laws of FCX, as amended through February 2, 2010.		8-K	001-11307-01	2/5/2010
4.1	Indenture dated as of March 19, 2007, from FCX to The Bank of New York, as Trustee, with respect to the 8.375% Senior Notes due 2017, and the Senior Floating Rate Notes due 2015.		8-K	001-11307-01	3/19/2007
4.2	Indenture dated as of February 13, 2012 between Freeport-McMoRan Copper & Gold Inc. and U.S. Bank National Association, as trustee.		8-K	001-11307-01	2/13/2012
4.3	First Supplemental Indenture dated as of February 13, 2012 between Freeport-McMoRan Copper & Gold Inc. and U.S. Bank National Association, as trustee.		8-K	001-11307-01	2/13/2012
4.4	Second Supplemental Indenture dated as of February 13, 2012 between Freeport-McMoRan Copper & Gold Inc. and U.S. Bank National Association, as trustee.		8-K	001-11307-01	2/13/2012
4.5	Third Supplemental Indenture dated as of February 13, 2012 between Freeport-McMoRan Copper & Gold Inc. and U.S. Bank National Association, as trustee.		8-K	001-11307-01	2/13/2012
10.1	Credit Agreement dated as of March 4, 2011, among FCX, the Lenders party thereto, the Issuing Banks party thereto, JP Morgan Chase Bank, N.A. as Administrative Agent and Bank of America, N.A., as Syndication Agent.		10-Q	001-11307-01	5/6/2011
10.2	Contract of Work dated December 30, 1991, between the Government of the Republic of Indonesia and PT Freeport Indonesia.		S-3	333-72760	11/5/2001
10.3	Contract of Work dated August 15, 1994, between the Government of the Republic of Indonesia and PT Irja Eastern Minerals Corporation.		S-3	333-72760	11/5/2001
10.4	Participation Agreement dated as of October 11, 1996, between PT Freeport Indonesia and P.T. RTZ-CRA Indonesia (a subsidiary of Rio Tinto PLC) with respect to a certain contract of work.		S-3	333-72760	11/5/2001
10.5	Agreement dated as of October 11, 1996, to Amend and Restate Trust Agreement among PT Freeport Indonesia, FCX, the RTZ Corporation PLC (now Rio Tinto PLC), P.T. RTZ-CRA Indonesia, RTZ Indonesian Finance Limited and First Trust of New York, National Association, and The Chase Manhattan Bank, as Administrative Agent, JAA Security Agent and Security Agent.		8-K	001-09916	11/13/1996
10.6	Concentrate Purchase and Sales Agreement dated effective December 11, 1996, between PT Freeport Indonesia and PT Smelting.		S-3	333-72760	11/5/2001
10.7	Second Amended and Restated Joint Venture and Shareholders’ Agreement dated as of December 11, 1996, among Mitsubishi Materials Corporation, Nippon Mining and Metals Company, Limited and PT Freeport Indonesia.		S-3	333-72760	11/5/2001

E - 1

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-K	Form	File No.	Date Filed
10.8	Participation Agreement, dated as of March 16, 2005, among Phelps Dodge Corporation, Cyprus Amax Minerals Company, a Delaware corporation, Cyprus Metals Company, a Delaware corporation, Cyprus Climax Metals Company, a Delaware corporation, Sumitomo Corporation, a Japanese corporation, Summit Global Management, B.V., a Dutch corporation, Sumitomo Metal Mining Co., Ltd., a Japanese corporation, Compañia de Minas Buenaventura S.A.A., a Peruvian sociedad anonima abierta, and Sociedad Minera Cerro Verde S.A.A., a Peruvian sociedad anonima abierta.		8-K	001-00082	3/22/2005
10.9	Shareholders Agreement, dated as of June 1, 2005, among Phelps Dodge Corporation, Cyprus Climax Metals Company, a Delaware corporation, Sumitomo Corporation, a Japanese corporation, Sumitomo Metal Mining Co., Ltd., a Japanese corporation, Summit Global Management B.V., a Dutch corporation, SMM Cerro Verde Netherlands, B.V., a Dutch corporation, Compañia de Minas Buenaventura S.A.A., a Peruvian sociedad anonima abierta, and Sociedad Minera Cerro Verde S.A.A., a Peruvian sociedad anonima abierta.		8-K	001-00082	6/7/2005
10.10	Master Agreement and Plan of Merger among Columbian Chemicals Company, Columbian Chemicals Acquisition LLC, Columbian Chemicals Merger Sub, Inc. and Phelps Dodge Corporation, dated November 15, 2005.		10-K	001-00082	2/27/2006
10.11	Reclamation and Remediation Trust Agreement between Phelps Dodge Corporation and Wells Fargo Delaware Trust Company, dated December 22, 2005.		10-K	001-00082	2/27/2006
10.12	Amended and Restated Mining Convention dated as of September 28, 2005, among the Democratic Republic of Congo, La Générale des Carrières et des Mines, Lundin Holdings Ltd. (now TF Holdings Limited) and Tenke Fungurume Mining S.A.R.L.		8-K	001-11307-01	9/2/2008
10.13	Addendum No.1 to the Amended and Restated Mining Convention dated as of September 28, 2005, among the Democratic Repbulic 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		10-Q	001-11307-01	5/6/2011
10.14	Amended and Restated Shareholders Agreement dated as of September 28, 2005, by and between La Générale des Carrières et des Mines and Lundin Holdings Ltd. (now TF Holdings Limited) and its subsidiaries.		8-K	001-11307-01	9/2/2008
10.15	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., Tembo Ltd., and Tenke Fungurume Mining S.A.R.L., dated as of December 11, 2010.		10-Q	001-11307-01	5/6/2011
10.16	Stock Purchase Agreement dated September 19, 2010, by and among Freeport-McMoRan Copper & Gold Inc., Freeport-McMoRan Preferred LLC and McMoRan Exploration Co.		10-Q	001-11307-01	11/5/2010
10.17	Registration Rights Agreement by and between Freeport-McMoRan Preferred LLC and McMoRan Exploration Co.		8-K	001-11307-01	12/30/2010
10.18	Stockholder Agreement by and among McMoRan Exploration Co., Freeport-McMoRan Copper & Gold Inc. and Freeport-McMoRan Preferred LLC.		8-K	001-11307-01	12/30/2010
10.19*	FCX Director Compensation.		10-Q	001-11307-01	5/6/2011

E - 2

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-K	Form	File No.	Date Filed
10.20*	Amended and restated Agreement for Consulting Services between FMS and B. M. Rankin, Jr. effective as of January 1, 2010.		10-K	001-11307-01	2/26/2010
10.21*	Amended and Restated Executive Employment Agreement dated effective as of December 2, 2008, between FCX and James R. Moffett.		10-K	001-11307-01	2/26/2009
10.22*	Amended and Restated Change of Control Agreement dated effective as of December 2, 2008, between FCX and James R. Moffett.		10-K	001-11307-01	2/26/2009
10.23*	Amended and Restated Change of Control Agreement dated effective as of December 2, 2008, between FCX and Michael J. Arnold.		10-K	001-11307-01	2/26/2009
10.24*	Amended and Restated Executive Employment Agreement dated effective as of December 2, 2008, between FCX and Richard C. Adkerson.		10-K	001-11307-01	2/26/2009
10.25*	Amendment to Amended and Restated Executive Employment Agreement dated December 2, 2008, by and between FCX and Richard C. Adkerson, dated April 27, 2011.		8-K	001-11307-01	4/28/2011
10.26*	Amended and Restated Executive Employment Agreement dated effective as of December 2, 2008, between FCX and Kathleen L. Quirk.		10-K	001-11307-01	2/26/2009
10.27*	Amendment to Amended and Restated Executive Employment Agreement dated December 2, 2008, by and between FCX and Kathleen L. Quirk, dated April 27, 2011.		8-K	001-11307-01	4/28/2011
10.28*	FCX Executive Services Program, as amended and restated May 5, 2009.	X
10.29*	FCX Supplemental Executive Retirement Plan, as amended and restated.		8-K	001-11307-01	2/5/2007
10.30*	FCX Supplemental Executive Capital Accumulation Plan.		10-Q	001-11307-01	5/12/2008
10.31*	FCX Supplemental Executive Capital Accumulation Plan Amendment One.		10-Q	001-11307-01	5/12/2008
10.32*	FCX Supplemental Executive Capital Accumulation Plan Amendment Two.		10-K	001-11307-01	2/26/2009
10.33*	FCX 2005 Supplemental Executive Capital Accumulation Plan.		10-K	001-11307-01	2/26/2009
10.34*	FCX 2005 Supplemental Executive Capital Accumulation Plan Amendment One.		10-K	001-11307-01	2/26/2010
10.35*	FCX 1995 Stock Option Plan for Non-Employee Directors, as amended and restated.		10-Q	001-11307-01	5/10/2007
10.36*	FCX Amended and Restated 1999 Stock Incentive Plan, as amended and restated.		10-Q	001-11307-01	5/10/2007
10.37*	FCX 2003 Stock Incentive Plan, as amended and restated.		10-Q	001-11307-01	5/10/2007
10.38*	Form of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options and Stock Appreciation Rights under the 2004 Director Compensation Plan.		8-K	001-11307-01	5/5/2006
10.39*	FCX 2004 Director Compensation Plan, as amended and restated.		10-Q	001-11307-01	8/6/2010
10.40*	FCX 2005 Annual Incentive Plan, as amended and restated.		10-K	001-11307-01	2/26/2009

E - 3

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-K	Form	File No.	Date Filed
10.41*	FCX Amended and Restated 2006 Stock Incentive Plan.		8-K	001-11307-01	6/14/2010
10.42*	Form of Notice of Grant of Nonqualified Stock Options for grants under the FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan.		10-K	001-11307-01	2/29/2008
10.43*	Form of Notice of Grant of Restricted Stock Units for grants under the FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan.		10-K	001-11307-01	2/26/2010
10.44*	Form of Notice of Grant of Nonqualified Stock Options and Restricted Stock Units under the 2006 Stock Incentive Plan (for grants made to non-management directors and advisory directors).		8-K	001-11307-01	6/14/2010
10.45*	Form of Performance-Based Restricted Stock Unit Agreement for grants under the FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan, (Form used for awards granted prior to 2010).		10-K	001-11307-01	2/29/2008
10.46*	Form of Notice of Grant of Performance-Based Restricted Stock Units for grants under the FCX 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan.		8-K	001-11307-01	2/5/2010
10.47*	Form of Restricted Stock Unit Agreement (form used in connection with participant elections) for grants under the FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan.		10-K	001-11307-01	2/29/2008
10.48*	Form of Performance-Based Restricted Stock Unit Agreement (form used in connection with participant elections) for grants under the FCX 1999 Stock Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock Incentive Plan.		10-K	001-11307-01	2/29/2008
10.49*	FCX 2009 Annual Incentive Plan		8-K	001-11307-01	6/17/2009
10.50*	Form of Nonqualified Stock Options Grant Agreement (effective February 2012).	X
10.51*	Form of Restricted Stock Unit Agreement (effective February 2012).	X
10.52*	Form of Performance-Based Restricted Stock Unit Agreement (effective February 2012).	X
12.1	FCX Computation of Ratio of Earnings to Fixed Charges.	X
14.1	FCX Principles of Business Conduct.		10-K	001-11307-01	2/29/2008
21.1	Subsidiaries of FCX.	X
23.1	Consent of Ernst & Young LLP.	X
24.1	Certified resolution of the Board of Directors of FCX authorizing this report to be signed on behalf of any officer or director pursuant to a Power of Attorney.	X
24.2	Powers of Attorney pursuant to which this report has been signed on behalf of certain officers and directors of FCX.	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

E - 4

FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
		Filed
Exhibit		with this	Incorporated by Reference
Number	Exhibit Title	Form 10-K	Form	File No.	Date Filed
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350.	X
95.1	Mine Safety Disclosure	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

Note:  Certain instruments with respect to long-term debt of FCX have not been filed as exhibits to this Annual Report on Form 10-K since the total amount of securities authorized under any such instrument does not exceed 10 percent of the total assets of FCX and its subsidiaries on a consolidated basis. FCX agrees to furnish a copy of each such instrument upon request of the Securities and Exchange Commission.

*  Indicates management contract or compensatory plan or arrangement.

E - 5

EX-10.28

Exhibit 10.28

Freeport-McMoRan Copper & Gold Inc.

Executive Services Program

(Replaces the Financial Counseling and Tax Return Preparation and Certification Program)

1.Purpose. The Freeport-McMoRan Copper & Gold Inc. Executive Services Program (the “Program”) is designed to enable the eligible participants to devote to the business activities of Freeport-McMoRan Copper & Gold Inc. (the “Company”) or its subsidiaries the time and attention that such individual would otherwise have had to devote to their personal planning concerns.

2.Financial Counseling. The Program contemplates the provision of professional counseling services in the area of personal financial and estate planning by an independent adviser selected by each participant.

3.Tax Return Preparation and Certification. The Program contemplates the provision of professional assistance, by a public accounting firm selected by the participant, with the preparation and filing of personal income tax returns.

4.Club Memberships. The Program contemplates the reimbursement of annual social and business club membership fees for certain Program participants for the primary purpose of facilitating business-related entertaining and networking. As of January 1, 2009, reimbursement of annual social and business club membership fees is not available to Program participants who are executive officers of the Company.

5.Long-Term Care Insurance. The Program contemplates the reimbursement of all or a portion of the premiums relating to long-term care insurance for Program participants.

6.Administration. The Program shall be administered by the President and Chief Executive Officer of the Company or his or her designees who shall have full authority to

interpret the Program and from time to time adopt rules and regulations for carrying out the Program, subject to such directions as the Corporate Personnel Committee of the Company's Board of Directors may give, either as general guidelines or in particular cases.

7.Eligibility for Participation. Participation in the Program shall be offered to the Chairman of the Board, the President and Chief Executive Officer, and the Senior Vice Presidents of the Company, and, in addition to such participants, employees of the Company or any of its subsidiaries who may from time to time be selected by the President and Chief Executive Officer. Participation in the Program is subject to an annual allowance per eligible participant and will generally continue through the year following each participant's retirement unless otherwise determined by the President and Chief Executive Officer.

8.General Provisions. The selection of any employee for participation in the Program shall not give such employee any right to be retained in the employ of the Company or any of its subsidiaries, and the right of the Company and of such subsidiary to dismiss or discharge any such employee is specifically reserved. The benefits provided for employees under the Program shall be in addition to, and in no way preclude, other forms of compensation to or in respect of such employee.

9.Tax Gross-Up. Except as provided below, the amount of fees paid pursuant to the Program for each participant can be grossed-up for Federal, State (where applicable), Social Security and Medicare taxes at the highest marginal tax rate. The Company will pay the taxes directly to the respective agencies on behalf of participants. Each participant's earnings statement and W-2 will reflect the benefit paid on behalf of the participant under the Program and the associated tax gross-up as earnings. The taxes paid on behalf of the participant will also be shown as withholdings. The tax gross-up payment for reimbursements provided during a

calendar year will be made before the end of that calendar year. Effective January 1, 2009, the Company will no longer provide tax gross-ups on the fees paid pursuant to the Program for participants who are executive officers of the Company, and effective December 31, 2009, the Company will no longer provide tax gross-ups on the fees paid pursuant to the Program for all other Program participants.

10.Section 409A. This Program shall be interpreted to avoid any penalty sanctions under Section 409A of the Internal Revenue Code, as amended, and applicable Treasury Regulations and guidance thereunder (“Section 409A”). The timing of any payment provided hereunder that is subject to Section 409A may not be accelerated unless permitted under Section 409A. In no event shall a participant, directly or indirectly, designate the calendar year of payment. All reimbursements and in-kind benefits provided under this Program shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (ii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

11.Amendment or Termination. The Corporate Personnel Committee may from time to time amend or at any time terminate the Program.

EX-10.50

Exhibit 10.50

FREEPORT-McMoRan COPPER & GOLD INC.

NONQUALIFIED STOCK OPTIONS

GRANT AGREEMENT

UNDER THE

______ STOCK INCENTIVE PLAN

1.(a)Pursuant to the Freeport-McMoRan Copper & Gold Inc. ______ Stock Incentive Plan (the “Plan”), _________________ (the “Optionee”) is hereby granted effective _______________, ______, in consideration of future services, Options to purchase from the Company, on the terms and conditions set forth in this Agreement and in the Plan, _______ shares of the Common Stock of the Company at a purchase price of $_______ per share.

(b)Defined terms not otherwise defined in Section 12 of this Agreement shall have the meanings set forth in Section 2 of the Plan.

(c)The Options granted hereunder are intended to constitute nonqualified stock options and are not intended to constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.(a)All Options granted hereunder shall terminate on __________, 20___, unless terminated earlier as provided in Section 4 of this Agreement.

(b)Except as otherwise provided herein, the Options granted hereunder shall become exercisable in installments as follows:

Date ExercisableNumber of Shares

(c)The Options granted hereunder may be exercised with respect to all or any part of the Shares comprising each installment as the Optionee may elect at any time after such Options become exercisable until the termination date set forth in Section 2(a) or Section 4, as the case may be.

3.Upon each exercise of the Options granted hereunder, the Optionee shall give written notice to the Company, which shall specify the number of Shares to be purchased and shall be accompanied by payment in full of the aggregate purchase price thereof, in accordance with procedures established by the Committee. Such exercise shall be effective upon receipt by the Company of such notice in good order and payment.

4.(a)Except as set forth in this Section 4, the Options provided for in this Agreement shall immediately terminate on the date that the Optionee ceases for any reason to be an Eligible Individual.

(b)Unless Section 4(f) applies, if the Optionee ceases to be an Eligible Individual for any reason other than death, Disability, Retirement or termination for Cause, any Option granted hereunder that is then exercisable shall remain exercisable in accordance with the terms of this Agreement within three months after the date of such cessation, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a).

(c)If the Optionee ceases to be an Eligible Individual by reason of the Optionee's Disability or Retirement, any Option granted hereunder that is exercisable on the date of such cessation, as well as any Option granted hereunder that would have become exercisable within one year after the date of such cessation had the Optionee continued to be an Eligible Individual, shall remain exercisable in accordance with the terms of this Agreement within three years after the date of such cessation, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a).

(d)(i)If the Optionee ceases to be an Eligible Individual as a result of the Optionee's death, any Option granted hereunder that is exercisable on the date of such death, as well as any Option granted hereunder that would have become exercisable within one year after the date of such death had the Optionee continued to be an Eligible Individual, shall remain exercisable by the Optionee's Designated Beneficiary in accordance with the terms of this Agreement until the third anniversary of the date of such death, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a).

(ii)If the Optionee dies after having ceased to be an Eligible Individual and any Option granted hereunder is then exercisable in accordance with the provisions of this Section 4, such Option will remain exercisable by the Optionee's Designated Beneficiary in accordance with the terms of this Agreement until the third anniversary of the date the Optionee ceased to be an Eligible Individual, but in no event shall any such Option be exercisable after the termination date specified in Section 2(a).

(e)If the Optionee ceases to be an Eligible Individual by reason of the Optionee's termination for Cause, any Option granted hereunder that is exercisable on the date of such cessation shall terminate immediately.

(f)If there has been a Change in Control of the Company, and within one year following the date of such Change in Control the Optionee ceases to be an Eligible Individual by reason of the Company's termination of the Optionee's employment without Cause or Optionee's termination of employment with Good Reason, then all Options granted hereunder shall immediately become exercisable in their entirety, and shall remain exercisable in accordance with the terms of this Agreement until the termination date specified in Section 2(a).

1.The Options granted hereunder are not transferable by the Optionee otherwise than by will or by the laws of descent and distribution, and shall be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee's duly appointed legal representative.

2.If the Optionee is or becomes subject to the terms of the Company's Compensation Recovery Policy (the “Policy”), as such Policy may be amended from time to time, including amendments adopted in order to conform to the requirements of Section 954 of

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the Dodd-Frank Wall Street Reform and Consumer Protection Act and any resulting rules issued by the SEC or national securities exchanges thereunder, then the Options granted hereunder shall also be subject to such Policy. Accordingly, if the Board determines that recovery of compensation under such Policy is due, then the Options granted hereunder shall automatically terminate and be forfeited effective on the date of such determination and all shares of Common Stock acquired by the Optionee pursuant to this Agreement (or other securities into which such shares have been converted or exchanged) shall be returned to the Company or, if no longer held by the Optionee, the Optionee shall pay to the Company, without interest, all cash, securities or other assets received by the Optionee upon the sale or transfer of such stock or securities.

3.All notices hereunder shall be in writing and, if to the Company, shall be delivered personally to the Secretary of the Company or mailed to its principal office, 333 North Central Avenue, Phoenix, Arizona 85004, addressed to the attention of the Secretary; and, if to the Optionee, shall be delivered personally, mailed or delivered via e-mail to the Optionee at the address on file with the Company. Such addresses may be changed at any time by notice from one party to the other.

4.The terms of this Agreement shall bind and inure to the benefit of the Optionee, the Company and the successors and assigns of the Company (and the term “Company” shall include any such successors and assigns) and, to the extent provided in the Plan and in this Agreement, the Designated Beneficiaries and the legal representatives of the Optionee.

5.This Agreement is subject to the provisions of the Plan. The Plan may at any time be amended by the Board, except that any such amendment of the Plan that would materially impair the rights of the Optionee hereunder may not be made without the Optionee's consent. The Committee may amend, modify or terminate this Agreement and any of the Options granted hereunder at any time prior to exercise in any manner not inconsistent with the terms of the Plan, including, without limitation, to change the date or dates as of which the Options granted hereunder become exercisable. Notwithstanding the foregoing, no such amendment, modification or termination may materially impair the rights of the Optionee hereunder without the Optionee's consent. Except as set forth above, any applicable determinations, orders, resolutions or other actions of the Committee shall be final, conclusive and binding on the Company and the Optionee.

6.The Optionee is required to satisfy any obligation in respect of withholding or other payroll taxes resulting from the exercise of any Option granted hereunder, in accordance with procedures established by the Committee, as a condition to receiving any securities resulting from the exercise of any such Option.

7.Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of the Company or any of its Subsidiaries, or to interfere in any way with the right of the Company or any of its Subsidiaries to terminate Optionee's employment relationship with the Company or any of its Subsidiaries at any time.

8.As used in this Agreement, the following terms shall have the meanings set forth below.

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(a)“Cause” shall mean any of the following: (i) the commission by the Optionee of an illegal act (other than traffic violations or misdemeanors punishable solely by the payment of a fine), (ii) the engagement of the Optionee in dishonest or unethical conduct, as determined by the Committee or its designee, (iii) the commission by the Optionee of any fraud, theft, embezzlement, or misappropriation of funds, (iv) the failure of the Optionee to carry out a directive of his superior, employer or principal, or (v) the breach of the Optionee of the terms of his engagement.

(b)Change in Control.

(i)For purposes of this Agreement, “Change in Control” means (capitalized terms not otherwise defined will have the meanings ascribed to them in paragraph (ii) below):

(A)the acquisition by any Person together with all Affiliates of such Person, of Beneficial Ownership of the Threshold Percentage or more; provided, however, that for purposes of this Section 12(b)(i)(A), the following will not constitute a Change in Control:

(1)any acquisition (other than a “Business Combination,” as defined below, that constitutes a Change in Control under Section 12(b)(i)(C) hereof) of Common Stock directly from the Company,

(2)any acquisition of Common Stock by the Company or its subsidiaries,

(3)any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other entity controlled by the Company, or

(4)any acquisition of Common Stock pursuant to a Business Combination that does not constitute a Change in Control under Section 12(b)(i)(C) hereof; or

(B)individuals who as of the effective date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, unless such individual's initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or any other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or

(C)the consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of

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the Company (a “Business Combination”), in each case, unless, immediately following such Business Combination:

(1)the individuals and entities who were the Beneficial Owners of the Company Voting Stock immediately prior to such Business Combination have direct or indirect Beneficial Ownership of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Company, and

(2)no Person together with all Affiliates of such Person (excluding the Company and any employee benefit plan or related trust of the Company or any subsidiary of the Company) Beneficially Owns 30% or more of the then outstanding shares of common stock of the Company or 30% or more of the combined voting power of the then outstanding voting securities of the Company, and

(3)at least a majority of the members of the board of directors of the Company were members of the Incumbent Board at the time of the execution of the initial agreement, and of the action of the Board, providing for such Business Combination; or

(D)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(ii)As used in this Section 12(b), the following terms have the meanings indicated:

(A)Affiliate: “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another specified Person.

(B)Beneficial Owner: “Beneficial Owner” (and variants thereof), with respect to a security, means a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (1) the power to vote, or direct the voting of, the security, and/or (2) the power to dispose of, or to direct the disposition of, the security.

(C)Company Voting Stock: “Company Voting Stock” means any capital stock of the Company that is then entitled to vote for the election of directors.

(D)Majority Shares: “Majority Shares” means the number of shares of Company Voting Stock that could elect a majority of the directors of the Company if all directors were to be elected at a single meeting.

(E)Person: “Person” means a natural person or entity, and will also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including without limitation a partnership, limited partnership, joint venture or other joint undertaking) for the purpose of acquiring, holding, or disposing of a security, except that

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“Person” will not include an underwriter temporarily holding a security pursuant to an offering of the security.

(F)Threshold Percentage: “Threshold Percentage” means 30% of all then outstanding Common Stock.

(c) “Disability” shall mean long-term disability, as defined in the Company's long-term disability plan.

(d)“Good Reason” shall mean either of the following (without Optionee's express written consent): (i) a material diminution in Optionee's base salary as of the day immediately preceding the Change in Control or (ii) the Company's requiring Optionee to be based at any office or location more than 50 miles from Optionee's principal office or location as of the day immediately preceding the Change in Control. Notwithstanding the foregoing, Optionee shall not have the right to terminate Optionee's employment hereunder for Good Reason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right Optionee provides written notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, Optionee must terminate Optionee's employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period. The foregoing to the contrary notwithstanding, if at any time the Optionee is subject to an effective employment or change in control agreement with the Company or an Affiliate (as defined in Section 12(b)), then, in lieu of the foregoing definition, “Good Reason” shall at that time have such meaning as may be specified in such other agreement.

(e)“Retirement” shall mean early, normal or deferred retirement of the Optionee under a tax qualified retirement plan of the Company or any other cessation of the provision of services to the Company or a Subsidiary by the Optionee that is deemed by the Committee to constitute a retirement.

9.The Company may, in its sole discretion, deliver any documents related to the Optionee's current or future participation in the Plan by electronic means or request your consent to participate in the Plan by electronic means. By accepting the terms of this Agreement, the Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Optionee must expressly accept the terms and conditions of this Agreement by electronically accepting this Agreement in a timely manner. If the Optionee does not accept the terms of this Agreement, the Options are subject to cancellation.

* * * * * * * * * * * * *

By clicking the “Accept” button, the Optionee represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Agreement in their entirety and fully understands all provisions of this Agreement. Optionee agrees to accept as

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binding, conclusive and final all decisions or interpretations of the Corporate Personnel Committee of the Company's Board of Directors upon any questions arising under the Plan or this Agreement.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

7

EX-10.51

Exhibit 10.51

FREEPORT-McMoRan COPPER & GOLD INC.

RESTRICTED STOCK UNIT AGREEMENT

UNDER THE 20__ STOCK INCENTIVE PLAN

1.(a)Pursuant to the Freeport-McMoRan Copper & Gold Inc. 20__ Stock Incentive Plan (the “Plan”), on ____________, 20__ (the “Grant Date”), Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”) granted _________ restricted stock units (“Restricted Stock Units” or “RSUs”) to _______________ (the “Participant”) on the terms and conditions set forth in this Agreement and in the Plan.

(b)Defined terms not otherwise defined herein shall have the meanings set forth in Section 2 of the Plan.

(c)Subject to the terms, conditions, and restrictions set forth in the Plan and herein, each RSU granted hereunder represents the right to receive from the Company, on the respective scheduled vesting date for such RSU set forth in Section 2(a) of this Agreement or on such earlier date as provided in Sections 5(b) and 5(c) of this Agreement (the “Vesting Date”), one share (a “Share”) of common stock of the Company (“Common Stock”), free of any restrictions, all amounts notionally credited to the Participant's Dividend Equivalent Account (as defined in Section 4 of this Agreement) with respect to such RSU, and all securities and property comprising all Property Distributions (as defined in Section 4 of this Agreement) deposited in such Dividend Equivalent Account with respect to such RSU.

(d)As soon as practicable after the Vesting Date (but no later than 30 days from such date) for any RSUs granted hereunder, the Participant shall receive from the Company the number of Shares to which the vested RSUs relate, free of any restrictions, a cash payment for all amounts notionally credited to the Participant's Dividend Equivalent Account with respect to such vested RSUs, and all securities and property comprising all Property Distributions deposited in such Dividend Equivalent Account with respect to such vested RSUs.

2.(a)The RSUs granted hereunder shall vest in installments as follows:

Scheduled Vesting Date Number of RSUs

(b)Until the respective Vesting Date for an RSU granted hereunder, such RSU, all amounts notionally credited in any Dividend Equivalent Account related to such RSU, and all securities or property comprising all Property Distributions deposited in such Dividend

Equivalent Account related to such RSU shall be subject to forfeiture as provided in Section 5 of this Agreement.

3.Except as provided in Section 4 of this Agreement, an RSU shall not entitle the Participant to any incidents of ownership (including, without limitation, dividend and voting rights) in any Share until the RSU shall vest and the Participant shall be issued the Share to which such RSU relates nor in any securities or property comprising any Property Distribution deposited in a Dividend Equivalent Account related to such RSU until such RSU vests.

4.From and after the Grant Date of an RSU until the issuance of the Share payable in respect of such RSU, the Participant shall be credited, as of the payment date therefor, with (i) the amount of any cash dividends and (ii) the amount equal to the Fair Market Value of any Shares, Subsidiary securities, other securities, or other property distributed or distributable in respect of one share of Common Stock to which the Participant would have been entitled had the Participant been a record holder of one share of Common Stock at all times from the Grant Date to such issuance date (a “Property Distribution”). All such credits shall be made notionally to a dividend equivalent account (a “Dividend Equivalent Account”) established for the Participant with respect to all RSUs granted hereunder with the same Vesting Date. All credits to a Dividend Equivalent Account for the Participant shall be notionally increased by the Account Rate (as hereinafter defined), compounded quarterly, from and after the applicable date of credit until paid in accordance with the provisions of this Agreement. The “Account Rate” shall be the prime commercial lending rate announced from time to time by JPMorgan Chase Bank, N.A. or by another major national bank headquartered in New York, New York designated by the Committee. The Committee may, in its discretion, deposit in the Participant's Dividend Equivalent Account the securities or property comprising any Property Distribution in lieu of crediting such Dividend Equivalent Account with the Fair Market Value thereof, or may otherwise adjust the terms of the Award as permitted under Section 5(b) of the Plan.

5.(a)Except as set forth in Sections 5(b) or 5(c) of this Agreement, all unvested RSUs provided for in this Agreement, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall immediately be forfeited on the date the Participant ceases to be an Eligible Individual (the “Termination Date”).

(b)Notwithstanding the foregoing, if the Participant ceases to be an Eligible Individual (the “Termination”) by reason of the Participant's death, Disability, or Retirement, the RSUs granted hereunder that are scheduled to vest on the first Vesting Date following the Termination Date, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall vest as of the Participant's Termination Date. Except in connection with a Change in Control under Section 5(c), in the event that the Participant ceases to be an Eligible Individual by reason of the Participant's Termination by his employer or principal without Cause, the Committee or any person to whom the Committee has delegated authority may, in its or his sole discretion, determine that the RSUs granted hereunder that are scheduled to vest on the first Vesting Date following the Termination Date, all amounts credited to the Participant's Dividend Equivalent

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Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall vest as of the Participant's Termination Date.

(c)If there has been a Change in Control of the Company, and within one year following the date of such Change in Control the Participant ceases to be an Eligible Individual by reason of the Participant's Termination by his employer or principal without Cause or Participant's termination of employment with Good Reason, then the RSUs granted hereunder that have not yet vested, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall vest as of the Participant's Termination Date.

(d)In the event vesting is accelerated pursuant to this Section 5 and the Participant is a Key Employee, a distribution of Shares issuable to the Participant, all amounts notionally credited to the Participant's Dividend Equivalent Account, and all securities and property comprising all Property Distributions deposited in such Dividend Equivalent Account due the Participant upon the vesting of the RSUs shall not occur until six months after the Participant's Termination Date, unless the Participant's Termination is due to death or Disability.

6.The RSUs granted hereunder, any amounts notionally credited in the Participant's Dividend Equivalent Accounts, and any securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts are not transferable by the Participant otherwise than by will or by the laws of descent and distribution.

7.If the Participant is or becomes subject to the terms of the Company's Compensation Recovery Policy (the “Policy”), as such Policy may be amended from time to time, including amendments adopted in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any resulting rules issued by the SEC or national securities exchanges thereunder, then the RSUs granted hereunder shall also be subject to such Policy. Accordingly, if the Board determines that recovery of compensation under such Policy is due, then the RSUs granted hereunder shall automatically terminate and be forfeited effective on the date of such determination and all shares of Common Stock acquired by the Participant pursuant to this Agreement (or other securities into which such shares have been converted or exchanged) shall be returned to the Company or, if no longer held by the Participant, the Participant shall pay to the Company, without interest, all cash, securities or other assets received by the Participant upon the sale or transfer of such stock or securities.

8.All notices hereunder shall be in writing and, if to the Company, shall be delivered personally to the Secretary of the Company or mailed to 333 North Central Avenue, Phoenix, Arizona 85004, addressed to the attention of the Secretary; and, if to the Participant, shall be delivered personally or mailed to the Participant at the address on file with the Company. Such addresses may be changed at any time by notice from one party to the other.

9.This Agreement is subject to the provisions of the Plan. The Plan may at any time be amended by the Board, except that any such amendment of the Plan that would materially impair the rights of the Participant hereunder may not be made without the Participant's consent.

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The Committee may amend this Agreement at any time in any manner that is not inconsistent with the terms of the Plan and that will not result in the application of Section 409A(a)(1) of the Code. Notwithstanding the foregoing, no such amendment may materially impair the rights of the Participant hereunder without the Participant's consent. Except as set forth above, any applicable determinations, orders, resolutions or other actions of the Committee shall be final, conclusive and binding on the Company and the Participant.

10.The Participant is required to satisfy any obligation in respect of withholding or other payroll taxes resulting from the vesting of any RSU granted hereunder or the payment of any securities, cash, or property hereunder, in accordance with procedures established by the Committee, as a condition to receiving any securities, cash payments, or property resulting from the vesting of any RSU or otherwise.

11.Nothing in this Agreement shall confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries, or to interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Participant's employment relationship with the Company or any of its Subsidiaries at any time.

12.As used in this Agreement, the following terms shall have the meanings set forth below.

(a)“Cause” shall mean any of the following: (i) the commission by the Participant of an illegal act (other than traffic violations or misdemeanors punishable solely by the payment of a fine); (ii) the engagement of the Participant in dishonest or unethical conduct, as determined by the Committee or its designee; (iii) the commission by the Participant of any fraud, theft, embezzlement, or misappropriation of funds; (iv) the failure of the Participant to carry out a directive of his superior, employer or principal; or (v) the breach of the Participant of the terms of his engagement.

(b)Change in Control.

(i)For purposes of this Agreement, “Change in Control” means (capitalized terms not otherwise defined will have the meanings ascribed to them in paragraph (ii) below):

(A)the acquisition by any Person together with all Affiliates of such Person, of Beneficial Ownership of the Threshold Percentage or more; provided, however, that for purposes of this Section 12(b)(i)(A), the following will not constitute a Change in Control:

(1)any acquisition (other than a “Business Combination,” as defined below, that constitutes a Change in Control under Section 12(b)(i)(C) hereof) of Common Stock directly from the Company,

(2)any acquisition of Common Stock by the Company or its subsidiaries,

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(3)any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other entity controlled by the Company, or

(4)any acquisition of Common Stock pursuant to a Business Combination that does not constitute a Change in Control under Section 12(b)(i)(C) hereof; or

(B)individuals who as of the effective date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, unless such individual's initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or any other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or

(C)the consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, immediately following such Business Combination:

(1)the individuals and entities who were the Beneficial Owners of the Company Voting Stock immediately prior to such Business Combination have direct or indirect Beneficial Ownership of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Company, and

(2)no Person together with all Affiliates of such Person (excluding the Company and any employee benefit plan or related trust of the Company or any subsidiary of the Company) Beneficially Owns 30% or more of the then outstanding shares of common stock of the Company or 30% or more of the combined voting power of the then outstanding voting securities of the Company, and

(3)at least a majority of the members of the board of directors of the Company were members of the Incumbent Board at the time of the execution of the initial agreement, and of the action of the Board, providing for such Business Combination; or

(D)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(ii)As used in this Section 12(b), the following terms have the meanings indicated:

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(A)Affiliate: “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another specified Person.

(B)Beneficial Owner: “Beneficial Owner” (and variants thereof), with respect to a security, means a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (1) the power to vote, or direct the voting of, the security, and/or (2) the power to dispose of, or to direct the disposition of, the security.

(C)Company Voting Stock: “Company Voting Stock” means any capital stock of the Company that is then entitled to vote for the election of directors.

(D)Majority Shares: “Majority Shares” means the number of shares of Company Voting Stock that could elect a majority of the directors of the Company if all directors were to be elected at a single meeting.

(E)Person: “Person” means a natural person or entity, and will also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including without limitation a partnership, limited partnership, joint venture or other joint undertaking) for the purpose of acquiring, holding, or disposing of a security, except that “Person” will not include an underwriter temporarily holding a security pursuant to an offering of the security.

(F)Threshold Percentage: “Threshold Percentage” means 30% of all then outstanding Common Stock.

(c)“Disability” shall have occurred if the Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant's employer.

(d)“Fair Market Value” shall, with respect to a share of Common Stock, a Subsidiary security, or any other security, have the meaning set forth in the Freeport-McMoRan Copper & Gold Inc. Policies of the Committee applicable to the Plan, and, with respect to any other property, mean the value thereof determined by the board of directors of the Company in connection with declaring the dividend or distribution thereof.

(e)“Good Reason” shall mean either of the following (without Participant's express written consent): (i) a material diminution in Participant's base salary as of the day immediately preceding the Change in Control or (ii) the Company's requiring Participant to be based at any office or location more than 50 miles from Participant's principal office or location as of the day immediately preceding the Change in Control. Notwithstanding the foregoing, Participant shall not have the right to terminate Participant's employment hereunder for Good

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Reason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right Participant provides written notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, Participant must terminate Participant's employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period. The foregoing to the contrary notwithstanding, if at any time the Participant is subject to an effective employment or change in control agreement with the Company or an Affiliate (as define in Section 12(b)), then, in lieu of the foregoing definition, “Good Reason” shall at that time have such meaning as may be specified in such other agreement.

(f)“Key Employee” shall mean any employee who meets the definition of “key employee” as defined in Section 416(i) of the Code.

(g)“Retirement” shall mean early, normal or deferred retirement of the Participant under a tax qualified retirement plan of the Company or any other cessation of the provision of services to the Company or a Subsidiary by the Participant that is deemed by the Committee or its designee to constitute a retirement.

13.The Company may, in its sole discretion, deliver any documents related to the Participant's current or future participation in the Plan by electronic means or request Participant's consent to participate in the Plan by electronic means. By accepting the terms of this Agreement, the Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant must expressly accept the terms and conditions of this Agreement by electronically accepting this Agreement in a timely manner. If the Participant does not accept the terms of this Agreement, the RSUs are subject to cancellation.

* * * * * * * * * * * * *

By clicking the “Accept” button, the Participant represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Agreement in their entirety and fully understands all provisions of this Agreement. Participant agrees to accept as binding, conclusive and final all decisions or interpretations of the Corporate Personnel Committee of the Company's Board of Directors upon any questions arising under the Plan or this Agreement.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

7

EX-10.52

Exhibit 10.52

FREEPORT-McMoRan COPPER & GOLD INC.

PERFORMANCE-BASED

RESTRICTED STOCK UNIT AGREEMENT

UNDER THE

20__ STOCK INCENTIVE PLAN

1.(a)Pursuant to the Freeport-McMoRan Copper & Gold Inc. 20__ Stock Incentive Plan (the “Plan”), on ____________, 20__ (the “Grant Date”), Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”) granted ____________ restricted stock units (“Restricted Stock Units” or “RSUs”) to _________________ (the “Participant”) on the terms and conditions set forth in this Agreement and in the Plan.

(b)Defined terms not otherwise defined herein shall have the meanings set forth in Section 2 of the Plan.

(c)The RSUs granted hereunder represent a portion of the Participant's incentive award under the Company's 2009 Annual Incentive Plan, or a predecessor plan (the “AIP”). The AIP is a stockholder approved plan intended to provide “performance-based” compensation under Section 162(m) of the Code. Under the AIP, a portion of each participant's annual incentive award may not be made in cash, but must instead be made in the form of restricted stock units.

(d)Subject to the terms, conditions, and restrictions set forth in the Plan and herein, each RSU granted hereunder represents the right to receive from the Company, on the scheduled vesting date set forth in Section 2(a) of this Agreement or on such earlier date as provided in Section 5 of this Agreement (the “Vesting Date”), one share (a “Share”) of common stock of the Company (“Common Stock”), free of any restrictions, all amounts notionally credited to the Participant's Dividend Equivalent Account (as defined in Section 4 of this Agreement) with respect to such RSU, and all securities and property comprising all Property Distributions (as defined in Section 4 of this Agreement) deposited in such Dividend Equivalent Account with respect to such RSU.

(e)Provided the conditions of Section 6 of this Agreement have been met, as soon as practicable after the Vesting Date (but no later than 30 days from such date) for any RSUs granted hereunder, the Participant shall receive from the Company the number of Shares to which the vested RSUs relate, free of any restrictions, a cash payment for all amounts notionally credited to the Participant's Dividend Equivalent Account with respect to such vested RSUs, and all securities and property comprising all Property Distributions deposited in such Dividend Equivalent Account with respect to such vested RSUs.

2.(a)Provided the conditions of Section 6 of this Agreement have been met, the RSUs granted hereunder shall vest on February 15, 20__ [three-years from Grant Date].

(b)Until the Vesting Date for an RSU granted hereunder, such RSU, all amounts notionally credited in any Dividend Equivalent Account related to such RSU, and all securities or property comprising all Property Distributions deposited in such Dividend

Equivalent Account related to such RSU shall be subject to forfeiture as provided in Section 5 of this Agreement.

3.Except as provided in Section 4 of this Agreement, an RSU shall not entitle the Participant to any incidents of ownership (including, without limitation, dividend and voting rights) in any Share until the RSU shall vest and the Participant shall be issued the Share to which such RSU relates nor in any securities or property comprising any Property Distribution deposited in a Dividend Equivalent Account related to such RSU until such RSU vests.

4.From and after the Grant Date of an RSU until the issuance of the Share payable in respect of such RSU, the Participant shall be credited, as of the payment date therefor, with (i) the amount of any cash dividends and (ii) the amount equal to the Fair Market Value of any Shares, Subsidiary securities, other securities, or other property distributed or distributable in respect of one share of Common Stock to which the Participant would have been entitled had the Participant been a record holder of one share of Common Stock at all times from the Grant Date to such issuance date (a “Property Distribution”). All such credits shall be made notionally to a dividend equivalent account (a “Dividend Equivalent Account”) established for the Participant with respect to all RSUs granted hereunder with the same Vesting Date. All credits to a Dividend Equivalent Account for the Participant shall be notionally increased by the Account Rate (as hereinafter defined), compounded quarterly, from and after the applicable date of credit until paid in accordance with the provisions of this Agreement. The “Account Rate” shall be the prime commercial lending rate announced from time to time by JPMorgan Chase Bank, N.A. or by another major national bank headquartered in New York, New York designated by the Committee. The Committee may, in its discretion, deposit in the Participant's Dividend Equivalent Account the securities or property comprising any Property Distribution in lieu of crediting such Dividend Equivalent Account with the Fair Market Value thereof, or may otherwise adjust the terms of the Award as permitted under Section 5(b) of the Plan.

5.(a)Except as set forth in Sections 5(b) through 5(d) of this Agreement, all unvested RSUs provided for in this Agreement, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall immediately be forfeited on the date the Participant ceases to be an Eligible Individual (the “Termination Date”).

(b)Notwithstanding the foregoing, if the Participant ceases to be an Eligible Individual (the “Termination”) by reason of the Participant's death, Disability, or Retirement, the RSUs granted hereunder shall not be forfeited, and all such RSUs, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall remain outstanding and vest as of the date set forth in Section 2(a) provided the condition set forth in Section 6(b), but not Section 6(a), of this Agreement has been met.

(c)Unless Section 5(d) applies, in the event that the Participant ceases to be an Eligible Individual by reason of the Participant's Termination by his employer or principal without Cause, and provided the conditions of Section 6(a) and 6(b) of this Agreement have been

2

met as of the Participant's Termination Date, the Committee may, in its sole discretion, determine that the RSUs granted hereunder, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall vest as of the Participant's Termination Date.

(d)If there has been a Change in Control of the Company, and within one year following the date of such Change in Control the Participant ceases to be an Eligible Individual by reason of the Participant's Termination by his employer or principal without Cause or Participant's termination of employment with Good Reason, then the RSUs granted hereunder shall not be forfeited, and all such RSUs, all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall remain outstanding and vest as of the date set forth in Section 2(a) provided the conditions of Section 6(a) and 6(b) of this Agreement have been met.

(e)In the event vesting is accelerated pursuant to this Section 5 and the Participant is a Key Employee, a distribution of Shares issuable to the Participant, all amounts notionally credited to the Participant's Dividend Equivalent Account, and all securities and property comprising all Property Distributions deposited in such Dividend Equivalent Account due the Participant upon the vesting of the RSUs shall not occur until six months after the Participant's Termination Date, unless the Participant's Termination is due to death or Disability.

6.(a)No RSU granted hereunder shall vest on the scheduled Vesting Date under Section 2(a) of this Agreement or as a result of the Participant's Termination pursuant to Section 5(c) of this Agreement unless the average of the Return on Investment for the five calendar years preceding the year in which such event occurs is at least 6%.

(b)Notwithstanding the Company' satisfaction of the condition in Section 6(a), if the Company's Total Shareholder Return is below the median of the Total Shareholder Return of the Peer Group, then 20% of the RSUs granted hereunder shall be forfeited.

(c) If required or deemed necessary to satisfy the requirements to qualify such RSU as “performance-based compensation” under Section 162(m), the appropriate members of the Committee shall certify prior to vesting the Company's achievement of the conditions in Sections 6(a) and 6(b). Any RSUs that do not vest as a result of the failure to meet the conditions of Sections 6(a) or 6(b), all amounts credited to the Participant's Dividend Equivalent Accounts with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts with respect to such RSUs shall immediately be forfeited.

7.The RSUs granted hereunder, any amounts notionally credited in the Participant's Dividend Equivalent Accounts, and any securities and property comprising Property Distributions deposited in such Dividend Equivalent Accounts are not transferable by the Participant otherwise than by will or by the laws of descent and distribution.

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8.If the Participant is or becomes subject to the terms of the Company's Compensation Recovery Policy (the “Policy”), as such Policy may be amended from time to time, including amendments adopted in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any resulting rules issued by the SEC or national securities exchanges thereunder, then the RSUs granted hereunder shall also be subject to such Policy. Accordingly, if the Board determines that recovery of compensation under such Policy is due, then the RSUs granted hereunder shall automatically terminate and be forfeited effective on the date of such determination and all shares of Common Stock acquired by the Participant pursuant to this Agreement (or other securities into which such shares have been converted or exchanged) shall be returned to the Company or, if no longer held by the Participant, the Participant shall pay to the Company, without interest, all cash, securities or other assets received by the Participant upon the sale or transfer of such stock or securities.

9.All notices hereunder shall be in writing and, if to the Company, shall be delivered personally to the Secretary of the Company or mailed to 333 North Central Avenue, Phoenix, Arizona 85004, addressed to the attention of the Secretary; and, if to the Participant, shall be delivered personally or mailed to the Participant at the address on file with the Company. Such addresses may be changed at any time by notice from one party to the other.

10.This Agreement is subject to the provisions of the Plan. The Plan may at any time be amended by the Board, except that any such amendment of the Plan that would materially impair the rights of the Participant hereunder may not be made without the Participant's consent. The Committee may amend this Agreement at any time in any manner that is not inconsistent with the terms of the Plan and that will not result in the application of Section 409A(a)(1) of the Code. Notwithstanding the foregoing, no such amendment may materially impair the rights of the Participant hereunder without the Participant's consent. Except as set forth above, any applicable determinations, orders, resolutions or other actions of the Committee shall be final, conclusive and binding on the Company and the Participant.

11.The Participant is required to satisfy any obligation in respect of withholding or other payroll taxes resulting from the vesting of any RSU granted hereunder or the payment of any securities, cash, or property hereunder, in accordance with procedures established by the Committee, as a condition to receiving any securities, cash payments, or property resulting from the vesting of any RSU or otherwise.

12.Nothing in this Agreement shall confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries, or to interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Participant's employment relationship with the Company or any of its Subsidiaries at any time.

13.As used in this Agreement, the following terms shall have the meanings set forth below.

(a)“Cause” shall mean any of the following: (i) the commission by the Participant of an illegal act (other than traffic violations or misdemeanors punishable solely by the payment of a fine), (ii) the engagement of the Participant in dishonest or unethical conduct, as determined by the Committee or its designee, (iii) the commission by the Participant of any

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fraud, theft, embezzlement, or misappropriation of funds, (iv) the failure of the Participant to carry out a directive of his superior, employer or principal, or (v) the breach of the Participant of the terms of his engagement.

(b)“Change in Control.”

(i)For purposes of this Agreement, “Change in Control” means (capitalized terms not otherwise defined will have the meanings ascribed to them in paragraph (ii) below):

(A)the acquisition by any Person together with all Affiliates of such Person, of Beneficial Ownership of the Threshold Percentage or more; provided, however, that for purposes of this Section 13(b)(i)(A), the following will not constitute a Change in Control:

(1)any acquisition (other than a “Business Combination,” as defined below, that constitutes a Change in Control under Section 13(b)(i)(C) hereof) of Common Stock directly from the Company,

(2)any acquisition of Common Stock by the Company or its subsidiaries,

(3)any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other entity controlled by the Company, or

(4)any acquisition of Common Stock pursuant to a Business Combination that does not constitute a Change in Control under Section 13(b)(i)(C) hereof; or

(B)individuals who as of the effective date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, unless such individual's initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or any other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or

(C)the consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, immediately following such Business Combination:

(1)the individuals and entities who were the Beneficial Owners of the Company Voting Stock immediately prior to such Business Combination have

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direct or indirect Beneficial Ownership of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Company, and

(2)no Person together with all Affiliates of such Person (excluding the Company and any employee benefit plan or related trust of the Company or any subsidiary of the Company) Beneficially Owns 30% or more of the then outstanding shares of common stock of the Company or 30% or more of the combined voting power of the then outstanding voting securities of the Company, and

(3)at least a majority of the members of the board of directors of the Company were members of the Incumbent Board at the time of the execution of the initial agreement, and of the action of the Board, providing for such Business Combination; or

(D)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(ii)As used in this Section 13(b), the following terms have the meanings indicated:

(A)Affiliate: “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another specified Person.

(B)Beneficial Owner: “Beneficial Owner” (and variants thereof), with respect to a security, means a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (1) the power to vote, or direct the voting of, the security, and/or (2) the power to dispose of, or to direct the disposition of, the security.

(C)Company Voting Stock: “Company Voting Stock” means any capital stock of the Company that is then entitled to vote for the election of directors.

(D)Majority Shares: “Majority Shares” means the number of shares of Company Voting Stock that could elect a majority of the directors of the Company if all directors were to be elected at a single meeting.

(E)Person: “Person” means a natural person or entity, and will also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including without limitation a partnership, limited partnership, joint venture or other joint undertaking) for the purpose of acquiring, holding, or disposing of a security, except that “Person” will not include an underwriter temporarily holding a security pursuant to an offering of the security.

(F)Threshold Percentage: “Threshold Percentage” means 30% of all then outstanding Common Stock.

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(c)“Disability” shall have occurred if the Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant's employer.

(d)“Fair Market Value” shall, with respect to a share of Common Stock, a Subsidiary security, or any other security, have the meaning set forth in the Freeport-McMoRan Copper & Gold Inc. Policies of the Committee applicable to the Plan, and, with respect to any other property, mean the value thereof determined by the board of directors of the Company in connection with declaring the dividend or distribution thereof.

(e)“Good Reason” shall mean either of the following (without Participant's express written consent): (i) a material diminution in Participant's base salary as of the day immediately preceding the Change in Control or (ii) the Company's requiring Participant to be based at any office or location more than 50 miles from Participant's principal office or location as of the day immediately preceding the Change in Control. Notwithstanding the foregoing, Participant shall not have the right to terminate Participant's employment hereunder for Good Reason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right Participant provides written notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, Participant must terminate Participant's employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period. The foregoing to the contrary notwithstanding, if at any time the Participant is subject to an effective employment or change in control agreement with the Company or an Affiliate (as defined in Section 13(b)), then, in lieu of the foregoing definition, “Good Reason” shall at that time have such meaning as may be specified in such other agreement

(f)“Key Employee” shall mean any employee who meets the definition of “key employee” as defined in Section 416(i) of the Code.

(g)“Managed Net Income” shall mean, the managed net income as reviewed by the Company's independent registered public accounting firm, released by the Company to the public and approved by the Board, the net income (or net loss) of the Company and its consolidated subsidiaries with respect to any year, plus (or minus) the following items if included in such net income (or net loss) amounts:

(i)the non-controlling interests' share in the net income (or net loss) of the Company's consolidated subsidiaries for such year;

(ii)the cumulative effect of changes in accounting principles of the Company and its consolidated subsidiaries for such year plus (or minus) the non-controlling interests' share in such changes in accounting principles;

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(iii)any extraordinary, unusual or non-recurring items for such year plus (or minus) the non-controlling interests' share in such extraordinary, unusual or non-recurring items;

(iv)the effect of discontinued operations for such year plus (or minus) the non-controlling interests' share in such discontinued operations;

(v)any non-cash gain or loss attributable to any hedging agreement relating to commodity prices for such year plus (or minus) the non-controlling interests' share in such non-cash gain or loss; until such time as it is settled, at which time the net gain or loss shall be included plus (or minus) the non-controlling interests' share in such non-cash gain or loss;

(vi)any non-cash gain or loss attributable to any changes in accounting principles or policies (including adoption of International Financial Reporting Standards) for such year plus (or minus) the non-controlling interests' share in such non-cash gain or loss;

(vii)any non-cash asset impairment charges (including any goodwill impairment) and any amortization of intangible assets or liabilities for such year following approval of the Plan plus (or minus) the non-controlling interests' share in such non-cash charges or amortization;

(viii)any change in cost of goods sold attributable to inventories resulting from the acquisition method of accounting in connection with any acquisition for such year following approval of the Plan plus (or minus) the non-controlling interests' share in such increase or decrease; and

(ix)any adjustments specified by the Committee within the first 90 days of each year, including without limitation, adjustments related toasset write-downs; acquisition-related charges; litigation or claim judgments or settlements; the effects of changes in tax law or other laws or provisions affecting reported results; accruals for reorganization and restructuring programs; and unrealized gains or losses on investments.

(h)“Net Cash Provided by Operating Activities” shall mean, with respect to any year, the net cash provided by operating activities excluding working capital changes of the Company and its consolidated subsidiaries for such year as reviewed by the Company's independent registered public accounting firm, released by the Company to the public and approved by the Board.

(i)“Net Interest Expense” shall mean, with respect to any year, the net interest expense of the Company and its consolidated subsidiaries for such year as reviewed by the Company's independent registered public accounting firm, released by the Company to the public and approved by the Board.

(j)“Peer Group” shall refer to the following companies: Alcoa Inc., Anglo American plc, Antofagasta plc, Barrick Gold Corporation, BHP Billiton Limited, Newmont Mining Corporation, Rio Tinto plc, Southern Copper Corporation, Teck Resources Limited,

8

United States Steel Corporation, Vale S.A., and Xstrata plc. If any Peer Group company's TSR shall cease to be publicly available (due to a business combination, receivership, bankruptcy or other event) or if any such company is no longer publicly held, the Committee shall exclude that company from the Peer Group.

(k)“Performance Period” shall mean the three-year period beginning on the January 1^st preceding the Grant Date and ending on December 31^st of the year prior to the Vesting Date set forth in Section 2(a).

(l)“Retirement” shall mean early, normal or deferred retirement of the Participant under a tax qualified retirement plan of the Company or any other cessation of the provision of services to the Company or a Subsidiary by the Participant that is deemed by the Committee or its designee to constitute a retirement.

(m)“Return on Investment” shall mean, with respect to any year, the result (expressed as a percentage) calculated according to the following formula:

a + (b - c)

d

in which “a” equals Managed Net Income for such year, “b” equals Net Interest Expense for such year, “c” equals Tax on Net Interest Expense for such year, and “d” equals Total Investment of Capital for such year.

(n)“Tax on Net Interest Expense” shall mean, with respect to any year, the tax on the net interest expense of the Company and its consolidated subsidiaries for such year calculated at the appropriate income tax rate for such year as reviewed by the Company's independent registered public accounting firm.

(o)“Total Investment of Capital” shall mean, with respect to any year, (i) the sum of (A) the average of total equity in the Company and its consolidated subsidiaries for such year, (B) the average of temporary equity of the Company for such year, and (C) the average of debt of the Company and its consolidated subsidiaries for such year, all as shown in the quarterly balance sheets of the Company and its consolidated subsidiaries for such year, (ii) minus the average of cash and cash equivalents of the Company and its consolidated subsidiaries for such year as shown in the quarterly balance sheets of the Company and its consolidated subsidiaries for such year. If the Company is required to adopt International Financial Reporting Standards, the foregoing calculation will exclude any impact resulting from such adoption.

(p)“Total Shareholder Return” or “TSR” as applied to the Company or any company in the Peer Group means stock price appreciation from the beginning to the end of the Performance Period, including dividends and distributions made or declared (assuming such dividends or distributions are reinvested in the common stock of the Company or any company in the Peer Group) during the Performance Period, expressed as a percentage return, using the following formula:

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TSR = (A/B)-1, with A equal to the Ending Stock Price including dividends paid and B equal to the Beginning Stock Price.

For purposes of computing TSR, the Beginning Stock Price will be the average price of a share of Common Stock over the 20 trading days ending on the day before the first day of the Performance Period or other relevant measurement period, and the Ending Stock Price will be the average price of a share of Common Stock over the 20 trading days ending on the last day of the Performance Period or other measurement period. TSR of the Company or any company in the Peer Group shall be equitably adjusted to reflect any spin off, stock split, reverse stock split, stock dividend, recapitalization, or reclassification or other similar change in the number of outstanding shares of common stock.

14.The Company may, in its sole discretion, deliver any documents related to the Participant's current or future participation in the Plan by electronic means or request Participant's consent to participate in the Plan by electronic means. By accepting the terms of this Agreement, the Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. The Participant must expressly accept the terms and conditions of this Agreement by electronically accepting this Agreement in a timely manner. If the Participant does not accept the terms of this Agreement, the RSUs are subject to cancellation.

* * * * * * * * * * * * *

By clicking the “Accept” button, the Participant represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Agreement in their entirety and fully understands all provisions of this Agreement. Participant agrees to accept as binding, conclusive and final all decisions or interpretations of the Corporate Personnel Committee of the Company's Board of Directors upon any questions arising under the Plan or this Agreement.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

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EX-12.1

Exhibit 12.1

FREEPORT-McMoRan COPPER & GOLD INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

(in millions except ratios)

	For the years ended December 31,
	2011			2010		2009		2008			2007
Income (loss) from continuing operations before income taxes and equity in affiliated companies' net earnings	$	8,818		8,512		5,816		(13,309	)		6,111
Amortization of previously capitalized interest	36			34		31		25			17
Less: capitalized interest	(109		)	(66	)	(78	)	(122	)		(147	)
Earnings (losses) from continuing operations before fixed charges	$	8,745		8,480		5,769		(13,406	)		5,981
Fixed charges:
Interest expense, net of capitalized interest	$	301		448		568		567			496
Capitalized interest	109			66		78		122			147
Amortization of debt expenses, premiums and and discounts	11			14		18		17			17
Interest portion of rental expense	23			26		32		18			12
Total fixed charges	$	444		554		696		724			672
Adjusted earnings (losses)	9,189			9,034		6,465		(12,682	)		6,653
Ratio of earnings to fixed charges (a)	$	20.7		16.3		9.3		—		(b)	9.9
Preferred dividend requirements:
Total fixed charges	$	444		554		696		724			672
Preferred stock dividends	—			96		370		347			340
Combined fixed charges and preferred stock dividends	444			650		1,066		1,071			1,012
Ratio of earnings to combined fixed charges and preferred stock dividends (a)	$	20.7		13.9		6.1		—		(c)	6.6

(a) For purposes of computing the consolidated ratio of earning to fixed charges, earnings consist of income (loss) from continuing operations before income taxes, equity in affiliated companies' net earnings and cumulative effect of accounting changes. Noncontrolling interests were not deducted from earnings as all such subsidiaries had fixed charges. Fixed charges from continuing operations consist of interest (including capitalized interest) of all indebtedness; amortization of debt discounts, premiums and expenses; and that portion of rental expense that FCX believes to be representative of interest. For purposes of calculating the ratio of earnings to combined fixed charges and preferred stock dividends, the preferred stock dividend requirements were assumed to be equal to the pre-tax earnings that would be required to cover such dividend requirements. The amount of pre-tax earnings required to cover such preferred stock dividends was computed using the effective tax rate for each applicable year.

(b) As a result of the loss recorded in 2008, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $13.4 billion to achieve coverage of 1:1 in 2008.

(c) As a result of the loss recorded in 2008, the ratio coverage was less than 1:1. FCX would have needed to generate additional earnings of $13.8 billion to achieve coverage of 1:1 in 2008.

EX-21.1

Exhibit 21.1

List of Subsidiaries of
Freeport-McMoRan Copper & Gold Inc.
Entity(1)		Jurisdiction of Organization
Compañia Contractual Minera Candelaria		Chile
Cyprus Amax Minerals Company		Delaware
Freeport-McMoRan Corporation		New York
Freeport-McMoRan Morenci Inc.		Delaware
PT Freeport Indonesia		Indonesia and Delaware
Sociedad Minera Cerro Verde S.A.A.		Peru
Tenke Fungurume Mining S.A.R.L.		Democratic Republic of Congo
(1)	Omitted from this list are subsidiaries that, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary as of December 31, 2011.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements of Freeport-McMoRan Copper & Gold Inc. on Form S-3 (File No. 333-179420) and Form 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 reports dated February 24, 2012, with respect to the consolidated financial statements and schedule of Freeport-McMoRan Copper & Gold Inc. and the effectiveness of internal control over financial reporting of Freeport-McMoRan Copper & Gold Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2011.

/s/ Ernst & Young LLP

Phoenix, Arizona

February 27, 2012

EX-24.1

Exhibit 24.1

Freeport-McMoRan Copper & Gold Inc.

Secretary's Certificate

I, Douglas N. Currault II, Secretary of Freeport-McMoRan Copper & Gold Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), do hereby certify that the following resolution was duly adopted by the Board of Directors of the Corporation at a meeting held on December 13, 1988, and that such resolution has not been amended, modified or rescinded and is in full force and effect on the date hereof:

RESOLVED, That any report, registration statement or other form filed on behalf of this corporation pursuant to the Securities Exchange Act of 1934, or any amendment to any such report, registration statement or other form, may be signed on behalf of any director or officer of this corporation pursuant to a power of attorney executed by such director or officer.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the Corporation on February 8, 2012.

/s/ Douglas N. Currault II

Douglas N. Currault II

Secretary

Seal

EX-24.2

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Robert A. Day

Robert A. Day

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011 and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Bobby Lee Lackey

Bobby Lee Lackey

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint RICHARD C. ADKERSON, his true and lawful attorney-in-fact with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorney full power and authority to do and perform each and every act and thing whatsoever that said attorney may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ James R. Moffett

James R. Moffett

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT, his true and lawful attorney-in-fact with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorney full power and authority to do and perform each and every act and thing whatsoever that said attorney may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Richard C. Adkerson

Richard C. Adkerson

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ B. M. Rankin, Jr.

B. M. Rankin, Jr.

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in her capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, her true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of her, in her name and in her capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Kathleen L. Quirk

Kathleen L. Quirk

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ C. Donald Whitmire, Jr.

C. Donald Whitmire, Jr.

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ H. Devon Graham, Jr.

H. Devon Graham, Jr.

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Gerald J. Ford

Gerald J. Ford

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Robert J. Allison, Jr.

Robert J. Allison, Jr.

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Stephen H. Siegele

Stephen H. Siegele

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Charles C. Krulak

Charles C. Krulak

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Jon C. Madonna

Jon C. Madonna

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN: That the undersigned, in his capacity or capacities as an officer and/or a member of the Board of Directors of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the “Company”), does hereby make, constitute and appoint JAMES R. MOFFETT and RICHARD C. ADKERSON, and each of them acting individually, his true and lawful attorney-in-fact with power to act without the other and with full power of substitution, to execute, deliver and file, for and on behalf of him, in his name and in his capacity or capacities as aforesaid, an Annual Report of the Company on Form 10-K for the year ended December 31, 2011, and any amendment or amendments thereto and any other document in support thereof or supplemental thereto, and the undersigned hereby grants to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever that said attorney or attorneys may deem necessary or advisable to carry out fully the intent of the foregoing as the undersigned might or could do personally or in the capacity or capacities as aforesaid, hereby ratifying and confirming all acts and things which said attorney or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED on February 7, 2012.

/s/ Dustan E. McCoy

Dustan E. McCoy

EX-31.1

Exhibit 31.1

Certification

I, Richard C. Adkerson, certify that:

1. I have reviewed this annual report on Form 10-K 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: February 27, 2012

/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 annual report on Form 10-K 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: February 27, 2012

/s/  Kathleen L. Quirk

Kathleen L. Quirk

Executive Vice President,

Chief Financial Officer and Treasurer

EX-32.1

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 Annual Report on Form 10-K of Freeport-McMoRan Copper & Gold Inc. (the “Company”) for the year ending December 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: February 27, 2012

/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 Annual Report on Form 10-K of Freeport-McMoRan Copper & Gold Inc. (the “Company”) for the year ending December 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: February 27, 2012

/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-95.1

Exhibit 95.1

Mine Safety and Health Administration (MSHA) Safety Data

FCX's U.S. mining operations are subject to regulations issued by MSHA under the U.S. Federal Mine Safety and Health Act of 1977 (the Mine Act). MSHA inspects our U.S. 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).

Mine Safety Data. Following provides additional information about references used in the table below to describe the categories of violations, orders or citations issued by MSHA under the Mine Act:

• Section 104 S&S Citations: 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: 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: 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) Violations: 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: 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 table details the violations, citations and orders issued to us by MSHA during the year ended December 31, 2011:

											Potential
											to Have
										Pattern of	Pattern of
				Section						Violations	Violation
		Section	Section	104(d)		Section	Section		Mining	Under	Under
		104 S&S	104(b)	Citations		110(b)(2)	107(a)	Proposed	Related	Section	Section
		Citations	Orders	and Orders		Violations	Orders	Assessments(2)	Fatalities	104(e)	104(e)
Mine ID(1)	Mine or Operation Name	(#)	(#)	(#)		(#)	(#)	($)	(#)	(yes/no)	(yes/no)
0200137	Freeport-McMoRan Bagdad Inc. (Bagdad)	4	—	—		—	—	16,934	—	No	No
	Freeport-McMoRan Chino Mines Company (Chino):
2900708	Chino Mines Co Mine	21	—	2	(3)	—	—	14,998	—	No	No
2900762	SX-EW	5	1	—		—	—	2,970	—	No	No
2901882	Ivanhoe Concentrator	5	—	—		—	—	10,712	—	No	No
0200112	Freeport-McMoRan Miami Inc (Miami)	26	2	—		—	—	49,260	—	No	No
0200024	Freeport-McMoRan Morenci Inc (Morenci)	62	1	1		—	—	225,866	—	No	No
0203131	Freeport-McMoRan Safford Inc (Safford)	2	—	—		—	—	6,008	—	No	No
0200144	Freeport-McMoRan Sierrita Inc (Sierrita)	36	—	—		—	—	153,881	—	No	No
2900159	Tyrone Mine (Tyrone)	13	—	—		—	—	19,913	—	No	No
0500790	Henderson Operations (Henderson)	11	—	—		—	—	19,029	—	No	No
0502256	Climax Mine (Climax)	—	—	—		—	—	1,100	—	No	No
	Freeport-McMoRan Cobre Mining Company:
2900725	Open Pit & Continental Surf Comp	—	—	—		—	—	—	—	No	No
2900731	Continental Mill Complex	4	—	—		—	—	1,351	—	No	No
0201656	Copper Queen Branch	—	—	—		—	—	—	—	No	No
0202579	Cyprus Tohono Corporation	—	—	—		—	—	—	—	No	No
0203262	Twin Buttes Mine	—	—	—		—	—	—	—	No	No
2902395	Chieftain 2100 Screening Plant	—	—	—		—	—	—	—	No	No
0203254	Warrior 1800 Screening Plant	—	—	—		—	—	—	—	No	No

(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 February 15, 2012, for citations or orders issued by MSHA during the year ended December 31, 2011. FCX is contesting $227,183 of these proposed assessments.

(3) During the year ended December 31, 2011, Chino was issued a 104(d) citation that was subsequently reduced to a 104 S&S violation.

Pending Legal Actions. The table below provides a summary of legal actions pending before the Federal Mine Safety and Health Review Commission (the Commission) as of December 31, 2011, as well as the aggregate number of legal actions instituted and resolved during the year 2011. 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 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 by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order. FCX does not institute civil penalty proceedings based solely on the assessment amount of proposed penalties. Any initiated adjudications described in the table below address substantive matters of law and policy instituted on conditions that are alleged to be in violation of mandatory standards or the Mine Act.

• Discrimination Proceedings - 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. Also includes temporary reinstatement proceedings involving 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 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.

• Temporary Relief - Applications for temporary relief are applications filed under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order.

• Appeals - An appeal may be filed by an operator to challenge judges decisions or orders to the commission, including petitions for discretionary review and review by the commission on its own motion.

	Legal Actions Pending at December 31, 20112
	Contest	Civil Penalty	Discrimination	Compensation	Temporary			Legal Actions	Legal Actions
	Proceedings	Proceedings	Proceedings	Proceedings	Relief	Appeals	Total	Instituted(2)	Resolved(3)
Mine ID(1)	(#)	(#)	(#)	(#)	(#)	(#)	(#)	(#)	(#)
0200137	37	—	1	—	—	—	38	5	43
2900708	12	—	—	—	—	—	12	8	1
2900762	4	—	—	—	—	—	4	1	3
2901882	1	—	—	—	—	—	1	3	1
0200112	19	—	—	—	—	—	19	17	1
0200024	111	—	1	—	—	—	111	100	14
0203131	—	—	—	—	—	—	—	—	—
0200144	54	—	—	—	—	—	54	51	69
2900159	4	—	—	—	—	—	4	2	11
0500790	5	—	—	—	—	—	5	16	41
0502256	1	—	—	—	—	—	1	—	—
2900725	—	—	—	—	—	—	—	—	—
2900731	—	—	—	—	—	—	—	—	—
0201656	—	—	—	—	—	—	—	—	—
0202579	—	—	—	—	—	—	—	—	—
0203262	1	—	—	—	—	—	1	1	—
2902395	—	—	—	—	—	—	—	—	—
0203254	—	—	—	—	—	—	—	—	—

(1) MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. Refer to "Mine Safety Data" table for related mine or operation name.

(2) Legal actions pending at December 31, 2011, and legal actions instituted during the year are based on the date that a docket number was assigned to the proceeding.

(3) Legal actions resolved during the year are based on the date that the settlement motion resolving disputed matters is filed with the Commission and the matter is effectively closed by MSHA.

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STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note [Abstract]

Compensation costs charged against earnings

Stock-Based Compensation Cost. Compensation cost charged against earnings for stock-based awards for the years ended December 31 follows:

	2011			2010			2009
Stock options awarded to employees (including directors)	$	84		$	84		$	67
Stock options awarded to nonemployees	1			5			5
Restricted stock units awarded to employees
(including directors)	32			30			29
Restricted stock awards to employees	—			1			2
SARs	(2		)	2			4
Total stock-based compensation costa	115			122			107
Tax benefit	(42		)	(45		)	(41		)
Noncontrolling interests’ share	(4		)	(3		)	(3		)
Impact on net income	$	69		$	74		$	63

a. Amounts are before Rio Tinto’s share of the cost of employee exercises of in-the-money stock options, which decreased consolidated selling, general and administrative expenses by $3 million in 2011, $4 million in 2010 and $2 million in 2009.

Summary of stock options and SARs outstanding and changes during the period

A summary of options outstanding as of December 31, 2011, including 69,672 SARs, and changes during the year ended December 31, 2011, follows:

	Number of Options		Weighted- Average Option Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	26,930,444		$	30.22
Granted	4,230,500		55.43
Exercised	(3,044,174	)	21.88
Expired/Forfeited	(149,625	)	37.61
Balance at December 31	27,967,145		34.90		6.9	$	152
Vested and exercisable at December 31	13,560,645		$	33.10	5.7	$	65

Summaries of options outstanding, including SARs, and changes during the years ended December 31 follow:

	2010				2009
	Number of Options		Weighted- Average Option Price		Number of Options		Weighted- Average Option Price
Balance at January 1	24,921,594		$	27.59	19,705,894		$	32.49
Granted	8,303,000		36.15		7,302,000		12.94
Exercised	(6,081,650	)	27.54		(1,571,874	)	20.15
Expired/Forfeited	(212,500	)	30.29		(514,426	)	30.29
Balance at December 31	26,930,444		30.22		24,921,594		27.59

Weighted average assumptions used to value stock option awards

The weighted-average assumptions used to value stock option awards during the years ended December 31 follow:

	2011		2010		2009
Expected volatility	50.9	%	51.9	%	70.6	%
Expected life of options (in years)	4.34		4.61		4.37
Expected dividend rate	1.8	%	0.8	%	—	%
Risk-free interest rate	1.6	%	2.2	%	1.5	%

Schedule of amounts related to exercises of stock options and stock appreciation rights and the vesting of restricted stock units and restricted stock awards

The following table includes amounts related to exercises of stock options and SARs and vesting of restricted stock units and restricted stock awards during the years ended December 31:

	2011		2010		2009
FCX shares tendered to pay the exercise price
and/or the minimum required taxesa	936,811		934,099		542,786
Cash received from stock option exercises	$	48	$	109	$	18
Actual tax benefit realized for tax deductions	45		50		21
Amounts FCX paid for employee taxes	45		28		12
Amounts FCX paid for exercised SARs	1		1		1

a. Under terms of the related plans, upon exercise of stock options and vesting of restricted stock units and restricted stock awards, employees may tender FCX shares to FCX to pay the exercise price and/or the minimum required taxes.

Summary Of Outstanding Restricted Stock Units [Text Block]

A summary of outstanding restricted stock units as of December 31, 2011, and activity during the year ended December 31, 2011, follows:

	Number of Restricted Stock Units		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	2,140,914
Granted	381,636
Vested	(1,257,274	)
Forfeited	—
Balance at December 31	1,265,276		1.4	$	47

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PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Property, Plant and Equipment, Net [Abstract]
VBPP recorded in connection with the Phelps Dodge acquisition					$ 2,200,000,000
VBPP transferred to proven and probable reserves	23,000,000	197,000,000		542,000,000
Cumulative impairments of VBPP	477,000,000
Impairment charges of VBPP	6,000,000	0	0
Capitalized interest total	$ 109,000,000	$ 66,000,000	$ 78,000,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended															12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010	Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009		May 01, 2010
Accounting Policies [Abstract]
Minimum ownership percentage of subsidiary for inclusion in consolidated financial statements (in hundredths)																50.00%
Ownership percentage of subsidiary PT Freeport Indonesia (in hundredths)																90.64%
Minimum ownership percentage for investment in unconsolidated companies accounted for using the equity method	20.00%															20.00%
Maximum ownership percentage for investments in unconsolidated companies carried at cost	20.00%															20.00%
Percentage of ultimate copper recovery from leach stockpiles (in hundredths)																90.00%
Percentage of the copper ultimately recoverable from newly placed material on active stockpiles (in hundredths)																70.00%
Pounds of copper under outstanding provisionally priced sales (net of noncontrolling interests) (in pounds of copper)																252,000,000
Average price per pound of outstanding provisionally priced copper sales (in dollars per pound)																$ 3.44
Earnings Per Share [Abstract]
Net income	$ 866		$ 1,294	[1]	$ 1,726		$ 1,861		$ 1,964		$ 1,533	$ 832		$ 1,215		$ 5,747	[1]	$ 5,544		$ 3,534
Net income attributable to noncontrolling interests	(226)		(241)		(358)		(362)		(415)		(355)	(168)		(270)		(1,187)		(1,208)		(785)
Preferred dividends																0		(63)		(222)
Net income attributable to FCX common stockholders	640	[2]	1,053	[1]	1,368	[3]	1,499	[3]	1,549	[4]	1,178	649	[4]	897	[4]	4,560	[1],[2],[3]	4,273	[4]	2,527
Plus income impact of assumed conversion of: [Abstract]
6 3/4% Mandatory Convertible Preferred Stock																0	[5]	63	[5]	194	[5]
5 1/2% Convertible Perpetual Preferred Stock																0	[6]	0	[6]	28	[6]
Diluted net income attributable to FCX common stockholders																$ 4,560		$ 4,336		$ 2,749
Weighted-average shares of common stock outstanding (in shares)																947,000,000		915,000,000		829,000,000
Add stock issuable upon conversion, exercise or vesting of: [Abstract]
6 3/4% Mandatory Convertible Preferred Stock (in shares)																0	[5]	26,000,000	[5]	79,000,000	[5]
5 1/2% Convertible Perpetual Preferred Stock (in shares)																0	[6]	0	[6]	25,000,000	[6]
Dilutive stock options																7,000,000	[7]	6,000,000		3,000,000
Restricted stock units																1,000,000		2,000,000		2,000,000
Weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share (in shares)																955,000,000		949,000,000		938,000,000
Diluted net income per share attributable to FCX common stockholders	$ 0.67	[2]	$ 1.10	[1]	$ 1.43	[3]	$ 1.57	[3]	$ 1.63	[4]	$ 1.24	$ 0.70	[4]	$ 1.00	[4]	$ 4.78	[1],[2],[3]	$ 4.57	[4]	$ 2.93
Actual conversion rate of preferred stock into common stock (in shares)																						2.7432
Mandatory Convertible Preferred Stock Dividend Rate Percentage																		6.75%		6.75%
Convertible Perpetual Preferred Stock Dividend Rate Percentage																				5.50%
Potential anti-dilutive additional shares of common stock from stock options and restricted stock units																2,000,000
Outstanding stock options with exercise prices greater than average market price of common stock (in shares)																4,000,000		10,000,000		13,000,000
Weighted-average exercise price of stock options excluded																$ 53.91		$ 38.56		$ 36.27

[1] Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

[2] Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

[3] Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

[4] Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

[5] All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.

[6] In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.

[7] Potential additional shares of common stock that were anti-dilutive totaled approximately two million.

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INCOME TAXES (Tax Credit Carryforward) (Details) (USD $) In Millions, unless otherwise specified			12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 U.S. foreign tax credit carryforwards [Member]	Dec. 31, 2011 U.S. minimum tax credits carrryforwards [Member]	Dec. 31, 2011 Congolese Net Operating Loss Carryforwards [Member]	Dec. 31, 2011 U.S. state net operating loss carryforwards [Member]	Dec. 31, 2011 Spanish net operating loss carryforwards [Member]
Tax credit carryforward [Line Items]
Deferred Tax Assets, Tax Credit Carryforwards, Foreign	$ 2,011	$ 1,837
Tax credit carryforward, amount					560	468	541
Tax credit carryforward, expiration dates			between 2012 and 2021	indefinitely, but may be used only to the extent that regular tax exceeds the alternative minimum tax in any given year.	indefinitely	between 2012 and 2031	between 2012 and 2026
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax	$ 406	$ 413

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PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET (Schedule of PPE) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	$ 25,975	$ 23,379
Accumulated depreciation, depletion and amortization	(7,526)	(6,594)
Property, plant, equipment and development costs, net	18,449	16,785
Proven and probable reserves [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	4,572	4,503
Value beyond proven and probable reserves (VBPP) [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	1,071	1,100
Development and other [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	3,447	3,188
Buildings and infrastructure [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	3,151	2,815
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	8,171	7,523
Mobile equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	2,859	2,365
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant, equipment and development costs	$ 2,704	$ 1,885

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COMMITMENTS AND GUARANTEES (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating leases, future minimum payments due: [Abstract]
2012	$ 24
2013	18
2014	15
2015	15
2016	12
Thereafter	116
Total payments	200
Total aggregate rental expense under operating leases	$ 70	$ 64	$ 74

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SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2011

Supplementary Mineral Reserve Information [Abstract]

Estimated Recoverable Proven and Probable Reserves by Location

	Recoverable Proven and Probable Reserves
	December 31, 2011
	Coppera (billion pounds)	Gold (million ounces)	Molybdenum (billion pounds)
North America	40.6	0.4	2.71
South America	39.1	1.3	0.71
Indonesia	31.6	32.2	—
Africa	8.4	—	—
Consolidated basisb	119.7	33.9	3.42
Net equity interestc	96.1	30.6	3.09

a. Consolidated recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles.

b. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.86 billion pounds of cobalt at Tenke Fungurume and 330.3 million ounces of silver in Indonesia, South America and North America.

c. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke Fungurume and 272.1 million ounces of silver in Indonesia, South America and North America.

Supplementary Reserve Information at 100% Basis by Location

	100% Basis
		Average Ore Grade Per Metric Ton					Recoverable Proven and Probable Reservesa
	Ore (million	Copper	Gold		Molybdenum		Copper (billion	Gold (million	Molybdenum (billion
Year-End	metric tons)	(%)	(grams)		(%)		pounds)	ounces)	pounds)
2007	12,224	0.51	0.20		0.01		110.4	54.1	2.04
2008	14,067	0.48	0.17		0.01		118.8	53.4	2.49
2009	13,807	0.49	0.17		0.01		120.9	49.8	2.60
2010	18,516	0.42	0.12		0.01		137.9	47.9	3.41
2011	17,739	0.43	0.12		0.01		136.7	46.1	3.43
By Area at December 31, 2011:
North America
Developed and producing:
Morenci	4,250	0.27	—		—	b	15.6	—	0.09
Bagdad	1,629	0.30	—	b	0.02		8.7	0.1	0.40
Safford	206	0.43	—		—		1.6	—	—
Sierrita	2,777	0.23	—	b	0.03		12.1	0.1	1.24
Tyrone	148	0.29	—		—		0.7	—	—
Chino	421	0.42	0.02		—	b	3.5	0.2	0.01
Miami	60	0.47	—		—		0.5	—	—
Henderson	121	—	—		0.17		—	—	0.40
Undeveloped:
Climax	187	—	—		0.16		—	—	0.58
Cobre	73	0.39	—		—		0.3	—	—
South America
Developed and producing:
Cerro Verde	3,977	0.39	—		0.01		30.2	—	0.71
El Abra	881	0.42	—		—		4.3	—	—
Candelaria	339	0.58	0.13		—		4.5	1.2	—
Ojos del Salado	6	1.00	0.25		—		0.1	0.1	—
Indonesia
Developed and producing:
Grasberg open pit	312	0.85	0.91		—		4.9	7.3	—
Deep Ore Zone	206	0.57	0.69		—		2.2	3.5	—
Big Gossan	56	2.18	0.97		—		2.4	1.2	—
Undeveloped:
Grasberg block cave	1,019	0.98	0.77		—		18.7	16.3	—
Kucing Liar	420	1.23	1.09		—		9.7	6.8	—
Deep Mill Level Zone	510	0.85	0.72		—		8.3	9.3	—
Africa
Developed and producing:
Tenke Fungurume	141	3.00	—		—		8.4	—	—
Total 100% basis	17,739						136.7	46.1	3.43
Consolidated basisc							119.7	33.9	3.42
FCX’s equity shared							96.1	30.6	3.09

a. Includes estimated recoverable metals contained in stockpiles.

b. Amounts not shown because of rounding.

c. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia.

d. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

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INTANGIBLE ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2011

Intangible Assets and Liabilities [Abstract]

Intangible Assets And Liabilities by Major Class

The components of intangible assets and intangible liabilities (included in other liabilities) follow:

	December 31, 2011
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	239	$	—		$	239
Patents and process technology	48		(14		)	34
Royalty payments	37		(21		)	16
Power contracts	25		(18		)	7
Other intangibles	38		(9		)	29
Total intangible assets	$	387	$	(62	)	$	325
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(30	)	$	22

	December 31, 2010
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	245	$	—		$	245
Patents and process technology	48		(11		)	37
Royalty payments	37		(18		)	19
Power contracts	25		(17		)	8
Other intangibles	25		(6		)	19
Total intangible assets	$	380	$	(52	)	$	328
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(25	)	$	27

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COMMITMENTS AND GUARANTEES (Contractual Obligations) (Details) (USD $)	Dec. 31, 2011
Contractual obligations [Member]
Unconditional purchase obligations [Line Items]
Unconditional purchase obligations	$ 2,100,000,000
2012	1,300,000,000
2013	311,000,000
2014	86,000,000
2015	61,000,000
2016	52,000,000
After 2016	237,000,000
Copper concentrates and cathodes [Member]
Unconditional purchase obligations [Line Items]
Unconditional purchase obligations	1,100,000,000
Transportation [Member]
Unconditional purchase obligations [Line Items]
Unconditional purchase obligations	293,000,000
Oxygen [Member]
Unconditional purchase obligations [Line Items]
Unconditional purchase obligations	128,000,000
Electricity [Member]
Unconditional purchase obligations [Line Items]
Unconditional purchase obligations	$ 338,000,000

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INCOME TAXES (Mining Royalty Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2011 Peruvian Royalty and Mining Tax New Legislation [Member]	Dec. 31, 2023 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2022 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2021 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2020 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2019 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2018 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2017 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2016 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2015 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2014 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2013 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2012 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2011 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2010 Chilean Mine Current Tax Legislation [Member]	Dec. 31, 2017 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2016 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2015 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2014 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2013 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2012 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2011 Chilean Mine New Tax Legislation [Member]	Dec. 31, 2010 Chilean Mine New Tax Legislation [Member]
Mining royalty taxes by location [Line Items]
Special Mining Burden Maximum Effective Tax Rate			8.79%
Mining royalty tax rate (in hundredths)										4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%
Mining royalty sliding scale rate low end of range (in hundredths)			4.00%	5.00%	5.00%	5.00%	5.00%	5.00%	5.00%														4.00%	4.00%	4.00%
Mining royalty sliding scale rate high end of range (in hundredths)			13.00%	14.00%	14.00%	14.00%	14.00%	14.00%	14.00%														9.00%	9.00%	9.00%
Additional tax expense from new legislation on mining royalties	$ 57	$ 53	$ 53
Additional tax expense from new legislation on mining royalties, net of noncontrolling interests	$ 50	$ 49	$ 49

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BUSINESS SEGMENTS (Product Revenue) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Product revenue [Line Items]
Treatment and refining charges included in copper concentrates revenues									$ 362		$ 413		$ 429
Revenues	4,162	5,195	5,814	5,709	5,603	5,152	3,864	4,363	20,880	[1]	18,982	[1]	15,040	[1]
Refined Copper Products [Member]
Product revenue [Line Items]
Revenues									10,297		9,203		6,563
Copper in concentrates [Member]
Product revenue [Line Items]
Revenues									5,938	[2]	5,674	[2]	4,763	[2]
Gold [Member]
Product revenue [Line Items]
Revenues									2,429		2,370		2,591
Molybdenum [Member]
Product revenue [Line Items]
Revenues									1,348		1,143		792
Other [Member]
Product revenue [Line Items]
Revenues									$ 868		$ 592		$ 331

[1] Revenues are attributed to countries based on the location of the customer.

[2] Amounts are net of treatment and refining charges totaling $362 million for 2011, $413 million for 2010 and $429 million for 2009.

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LONG-TERM RECEIVABLES AND OTHER ASSETS (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010
Components of long-term receivables [Abstract]
Income taxes	$ 295		$ 0
Loan with Congolese public utility	138		110
Disputed tax assessments	109		0
Loan with La Generale des Carrieres et des Mines (related party)	30		0
Other	103		90
Total long-term receivables	675		200
Components of other assets [Abstract]
Cost-basis investments - McMoRan Exploration Co. (MMR)	475	[1]	500	[1]
Cost-basis investments - Other	2		3
Equity-basis investments - PT Smelting	125	[2]	11	[2]
Equity-basis investments - Other	47		43
Trust assets	152	[3],[4]	140	[3],[4]
Debt issue costs	40		58
Available for sale securities	9		28
Other	38		14
Total other assets	888		797
Number of shares of MMR 5 3/4% Convertible Perpetual Preferred Stock purchased by the Company			500,000
Dividend rate of MMR preferred stock (in hundredths)	5.75%
Aggregate purchase price for MMR preferred stock			500
Initial Conversion rate of MMR preferred stock into MMR common stock	62.5 shares of common per share preferred
Aggregate number of shares of MMR common stock upon assumed initial conversion of MMR preferred stock (in shares)			31,250,000
Initial conversion price per share of MMR common stock (in dollars per share)			$ 16
Unrecognized profit on sales from PT Freeport Indonesia to PT Smelting	2		113
Legally restricted funds for asset retirement obligations at New Mexico mines	151		137
Current portion of trust assets	$ 0		$ 8

[1] In December 2010, FCX purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million.The Preferred Stock is initially convertible into 62.5 shares of MMR common stock per share of Preferred Stock (an aggregate of 31.25 million shares of MMR common stock), at an initial conversion price of $16 per share of MMR common stock. Dividends received are recorded as a return of investment because of MMR's reported losses. Several of FCX’s directors and executive officers also serve as directors or executive officers of MMR.

[2] Amounts are reduced by unrecognized profits on sales from PT Freeport Indonesia to PT Smelting totaling $2 million at December 31, 2011, and $113 million at December 31, 2010.

[3] The current portion, which is included in other current assets, totaled $8 million at December 31, 2010, and none at December 31, 2011.

[4] Includes $151 million in 2011 and $137 million in 2010 of legally restricted funds for AROs at the Chino, Tyrone and Cobre mines (refer to Note 13 for further discussion).

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CONTINGENCIES (Asset Retirement Obligations) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Balance at beginning of year	$ 856	$ 731	$ 712
Liabilities incurred	9	5	12
Revisions to cash flow estimates	48	105	(17)
Accretion expense	58	54	52
Spending	(49)	(38)	(28)
Foreign currency translation adjustment	(1)	(1)	0
Balance at beginning of year	921	856	731
Less current portion	(31)	(69)	(46)
Long-term portion	890	787	685
New Mexico environmental and reclamation programs [Member]
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Accrued reclamation and closure costs	424
Arizona environmental and reclamation programs [Member]
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Accrued reclamation and closure costs	220
Chile environmental and reclamation programs [Member]
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Accrued reclamation and closure costs	49
PT Freeport Indonesia environmental and reclamation programs [Member]
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Estimated years the mining activities are expected to continue (in years)	30
Accrued reclamation and closure costs	140
Long-term receivable held in long-term receivables for joint venture partner's share of reclamation and closure costs	14
Current cash balance of reclamation fund	15
Minimum cash fund balance, including interest, for reclamation activities upon mine closure	$ 100

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FAIR VALUE MEASUREMENT (Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring Basis, Financial Statement Captions [Line Items]
Time Deposits, at Carrying Value		$ 19
Cash equivalents: [Abstract]
Money market funds	4,007	3,584
Trust assets (current and long-term): [Abstract]
U.S. core fixed income fund	46	42
Government mortgage-backed securities	47	35
Corporate bonds	19	23
Asset-backed securities	9	22
Government bonds and notes	21	10
Money market funds	9	15
Municipal bonds	1	1
Total trust assets	152	148
Available-for-sale securities: [Abstract]
Equity securities	9	9	[1]
Money market funds	2	6	[1]
Total available-for-sale securities	11	15	[1]
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	72	357	[2]
Copper futures and swap contracts	3	18
Copper forward contracts	2
Total derivative assets	77	375
Total assets	4,247	4,122
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	(82)	(115)	[2]
Copper Futures And Swap Contracts	(13)
Copper forward contracts		(10)
Total derivative liabilities	(95)	(125)
Level 1 [Member]
Cash equivalents: [Abstract]
Money market funds	4,007	3,584
Trust assets (current and long-term): [Abstract]
U.S. core fixed income fund	0	0
Government mortgage-backed securities	0	0
Corporate bonds	0	0
Asset-backed securities	0	0
Government bonds and notes	0	0
Money market funds	9	15
Municipal bonds	0	0
Total trust assets	9	15
Available-for-sale securities: [Abstract]
Equity securities	9	9	[1]
Money market funds	2	6	[1]
Total available-for-sale securities	11	15	[1]
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	0	0	[2]
Copper futures and swap contracts	3	18
Copper forward contracts	1
Total derivative assets	4	18
Total assets	4,031	3,632
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	0	0	[2]
Copper Futures And Swap Contracts	(11)
Copper forward contracts		(1)
Total derivative liabilities	(11)	(1)
Level 2 [Member]
Cash equivalents: [Abstract]
Money market funds	0	0
Trust assets (current and long-term): [Abstract]
U.S. core fixed income fund	46	42
Government mortgage-backed securities	47	35
Corporate bonds	19	23
Asset-backed securities	9	22
Government bonds and notes	21	10
Money market funds	0	0
Municipal bonds	1	1
Total trust assets	143	133
Available-for-sale securities: [Abstract]
Equity securities	0	0	[1]
Money market funds	0	0	[1]
Total available-for-sale securities	0	0	[1]
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	72	357	[2]
Copper futures and swap contracts	0	0
Copper forward contracts	1
Total derivative assets	73	357
Total assets	216	490
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	(82)	(115)	[2]
Copper Futures And Swap Contracts	(2)
Copper forward contracts		(9)
Total derivative liabilities	(84)	(124)
Level 3 [Member]
Cash equivalents: [Abstract]
Money market funds	0	0
Trust assets (current and long-term): [Abstract]
U.S. core fixed income fund	0	0
Government mortgage-backed securities	0	0
Corporate bonds	0	0
Asset-backed securities	0	0
Government bonds and notes	0	0
Money market funds	0	0
Municipal bonds	0	0
Total trust assets	0	0
Available-for-sale securities: [Abstract]
Equity securities	0	0	[1]
Money market funds	0	0	[1]
Total available-for-sale securities	0	0	[1]
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	0	0	[2]
Copper futures and swap contracts	0	0
Copper forward contracts	0
Total derivative assets	0	0
Total assets	0	0
Derivatives: [Abstract]
Embedded derivatives in provisional sales/purchases contracts	0	0	[2]
Copper Futures And Swap Contracts	0
Copper forward contracts		0
Total derivative liabilities	$ 0	$ 0

[1] Excluded were $19 million of time deposits.

[2] At the end of 2011, FCX reevaluated its level determination for its embedded derivatives in provisional sales/purchases contracts, including those reported at December 31, 2010. Although the critical input in these measurements are quoted market prices for copper, gold and molybdenum, the contracts themselves are not traded on an exchange and, therefore, are more appropriately classified within Level 2 of the fair value hierarchy.

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COMMITMENTS AND GUARANTEES (Community Development Programs) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2006
Indonesia [Member]
Contractual obligations community development programs [line items]
Percentage of annual revenue committed for the development of the local people in the area of operations (in hundredths)	1.00%
Amount charged to cost of sales for the commitment	50	$ 64	$ 59
Peru [Member]
Contractual obligations community development programs [line items]
Period companies will make contributions to local development				five-year period
Percentage of after-tax profits for the contributions (in hundredths)	3.75%
Percentage of after-tax profits contributed to a local mining fund (in hundredths)	2.75%
Percentage of after-tax profits contributed to a regional mining fund (in hundredths)	1.00%
Charge to cost of sales for the local mining fund contributions		41	28
Tenke [Member]
Contractual obligations community development programs [line items]
Percentage of net sales revenue from production to community development fund to assist the local communities with development of local infrastructure and related services. (in hundredths)	0.30%
Charge to cost of sales for contributions to community development fund to assist the local communities with development of local infrastructure and related services	4	$ 3	$ 1

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FAIR VALUE MEASUREMENT (Carrying Amount and FV of Other Financial Instruments) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009	Dec. 31, 2008
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 4,822		$ 3,738		$ 2,656	$ 872
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	4,822	[1]	3,738	[1]
MMR cost investment	475	[2]	500	[2]
Net embedded derivatives included in accounts receivable or payable	(10)		242
Trust assets (current and long-term)	152	[1],[3]	148	[1],[3]
Available-for-sale securities (current and long-term)	11	[1],[3]	34	[1],[3]
Derivative assets	5	[1],[4]	18	[1],[4]
Derivative liabilities	(13)	[1],[5]	(10)	[1],[5]
Debt (including amounts due within one year)	(3,537)	[6]	(4,755)	[6]
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	4,822	[1]	3,738	[1]
MMR cost investment	507	[2]	623	[2]
Net embedded derivatives included in accounts receivable or payable	(10)		242
Trust assets (current and long-term)	152	[1],[3]	148	[1],[3]
Available-for-sale securities (current and long-term)	11	[1],[3]	34	[1],[3]
Derivative assets	5	[1],[4]	18	[1],[4]
Derivative liabilities	(13)	[1],[5]	(10)	[1],[5]
Debt (including amounts due within one year)	$ (3,797)	[6]	$ (5,146)	[6]

[1] Recorded at fair value.

[2] Recorded at cost and included in other assets. At December 31, 2011, these securities were not actively trading; as such, fair value was based on a pricing simulation model using MMR's publicly traded common stock as the most significant observable input. At December 31, 2010, fair value was based on a bid evaluation, which is an estimated price at which a dealer would pay for a security.

[3] Current portion included in other current assets and long-term portion included in other assets.

[4] Included in other current assets.

[5] Included in accounts payable and accrued liabilities.

[6] Recorded at cost except for long-term debt acquired in the FMC 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.

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CONTINGENCIES (Other Contingencies) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Subsidiary FMC [Member]	Dec. 31, 2011 Cerro Verde Mine - Mining Royalties and Penalties [Member]	Dec. 31, 2011 Relating To 2005 [Member] PT Freeport Indonesia - Taxes [Member]	Oct. 31, 2010 Relating To 2005 [Member] PT Freeport Indonesia - Taxes [Member]	Oct. 31, 2010 Relating To 2005 [Member] PT Freeport Indonesia - Interest [Member]	Nov. 30, 2011 Relating To 2006 [Member] PT Freeport Indonesia - Taxes [Member]	Nov. 30, 2011 Relating To 2006 [Member] PT Freeport Indonesia - Interest [Member]
Other contingencies by location [Line Items]
Foreign government assessment in connection with alleged obligations				$ 190		$ 106	$ 52	$ 22	$ 10
Low range interest rate for penalties in connection with the alleged obligations for mining royalties (in hundredths)				7.00%
High range interest rate for penalties in connection with the alleged obligations for mining royalties (in hundredths)				18.00%
Aggregate cap for indemnity obligations under 2005 sale agreement of Columbian Chemicals Company			110
Disputed tax assessments paid	$ 109	$ 0			$ 109

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INCOME TAXES (Reserve for Unrecognized tax benefits, interest and penalties) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Reserve for unrecognized tax benefits, interest and penalties, type [Line Items]
High Range Unrecognized Tax Benefit Decrease	$ 101
Low Range Unrecognized Tax Benefit Decrease	25
Unrecognized Tax Benefits [Member]
Reserve for unrecognized tax benefits, interest and penalties, type [Line Items]
Unrecognized Tax Benefits, Beginning Balance	200	253
Additions: [Abstract]
Prior year tax positions	25	9
Current year tax positions	16	24
Interest and penalties	0	0
Decreases: [Abstract]
Prior year tax positions	(34)	(26)
Current year tax positions	(8)	0
Lapse of statute of limitations	(53)	(60)
Interest and penalties	0	0
Unrecognized Tax Benefits, Ending Balance	146	200
Interest [Member]
Reserve for unrecognized tax benefits, interest and penalties, type [Line Items]
Unrecognized Tax Benefits, Beginning Balance	33	34
Additions: [Abstract]
Interest and penalties	7	2
Decreases: [Abstract]
Interest and penalties	(6)	(3)
Unrecognized Tax Benefits, Ending Balance	34	33
Penalties [Member]
Reserve for unrecognized tax benefits, interest and penalties, type [Line Items]
Unrecognized Tax Benefits, Beginning Balance	0	0
Additions: [Abstract]
Interest and penalties	0	0
Decreases: [Abstract]
Interest and penalties	0	0
Unrecognized Tax Benefits, Ending Balance	$ 0	$ 0

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SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2011

Supplementary Mineral Reserve Information [Abstract]

Supplementary Mineral Reserve Information

SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED)

Recoverable proven and probable reserves have been calculated as of December 31, 2011, in accordance with Industry Guide 7 as required by the Securities Exchange Act of 1934. FCX’s proven and probable reserves may not be comparable to similar information regarding mineral reserves disclosed in accordance with the guidance in other countries. Proven and probable reserves were determined by the use of mapping, drilling, sampling, assaying and evaluation methods generally applied in the mining industry, as more fully discussed below. The term “reserve,” as used in the reserve data presented here, means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination. The term “proven reserves” means reserves for which (i) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (ii) grade and/or quality are computed from the results of detailed sampling; and (iii) the sites for inspection, sampling and measurements are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well established. The term “probable reserves” means reserves for which quantity and grade are computed from information similar to that used for proven reserves but the sites for sampling are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

FCX’s reserve estimates are based on the latest available geological and geotechnical studies. FCX conducts ongoing studies of its ore bodies to optimize economic values and to manage risk. FCX revises its mine plans and estimates of proven and probable mineral reserves as required in accordance with the latest available studies.

Estimated recoverable proven and probable reserves at December 31, 2011, were determined using long-term average prices of $2.00 per pound for copper, $750 per ounce for gold, $10 per pound for molybdenum, $15 per ounce for silver and $10 per pound for cobalt, consistent with year-end 2010. For the three year period ended December 31, 2011, LME spot copper prices averaged $3.25 per pound, London PM gold prices averaged $1,245 per ounce and the weekly average price for molybdenum quoted by Metals Week averaged $14.06 per pound. The recoverable proven and probable reserves presented in the table below represent the estimated metal quantities from which FCX expects to be paid after application of estimated metallurgical recovery rates and smelter recovery rates, where applicable. Recoverable reserves are that part of a mineral deposit that FCX estimates can be economically and legally extracted or produced at the time of the reserve determination.

	Recoverable Proven and Probable Reserves
	December 31, 2011
	Coppera (billion pounds)	Gold (million ounces)	Molybdenum (billion pounds)
North America	40.6	0.4	2.71
South America	39.1	1.3	0.71
Indonesia	31.6	32.2	—
Africa	8.4	—	—
Consolidated basisb	119.7	33.9	3.42
Net equity interestc	96.1	30.6	3.09

a. Consolidated recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles.

b. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.86 billion pounds of cobalt at Tenke Fungurume and 330.3 million ounces of silver in Indonesia, South America and North America.

c. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke Fungurume and 272.1 million ounces of silver in Indonesia, South America and North America.

	100% Basis
		Average Ore Grade Per Metric Ton					Recoverable Proven and Probable Reservesa
	Ore (million	Copper	Gold		Molybdenum		Copper (billion	Gold (million	Molybdenum (billion
Year-End	metric tons)	(%)	(grams)		(%)		pounds)	ounces)	pounds)
2007	12,224	0.51	0.20		0.01		110.4	54.1	2.04
2008	14,067	0.48	0.17		0.01		118.8	53.4	2.49
2009	13,807	0.49	0.17		0.01		120.9	49.8	2.60
2010	18,516	0.42	0.12		0.01		137.9	47.9	3.41
2011	17,739	0.43	0.12		0.01		136.7	46.1	3.43
By Area at December 31, 2011:
North America
Developed and producing:
Morenci	4,250	0.27	—		—	b	15.6	—	0.09
Bagdad	1,629	0.30	—	b	0.02		8.7	0.1	0.40
Safford	206	0.43	—		—		1.6	—	—
Sierrita	2,777	0.23	—	b	0.03		12.1	0.1	1.24
Tyrone	148	0.29	—		—		0.7	—	—
Chino	421	0.42	0.02		—	b	3.5	0.2	0.01
Miami	60	0.47	—		—		0.5	—	—
Henderson	121	—	—		0.17		—	—	0.40
Undeveloped:
Climax	187	—	—		0.16		—	—	0.58
Cobre	73	0.39	—		—		0.3	—	—
South America
Developed and producing:
Cerro Verde	3,977	0.39	—		0.01		30.2	—	0.71
El Abra	881	0.42	—		—		4.3	—	—
Candelaria	339	0.58	0.13		—		4.5	1.2	—
Ojos del Salado	6	1.00	0.25		—		0.1	0.1	—
Indonesia
Developed and producing:
Grasberg open pit	312	0.85	0.91		—		4.9	7.3	—
Deep Ore Zone	206	0.57	0.69		—		2.2	3.5	—
Big Gossan	56	2.18	0.97		—		2.4	1.2	—
Undeveloped:
Grasberg block cave	1,019	0.98	0.77		—		18.7	16.3	—
Kucing Liar	420	1.23	1.09		—		9.7	6.8	—
Deep Mill Level Zone	510	0.85	0.72		—		8.3	9.3	—
Africa
Developed and producing:
Tenke Fungurume	141	3.00	—		—		8.4	—	—
Total 100% basis	17,739						136.7	46.1	3.43
Consolidated basisc							119.7	33.9	3.42
FCX’s equity shared							96.1	30.6	3.09

a. Includes estimated recoverable metals contained in stockpiles.

b. Amounts not shown because of rounding.

c. Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia.

d. Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Intangible Assets) (Details)	12 Months Ended
	Dec. 31, 2011 years
Molybdenum Sales, Treatment and Refining and Power and Tire Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Useful Life, Minimum (in years)	1
Finite-Lived Intangible Assets, Useful Life, Maximum (in years)	10
Royalty payments [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Useful Life, Minimum (in years)	1
Finite-Lived Intangible Assets, Useful Life, Maximum (in years)	12
Patents and process technology [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Useful Life, Minimum (in years)	10
Finite-Lived Intangible Assets, Useful Life, Maximum (in years)	20

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COMMITMENTS AND GUARANTEES (Tables)

12 Months Ended

Dec. 31, 2011

Commitments and Guarantees [Abstract]

Summary of future minimum rentals under non-cancelable leases

A summary of future minimum rentals under non-cancelable leases at December 31, 2011, follows:

2012	$	24
2013	18
2014	15
2015	15
2016	12
Thereafter	116
Total payments	$	200

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CONTINGENCIES (Environmental Obligations) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended			12 Months Ended				12 Months Ended
	Dec. 31, 2011 Miami smelter [Member]	Dec. 31, 2010 Miami smelter [Member]	Dec. 31, 2011 Gilt Edge Mine Site [Member]	Dec. 31, 2011 Historical Smelter Sites [Member]	Dec. 31, 2011 Uranium Mining Sites [Member]	Dec. 31, 2009 Historical Smelter Sites [Member] Blackwell Oklahoma Zinc Smelters [Member]	Dec. 31, 2011 Historical Smelter Sites [Member] Blackwell Oklahoma Zinc Smelters [Member]	Dec. 31, 2009 Historical Smelter Sites [Member] Bisbee Arizona Smelters [Member]
Environmental obligations [Line Items]
Potential Future Payment for Partial or Full Settlement of Lawsuit Regarding Environmental Issues							$ 70
Response costs incurred by the U.S. for which FCX may be liable			91
Percentage of sampled properties requiring some level of cleanup (in hundredths)								42.00%
Percentage of completed clean-up of properties that required remediation (in hundredths)								30.00%
Number of individuals who filed suit alleging personal injuries from exposure to lead (in number of individuals)						18
Payment for partial or full settlement of lawsuit regarding environmental issues		40
Revision to estimate for environmental obligation	$ 31			$ 36	$ (53)			$ 31

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended															12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010	Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Quarterly Financial Data [Abstract]
Revenues	$ 4,162		$ 5,195		$ 5,814		$ 5,709		$ 5,603		$ 5,152	$ 3,864		$ 4,363		$ 20,880	[1]	$ 18,982	[1]	$ 15,040	[1]
Operating income	1,297	[2]	2,150		2,757		2,936		3,097		2,499	1,424		2,048		9,140	[2]	9,068		6,503
Net income	866		1,294	[3]	1,726		1,861		1,964		1,533	832		1,215		5,747	[3]	5,544		3,534
Net income attributable to noncontrolling interests	226		241		358		362		415		355	168		270		1,187		1,208		785
Net income attributable to FCX common stockholders	640	[2]	1,053	[3]	1,368	[4]	1,499	[4]	1,549	[5]	1,178	649	[5]	897	[5]	4,560	[2],[3],[4]	4,273	[5]	2,527
Basic net income per share attributable to FCX common stockholders (in dollars per share)	$ 0.67		$ 1.11		$ 1.44		$ 1.58		$ 1.64		$ 1.25	$ 0.71		$ 1.04		$ 4.81		$ 4.67		$ 3.05
Diluted net income per share attributable to FCX common stockholders	$ 0.67	[2]	$ 1.10	[3]	$ 1.43	[4]	$ 1.57	[4]	$ 1.63	[5]	$ 1.24	$ 0.70	[5]	$ 1.00	[5]	$ 4.78	[2],[3],[4]	$ 4.57	[5]	$ 2.93
Signing Bonus Expense For New Labor Agreements																116
Signing Bonus Expenses For New Labor Agreements Effect On Net Income																50
Signing Bonus Expenses For New Labor Agreements Effect on Diluted Earnings Per Share																$ 0.05
Additional Tax Expense From New Legislation On Mining Royalties			57													53
Additional Tax Expense From New Legislation On Mining Royalties Net Of Noncontrolling Interests			50													49
Additional Tax Expense From New Legislation On Mining Royalties Effect On Diluted Earnings Per share			$ 0.05													$ 0.05
Loss on early extinguishment of debt, effect on net income attributable to common stockholders					$ 54		$ 6		$ 3			$ 42		$ 23		$ 60		$ 71
Loss on early extinguishment of debt, effect on net income per diluted share (in dollars per share)					$ 0.06		$ 0.01		$ 0.01			$ 0.05		$ 0.02		$ 0.06		$ 0.07

[1] Revenues are attributed to countries based on the location of the customer.

[2] Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

[3] Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

[4] Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

[5] Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

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DEBT (Tables)

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

Schedule of debt instruments

The components of debt follow:

	December 31,
	2011			2010
Revolving Credit Facility	$	—		$	—
Senior Notes:
8.375% Senior Notes due 2017	3,011			3,011
8.25% Senior Notes due 2015	—			1,079
9½% Senior Notes due 2031	131			175
61/8% Senior Notes due 2034	115			115
71/8% Debentures due 2027	115			115
8¾% Senior Notes due 2011	—			85
Other (including equipment capital leases and
short-term borrowings)	165			175
Total debt	3,537			4,755
Less current portion of debt	(4		)	(95		)
Long-term debt	$	3,533		$	4,660

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INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES (Components of Inventories) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Components of Inventories [Line Items]
Total product inventories	$ 1,226		$ 1,316
Total material and supplies, net	1,354	[1]	1,169	[1]
Total Inventories	2,580		2,485
Inventory obsolescence reserves	26		26
Mining Operations [Member]
Components of Inventories [Line Items]
Raw materials	1		1
Finished goods	769	[2]	704	[2]
Atlantic Copper [Member]
Components of Inventories [Line Items]
Raw materials	260		336
Work-in-process	187		266
Finished goods	$ 9		$ 9

[1] Materials and supplies inventory is net of obsolescence reserves totaling $26 million at December 31, 2011 and 2010.

[2] Primarily includes molybdenum concentrates and copper concentrates, anodes, cathodes and rod.

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STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Convertible Preferred Stock) (Details) (USD $)	1 Months Ended	12 Months Ended				1 Months Ended		12 Months Ended			1 Months Ended			9 Months Ended	12 Months Ended
	Feb. 28, 2009	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	May 01, 2010	Mar. 31, 2007 6 3/4% Mandatory Convertible Preferred Stock [Member]	Mar. 31, 2004 6 3/4% Mandatory Convertible Preferred Stock [Member]	Dec. 31, 2010 6 3/4% Mandatory Convertible Preferred Stock [Member]	May 01, 2010 6 3/4% Mandatory Convertible Preferred Stock [Member]	Mar. 28, 2007 6 3/4% Mandatory Convertible Preferred Stock [Member]	Aug. 31, 2009 5 1/2% Convertible Perpetual Preferred Stock [Member]	Mar. 31, 2007 5 1/2% Convertible Perpetual Preferred Stock [Member]	Mar. 31, 2004 5 1/2% Convertible Perpetual Preferred Stock [Member]	Sep. 30, 2009 5 1/2% Convertible Perpetual Preferred Stock [Member]	Dec. 31, 2008 5 1/2% Convertible Perpetual Preferred Stock [Member]
Convertible preferred stock [Line Items]
Shares of preferred stock issued										28,750,000			1,100,000
Convertible preferred stock dividend rate (in hundredths)										6.75%			5.50%
Preferred stock liquidation preference per share										$ 100
Proceeds from Issuance of Preferred Stock and Preference Stock						$ 2,800,000,000							$ 1,100,000,000
Proceeds from Issuance of Common Stock	740,000,000	0	0	740,000,000
Preferred stock liquidation preference value															268,000,000
Maximum dividends per quarter on common stock before changes in preferred stock conversion rate (in dollars per share)							$ 0.15625					$ 0.10
Actual conversion rate of preferred stock into common stock (in shares)					2.7432				2.7432
Conversion rate of preferred stock into common stock (in shares)											43.061
Price per share of common stock upon conversion of preferred stock											$ 23.22
Shares of common stock issued to induce conversion															2,000,000
Value of additional shares of common stock issued to induce conversion															22,000,000
Number of preferred shares outstanding at time of call														831,554
Number of preferred shares converted into common shares								28,749,560						830,529	268,331
Number of common stock shares received by shareholders in conversion								78,900,000						35,800,000	11,500,000
Shares of preferred stock redeemed for cash														1,025
Cash payment for redemption of preferred stock														$ 1,000,000

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EMPLOYEE BENEFITS (Details) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 USD ($) years	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2011 Atlantic Copper [Member] USD ($) years	Dec. 31, 2011 Atlantic Copper [Member] EUR (€)
Employee Benefits [Line Items]
Estimated future average expected rate of return per annum on pension assets (in hundredths)	7.50%
Number of years over which estimated future average expected rate of return per annum is calculated (in years)	10
Estimated future average expected rate of return on passively managed pension assets (in hundredths)	7.00%
Estimated future average expected premium on actively managed pension assets (in hundredths)	0.50%
Annual funding for contractual obligation to Atlantic Copper retirees (in millions of euros)					€ 7.2
Annual funding for contractual obligation to Atlantic Copper retirees (in millions of dollars)				9
Exchange Rate Of Dollars To Euros				1.29
Number of years for funding of contractual obligation to Atlantic Copper retirees (in years)				15	15
Total contractual obligation to Atlantic Copper retirees (in millions of euros)					72
Accumulated benefit obligations in excess of plan assets [Abstract]
Projected benefit obligation	2,055	1,662
Accumulated benefit obligation	1,874	1,581
Fair value of plan assets	1,261	1,122
Current company match for employee savings plan (in hundredths)	4.00%
Company match for employee savings plan for certain long-term employees (in hundredths)	10.00%
Balance of unfunded defined contribution plan	56	49
Costs charged to operations for employee savings plans and defined contribution plans	$ 35	$ 36	$ 30

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Data [Abstract]

Quarterly financial information

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
2011
Revenues	$	5,709		$	5,814		$	5,195		$	4,162		$	20,880
Operating income	2,936			2,757			2,150			1,297		a	9,140		a
Net income	1,861			1,726			1,294		b	866			5,747		b
Net income attributable to noncontrolling
interests	362			358			241			226			1,187
Net income attributable to FCX common
stockholders	1,499		c	1,368		c	1,053		b	640		a	4,560		a,b,c
Basic net income per share attributable
to FCX common stockholders	1.58			1.44			1.11			0.67			4.81
Diluted net income per share attributable
to FCX common stockholders	1.57		c	1.43		c	1.10		b	0.67		a	4.78		a,b,c
2010
Revenues	$	4,363		$	3,864		$	5,152		$	5,603		$	18,982
Operating income	2,048			1,424			2,499			3,097			9,068
Net income	1,215			832			1,533			1,964			5,544
Net income attributable to noncontrolling
interests	270			168			355			415			1,208
Net income attributable to FCX common
stockholders	897		d	649		d	1,178			1,549		d	4,273		d
Basic net income per share attributable
to FCX common stockholders	1.04			0.71			1.25			1.64			4.67
Diluted net income per share attributable
to FCX common stockholders	1.00		d	0.70		d	1.24			1.63		d	4.57		d

All references to income or losses per share are on a diluted basis.

a. Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

b. Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

c. Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

d. Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

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OWNERSHIP IN SUBSIDIARIES, JOINT VENTURES AND INVESTMENT IN PT SMELTING

12 Months Ended

Dec. 31, 2011

Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]

Ownership In Subsidiaries Joint Ventures And Investment In PT Smelting

OWNERSHIP IN SUBSIDIARIES, JOINT VENTURES AND INVESTMENT IN PT SMELTING

Ownership in Subsidiaries.  FMC is a fully integrated producer of copper and molybdenum, with mines in North America, South America and the Tenke Fungurume minerals district in the DRC, and copper and molybdenum conversion facilities. At December 31, 2011, FMC’s operating copper mines in North America were Morenci, Sierrita, Bagdad, Safford and Miami located in Arizona, and Tyrone and Chino located in New Mexico. FCX has an 85 percent interest in Morenci (refer to “Joint Ventures – Sumitomo”) and owns 100 percent of the other North America copper mines. FMC also owns 100 percent of the Henderson molybdenum mine and the Climax molybdenum mine (construction activities are substantially complete with plans to commence production in 2012), which are located in Colorado. At December 31, 2011, operating copper mines in South America were Cerro Verde (53.56 percent owned) located in Peru, and El Abra (51 percent owned), Candelaria (80 percent owned) and Ojos del Salado (80 percent owned) located in Chile. In addition to copper and molybdenum, certain FMC mines produce other minerals, such as gold, silver and rhenium. At December 31, 2011, FMC owned an effective 57.75 percent interest in the Tenke Fungurume minerals district in the DRC (refer to Note 14 for discussion of the future change in ownership interest). In addition to copper, the Tenke Fungurume minerals district also produces cobalt hydroxide. At December 31, 2011, FMC’s net assets totaled $14.9 billion and its accumulated deficit totaled $13.1 billion. FCX had $109 million in loans outstanding to FMC at December 31, 2011.

FCX’s direct ownership in PT Freeport Indonesia totals 81.28 percent. PT Indocopper Investama, an Indonesian company, owns 9.36 percent of PT Freeport Indonesia and FCX owns 100 percent of PT Indocopper Investama. At December 31, 2011, PT Freeport Indonesia’s net assets totaled $3.2 billion and its retained earnings totaled $3.1 billion. As of December 31, 2011, FCX had no loans outstanding to PT Freeport Indonesia.

FCX owns 100 percent of the outstanding Atlantic Copper common stock. At December 31, 2011, Atlantic Copper’s net liabilities totaled $43 million and its accumulated deficit totaled $437 million. FCX had $586 million in loans outstanding to Atlantic Copper at December 31, 2011.

FCX owns an 85.71 percent interest in PT Puncakjaya Power (Puncakjaya Power), the owner of assets supplying power to PT Freeport Indonesia’s operations, including the 3x65 megawatt coal-fired power facilities. PT Freeport Indonesia purchases power from Puncakjaya Power under infrastructure asset financing arrangements. At December 31, 2011, FCX did not have any loans outstanding to Puncakjaya Power, PT Freeport Indonesia had infrastructure asset financing obligations payable to Puncakjaya Power totaling $81 million, and Puncakjaya Power had a receivable from PT Freeport Indonesia for $106 million, including Rio Tinto’s share. FCX consolidates PT Freeport Indonesia and Puncakjaya Power. FCX’s consolidated balance sheets reflect receivables of $23 million ($3 million in other accounts receivable and $20 million in long-term receivables) at December 31, 2011, and $25 million ($2 million in other accounts receivable and $23 million in long-term receivables) at December 31, 2010, for Rio Tinto’s share of Puncakjaya Power’s receivable from PT Freeport Indonesia as provided for in FCX’s joint venture agreement with Rio Tinto.

Joint Ventures.  FCX has the following unincorporated joint ventures with third parties.

Rio Tinto. FCX and Rio Tinto have established certain unincorporated joint ventures. Under the joint venture arrangements, Rio Tinto has a 40 percent interest in PT Freeport Indonesia’s Contract of Work and the option to participate in 40 percent of any other future exploration projects in Papua, Indonesia.

Pursuant to the joint venture agreement, Rio Tinto has a 40 percent interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver through 2021 in Block A of PT Freeport Indonesia’s Contract of Work, and, after 2021, a 40 percent interest in all production from Block A. All of PT Freeport Indonesia’s proven and probable reserves and its mining operations are located in the Block A area. Operating, nonexpansion capital and administrative costs are shared proportionately between PT Freeport Indonesia and Rio Tinto based on the ratio of (i) the incremental revenues from production from PT Freeport Indonesia’s most recent expansion completed in 1998 to (ii) total revenues from production from Block A, including production from PT Freeport Indonesia’s previously existing reserves. PT Freeport Indonesia will continue to receive 100 percent of the cash flow from specified annual amounts of copper, gold and silver through 2021 calculated by reference to its proven and probable reserves as of December 31, 1994, and 60 percent of all remaining cash flow. The agreement provides for adjustments to the specified annual amounts of copper, gold and silver attributable 100 percent to PT Freeport Indonesia upon the occurrence of certain events that cause an interruption in production to occur, including events such as the labor disruptions and the temporary suspension of milling operations at PT Freeport Indonesia from damage to the concentrate and fuel pipelines that occurred in 2011. As a result of the labor and pipeline disruptions, the 2011 specified amounts, before smelter recoveries, attributable 100 percent to PT Freeport Indonesia were reduced by approximately 228 million pounds for copper and approximately 224 thousand ounces for gold, which will be offset by identical increases in future periods. The payable to Rio Tinto for its share of joint venture cash flows was $45 million at December 31, 2011, and $132 million at December 31, 2010.

Under the joint venture arrangements, Rio Tinto funded $100 million in 1996 for approved exploration costs in the areas covered by Contracts of Work held by FCX subsidiaries. Agreed-upon exploration costs in the joint venture areas are shared 60 percent by FCX and 40 percent by Rio Tinto. Since September 2008, Rio Tinto is no longer participating in exploration joint ventures in the PT Nabire Bakti Mining and PT Irja Eastern Minerals Contract of Work areas in Indonesia. As a result, as long as Rio Tinto continues not to fund these exploration projects, FCX has the option to fund 100 percent of future exploration costs in these areas and Rio Tinto's interest in these areas will decline over time in accordance with the joint venture agreement. Rio Tinto has the option to resume participation in PT Irja Eastern Minerals on a monthly basis and in PT Nabire Bakti Mining on an annual basis. Rio Tinto continues to participate in exploration joint ventures in PT Freeport Indonesia's Contract of Work areas.

Sumitomo. FCX owns an 85 percent undivided interest in Morenci via an unincorporated joint venture. The remaining 15 percent is owned by Sumitomo, a jointly owned subsidiary of Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation. Each partner takes in kind its share of Morenci’s production. FMC purchased 67 million pounds of Morenci’s copper cathode from Sumitomo for $268 million during 2011, 66 million pounds for $223 million during 2010 and 75 million pounds for $175 million during 2009. FCX had a receivable from Sumitomo of $12 million at December 31, 2011, and $8 million at December 31, 2010.

Investment in PT Smelting.  PT Smelting, an Indonesian company, operates a smelter and refinery in Gresik, Indonesia. During 2006, PT Smelting completed an expansion of its production capacity to 275,000 metric tons of copper per year from 250,000 metric tons. PT Freeport Indonesia owns 25 percent of the outstanding PT Smelting common stock.

PT Freeport Indonesia’s contract with PT Smelting provides for the supply of 100 percent of the copper concentrate requirements necessary for PT Smelting to produce 205,000 metric tons of copper annually (essentially the smelter’s original design capacity) on a priority basis. For the first 15 years of PT Smelting’s commercial operations, beginning December 1998, PT Freeport Indonesia agreed that the combined treatment and refining charges would approximate market rates, but will not fall below specified minimum rates. The minimum rate, applicable to the period April 27, 2008, to April 27, 2014, is determined annually and must be sufficient to cover PT Smelting’s annual cash operating costs (net of credits and including costs of debt service) for 205,000 metric tons of copper. The maximum rate is $0.30 per pound. PT Freeport Indonesia also sells copper concentrate to PT Smelting at market rates, which are not subject to a minimum or maximum rate, for quantities in excess of 205,000 metric tons of copper annually.

FCX’s investment in PT Smelting (net of PT Freeport Indonesia's share of profits on sales to PT Smelting still in PT Smelting's inventory totaling $2 million at December 31, 2011, and $113 million at December 31, 2010) totaled $125 million at December 31, 2011, and $11 million at December 31, 2010. PT Smelting had project-specific debt, nonrecourse to PT Freeport Indonesia, totaling $320 million at December 31, 2011, and $180 million at December 31, 2010. PT Freeport Indonesia had a trade receivable from PT Smelting totaling $116 million at December 31, 2011, and $455 million at December 31, 2010.

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EMPLOYEE BENEFITS (Target Asset Allocation) (Details)	12 Months Ended
	Dec. 31, 2011
Equity Investments [Member] | U.S. [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, equity investments (in hundredths)	4.00%
Equity Investments [Member] | International [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, equity investments (in hundredths)	43.00%
Equity Investments [Member] | Emerging Markets Equity [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, equity investments (in hundredths)	7.00%
Equity Investments [Member] | Total [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, equity investments (in hundredths)	54.00%
Fixed Income [Member] | U.S. [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	18.00%
Fixed Income [Member] | International [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	5.00%
Fixed Income [Member] | Emerging Markets Equity [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	3.00%
Fixed Income [Member] | High Yield [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	5.00%
Fixed Income [Member] | Inflation Protection [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	4.00%
Fixed Income [Member] | Total [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, fixed income (in hundredths)	35.00%
Alternative Investments [Member] | Private [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, alternative investments (in hundredths)	5.00%
Alternative Investments [Member] | Private Real Estate [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, alternative investments (in hundredths)	3.00%
Alternative Investments [Member] | Real Estate Trusts [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, alternative investments (in hundredths)	3.00%
Alternative Investments [Member] | Total [Member]
Target asset allocation [Line Items]
Defined benefit plan, target allocation percentage of assets, alternative investments (in hundredths)	11.00%

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FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2011

Financial Instruments [Abstract]

Unrealized gains (losses) for derivative financial instruments that are designated and qualify as fair value hedge transactions and for the related hedged item

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) for the years ended December 31 follows:

	2011			2010			2009
Unrealized gains (losses):
Derivative financial instruments	$	(28	)	$	7		$	11
Hedged item	28			(7		)	(11		)
Realized gains (losses):
Matured derivative financial instruments	(28		)	37			49

Realized and unrealized gains (losses) for derivative financial instruments that do not qualify as hedge transactions

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, for the years ended December 31 follows:

	2011			2010			2009
Embedded derivatives in provisional sales contractsa	$	(519	)	$	619		$	1,393
Embedded derivatives in provisional purchase contractsb	—			(2		)	(3		)
Copper forward contractsa	—			—			(104		)
Copper forward contractsb	(2		)	(30		)	2
Copper futures and swap contractsa	—			—			64

Fair Values of Unsettled Derivative Financial Instruments

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

	December 31,
	2011			2010
Derivatives designated as hedging instruments
Commodity contracts:
Copper futures and swap contracts:a
Asset positionb	$	3		$	18
Liability positionc	(13		)	—

Derivatives not designated as hedging instruments
Commodity contracts:
Embedded derivatives in provisional sales/purchases contracts:d
Asset position	$	72		$	357
Liability position	(82		)	(115		)
Copper forward contracts:
Asset positionb	2			—
Liability positionc	—			(10		)

Schedule of Derivative Instruments

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

	Open	Average Price Per Unit				Maturities
	Positions	Contract		Market		Through
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	388	$	3.55	$	3.44	June 2012
Gold (thousands of ounces)	52	1,676		1,576		February 2012
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	376	3.56		3.45		April 2012
Molybdenum (thousands of pounds)	33	11.80		11.78		January 2012

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation.  The consolidated financial statements of Freeport-McMoRan Copper & Gold Inc. (FCX) include the accounts of those subsidiaries where FCX directly or indirectly has more than 50 percent of the voting rights and has the right to control significant management decisions. The most significant entities that FCX consolidates include its 90.64 percent-owned subsidiary PT Freeport Indonesia, and its wholly owned subsidiaries, Freeport-McMoRan Corporation (FMC - formerly Phelps Dodge Corporation) and Atlantic Copper, S.L. (Atlantic Copper). FCX’s unincorporated joint ventures with Rio Tinto plc (Rio Tinto) and Sumitomo Metal Mining Arizona, Inc. (Sumitomo) are reflected using the proportionate consolidation method (refer to Note 2 for further discussion). All significant intercompany transactions have been eliminated. Dollar amounts in tables are stated in millions, except per share amounts.

Investments in unconsolidated companies owned 20 percent or more are recorded using the equity method. Investments in companies owned less than 20 percent, and for which FCX does not exercise significant influence, are carried at cost.

Business Segments

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.

Use of Estimates

Use of Estimates.  The preparation of FCX’s financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation, depletion and amortization; reclamation and closure costs; environmental obligations; estimates of recoverable copper in mill and leach stockpiles; pension, postretirement, postemployment and other employee benefits; deferred taxes and valuation allowances; reserves for contingencies and litigation; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from those estimates.

Foreign Currencies

Foreign Currencies.  For foreign subsidiaries whose functional currency is the U.S. dollar, monetary assets and liabilities denominated in the local currency are translated at current exchange rates, and non-monetary assets and liabilities, such as inventories, property, plant, equipment and development costs, are translated at historical rates. Gains and losses resulting from translation of such account balances are included in operating results, as are gains and losses from foreign currency transactions.

For foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated at current exchange rates, while revenues and expenses are translated at average rates in effect for the period. The related translation gains and losses are included in accumulated other comprehensive income (loss) within equity.

Cash Equivalents

Cash Equivalents.  Highly liquid investments purchased with maturities of three months or less are considered cash equivalents.

Inventories

Inventories.  The largest components of inventories include finished goods (primarily concentrates and cathodes) at mining operations, concentrates and work-in-process at Atlantic Copper’s smelting and refining operations, and materials and supplies inventories (refer to Note 3 for further discussion). Inventories of materials and supplies, as well as salable products, are stated at the lower of weighted-average cost or market. Costs of finished goods and work-in-process (i.e., not materials and supplies) inventories include labor and benefits, supplies, energy, depreciation, depletion, amortization, site overhead costs and other necessary costs associated with the extraction and processing of ore, including, depending on the process, mining, haulage, milling, concentrating, smelting, leaching, solution extraction, refining, roasting and chemical processing. Corporate general and administrative costs are not included in inventory costs.

Work-in-Process. In-process inventories represent materials that are currently in the process of being converted to a salable product. Conversion processes for mining operations vary depending on the nature of the copper ore and the specific mining operation. For sulfide ores, processing includes milling and concentrating and results in the production of copper and molybdenum concentrates or, alternatively, copper cathode by concentrate leaching. For oxide ores and certain secondary sulfide ores, processing includes leaching of stockpiles, solution extraction and electrowinning (SX/EW) and results in the production of copper cathodes. In-process material is measured based on assays of the material included in these processes and projected recoveries. In-process inventories are valued based on the costs incurred to various points in the process, including depreciation relating to associated process facilities. For Atlantic Copper, in-process inventories represent copper concentrates at various stages of conversion into anodes and cathodes. Atlantic Copper’s in-process inventories are valued at the weighted-average cost of the material fed to the smelting and refining process plus in-process conversion costs.

Finished Goods. Finished goods include salable products (e.g., copper and molybdenum concentrates, copper anodes, copper cathodes, copper rod, copper wire, molybdenum oxide, high-purity molybdenum chemicals and other metallurgical products). Finished goods are valued based on the weighted-average cost of source material plus applicable conversion costs relating to associated process facilities.

Mill and Leach Stockpiles

Mill and Leach Stockpiles.  Mill and leach stockpiles are stated at the lower of weighted-average cost or market. Both mill and leach stockpiles generally contain lower grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles, recovery is through milling, concentrating, smelting and refining or, alternatively, by concentrate leaching. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve contained copper and deliver it in solution to extraction processing facilities. The recorded cost of mill and leach stockpiles includes mining and haulage costs incurred to deliver ore to stockpiles, depreciation, depletion, amortization and site overhead costs.

Because it is generally impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade of the material delivered to mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production-scale process), historical trends and other factors, including mineralogy of the ore and rock type. Ultimate recovery of copper contained in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including type of copper recovery, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 70 percent of the copper ultimately recoverable may be extracted during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes.

Property, Plant, Equipment and Development Costs

Property, Plant, Equipment and Development Costs.  Property, plant, equipment and development costs are carried at cost. Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources at development or production stage properties, are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred resulting from mine pre-production activities undertaken to gain access to proven and probable reserves including shafts, adits, drifts, ramps, permanent excavations, infrastructure and removal of overburden. Additionally, interest expense allocable to the cost of developing mining properties and to constructing new facilities is capitalized until assets are ready for their intended use.

Expenditures for replacements and improvements are capitalized. Costs related to periodic scheduled maintenance (i.e., turnarounds) are expensed as incurred. Depreciation for mining and milling life-of-mine assets, infrastructure and other common costs is determined using the unit-of-production method based on total estimated recoverable proven and probable copper reserves (for primary copper mines) and proven and probable molybdenum reserves (for primary molybdenum mines). Development costs and acquisition costs for proven and probable reserves that relate to a specific ore body are depreciated using the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. Depreciation, depletion and amortization using the unit-of-production method is recorded upon extraction of the recoverable copper or molybdenum from the ore body, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over estimated useful lives of up to 30 years for buildings and three to 20 years for machinery and equipment, and mobile equipment.

Included in property, plant, equipment and development costs is value beyond proven and probable reserves (VBPP) primarily resulting from FCX’s acquisition of FMC in 2007. The concept of VBPP has been interpreted differently by different mining companies. FCX’s VBPP is attributable to (i) mineralized material, which includes measured and indicated amounts, that FCX believes could be brought into production with the establishment or modification of required permits and should market conditions and technical assessments warrant, (ii) inferred mineral resources and (iii) exploration potential, as further defined below.

Mineralized material is a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support reported tonnage and average grade of minerals. Such a deposit does not qualify as proven and probable reserves until legal and economic feasibility are confirmed based upon a comprehensive evaluation of development costs, unit costs, grades, recoveries and other material factors. Inferred mineral resources are that part of a mineral resource for which the overall tonnages, grades and mineral contents can be estimated with a reasonable level of confidence based on geological evidence and apparent geological and grade continuity after applying economic parameters. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource. Exploration potential is the estimated value of potential mineral deposits that FCX has the legal right to access. The value assigned to exploration potential was determined by interpreting the known exploration information and exploration results, including geological data and/or geological information, that were available as of the acquisition date.

Carrying amounts assigned to VBPP are not charged to expense until the VBPP becomes associated with additional proven and probable reserves and the reserves are produced or the VBPP is determined to be impaired. Additions to proven and probable reserves for properties with VBPP will carry with them the value assigned to VBPP at the date acquired, less any impairment amounts.

Intangible Assets and Liabilities

Intangible Assets and Liabilities.  FCX recorded intangible assets and liabilities primarily as a result of the acquisition of FMC. Indefinite-lived intangibles primarily include water rights. Definite-lived intangibles include favorable and unfavorable contracts (primarily related to treatment and refining contract rates, power contracts and tire contracts), royalty payments, patents and process technology. The fair value of identifiable intangible assets was estimated based principally upon comparable market transactions and discounted future cash flow projections. The ranges for estimated useful lives are 1 to 10 years for treatment and refining, power and tire contracts; 1 to 12 years for royalty payments; and principally 10 to 20 years for patents and process technology. All indefinite-lived intangible assets are subject to impairment testing at least annually, unless events occur or circumstances change between annual tests that would more likely than not reduce the indefinite-lived intangible asset’s fair value below its carrying value.

Asset Impairment

Asset Impairment.  FCX reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long-lived assets, other than indefinite-lived intangible assets, are evaluated for impairment under the two-step model. An impairment is considered to exist if total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Once it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques, such as estimated future cash flows.

In evaluating mining operations’ long-lived assets for recoverability, estimates of after-tax undiscounted future cash flows of FCX’s individual mining operations are used, with impairment losses measured by reference to fair value. As quoted market prices are unavailable for FCX’s individual mining operations, fair value is determined through the use of discounted estimated future cash flows. Estimated cash flows used to assess recoverability of long-lived assets and measure the fair value of FCX’s mining operations are derived from current business plans, which are developed using near-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. Estimates of future cash flows include near and long-term metal price assumptions; estimates of commodity-based and other input costs; proven and probable reserve estimates, including any costs to develop the reserves and the timing of producing the reserves; and the use of appropriate current escalation and discount rates.

Deferred Mining Costs

Deferred Mining Costs.  Stripping costs (i.e., the costs of removing overburden and waste material to access mineral deposits) incurred during the production phase of a mine are considered variable production costs and are included as a component of inventory produced during the period in which stripping costs are incurred. Major development expenditures, including stripping costs to prepare unique and identifiable areas outside the current mining area for future production that are considered to be pre-production mine development, are capitalized and amortized on the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. However, where a second or subsequent pit or major expansion is considered to be a continuation of existing mining activities, stripping costs are accounted for as a current production cost and a component of the associated inventory.

Environmental Expenditures

Environmental Expenditures. Environmental expenditures are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. For closed facilities and closed portions of operating facilities with environmental obligations, the related obligation is accrued when a decision to close a facility, or a portion of a facility, is made by management and the environmental obligation is considered to be probable. Environmental obligations attributed to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or analogous state programs are considered probable when a claim is asserted, or is probable of assertion, and FCX, or any of its subsidiaries, have been associated with the site. Other environmental remediation obligations are considered probable based on specific facts and circumstances. FCX’s estimates of these costs are based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, remediation experience, whether or not FCX is a potentially responsible party (PRP) and the ability of other PRPs to pay their allocated portions. With the exception of those obligations assumed in the acquisition of FMC that were recorded at estimated fair values (refer to Note 13 for further discussion), environmental obligations are recorded on an undiscounted basis. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Possible recoveries of some of these costs from other parties are not recognized in the consolidated financial statements until they become probable. Legal costs associated with environmental remediation (such as fees to outside law firms for work relating to determining the extent and type of remedial actions and the allocation of costs among PRPs) are included as part of the estimated obligation. Environmental obligations assumed in the acquisition of FMC, which were initially estimated on a discounted basis, are accreted to full value over time through charges to interest expense.

Asset Retirement Obligations

Asset Retirement Obligations.  FCX records the fair value of estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period incurred. Retirement obligations associated with long-lived assets are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of sales. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Reclamation costs for future disturbances are recognized as an ARO and as a related ARC in the period of the disturbance. FCX’s AROs consist primarily of costs associated with mine reclamation and closure activities. These activities, which are site specific, generally include costs for earthwork, revegetation, water treatment and demolition (refer to Note 13 for further discussion).

Litigation Contingencies

Litigation Contingencies.  At least quarterly, FCX assesses the likelihood of any adverse judgments or outcomes related to legal matters (including pending or threatened litigation matters), as well as ranges of potential losses. A determination of the amount of the reserve required, if any, for litigation contingencies is made after analysis of known issues. FCX records reserves related to legal matters for which it believes it is probable that a loss has been incurred and the range of such loss can be reasonably estimated. If an amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued, otherwise, the minimum amount in the range is accrued. With respect to other matters, for which management has concluded that a loss is only reasonably possible or remote, or not reasonably estimable, no liability has been recorded. For losses assessed as reasonably possible, FCX discloses the nature of the contingency and an estimate of the possible loss or range of loss or states that such an estimate cannot be made. Costs incurred to defend claims are expensed as incurred.

Litigation is inherently unpredictable and it is difficult to project the outcome of particular matters with reasonable certainty; therefore, the actual amount of any loss could differ from the litigation contingencies reflected in FCX's consolidated financial statements. Refer to Note 13 for further discussion of FCX's litigation contingencies.

Income Taxes

Income Taxes.  FCX accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates (refer to Note 12 for further discussion). When appropriate, FCX evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. The effect on deferred income tax assets and liabilities of a change in tax rates or laws is recognized in income in the period in which such changes are enacted.

FCX accounts for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FCX’s policy associated with uncertain tax positions is to record accrued interest in interest expense and accrued penalties in other income and expenses rather than in the provision for income taxes (refer to Note 12 for further discussion).

With the exception of FCX’s operations in the Democratic Republic of Congo (DRC), income taxes are provided on the earnings of FCX’s material foreign subsidiaries under the assumption that these earnings will be distributed. FCX has determined that undistributed earnings related to its DRC operations are reinvested indefinitely or have been allocated toward specifically identifiable needs of the local operations. FCX has not provided for other differences between the book and tax carrying amounts of these investments as FCX considers its ownership position to be permanent in duration and quantification of the related deferred tax liability is not practicable.

Derivative Instruments

Derivative Instruments.  FCX and its subsidiaries have entered into derivative contracts to manage certain risks resulting from fluctuations in commodity prices (primarily copper and gold), foreign currency exchange rates and interest rates by creating offsetting market exposures. Every derivative instrument (including certain derivative instruments embedded in other contracts) is recorded in the balance sheet as either an asset or liability measured at its fair value. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. Refer to Note 15 for a summary of FCX’s outstanding derivative instruments at December 31, 2011, and a discussion of FCX’s risk management strategies for those designated as hedges.

Revenue Recognition

Revenue Recognition.  FCX sells its products pursuant to sales contracts entered into with its customers. Revenue for all FCX’s products is recognized when title and risk of loss pass to the customer and when collectibility is reasonably assured. The passing of title and risk of loss to the customer are based on terms of the sales contract, generally upon shipment or delivery of product.

Revenues from FCX’s concentrate and cathode sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Revenues from concentrate sales are recorded net of treatment and all refining charges (including price participation, if applicable, as discussed below) and the impact of derivative contracts. Moreover, because a portion of the metals contained in copper concentrates is unrecoverable as a result of the smelting process, FCX’s revenues from concentrate sales are also recorded net of allowances based on the quantity and value of these unrecoverable metals. These allowances are a negotiated term of FCX’s contracts and vary by customer. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed or, in certain cases, vary with the price of copper (referred to as price participation).

Under the long-established structure of sales agreements prevalent in the industry, copper contained in concentrates and cathodes is generally provisionally priced at the time of shipment. The provisional prices are finalized in a specified future month (generally one to four months from the shipment date) based on quoted monthly average spot copper prices on the London Metal Exchange (LME) or the New York Mercantile Exchange (COMEX). FCX receives market prices based on prices in the specified future month, which results in price fluctuations recorded to revenues until the date of settlement. FCX records revenues and invoices customers at the time of shipment based on then-current LME or COMEX prices, which results in an embedded derivative (i.e., a pricing mechanism that is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrates or cathodes at the then-current LME or COMEX price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since these contracts do not allow for net settlement and always result in physical delivery. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the period-end forward prices, until the date of final pricing. At December 31, 2011, FCX had outstanding provisionally priced copper sales from its copper mining operations of 252 million pounds of copper (net of noncontrolling interests), priced at an average of $3.44 per pound, subject to final pricing over the first several months of 2012 pursuant to the terms of the sales contracts.

Gold sales are priced according to individual contract terms, generally the average London Bullion Market Association price for a specified month near the month of shipment.

Substantially all of FCX’s 2011 molybdenum sales were priced based on prices published in Metals Week, Ryan’s Notes or Metal Bulletin, plus conversion premiums for products that undergo additional processing, such as ferromolybdenum and molybdenum chemical products. The majority of these sales use the average price of the previous month quoted by the applicable publication. FCX’s remaining molybdenum sales generally have pricing that is either based on a fixed price or adjusts within certain price ranges.

PT Freeport Indonesia concentrate sales and Tenke Fungurume Mining S.A.R.L. (TFM) metal sales are subject to certain royalties, which are recorded as a reduction to revenues (refer to Note 14 for further discussion).

Stock-Based Compensation

Stock-Based Compensation. Compensation costs for share-based payments to employees, including stock options, are measured at fair value and charged to expense over the requisite service period for awards that are expected to vest. The fair value of stock options is determined using the Black-Scholes-Merton option valuation model. The fair value for restricted stock units is based on FCX's stock price on the date of grant or an appropriate valuation model. The fair value for cash-settled stock appreciation rights (SARs) is the intrinsic value on the reporting or exercise date. FCX estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date of the awards if actual forfeitures differ from those estimates. FCX has elected to recognize compensation costs for stock option awards that vest over several years on a straight-line basis over the vesting period. Refer to Note 11 for further discussion.

Earnings Per Share

Earnings Per Share.  FCX’s basic net income per share of common stock was calculated by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding during the year. A reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share for the years ended December 31 follows:

	2011				2010			2009
Net income	$	5,747			$	5,544		$	3,534
Net income attributable to noncontrolling interests	(1,187		)		(1,208		)	(785		)
Preferred dividends	—				(63		)	(222		)
Net income attributable to FCX common stockholders	4,560				4,273			2,527
Plus income impact of assumed conversion of:
6¾% Mandatory Convertible Preferred Stocka	—				63			194
5½% Convertible Perpetual Preferred Stockb	—				—			28
Diluted net income attributable to FCX common
stockholders	$	4,560			$	4,336		$	2,749
Weighted-average shares of common stock outstanding	947				915			829
Add stock issuable upon conversion, exercise or vesting of
(refer to Note 11):
6¾% Mandatory Convertible Preferred Stocka	—				26			79
5½% Convertible Perpetual Preferred Stockb	—				—			25
Dilutive stock options	7			c	6			3
Restricted stock units	1				2			2
Weighted-average shares of common stock outstanding for
purposes of calculating diluted net income per share	955				949			938
Diluted net income per share attributable to FCX
common stockholders	$	4.78			$	4.57		$	2.93

a. All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.

b. In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.

c. Potential additional shares of common stock that were anti-dilutive totaled approximately two million.

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the year are excluded from the computation of diluted net income per share of common stock. Approximately 4 million stock options with a weighted-average exercise price of $53.91 were excluded in 2011; approximately 10 million stock options with a weighted-average exercise price of $38.56 were excluded in 2010; and approximately 13 million stock options with a weighted-average exercise price of $36.27 were excluded in 2009.

New Accounting Standards

New Accounting Standards.  In May 2011, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) in connection with guidance for fair value measurements and disclosures. This ASU clarifies the FASB's intent on current guidance, modifies and changes certain guidance and principles, and expands disclosures concerning Level 3 fair value measurements in the fair value hierarchy (including quantitative information about significant unobservable inputs within Level 3 of the fair value hierarchy). In addition, this ASU requires disclosure of the fair value hierarchy for assets and liabilities not measured at fair value in the statement of financial position, but whose fair value is required to be disclosed. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early application is not permitted.

In June 2011, FASB issued an ASU in connection with guidance on the presentation of comprehensive income. The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. This ASU requires an entity to present the components of net income and other comprehensive income and total comprehensive income (includes net income) either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of equity, but does not change the items that must be reported in other comprehensive income. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early adoption is permitted. FCX has determined it will present comprehensive income as a separate statement beginning in the first quarter of 2012. In December 2011, FASB deferred the effective date for the requirement in this ASU for presenting reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2011

Schedule To Financial Statements [Abstract]

Schedule II - Valuation and Qualifying Accounts

Col. A	Col. B		Col. C					Col. D				Col. E
			Additions
	Balance at		Charged to		Charged to			Other				Balance at
	Beginning of		Costs and		Other			Add				End of
	Period		Expense		Accounts			(Deduct)				Period
Reserves and allowances deducted
from asset accounts:
Materials and supplies inventory allowances
2011	$	26	$	4	$	—		$	(4	)	a	$	26
2010	21		11		—			(6		)	a	26
2009	22		4		—			(5		)	a	21
Valuation allowance for
deferred tax assets
2011	$	2,226	$	146	$	21		$	—			$	2,393
2010	2,157		55		14			—				2,226
2009	1,763		366		28			—				2,157
Reserves for non-income taxes:
2011	$	73	$	12	$	(2	)	$	(10	)	b	$	73
2010	47		29		—			(3		)	b	73
2009	32		15		3			(3		)	b	47

a. Primarily represents write-offs of obsolete materials and supplies inventories.

b. Represents amounts paid or adjustments to reserves based on revised estimates.

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INTANGIBLE ASSETS AND LIABILITIES (Intangibles by Class) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Intangible assets: [Abstract]
Gross carrying value	$ 387	$ 380
Accumulated amortization	(62)	(52)
Net book value	325	328
Intangible liabilities: [Abstract]
Amortization of intangible assets recognized in production and delivery costs	10	10	16
Amortization of intangible liabilities recognized in revenues	5	4	6
Indefinite-lived water rights [Member]
Intangible assets: [Abstract]
Gross carrying value	239	245
Accumulated amortization	0	0
Net book value	239	245
Patents and process technology [Member]
Intangible assets: [Abstract]
Gross carrying value	48	48
Accumulated amortization	(14)	(11)
Net book value	34	37
Royalty payments [Member]
Intangible assets: [Abstract]
Gross carrying value	37	37
Accumulated amortization	(21)	(18)
Net book value	16	19
Power contracts [Member]
Intangible assets: [Abstract]
Gross carrying value	25	25
Accumulated amortization	(18)	(17)
Net book value	7	8
Other Intangibles [Member]
Intangible assets: [Abstract]
Gross carrying value	38	25
Accumulated amortization	(9)	(6)
Net book value	29	19
Treatment and refining terms in sales contracts [Member]
Intangible liabilities: [Abstract]
Gross carrying value	52	52
Accumulated amortization	(30)	(25)
Net book value	$ 22	$ 27

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FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurement Inputs Disclosure

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

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	4,007	$	4,007	$	—	$	—
Trust assets:
Government mortgage-backed securities	47		—		47		—
U.S. core fixed income fund	46		—		46		—
Government bonds and notes	21		—		21		—
Corporate bonds	19		—		19		—
Money market funds	9		9		—		—
Asset-backed securities	9		—		9		—
Municipal bonds	1		—		1		—
Total trust assets	152		9		143		—
Available-for-sale securities:
Equity securities	9		9		—		—
Money market funds	2		2		—		—
Total available-for-sale securities	11		11		—		—

Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	72			—			72			—
Copper futures and swap contracts	3			3			—			—
Copper forward contracts	2			1			1			—
Total derivative assets	77			4			73			—
Total assets	$	4,247		$	4,031		$	216		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	$	(82	)	$	—		$	(82	)	$	—
Copper futures and swap contracts	(13		)	(11		)	(2		)	—
Total derivative liabilities	$	(95	)	$	(11	)	$	(84	)	$	—

	Fair Value at December 31, 2010
	Total			Level 1			Level 2			Level 3
Assets
Cash equivalents:
Money market funds	$	3,584		$	3,584		$	—		$	—
Trust assets:
U.S. core fixed income fund	42			—			42			—
Government mortgage-backed securities	35			—			35			—
Corporate bonds	23			—			23			—
Asset-backed securities	22			—			22			—
Money market funds	15			15			—			—
Government bonds and notes	10			—			10			—
Municipal bonds	1			—			1			—
Total trust assets	148			15			133			—
Available-for-sale securities:a
Equity securities	9			9			—			—
Money market funds	6			6			—			—
Total available-for-sale securities	15			15			—			—
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	357			—			357			—
Copper futures and swap contracts	18			18			—			—
Total derivative assets	375			18			357			—
Total assets	$	4,122		$	3,632		$	490		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	$	(115	)	$	—		$	(115	)	$	—
Copper forward contracts	(10		)	(1		)	(9		)	—
Total derivative liabilities	$	(125	)	$	(1	)	$	(124	)	$	—

a. Excluded were $19 million of time deposits.

b. At the end of 2011, FCX reevaluated its level determination for its embedded derivatives in provisional sales/purchases contracts, including those reported at December 31, 2010. Although the critical input in these measurements are quoted market prices for copper, gold and molybdenum, the contracts themselves are not traded on an exchange and, therefore, are more appropriately classified within Level 2 of the fair value hierarchy.

Carrying amount and fair value of other financial instruments

. A summary of the carrying amount and fair value of FCX’s other financial instruments as of December 31 follows:

	2011						2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalentsa	$	4,822		$	4,822		$	3,738		$	3,738
MMR cost investmentb	475			507			500			623
Net embedded derivatives included in accounts
receivable or payable	(10		)	(10		)	242			242
Trust assets (current and long-term)a, c	152			152			148			148
Available-for-sale securities (current and
long-term)a, c	11			11			34			34
Derivative assetsa, d	5			5			18			18
Derivative liabilitiesa, e	(13		)	(13		)	(10		)	(10		)
Debt (including amounts due within one year)f	(3,537		)	(3,797		)	(4,755		)	(5,146		)

a. Recorded at fair value.

b. Recorded at cost and included in other assets. At December 31, 2011, these securities were not actively trading; as such, fair value was based on a pricing simulation model using MMR's publicly traded common stock as the most significant observable input. At December 31, 2010, fair value was 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. Included in accounts payable and accrued liabilities.

f. Recorded at cost except for long-term debt acquired in the FMC 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 price

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Schedule of diluted earnings per share

A reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share for the years ended December 31 follows:

	2011				2010			2009
Net income	$	5,747			$	5,544		$	3,534
Net income attributable to noncontrolling interests	(1,187		)		(1,208		)	(785		)
Preferred dividends	—				(63		)	(222		)
Net income attributable to FCX common stockholders	4,560				4,273			2,527
Plus income impact of assumed conversion of:
6¾% Mandatory Convertible Preferred Stocka	—				63			194
5½% Convertible Perpetual Preferred Stockb	—				—			28
Diluted net income attributable to FCX common
stockholders	$	4,560			$	4,336		$	2,749
Weighted-average shares of common stock outstanding	947				915			829
Add stock issuable upon conversion, exercise or vesting of
(refer to Note 11):
6¾% Mandatory Convertible Preferred Stocka	—				26			79
5½% Convertible Perpetual Preferred Stockb	—				—			25
Dilutive stock options	7			c	6			3
Restricted stock units	1				2			2
Weighted-average shares of common stock outstanding for
purposes of calculating diluted net income per share	955				949			938
Diluted net income per share attributable to FCX
common stockholders	$	4.78			$	4.57		$	2.93

a. All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.

b. In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.

c. Potential additional shares of common stock that were anti-dilutive totaled approximately two million.

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INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES (Tables)

12 Months Ended

Dec. 31, 2011

Inventories, Including Long Term Mill and Leach Stockpiles [Abstract]

Components of Inventories

The components of inventories follow:

	December 31,
	2011		2010
Mining Operations:a
Raw materials	$	1	$	1
Finished goodsb	769		704
Atlantic Copper:
Raw materials (concentrates)	260		336
Work-in-process	187		266
Finished goods	9		9
Total product inventories	1,226		1,316
Total materials and supplies, netc	1,354		1,169
Total inventories	$	2,580	$	2,485

a. FCX's mining operations also have work-in-process inventories (i.e., mill and leach stockpiles), which have been summarized below.

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

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

Mill and Leach Stockpiles

A summary of mill and leach stockpiles follows:

	December 31, 2011
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	40	$	11	$	18	$	—	$	69
Leach stockpiles	963		216		—		41		1,220
Total current mill and leach
stockpiles	$	1,003	$	227	$	18	$	41	$	1,289
Long-term:a
Mill stockpiles	$	—	$	535	$	—	$	—	$	535
Leach stockpiles	718		284		—		149		1,151
Total long-term mill and leach
stockpiles	$	718	$	819	$	—	$	149	$	1,686

	December 31, 2010
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	15	$	29	$	24	$	—	$	68
Leach stockpiles	749		98		—		34		881
Total current mill and leach
stockpiles	$	764	$	127	$	24	$	34	$	949
Long-term:a
Mill stockpiles	$	—	$	470	$	—	$	—	$	470
Leach stockpiles	622		250		—		83		955
Total long-term mill and leach
stockpiles	$	622	$	720	$	—	$	83	$	1,425

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

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation.  The consolidated financial statements of Freeport-McMoRan Copper & Gold Inc. (FCX) include the accounts of those subsidiaries where FCX directly or indirectly has more than 50 percent of the voting rights and has the right to control significant management decisions. The most significant entities that FCX consolidates include its 90.64 percent-owned subsidiary PT Freeport Indonesia, and its wholly owned subsidiaries, Freeport-McMoRan Corporation (FMC - formerly Phelps Dodge Corporation) and Atlantic Copper, S.L. (Atlantic Copper). FCX’s unincorporated joint ventures with Rio Tinto plc (Rio Tinto) and Sumitomo Metal Mining Arizona, Inc. (Sumitomo) are reflected using the proportionate consolidation method (refer to Note 2 for further discussion). All significant intercompany transactions have been eliminated. Dollar amounts in tables are stated in millions, except per share amounts.

Investments in unconsolidated companies owned 20 percent or more are recorded using the equity method. Investments in companies owned less than 20 percent, and for which FCX does not exercise significant influence, are carried at cost.

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.

Use of Estimates.  The preparation of FCX’s financial statements in conformity with accounting principles generally accepted in the United States (U.S.) requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates include mineral reserve estimation; useful asset lives for depreciation, depletion and amortization; reclamation and closure costs; environmental obligations; estimates of recoverable copper in mill and leach stockpiles; pension, postretirement, postemployment and other employee benefits; deferred taxes and valuation allowances; reserves for contingencies and litigation; and asset impairment, including estimates used to derive future cash flows associated with those assets. Actual results could differ from those estimates.

Foreign Currencies.  For foreign subsidiaries whose functional currency is the U.S. dollar, monetary assets and liabilities denominated in the local currency are translated at current exchange rates, and non-monetary assets and liabilities, such as inventories, property, plant, equipment and development costs, are translated at historical rates. Gains and losses resulting from translation of such account balances are included in operating results, as are gains and losses from foreign currency transactions.

For foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated at current exchange rates, while revenues and expenses are translated at average rates in effect for the period. The related translation gains and losses are included in accumulated other comprehensive income (loss) within equity.

Cash Equivalents.  Highly liquid investments purchased with maturities of three months or less are considered cash equivalents.

Inventories.  The largest components of inventories include finished goods (primarily concentrates and cathodes) at mining operations, concentrates and work-in-process at Atlantic Copper’s smelting and refining operations, and materials and supplies inventories (refer to Note 3 for further discussion). Inventories of materials and supplies, as well as salable products, are stated at the lower of weighted-average cost or market. Costs of finished goods and work-in-process (i.e., not materials and supplies) inventories include labor and benefits, supplies, energy, depreciation, depletion, amortization, site overhead costs and other necessary costs associated with the extraction and processing of ore, including, depending on the process, mining, haulage, milling, concentrating, smelting, leaching, solution extraction, refining, roasting and chemical processing. Corporate general and administrative costs are not included in inventory costs.

Work-in-Process. In-process inventories represent materials that are currently in the process of being converted to a salable product. Conversion processes for mining operations vary depending on the nature of the copper ore and the specific mining operation. For sulfide ores, processing includes milling and concentrating and results in the production of copper and molybdenum concentrates or, alternatively, copper cathode by concentrate leaching. For oxide ores and certain secondary sulfide ores, processing includes leaching of stockpiles, solution extraction and electrowinning (SX/EW) and results in the production of copper cathodes. In-process material is measured based on assays of the material included in these processes and projected recoveries. In-process inventories are valued based on the costs incurred to various points in the process, including depreciation relating to associated process facilities. For Atlantic Copper, in-process inventories represent copper concentrates at various stages of conversion into anodes and cathodes. Atlantic Copper’s in-process inventories are valued at the weighted-average cost of the material fed to the smelting and refining process plus in-process conversion costs.

Finished Goods. Finished goods include salable products (e.g., copper and molybdenum concentrates, copper anodes, copper cathodes, copper rod, copper wire, molybdenum oxide, high-purity molybdenum chemicals and other metallurgical products). Finished goods are valued based on the weighted-average cost of source material plus applicable conversion costs relating to associated process facilities.

Mill and Leach Stockpiles.  Mill and leach stockpiles are stated at the lower of weighted-average cost or market. Both mill and leach stockpiles generally contain lower grade ores that have been extracted from the ore body and are available for copper recovery. For mill stockpiles, recovery is through milling, concentrating, smelting and refining or, alternatively, by concentrate leaching. For leach stockpiles, recovery is through exposure to acidic solutions that dissolve contained copper and deliver it in solution to extraction processing facilities. The recorded cost of mill and leach stockpiles includes mining and haulage costs incurred to deliver ore to stockpiles, depreciation, depletion, amortization and site overhead costs.

Because it is generally impracticable to determine copper contained in mill and leach stockpiles by physical count, reasonable estimation methods are employed. The quantity of material delivered to mill and leach stockpiles is based on surveyed volumes of mined material and daily production records. Sampling and assaying of blasthole cuttings determine the estimated copper grade of the material delivered to mill and leach stockpiles.

Expected copper recovery rates for mill stockpiles are determined by metallurgical testing. The recoverable copper in mill stockpiles, once entered into the production process, can be produced into copper concentrate almost immediately.

Expected copper recovery rates for leach stockpiles are determined using small-scale laboratory tests, small- to large-scale column testing (which simulates the production-scale process), historical trends and other factors, including mineralogy of the ore and rock type. Ultimate recovery of copper contained in leach stockpiles can vary significantly from a low percentage to more than 90 percent depending on several variables, including type of copper recovery, mineralogy and particle size of the rock. For newly placed material on active stockpiles, as much as 70 percent of the copper ultimately recoverable may be extracted during the first year, and the remaining copper may be recovered over many years.

Processes and recovery rates are monitored regularly, and recovery rate estimates are adjusted periodically as additional information becomes available and as related technology changes.

Property, Plant, Equipment and Development Costs.  Property, plant, equipment and development costs are carried at cost. Mineral exploration costs, as well as drilling and other costs incurred for the purpose of converting mineral resources to proven and probable reserves or identifying new mineral resources at development or production stage properties, are charged to expense as incurred. Development costs are capitalized beginning after proven and probable reserves have been established. Development costs include costs incurred resulting from mine pre-production activities undertaken to gain access to proven and probable reserves including shafts, adits, drifts, ramps, permanent excavations, infrastructure and removal of overburden. Additionally, interest expense allocable to the cost of developing mining properties and to constructing new facilities is capitalized until assets are ready for their intended use.

Expenditures for replacements and improvements are capitalized. Costs related to periodic scheduled maintenance (i.e., turnarounds) are expensed as incurred. Depreciation for mining and milling life-of-mine assets, infrastructure and other common costs is determined using the unit-of-production method based on total estimated recoverable proven and probable copper reserves (for primary copper mines) and proven and probable molybdenum reserves (for primary molybdenum mines). Development costs and acquisition costs for proven and probable reserves that relate to a specific ore body are depreciated using the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. Depreciation, depletion and amortization using the unit-of-production method is recorded upon extraction of the recoverable copper or molybdenum from the ore body, at which time it is allocated to inventory cost and then included as a component of cost of goods sold. Other assets are depreciated on a straight-line basis over estimated useful lives of up to 30 years for buildings and three to 20 years for machinery and equipment, and mobile equipment.

Included in property, plant, equipment and development costs is value beyond proven and probable reserves (VBPP) primarily resulting from FCX’s acquisition of FMC in 2007. The concept of VBPP has been interpreted differently by different mining companies. FCX’s VBPP is attributable to (i) mineralized material, which includes measured and indicated amounts, that FCX believes could be brought into production with the establishment or modification of required permits and should market conditions and technical assessments warrant, (ii) inferred mineral resources and (iii) exploration potential, as further defined below.

Mineralized material is a mineralized body that has been delineated by appropriately spaced drilling and/or underground sampling to support reported tonnage and average grade of minerals. Such a deposit does not qualify as proven and probable reserves until legal and economic feasibility are confirmed based upon a comprehensive evaluation of development costs, unit costs, grades, recoveries and other material factors. Inferred mineral resources are that part of a mineral resource for which the overall tonnages, grades and mineral contents can be estimated with a reasonable level of confidence based on geological evidence and apparent geological and grade continuity after applying economic parameters. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource. Exploration potential is the estimated value of potential mineral deposits that FCX has the legal right to access. The value assigned to exploration potential was determined by interpreting the known exploration information and exploration results, including geological data and/or geological information, that were available as of the acquisition date.

Carrying amounts assigned to VBPP are not charged to expense until the VBPP becomes associated with additional proven and probable reserves and the reserves are produced or the VBPP is determined to be impaired. Additions to proven and probable reserves for properties with VBPP will carry with them the value assigned to VBPP at the date acquired, less any impairment amounts.

Intangible Assets and Liabilities.  FCX recorded intangible assets and liabilities primarily as a result of the acquisition of FMC. Indefinite-lived intangibles primarily include water rights. Definite-lived intangibles include favorable and unfavorable contracts (primarily related to treatment and refining contract rates, power contracts and tire contracts), royalty payments, patents and process technology. The fair value of identifiable intangible assets was estimated based principally upon comparable market transactions and discounted future cash flow projections. The ranges for estimated useful lives are 1 to 10 years for treatment and refining, power and tire contracts; 1 to 12 years for royalty payments; and principally 10 to 20 years for patents and process technology. All indefinite-lived intangible assets are subject to impairment testing at least annually, unless events occur or circumstances change between annual tests that would more likely than not reduce the indefinite-lived intangible asset’s fair value below its carrying value.

Asset Impairment.  FCX reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long-lived assets, other than indefinite-lived intangible assets, are evaluated for impairment under the two-step model. An impairment is considered to exist if total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. Once it is determined that an impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. Fair value is generally determined using valuation techniques, such as estimated future cash flows.

In evaluating mining operations’ long-lived assets for recoverability, estimates of after-tax undiscounted future cash flows of FCX’s individual mining operations are used, with impairment losses measured by reference to fair value. As quoted market prices are unavailable for FCX’s individual mining operations, fair value is determined through the use of discounted estimated future cash flows. Estimated cash flows used to assess recoverability of long-lived assets and measure the fair value of FCX’s mining operations are derived from current business plans, which are developed using near-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. Estimates of future cash flows include near and long-term metal price assumptions; estimates of commodity-based and other input costs; proven and probable reserve estimates, including any costs to develop the reserves and the timing of producing the reserves; and the use of appropriate current escalation and discount rates.

Deferred Mining Costs.  Stripping costs (i.e., the costs of removing overburden and waste material to access mineral deposits) incurred during the production phase of a mine are considered variable production costs and are included as a component of inventory produced during the period in which stripping costs are incurred. Major development expenditures, including stripping costs to prepare unique and identifiable areas outside the current mining area for future production that are considered to be pre-production mine development, are capitalized and amortized on the unit-of-production method based on estimated recoverable proven and probable reserves for the ore body benefited. However, where a second or subsequent pit or major expansion is considered to be a continuation of existing mining activities, stripping costs are accounted for as a current production cost and a component of the associated inventory.

Environmental Expenditures. Environmental expenditures are expensed or capitalized, depending upon their future economic benefits. Accruals for such expenditures are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. For closed facilities and closed portions of operating facilities with environmental obligations, the related obligation is accrued when a decision to close a facility, or a portion of a facility, is made by management and the environmental obligation is considered to be probable. Environmental obligations attributed to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or analogous state programs are considered probable when a claim is asserted, or is probable of assertion, and FCX, or any of its subsidiaries, have been associated with the site. Other environmental remediation obligations are considered probable based on specific facts and circumstances. FCX’s estimates of these costs are based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, remediation experience, whether or not FCX is a potentially responsible party (PRP) and the ability of other PRPs to pay their allocated portions. With the exception of those obligations assumed in the acquisition of FMC that were recorded at estimated fair values (refer to Note 13 for further discussion), environmental obligations are recorded on an undiscounted basis. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Possible recoveries of some of these costs from other parties are not recognized in the consolidated financial statements until they become probable. Legal costs associated with environmental remediation (such as fees to outside law firms for work relating to determining the extent and type of remedial actions and the allocation of costs among PRPs) are included as part of the estimated obligation. Environmental obligations assumed in the acquisition of FMC, which were initially estimated on a discounted basis, are accreted to full value over time through charges to interest expense. Adjustments arising from changes in amounts and timing of estimated costs and settlements may result in increases and decreases in these obligations and are calculated on a discounted basis if they were initially estimated on a discounted basis. Unless these adjustments qualify for capitalization, changes in environmental obligations are charged to operating income when they occur.

Asset Retirement Obligations.  FCX records the fair value of estimated asset retirement obligations (AROs) associated with tangible long-lived assets in the period incurred. Retirement obligations associated with long-lived assets are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to cost of sales. In addition, asset retirement costs (ARCs) are capitalized as part of the related asset’s carrying value and are depreciated (primarily on a unit-of-production basis) over the asset’s respective useful life. Reclamation costs for future disturbances are recognized as an ARO and as a related ARC in the period of the disturbance. FCX’s AROs consist primarily of costs associated with mine reclamation and closure activities. These activities, which are site specific, generally include costs for earthwork, revegetation, water treatment and demolition (refer to Note 13 for further discussion).

Litigation Contingencies.  At least quarterly, FCX assesses the likelihood of any adverse judgments or outcomes related to legal matters (including pending or threatened litigation matters), as well as ranges of potential losses. A determination of the amount of the reserve required, if any, for litigation contingencies is made after analysis of known issues. FCX records reserves related to legal matters for which it believes it is probable that a loss has been incurred and the range of such loss can be reasonably estimated. If an amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued, otherwise, the minimum amount in the range is accrued. With respect to other matters, for which management has concluded that a loss is only reasonably possible or remote, or not reasonably estimable, no liability has been recorded. For losses assessed as reasonably possible, FCX discloses the nature of the contingency and an estimate of the possible loss or range of loss or states that such an estimate cannot be made. Costs incurred to defend claims are expensed as incurred.

Litigation is inherently unpredictable and it is difficult to project the outcome of particular matters with reasonable certainty; therefore, the actual amount of any loss could differ from the litigation contingencies reflected in FCX's consolidated financial statements. Refer to Note 13 for further discussion of FCX's litigation contingencies.

Income Taxes.  FCX accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates (refer to Note 12 for further discussion). When appropriate, FCX evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. The effect on deferred income tax assets and liabilities of a change in tax rates or laws is recognized in income in the period in which such changes are enacted.

FCX accounts for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FCX’s policy associated with uncertain tax positions is to record accrued interest in interest expense and accrued penalties in other income and expenses rather than in the provision for income taxes (refer to Note 12 for further discussion).

With the exception of FCX’s operations in the Democratic Republic of Congo (DRC), income taxes are provided on the earnings of FCX’s material foreign subsidiaries under the assumption that these earnings will be distributed. FCX has determined that undistributed earnings related to its DRC operations are reinvested indefinitely or have been allocated toward specifically identifiable needs of the local operations. FCX has not provided for other differences between the book and tax carrying amounts of these investments as FCX considers its ownership position to be permanent in duration and quantification of the related deferred tax liability is not practicable.

Derivative Instruments.  FCX and its subsidiaries have entered into derivative contracts to manage certain risks resulting from fluctuations in commodity prices (primarily copper and gold), foreign currency exchange rates and interest rates by creating offsetting market exposures. Every derivative instrument (including certain derivative instruments embedded in other contracts) is recorded in the balance sheet as either an asset or liability measured at its fair value. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. Refer to Note 15 for a summary of FCX’s outstanding derivative instruments at December 31, 2011, and a discussion of FCX’s risk management strategies for those designated as hedges.

Revenue Recognition.  FCX sells its products pursuant to sales contracts entered into with its customers. Revenue for all FCX’s products is recognized when title and risk of loss pass to the customer and when collectibility is reasonably assured. The passing of title and risk of loss to the customer are based on terms of the sales contract, generally upon shipment or delivery of product.

Revenues from FCX’s concentrate and cathode sales are recorded based on a provisional sales price or a final sales price calculated in accordance with the terms specified in the relevant sales contract. Revenues from concentrate sales are recorded net of treatment and all refining charges (including price participation, if applicable, as discussed below) and the impact of derivative contracts. Moreover, because a portion of the metals contained in copper concentrates is unrecoverable as a result of the smelting process, FCX’s revenues from concentrate sales are also recorded net of allowances based on the quantity and value of these unrecoverable metals. These allowances are a negotiated term of FCX’s contracts and vary by customer. Treatment and refining charges represent payments or price adjustments to smelters and refiners and are either fixed or, in certain cases, vary with the price of copper (referred to as price participation).

Under the long-established structure of sales agreements prevalent in the industry, copper contained in concentrates and cathodes is generally provisionally priced at the time of shipment. The provisional prices are finalized in a specified future month (generally one to four months from the shipment date) based on quoted monthly average spot copper prices on the London Metal Exchange (LME) or the New York Mercantile Exchange (COMEX). FCX receives market prices based on prices in the specified future month, which results in price fluctuations recorded to revenues until the date of settlement. FCX records revenues and invoices customers at the time of shipment based on then-current LME or COMEX prices, which results in an embedded derivative (i.e., a pricing mechanism that is finalized after the time of delivery) that is required to be bifurcated from the host contract. The host contract is the sale of the metals contained in the concentrates or cathodes at the then-current LME or COMEX price. FCX applies the normal purchases and normal sales scope exception in accordance with derivatives and hedge accounting guidance to the host contract in its concentrate or cathode sales agreements since these contracts do not allow for net settlement and always result in physical delivery. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through earnings each period, using the period-end forward prices, until the date of final pricing. At December 31, 2011, FCX had outstanding provisionally priced copper sales from its copper mining operations of 252 million pounds of copper (net of noncontrolling interests), priced at an average of $3.44 per pound, subject to final pricing over the first several months of 2012 pursuant to the terms of the sales contracts.

Gold sales are priced according to individual contract terms, generally the average London Bullion Market Association price for a specified month near the month of shipment.

Substantially all of FCX’s 2011 molybdenum sales were priced based on prices published in Metals Week, Ryan’s Notes or Metal Bulletin, plus conversion premiums for products that undergo additional processing, such as ferromolybdenum and molybdenum chemical products. The majority of these sales use the average price of the previous month quoted by the applicable publication. FCX’s remaining molybdenum sales generally have pricing that is either based on a fixed price or adjusts within certain price ranges.

PT Freeport Indonesia concentrate sales and Tenke Fungurume Mining S.A.R.L. (TFM) metal sales are subject to certain royalties, which are recorded as a reduction to revenues (refer to Note 14 for further discussion).

Stock-Based Compensation. Compensation costs for share-based payments to employees, including stock options, are measured at fair value and charged to expense over the requisite service period for awards that are expected to vest. The fair value of stock options is determined using the Black-Scholes-Merton option valuation model. The fair value for restricted stock units is based on FCX's stock price on the date of grant or an appropriate valuation model. The fair value for cash-settled stock appreciation rights (SARs) is the intrinsic value on the reporting or exercise date. FCX estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date of the awards if actual forfeitures differ from those estimates. FCX has elected to recognize compensation costs for stock option awards that vest over several years on a straight-line basis over the vesting period. Refer to Note 11 for further discussion.

Earnings Per Share.  FCX’s basic net income per share of common stock was calculated by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding during the year. A reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating diluted net income per share for the years ended December 31 follows:

	2011				2010			2009
Net income	$	5,747			$	5,544		$	3,534
Net income attributable to noncontrolling interests	(1,187		)		(1,208		)	(785		)
Preferred dividends	—				(63		)	(222		)
Net income attributable to FCX common stockholders	4,560				4,273			2,527
Plus income impact of assumed conversion of:
6¾% Mandatory Convertible Preferred Stocka	—				63			194
5½% Convertible Perpetual Preferred Stockb	—				—			28
Diluted net income attributable to FCX common
stockholders	$	4,560			$	4,336		$	2,749
Weighted-average shares of common stock outstanding	947				915			829
Add stock issuable upon conversion, exercise or vesting of
(refer to Note 11):
6¾% Mandatory Convertible Preferred Stocka	—				26			79
5½% Convertible Perpetual Preferred Stockb	—				—			25
Dilutive stock options	7			c	6			3
Restricted stock units	1				2			2
Weighted-average shares of common stock outstanding for
purposes of calculating diluted net income per share	955				949			938
Diluted net income per share attributable to FCX
common stockholders	$	4.78			$	4.57		$	2.93

a. All outstanding 6¾% Mandatory Convertible Preferred Stock automatically converted on May 1, 2010, into FCX common stock at a conversion rate of 2.7432 shares of FCX common stock.

b. In September 2009, FCX redeemed the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock.

c. Potential additional shares of common stock that were anti-dilutive totaled approximately two million.

Outstanding stock options with exercise prices greater than the average market price of FCX’s common stock during the year are excluded from the computation of diluted net income per share of common stock. Approximately 4 million stock options with a weighted-average exercise price of $53.91 were excluded in 2011; approximately 10 million stock options with a weighted-average exercise price of $38.56 were excluded in 2010; and approximately 13 million stock options with a weighted-average exercise price of $36.27 were excluded in 2009.

New Accounting Standards.  In May 2011, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) in connection with guidance for fair value measurements and disclosures. This ASU clarifies the FASB's intent on current guidance, modifies and changes certain guidance and principles, and expands disclosures concerning Level 3 fair value measurements in the fair value hierarchy (including quantitative information about significant unobservable inputs within Level 3 of the fair value hierarchy). In addition, this ASU requires disclosure of the fair value hierarchy for assets and liabilities not measured at fair value in the statement of financial position, but whose fair value is required to be disclosed. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early application is not permitted.

In June 2011, FASB issued an ASU in connection with guidance on the presentation of comprehensive income. The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. This ASU requires an entity to present the components of net income and other comprehensive income and total comprehensive income (includes net income) either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of equity, but does not change the items that must be reported in other comprehensive income. This ASU is effective for interim and annual reporting periods beginning after December 15, 2011, and early adoption is permitted. FCX has determined it will present comprehensive income as a separate statement beginning in the first quarter of 2012. In December 2011, FASB deferred the effective date for the requirement in this ASU for presenting reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements.

Reclassifications. For comparative purposes, the prior year balance sheet amounts for work-in-process product inventories was reclassified to current mill and leach stockpiles to conform with the current year presentation.

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PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET (Tables)

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment, Net [Abstract]

Property, Plant, Equipment and Development Costs, Net

The components of net property, plant, equipment and development costs follow:

	December 31,
	2011			2010
Proven and probable reserves	$	4,572		$	4,503
VBPP	1,071			1,100
Development and other	3,447			3,188
Buildings and infrastructure	3,151			2,815
Machinery and equipment	8,171			7,523
Mobile equipment	2,859			2,365
Construction in progress	2,704			1,885
Property, plant, equipment and
development costs	25,975			23,379
Accumulated depreciation, depletion and
amortization	(7,526		)	(6,594		)
Property, plant, equipment and
development costs, net	$	18,449		$	16,785

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FINANCIAL INSTRUMENTS (Unrealized gains losses) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
FMC's copper futures and swap contracts [Member] | Amounts recorded in Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments not designated as hedging instruments, gain (loss), net	$ 0	[1]	$ 0	[1]	$ 64	[1]
Embedded derivatives in provisional sales contracts [Member] | Amounts recorded in Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments not designated as hedging instruments, gain (loss), net	(519)	[1]	619	[1]	1,393	[1]
Embedded derivatives in provisional purchase contracts - Copper [Member] | Amounts recorded in Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments not designated as hedging instruments, gain (loss), net	0	[2]	(2)	[2]	(3)	[2]
PT Freeport Indonesia's copper forward contracts [Member] | Amounts recorded in Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments not designated as hedging instruments, gain (loss), net	0	[1]	0	[1]	(104)	[1]
Atlantic Copper Copper Forward Commodity Contracts [Member] | Amounts recorded in Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments not designated as hedging instruments, gain (loss), net	(2)	[2]	(30)	[2]	2	[2]
Fair Value Hedging [Member] | FMC's copper futures and swap contracts [Member] | Amounts recorded in Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative financial instruments	(28)		7		11
Hedged item	28		(7)		(11)
Realized gains (losses) from matured derivative financial instruments that qualified for hedge accounting	$ (28)		$ 37		$ 49

[1] Amounts recorded in revenues.

[2] Amounts recorded in cost of sales as production and delivery costs.

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income before income taxes and equity in affiliated companies' net earnings

Geographic sources of income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 consist of the following:

	2011		2010		2009
United States	$	2,112	$	1,307	$	98
Foreign	6,706		7,205		5,718
Total	$	8,818	$	8,512	$	5,816

Provision for (benefit from) income taxes

FCX’s provision for income taxes for the years ended December 31 consists of the following:

	2011			2010			2009
Current income taxes:
Federal	$	394		$	207		$	19
State	21			27			7
Foreign	1,948			2,500			2,172
Total current	2,363			2,734			2,198
Deferred income taxes (benefits):
Federal	82			20			(70		)
State	(19		)	(10		)	79
Foreign	661			239			100
Total deferred	724			249			109
Provision for income taxes	$	3,087		$	2,983		$	2,307

Reconciliation of the U.S. federal statutory tax rate to effective income tax rate

A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:

	2011					2010					2009
	Amount			Percent		Amount			Percent		Amount			Percent
U.S. federal statutory tax rate	$	3,086		35	%	$	2,979		35	%	$	2,036		35	%
Foreign tax credit limitation	163			2		93			1		112			2
Percentage depletion	(283		)	(3	)	(263		)	(3	)	(168		)	(3	)
Withholding taxes	170			2		174			2		228			4
Valuation allowance on minimum
tax credits	(47		)	(1	)	18			—		104			2
State income taxes	—			—		17			—		(2		)	—
Other items, net	(2		)	—		(35		)	—		(3		)	—
Provision for income taxes	$	3,087		35	%	$	2,983		35	%	$	2,307		40	%

Components of deferred tax assets and liabilities

The components of deferred taxes follow:

	December 31,
	2011			2010
Deferred tax assets:
Foreign tax credits	$	2,011		$	1,837
Net operating loss carryforwards	356			442
Minimum tax credits	406			413
Accrued expenses	962			931
Employee benefit plans	245			215
Inventory	161			164
Other	276			224
Deferred tax assets	4,417			4,226
Valuation allowances	(2,393		)	(2,226		)
Net deferred tax assets	2,024			2,000
Deferred tax liabilities:
Property, plant, equipment and development costs	(4,227		)	(3,874		)
Undistributed earnings	(1,010		)	(917		)
Other	(72		)	(28		)
Total deferred tax liabilities	(5,309		)	(4,819		)
Net deferred tax liabilities	$	(3,285	)	$	(2,819	)

Reserve for unrecognized tax benefits, interest and penalties

A summary of the activities associated with FCX’s reserve for unrecognized tax benefits, interest and penalties follows:

	Unrecognized Tax Benefits			Interest			Penalties
Balance at January 1, 2010	$	253		$	34		$	—
Additions:
Prior year tax positions	9			*			*
Current year tax positions	24			*			*
Interest and penalties	—			2			—
Decreases:
Prior year tax positions	(26		)	*			*
Current year tax positions	—			*			*
Lapse of statute of limitations	(60		)	*			*
Interest and penalties	—			(3		)	—
Balance at December 31, 2010	200			33			—
Additions:
Prior year tax positions	25			*			*
Current year tax positions	16			*			*
Interest and penalties	—			7			—
Decreases:
Prior year tax positions	(34		)	*			*
Current year tax positions	(8		)	*			*
Lapse of statute of limitations	(53		)	*			*
Interest and penalties	—			(6		)	—
Balance at December 31, 2011	$	146		$	34		$	—

* Amounts not allocated.

Summary of income tax examinations

The tax years for FCX and its significant subsidiaries that remain subject to examination are as follows:

Jurisdiction	Years Under Examination	Additional Open Years
U.S. Federal	Short Year Ending December 31, 2007 2008-2010	2011
Indonesia	2005-2008	2009-2011
Peru	2007-2008	2002-2006, 2009-2011
Chile	2010	2011
Arizona	2003-2007	2008-2011
New Mexico	—	2003-2011

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INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES (Mill and Leach Stockpiles) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Current: [Abstract]
Mill Stockpiles	$ 69		$ 68
Leach Stockpiles	1,220		881
Total current mill and leach stockpiles	1,289		949
Long-term: [Abstract]
Mill Stockpiles	535	[1]	470	[1]
Leach Stockpiles	1,151	[1]	955	[1]
Total long-term mill and leach stockpiles	1,686	[1]	1,425	[1]
North America [Member]
Current: [Abstract]
Mill Stockpiles	40		15
Leach Stockpiles	963		749
Total current mill and leach stockpiles	1,003		764
Long-term: [Abstract]
Mill Stockpiles	0	[1]	0	[1]
Leach Stockpiles	718	[1]	622	[1]
Total long-term mill and leach stockpiles	718	[1]	622	[1]
South America [Member]
Current: [Abstract]
Mill Stockpiles	11		29
Leach Stockpiles	216		98
Total current mill and leach stockpiles	227		127
Long-term: [Abstract]
Mill Stockpiles	535	[1]	470	[1]
Leach Stockpiles	284	[1]	250	[1]
Total long-term mill and leach stockpiles	819	[1]	720	[1]
Indonesia [Member]
Current: [Abstract]
Mill Stockpiles	18		24
Leach Stockpiles	0		0
Total current mill and leach stockpiles	18		24
Long-term: [Abstract]
Mill Stockpiles	0	[1]	0	[1]
Leach Stockpiles	0	[1]	0	[1]
Total long-term mill and leach stockpiles	0	[1]	0	[1]
Africa [Member]
Current: [Abstract]
Mill Stockpiles	0		0
Leach Stockpiles	41		34
Total current mill and leach stockpiles	41		34
Long-term: [Abstract]
Mill Stockpiles	0	[1]	0	[1]
Leach Stockpiles	149	[1]	83	[1]
Total long-term mill and leach stockpiles	$ 149	[1]	$ 83	[1]

[1] Metals in stockpiles not expected to be recovered within the next 12 months.

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INCOME TAXES (Summary of Income Tax Examinations) (Details)	12 Months Ended
	Dec. 31, 2011
U.S. Federal [Member]
Income Tax Examination [Line Items]
Years under Examination	Short Year Ending December 31, 2007 2008-2010
Additional Open Years	2011
Indonesia [Member]
Income Tax Examination [Line Items]
Years under Examination	2005-2008
Additional Open Years	2009-2011
Peru [Member]
Income Tax Examination [Line Items]
Years under Examination	2007-2008
Additional Open Years	2002-2006, 2009-2011
Chile [Member]
Income Tax Examination [Line Items]
Years under Examination	2010
Additional Open Years	2011
Arizona [Member]
Income Tax Examination [Line Items]
Years under Examination	2003-2007
Additional Open Years	2008-2011
New Mexico [Member]
Income Tax Examination [Line Items]
Years under Examination	0
Additional Open Years	2003-2011

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Income Statement [Abstract]
Revenues	$ 20,880	[1]	$ 18,982	[1]	$ 15,040	[1]
Cost of sales:
Production and delivery	9,898		8,335		7,006
Depreciation, depletion and amortization	1,022		1,036		1,014
Total cost of sales	10,920		9,371		8,020
Selling, general and administrative expenses	415		381		321
Exploration and research expenses	271		143		90
Environmental Obligations And Shutdown Costs	134		19		106	[2]
Total costs and expenses	11,740		9,914		8,537
Operating income	9,140	[3]	9,068		6,503
Interest expense, net	(312)		(462)		(586)
Losses on early extinguishment of debt	(68)		(81)		(48)
Other income (expense), net	58		(13)		(53)
Income before income taxes and equity in affiliated companies' net earnings	8,818		8,512		5,816
Provision for income taxes	(3,087)		(2,983)		(2,307)
Equity in affiliated companies' net earnings	16		15		25
Net income	5,747	[4]	5,544		3,534
Net income attributable to noncontrolling interests	(1,187)		(1,208)		(785)
Preferred dividends	0		(63)		(222)
Net income attributable to FCX common stockholders	$ 4,560	[3],[4],[5]	$ 4,273	[6]	$ 2,527
Net income per share attributable to FCX common stockholders:
Basic (in dollars per share)	$ 4.81		$ 4.67		$ 3.05
Diluted (in dollars per share)	$ 4.78	[3],[4],[5]	$ 4.57	[6]	$ 2.93
Weighted-average common shares outstanding:
Basic (in shares)	947		915		829
Diluted (in shares)	955		949		938
Dividends declared per share of common stock (in dollars per share)	$ 1.50		$ 1.125		$ 0.075

[1] Revenues are attributed to countries based on the location of the customer.

[2] Includes charges totaling $23 million associated with net restructuring charges, primarily at the Morenci mine

[3] Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

[4] Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

[5] Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

[6] Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

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BUSINESS SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Revenues by product

FCX revenues attributable to the products it produced for the years ended December 31 follow:

	2011		2010		2009
Refined copper products	$	10,297	$	9,203	$	6,563
Copper in concentratesa	5,938		5,674		4,763
Gold	2,429		2,370		2,591
Molybdenum	1,348		1,143		792
Other	868		592		331
Total	$	20,880	$	18,982	$	15,040

a. Amounts are net of treatment and refining charges totaling $362 million for 2011, $413 million for 2010 and $429 million for 2009.

Revenues by geographic area of customer

Information concerning financial data by geographic area follows:

	Years Ended December 31,
	2011		2010		2009
Revenues:a
United States	$	7,176	$	5,295	$	4,890
Japan	2,501		3,428		3,093
Indonesia	2,266		2,266		1,937
Spain	1,643		1,483		986
Switzerland	1,219		1,063		379
China	942		795		496
India	878		690		566
Chile	741		759		563
Korea	561		745		475
Others	2,953		2,458		1,655
Total	$	20,880	$	18,982	$	15,040

a. Revenues are attributed to countries based on the location of the customer.

Long-lived assets by geographic area

	December 31,
	2011		2010		2009
Long-lived assets:a
United States	$	7,899	$	7,101	$	6,499
Indonesia	4,469		3,475		3,298
Democratic Republic of Congo	3,497		3,220		3,207
Peru	3,265		3,203		3,240
Chile	2,242		1,892		1,519
Spain	257		266		277
Others	68		48		50
Total	$	21,697	$	19,205	$	18,090

a. Long-lived assets exclude deferred tax assets and intangible assets.

Schedule of Segment Reporting Information By Segment

Business segments data for the years ended December 31 are presented in the following tables.

Business Segments

	North America Copper Mines								South America						Indonesia			Africa
	Morenci		Other Mines			Total			Cerro Verde		Other Mines		Total		Grasberg			Tenke Fung-urume		Molyb- denum		Rod & Refining		Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2011
Revenues:
Unaffiliated customers	$	418	$	180		$	598		$	2,115	$	2,457	$	4,572	$	4,504	a	$	1,282	$	1,424	$	5,523	$	2,969		$	8		$	20,880
Intersegment	1,697		3,338			5,035			417		269		686		542			7		—		26		15			(6,311		)	—
Production and delivery	984		1,645			2,629			827		1,078		1,905		1,902			591		1,036		5,527		2,991			(6,683		)	9,898
Depreciation, depletion and amortization	116		163			279			135		123		258		215			140		60		8		40			22			1,022
Selling, general and administrative expenses	2		2			4			4		3		7		124			8		15		—		22			235			415
Exploration and research expenses	7		—			7			—		—		—		—			—		3		—		—			261			271
Environmental and shutdown expenses	4		(15		)	(11		)	—		—		—		—			—		—		1		—			144			134
Operating income (loss)	1,002		1,723			2,725			1,566		1,522		3,088		2,805			550		310		13		(69		)	(282		)	9,140
Interest expense, net	2		6			8			1		—		1		8			6		—		—		15			274			312
Provision for income taxes	—		—			—			553		522		1,075		1,256			120		—		—		—			636			3,087
Total assets at December 31, 2011	2,006		5,086			7,092			5,110		3,604		8,714		5,349			3,890		2,434		259		1,109			3,223			32,070
Capital expenditures	95		400			495			198		405		603		648			193		461		10		32			92			2,534
Year Ended December 31, 2010
Revenues:
Unaffiliated customers	$	59	$	52		$	111		$	1,957	$	2,449	$	4,406	$	5,230	a	$	1,106	$	1,205	$	4,444	$	2,473		$	7		$	18,982
Intersegment	1,465		2,597			4,062			453		132		585		1,147			—		—		26		18			(5,838		)	—
Production and delivery	691		1,361			2,052			705		973		1,678		1,904			488		784		4,442		2,470			(5,483		)	8,335
Depreciation, depletion and amortization	134		139			273			148		102		250		257			128		51		8		38			31			1,036
Selling, general and administrative expenses	—		—			—			—		—		—		117			—		11		—		20			233			381
Exploration and research expenses	—		—			—			—		—		—		—			—		2		—		—			141			143
Environmental and shutdown expenses	—		—			—			—		—		—		—			—		—		1		—			18			19
Operating income (loss)	699		1,149			1,848			1,557		1,506		3,063		4,099			490		357		19		(37		)	(771		)	9,068
Interest expense, net	4		10			14			—		—		—		—			5		—		—		10			433			462
Provision for income taxes	—		—			—			516		483		999		1,709			118		—		—		—			157			2,983
Total assets at December 31, 2010	1,940		4,477			6,417			4,272		3,263		7,535		6,048			3,640		1,897		311		1,317			2,221			29,386
Capital expenditures	47		186			233			106		364		470		436			100		89		7		28			49			1,412

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $2.3 billion in 2011 and 2010.

	North America Copper Mines						South America						Indonesia				Africa
	Morenci		Other Mines		Total		Cerro Verde		Other Mines		Total		Grasberg				Tenke Fung-urume				Molyb- denum			Rod & Refining			Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2009
Revenues:
Unaffiliated customers	$	68	$	94	$	162	$	1,491	$	1,950	$	3,441	$	4,972		a	$	389			$	847		$	3,328		$	1,892		$	9		$	15,040
Intersegment	1,074		2,028		3,102		286		112		398		936				—				—			28			—			(4,464		)	—
Production and delivery	623		1,288		1,911		648		915		1,563		1,505				315			b	660			3,336			1,895			(4,179		)	7,006
Depreciation, depletion and amortization	142		138		280		153		122		275		275				66				49			8			36			25			1,014
Selling, general and administrative expenses	—		—		—		—		—		—		94				—				11			—			17			199			321
Exploration and research expenses	—		—		—		—		—		—		—				—				2			—			—			88			90
Environmental and shutdown expensesc	26		27		53		—		—		—		—				—				(1		)	(2		)	—			56			106
Operating income (loss)	351		669		1,020		976		1,025		2,001		4,034				8				126			14			(56		)	(644		)	6,503
Interest expense, net	3		12		15		—		2		2		(3		)		10				—			—			5			557			586
Provision for (benefit from) income taxes	—		—		—		313		337		650		1,697				(15		)		—			—			—			(25		)	2,307
Total assets at December 31, 2009	1,934		4,207		6,141		3,937		2,515		6,452		4,974				3,386				1,731			291			991			2,030			25,996
Capital expenditures	46		299		345		103		61		164		266				659				82			9			31			31			1,587

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $1.9 billion.

b. Includes charges totaling $50 million associated with Tenke Fungurume's project start-up costs.

c. Includes charges totaling $23 million associated with net restructuring charges, primarily at the Morenci mine.

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SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED) (Ore Reserves) (Details)	Dec. 31, 2011 lb MT oz g		Dec. 31, 2010 lb oz g MT		Dec. 31, 2009 oz g lb MT		Dec. 31, 2008 oz g lb MT		Dec. 31, 2007 lb g MT oz
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	17,739,000,000		18,516,000,000		13,807,000,000		14,067,000,000		12,224,000,000
Average ore grade of copper per metric ton (in hundredths)	0.43%		0.42%		0.49%		0.48%		0.51%
Average ore grade of gold per metric ton (in grams per metric ton)	0.12		0.12		0.17		0.17		0.20
Average ore grade of molybdenum per metric ton (in hundredths)	0.01%		0.01%		0.01%		0.01%		0.01%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	136,700,000,000	[1]	137,900,000,000	[1]	120,900,000,000	[1]	118,800,000,000	[1]	110,400,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	46,100,000	[1]	47,900,000	[1]	49,800,000	[1]	53,400,000	[1]	54,100,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	3,430,000,000	[1]	3,410,000,000	[1]	2,600,000,000	[1]	2,490,000,000	[1]	2,040,000,000	[1]
North America [Member] | Developed and producing [Member] | Morenci [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	4,250,000,000
Average ore grade of copper per metric ton (in hundredths)	0.27%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%	[2]
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	15,600,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	90,000,000	[1]
North America [Member] | Developed and producing [Member] | Bagdad [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	1,629,000,000
Average ore grade of copper per metric ton (in hundredths)	0.30%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00	[2]
Average ore grade of molybdenum per metric ton (in hundredths)	0.02%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	8,700,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	100,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	400,000,000	[1]
North America [Member] | Developed and producing [Member] | Safford [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	206,000,000
Average ore grade of copper per metric ton (in hundredths)	0.43%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	1,600,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
North America [Member] | Developed and producing [Member] | Sierrita [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	2,777,000,000
Average ore grade of copper per metric ton (in hundredths)	0.23%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00	[2]
Average ore grade of molybdenum per metric ton (in hundredths)	0.03%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	12,100,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	100,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	1,240,000,000	[1]
North America [Member] | Developed and producing [Member] | Tyrone [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	148,000,000
Average ore grade of copper per metric ton (in hundredths)	0.29%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	700,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
North America [Member] | Developed and producing [Member] | Chino [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	421,000,000
Average ore grade of copper per metric ton (in hundredths)	0.42%
Average ore grade of gold per metric ton (in grams per metric ton)	0.02
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%	[2]
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	3,500,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	200,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	10,000,000	[1]
North America [Member] | Developed and producing [Member] | Miami [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	60,000,000
Average ore grade of copper per metric ton (in hundredths)	0.47%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	500,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
North America [Member] | Developed and producing [Member] | Henderson [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	121,000,000
Average ore grade of copper per metric ton (in hundredths)	0.00%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.17%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	0	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	400,000,000	[1]
North America [Member] | Undeveloped [Member] | Climax [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	187,000,000
Average ore grade of copper per metric ton (in hundredths)	0.00%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.16%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	0	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	580,000,000	[1]
North America [Member] | Undeveloped [Member] | Cobre [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	73,000,000
Average ore grade of copper per metric ton (in hundredths)	0.39%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	300,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
South America [Member] | Developed and producing [Member] | Cerro Verde [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	3,977,000,000
Average ore grade of copper per metric ton (in hundredths)	0.39%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.01%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	30,200,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	710,000,000	[1]
South America [Member] | Developed and producing [Member] | El Abra [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	881,000,000
Average ore grade of copper per metric ton (in hundredths)	0.42%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	4,300,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
South America [Member] | Developed and producing [Member] | Candelaria [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	339,000,000
Average ore grade of copper per metric ton (in hundredths)	0.58%
Average ore grade of gold per metric ton (in grams per metric ton)	0.13
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	4,500,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	1,200,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
South America [Member] | Developed and producing [Member] | Ojos del Salado [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	6,000,000
Average ore grade of copper per metric ton (in hundredths)	1.00%
Average ore grade of gold per metric ton (in grams per metric ton)	0.25
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	100,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	100,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Developed and producing [Member] | Grasberg open pit [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	312,000,000
Average ore grade of copper per metric ton (in hundredths)	0.85%
Average ore grade of gold per metric ton (in grams per metric ton)	0.91
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	4,900,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	7,300,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Developed and producing [Member] | Deep Ore Zone [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	206,000,000
Average ore grade of copper per metric ton (in hundredths)	0.57%
Average ore grade of gold per metric ton (in grams per metric ton)	0.69
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	2,200,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	3,500,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Developed and producing [Member] | Big Gossan [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	56,000,000
Average ore grade of copper per metric ton (in hundredths)	2.18%
Average ore grade of gold per metric ton (in grams per metric ton)	0.97
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	2,400,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	1,200,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Undeveloped [Member] | Grasberg block cave [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	1,019,000,000
Average ore grade of copper per metric ton (in hundredths)	0.98%
Average ore grade of gold per metric ton (in grams per metric ton)	0.77
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	18,700,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	16,300,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Undeveloped [Member] | Kucing Liar [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	420,000,000
Average ore grade of copper per metric ton (in hundredths)	1.23%
Average ore grade of gold per metric ton (in grams per metric ton)	1.09
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	9,700,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	6,800,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Indonesia [Member] | Undeveloped [Member] | Deep Mill Level Zone [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	510,000,000
Average ore grade of copper per metric ton (in hundredths)	0.85%
Average ore grade of gold per metric ton (in grams per metric ton)	0.72
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	8,300,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	9,300,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Africa [Member] | Developed and producing [Member] | Tenke Fungurume [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	141,000,000
Average ore grade of copper per metric ton (in hundredths)	3.00%
Average ore grade of gold per metric ton (in grams per metric ton)	0.00
Average ore grade of molybdenum per metric ton (in hundredths)	0.00%
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	8,400,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	0	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	0	[1]
Total 100% basis [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Amount of ore reserves (in metric tons of ore)	17,739,000,000
Estimated Recoverable Proven and Probable Copper Reserves at 100% Basis (in pounds)	136,700,000,000	[1]
Estimated Recoverable Proven and Probable Gold Reserves at 100% Basis (in ounces)	46,100,000	[1]
Estimated Recoverable Proven And Probable Molybdenum Reserves At 100% Basis (in pounds)	3,430,000,000	[1]
Net Equity Interest [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Estimated Recoverable Proven And Probable Copper Reserves (in pounds)	96,100,000,000	[1],[3],[4],[5]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	30,600,000	[1],[4],[5]
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	3,090,000,000	[1],[4],[5]
Consolidated Basis [Member]
Ore, average ore grades and recoverable proven and probable reserves [Line Items]
Estimated Recoverable Proven And Probable Copper Reserves (in pounds)	119,700,000,000	[1],[3],[6],[7]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	33,900,000	[1],[6],[7]
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	3,420,000,000	[1],[6],[7]

[1] Includes estimated recoverable metals contained in stockpiles.

[2] Amounts not shown because of rounding.

[3] Consolidated recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles.

[4] Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

[5] Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke Fungurume and 272.1 million ounces of silver in Indonesia, South America and North America.

[6] Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.86 billion pounds of cobalt at Tenke Fungurume and 330.3 million ounces of silver in Indonesia, South America and North America.

[7] Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia.

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CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Millions, unless otherwise specified	Total		Convertible Perpetual Preferred Stock [Member]	Mandatory Convertible Preferred Stock [Member]	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock Held in Treasury [Member]	Total FCX Stockholders' Equity [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2008	$ 7,101		$ 832	$ 2,875	$ 89	$ 13,951	$ (8,267)	$ (305)	$ (3,402)	$ 5,773	$ 1,328
Balance (in shares) at Dec. 31, 2008			1	29	889				121
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversions and redemptions of 5 1/2% Convertible Perpetual Preferred Stock	(1)		(832)		4	827				(1)
Conversions and redemptions of 5 1/2% Convertible Perpetual Preferred Stock (in shares)			(1)		36
Sale of common stock	740				5	735				740
Sale of common stock (in shares)					53
Exercised and issued stock-based awards	18					18				18
Exercised and issued stock-based awards (in shares)					3
Stock-based compensation	100					100				100
Tax benefit for stock-based awards	6					6				6
Tender of shares for stock-based awards	(11)								(11)	(11)
Tender of shares for stock-based awards (in shares)									1
Dividends on common stock	(65)						(65)			(65)
Dividends on preferred stock	(222)						(222)			(222)
Distributions to noncontrolling interests	(535)										(535)
Contributions from noncontrolling interests	59										59
Comprehensive income:
Net income	3,534						2,749			2,749	785
Other comprehensive income (loss), net of taxes:
Unrealized gains (losses) on securities	3							3		3
Translation adjustment	3							3		3
Defined benefit plans:
Net gain (loss) during period, net of taxes	9							8		8	1
Amortization of unrecognized amounts	18							18		18
Other comprehensive income (loss)	33							32		32	1
Total comprehensive income	3,567									2,781	786
Balance at Dec. 31, 2009	10,757		0	2,875	98	15,637	(5,805)	(273)	(3,413)	9,119	1,638
Balance (in shares) at Dec. 31, 2009			0	29	981				122
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversions of 6 3/4% Mandatory Convertible Preferred Stock				(2,875)	8	2,867
Conversions of 6 3/4% Mandatory Convertible Preferred Stock (in shares)				(29)	79
Conversions of 7% Convertible Senior Notes	1					1				1
Exercised and issued stock-based awards	110				1	109				110
Exercised and issued stock-based awards (in shares)					7
Stock-based compensation	129					129				129
Tax benefit for stock-based awards	8					8				8
Tender of shares for stock-based awards	(28)								(28)	(28)
Tender of shares for stock-based awards (in shares)
Dividends on common stock	(1,058)						(1,058)			(1,058)
Dividends on preferred stock	(63)						(63)			(63)
Distributions to noncontrolling interests	(816)										(816)
Contributions from noncontrolling interests	28										28
Comprehensive income:
Net income	5,544						4,336			4,336	1,208
Other comprehensive income (loss), net of taxes:
Unrealized gains (losses) on securities	2							2		2
Defined benefit plans:
Net gain (loss) during period, net of taxes	(69)							(67)		(67)	(2)
Amortization of unrecognized amounts	15							15		15
Other comprehensive income (loss)	(52)							(50)		(50)	(2)
Total comprehensive income	5,492									4,286	1,206
Balance at Dec. 31, 2010	14,560		0	0	107	18,751	(2,590)	(323)	(3,441)	12,504	2,056
Balance (in shares) at Dec. 31, 2010			0	0	1,067				122
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised and issued stock-based awards	48					48				48
Exercised and issued stock-based awards (in shares)					4
Stock-based compensation	117					117				117
Tax benefit for stock-based awards	24					24				24
Tender of shares for stock-based awards	(45)					67			(112)	(45)
Tender of shares for stock-based awards (in shares)									1
Dividends on common stock	(1,424)						(1,424)			(1,424)
Dividends on preferred stock	0
Distributions to noncontrolling interests	(391)										(391)
Contributions from noncontrolling interests	62										62
Comprehensive income:
Net income	5,747	[1]					4,560			4,560	1,187
Other comprehensive income (loss), net of taxes:
Unrealized gains (losses) on securities	(1)							(1)		(1)
Translation adjustment	(2)							(2)		(2)
Defined benefit plans:
Net gain (loss) during period, net of taxes	(157)							(154)		(154)	(3)
Amortization of unrecognized amounts	15							15		15
Other comprehensive income (loss)	(145)							(142)		(142)	(3)
Total comprehensive income	5,602									4,418	1,184
Balance at Dec. 31, 2011	$ 18,553		$ 0	$ 0	$ 107	$ 19,007	$ 546	$ (465)	$ (3,553)	$ 15,642	$ 2,911
Balance (in shares) at Dec. 31, 2011			0	0	1,071				123

[1] Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

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SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED) (Details)	Dec. 31, 2011 lb
Supplementary Mineral Reserve Information [Abstract]
Estimated recoverable proven and probable copper reserves in leach stockpiles (in pounds)	3,100,000,000
Estimated recoverable proven and probable copper reserves in mill stockpiles (in pounds)	1,300,000,000
Long-term average price for copper used to estimate recoverable reserves (in dollars per pound)	2.00
Long-term average price for gold used to estimate recoverable reserves (in dollars per ounce)	750
Long-term average price for molybdenum used to estimate recoverable reserves (in dollars per pound)	10.00
Long-term average price for silver used to estimate recoverable reserves (in dollars per ounce)	15.00
Long-term average price for cobalt used to estimate recoverable reserves (in dollars per pound)	10
Three-year average London spot price for copper (per pound)	3.25
Three-year average London spot price for gold (per ounce)	1,245
Three-year average price for molybdenum (per pound)	14.06

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OTHER LIABILITIES (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Other Liabilities [Abstract]
Pension, postretirement, postemployment and other employment benefits	$ 1,277	[1]	$ 1,074	[1]
Reserve for uncertain tax benefits	128		133
Insurance claim reserve	50		58
Atlantic Copper contractual obligation to insurance company (refer to Note 10)	39		48
Other	157		146
Total other liabilities	$ 1,651		$ 1,459

[1] Refer to Note 7 for short-term portion and Note 10 for further discussion.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Materials and supplies allowance
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, Beginning Balance	$ 26		$ 21		$ 22
Additions Charged to Cost and Expense	4		11		4
Additons Charged to Other Accounts	0		0		0
Other Add (Deduct)	(4)	[1]	(6)	[1]	(5)	[1]
Balance, Ending Balance	26		26		21
Valuation allowance for deferred tax assets
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, Beginning Balance	2,226		2,157		1,763
Additions Charged to Cost and Expense	146		55		366
Additons Charged to Other Accounts	21		14		28
Other Add (Deduct)	0		0		0
Balance, Ending Balance	2,393		2,226		2,157
Reserves for non-income taxes
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, Beginning Balance	73		47		32
Additions Charged to Cost and Expense	12		29		15
Additons Charged to Other Accounts	(2)		0		3
Other Add (Deduct)	(10)	[2]	(3)	[2]	(3)	[2]
Balance, Ending Balance	$ 73		$ 73		$ 47

[1] Primarily represents write-offs of obsolete materials and supplies inventories.

[2] Represents amounts paid or adjustments to reserves based on revised estimates.

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2011

Accounts Payable and Accrued Liabilities, Current [Abstract]

Additional information regarding accounts payable and accrued liabilities

Additional information regarding accounts payable and accrued liabilities follows:

	December 31,
	2011		2010
Accounts payable	$	1,353	$	1,272
Salaries, wages and other compensation	257		244
Pension, postretirement, postemployment and other
employee benefitsa	180		156
Current deferred tax liability	103		61
Other accrued taxes	92		152
Accrued interestb	69		92
Deferred revenue	69		180
Community development programs	19		148
Other	110		136
Total accounts payable and accrued liabilities	$	2,252	$	2,441

a. Refer to Note 8 for long-term portion and Note 10 for further discussion.

b. Third-party interest paid, net of capitalized interest, was $284 million in 2011, $421 million in 2010 and $504 million in 2009.

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EMPLOYEE BENEFITS (FV, Assets Measured on Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, at the beginning of the period	$ 74	$ 65
Realized gains (losses)	0	2
Net unrealized gains related to assets still held at the end of the year	10	3
Purchases	5	7
Settlements, net	(4)	(3)
Fair Value, at the end of the period	85	74
Real Estate Property [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, at the beginning of the period	28	25
Realized gains (losses)	2	2
Net unrealized gains related to assets still held at the end of the year	5	1
Purchases	0	0
Settlements, net	0	0
Fair Value, at the end of the period	35	28
Private Equity Investments [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, at the beginning of the period	46	40
Realized gains (losses)	(2)	0
Net unrealized gains related to assets still held at the end of the year	5	2
Purchases	5	7
Settlements, net	(4)	(3)
Fair Value, at the end of the period	$ 50	$ 46

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FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

Financial Instruments [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

FCX does not purchase, hold or sell derivative financial instruments unless there is an existing asset or obligation or it anticipates a future activity that is likely to occur and will result in exposure to market risks that FCX intends to offset or mitigate. 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 financial derivative instruments are based on widely published market closing 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 December 31, 2011 and 2010, FCX had no price protection contracts relating to its mine production. A summary of FCX’s derivative contracts and programs follows.

Derivatives Designated as Hedging Instruments – Fair Value Hedges

Copper Futures and Swap Contracts. Some of FMC’s U.S. copper rod customers request a fixed market price instead of the 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 years ended December 31, 2011, resulting from hedge ineffectiveness. At December 31, 2011, FCX held copper futures and swap contracts that qualified for hedge accounting for 73 million pounds at an average contract price of $3.58 per pound, with maturities through April 2013.

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) for the years ended December 31 follows:

	2011			2010			2009
Unrealized gains (losses):
Derivative financial instruments	$	(28	)	$	7		$	11
Hedged item	28			(7		)	(11		)
Realized gains (losses):
Matured derivative financial instruments	(28		)	37			49

Derivatives Not Designated as Hedging Instruments

Embedded derivatives and derivative financial instruments that do not meet the criteria to qualify for hedge accounting are discussed below.

Embedded Derivatives. As described in Note 1 under “Revenue Recognition,” certain FCX copper concentrate, copper cathode and gold sales contracts provide for provisional pricing primarily based on LME or COMEX prices (copper) and the London Bullion Market Association price (gold) 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 generally based on an average Metals Week Molybdenum Dealer Oxide price). 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), the 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.

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

	Open	Average Price Per Unit				Maturities
	Positions	Contract		Market		Through
Embedded derivatives in provisional sales contracts:
Copper (millions of pounds)	388	$	3.55	$	3.44	June 2012
Gold (thousands of ounces)	52	1,676		1,576		February 2012
Embedded derivatives in provisional purchase contracts:
Copper (millions of pounds)	376	3.56		3.45		April 2012
Molybdenum (thousands of pounds)	33	11.80		11.78		January 2012

Copper Forward Contracts. Atlantic Copper 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 December 31, 2011, Atlantic Copper held net forward copper purchase contracts for 18 million pounds at an average contract price of $3.35 per pound, with maturities through March 2012.

In April 2009, FCX entered into copper forward sales contracts to lock in prices at an average of $1.86 per pound on 355 million pounds of PT Freeport Indonesia’s provisionally priced copper sales at March 31, 2009, which final priced from April 2009 through July 2009. These economic hedge transactions were intended to reduce short-term price volatility in earnings and cash flows. Gains and losses for these economic hedge transactions were recorded in revenues. FCX has not entered into additional forward sales contracts since April 2009 for its provisionally priced copper sales, but may enter into future transactions to lock in pricing on provisionally priced sales from time to time. However, FCX does not currently intend to change its long-standing policy of not hedging future copper production.

Copper Futures and Swap Contracts. In addition to the contracts discussed above that qualify for fair value hedge accounting, FCX also had similar contracts with some of FMC’s U.S. copper rod customers that did not qualify for hedge accounting because of certain terms in the sales contracts prior to 2010. Gains and losses for these economic hedge transactions were recorded in revenues.

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, for the years ended December 31 follows:

	2011			2010			2009
Embedded derivatives in provisional sales contractsa	$	(519	)	$	619		$	1,393
Embedded derivatives in provisional purchase contractsb	—			(2		)	(3		)
Copper forward contractsa	—			—			(104		)
Copper forward contractsb	(2		)	(30		)	2
Copper futures and swap contractsa	—			—			64

a. Amounts recorded in revenues.

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

Unsettled Derivative Financial Instruments

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

	December 31,
	2011			2010
Derivatives designated as hedging instruments
Commodity contracts:
Copper futures and swap contracts:a
Asset positionb	$	3		$	18
Liability positionc	(13		)	—

Derivatives not designated as hedging instruments
Commodity contracts:
Embedded derivatives in provisional sales/purchases contracts:d
Asset position	$	72		$	357
Liability position	(82		)	(115		)
Copper forward contracts:
Asset positionb	2			—
Liability positionc	—			(10		)

a. FCX had paid $31 million to brokers at December 31, 2011, and $3 million at December 31, 2010, for margin requirements (recorded in other current assets). In addition, FCX held $3 million in margin funding from customers at December 31, 2011, and $8 million from brokers at December 31, 2010, associated with margin requirements (recorded in accounts payable and accrued liabilities).

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.

Foreign Currency Exchange Contracts.  As a global company, FCX transacts business in many countries and currencies. Foreign currency transactions of 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 December 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 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 December 31, 2011.

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 counterparties that meet certain requirements and periodically reviews the creditworthiness of these counterparties. FCX does not anticipate that any of the counterparties it deals with will default on their obligations. As of December 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, accounts receivable, trust assets, available-for-sale securities, accounts payable and accrued liabilities, dividends payable, Rio Tinto's share of joint venture cash flows and long-term debt. Refer to Note 16 for the fair values of these financial instruments.

Cash and Cash Equivalents, Accounts Receivable, Accounts Payable and Accrued Liabilities, Dividends Payable and Rio Tinto's 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 (see Note 16 for further discussion of fair values).

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

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OTHER LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2011

Other Liabilities, Noncurrent [Abstract]

Additional information regarding other liabilities

Additional information regarding other liabilities follows:

	December 31,
	2011		2010
Pension, postretirement, postemployment and other
employment benefitsa	$	1,277	$	1,074
Reserve for uncertain tax benefits	128		133
Insurance claim reserve	50		58
Atlantic Copper contractual obligation to
insurance company (refer to Note 10)	39		48
Other	157		146
Total other liabilities	$	1,651	$	1,459

a.  Refer to Note 7 for short-term portion and Note 10 for further discussion.

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SUBSEQUENT EVENTS (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended					12 Months Ended				1 Months Ended					3 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Feb. 07, 2012	Feb. 28, 2012 Issuance of Debt [Member]	Feb. 28, 2012 1.40% Senior Notes Due 2015 [Member] Issuance of Debt [Member]	Feb. 28, 2012 2.15% Senior Notes Due 2017 [Member] Issuance of Debt [Member]	Feb. 28, 2012 3.55% Senior Notes Due 2022 [Member] Issuance of Debt [Member]	Mar. 31, 2007 Senior Notes Due 2017 [Member]	Mar. 31, 2012 Senior Notes Due 2017 [Member] Settlement of Debt [Member]	Mar. 14, 2012 Senior Notes Due 2017 [Member] Settlement of Debt [Member]
Subsequent Event [Line Items]
Annual Cash Dividend Before Increase									$ 1.00
Annual Cash Dividend Current									$ 1.25
Quarterly Cash Dividend Current									$ 0.3125
Face amount of senior notes sold											$ 500	$ 500	$ 2,000	$ 3,500
Debt Instrument, Interest Rate, Stated Percentage (in hundredths)											1.40%	2.15%	3.55%			8.375%
Proceeds from Issuance of Long-term Debt										2,971
Debt instrument carrying amount			4,755			3,537	4,755									3,000
Loss on early extinguishment of debt		(7)				(68)	(81)	(48)							168
Loss on early extinguishment of debt, effect on net income	$ (54)	$ (6)	$ (3)	$ (42)	$ (23)	$ (60)	$ (71)								$ 147

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BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Business Segments

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. Further discussion of the reportable segments included in FCX’s primary operating divisions, as well as FCX’s other reportable segments – Rod & Refining and Atlantic Copper Smelting & Refining – follows. Refer to Note 2 for information on FCX’s ownership interests and Note 14 for discussion of PT Freeport Indonesia’s and TFM’s mining contracts.

North America Copper Mines.  FCX has seven operating copper mines in North America – Morenci, Sierrita, Bagdad, Safford and Miami in Arizona, and Tyrone and Chino in New Mexico. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and SX/EW operations. A majority of the copper produced at the North America copper mines is cast into copper rod by FCX’s Rod & Refining operations. The North America copper mines include the Morenci copper mine as a reportable segment.

Morenci. The Morenci open-pit mine, located in southeastern Arizona, produces copper cathodes and copper concentrates. In addition, the Morenci mine produces molybdenum concentrates. The Morenci mine produced 42 percent of FCX’s North America copper during 2011.

Other Mines. Other mines include FCX’s other operating southwestern U.S. copper mines – Sierrita, Bagdad, Safford, Miami, Tyrone and Chino. In addition to copper, certain of these mines (primarily the Sierrita and Bagdad mines) produce molybdenum concentrates.

South America.  South America mining includes four operating copper mines – Cerro Verde in Peru, and Candelaria, Ojos del Salado and El Abra in Chile. These operations include open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. South America mining includes the Cerro Verde copper mine as a reportable segment.

Cerro Verde. The Cerro Verde open-pit copper mine, located near Arequipa, Peru, produces copper cathodes and copper concentrates. In addition to copper, the Cerro Verde mine produces molybdenum concentrates. The Cerro Verde mine produced 50 percent of FCX’s South America copper during 2011.

Other Mines. Other mines include FCX’s Chilean copper mines – Candelaria, Ojos del Salado and El Abra. In addition to copper, the Candelaria and Ojos del Salado mines produce gold and silver.

Indonesia.  Indonesia mining includes PT Freeport Indonesia’s Grasberg minerals district. PT Freeport Indonesia produces copper concentrates, which contain significant quantities of gold and silver.

Africa.  Africa mining includes the Tenke Fungurume minerals district. The Tenke Fungurume mine includes open-pit mining, leaching and SX/EW operations. In addition to copper, the Tenke Fungurume mine produces cobalt hydroxide. Copper cathode production commenced in March 2009.

Molybdenum.  The Molybdenum segment is 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 includes 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-added molybdenum chemical products. This segment also includes a sales company that purchases and sells molybdenum from the Henderson mine as well as from FCX’s North and South America copper mines that also produce molybdenum. This segment also includes FCX’s wholly owned Climax molybdenum mine in Colorado, for which construction activities are substantially complete and is planned to commence production during 2012.

In addition, at times this segment roasts and/or processes material on a toll basis. Toll arrangements require the tolling customer to deliver appropriate molybdenum-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

Rod & Refining.  The Rod & Refining segment consists of copper conversion facilities located in North America, and includes a refinery, three rod mills and a specialty copper products facility. These operations process copper produced at FCX’s North America copper mines and purchased copper into copper cathode, rod and custom copper shapes. At times these operations refine copper and produce copper rod and shapes for customers on a toll basis. Toll arrangements require the tolling customer to deliver appropriate copper-bearing material to FCX’s facilities for processing into a product that is returned to the customer, who pays FCX for processing its material into the specified products.

Atlantic Copper Smelting & Refining.  Atlantic Copper, FCX’s wholly owned smelting unit in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. During 2011, Atlantic Copper purchased 17 percent of its concentrate requirements from PT Freeport Indonesia and 30 percent from the South America mines at market prices.

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. 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 division 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.

Product Revenue

FCX revenues attributable to the products it produced for the years ended December 31 follow:

	2011		2010		2009
Refined copper products	$	10,297	$	9,203	$	6,563
Copper in concentratesa	5,938		5,674		4,763
Gold	2,429		2,370		2,591
Molybdenum	1,348		1,143		792
Other	868		592		331
Total	$	20,880	$	18,982	$	15,040

a. Amounts are net of treatment and refining charges totaling $362 million for 2011, $413 million for 2010 and $429 million for 2009.

Geographic Area

Information concerning financial data by geographic area follows:

	Years Ended December 31,
	2011		2010		2009
Revenues:a
United States	$	7,176	$	5,295	$	4,890
Japan	2,501		3,428		3,093
Indonesia	2,266		2,266		1,937
Spain	1,643		1,483		986
Switzerland	1,219		1,063		379
China	942		795		496
India	878		690		566
Chile	741		759		563
Korea	561		745		475
Others	2,953		2,458		1,655
Total	$	20,880	$	18,982	$	15,040

a. Revenues are attributed to countries based on the location of the customer.

	December 31,
	2011		2010		2009
Long-lived assets:a
United States	$	7,899	$	7,101	$	6,499
Indonesia	4,469		3,475		3,298
Democratic Republic of Congo	3,497		3,220		3,207
Peru	3,265		3,203		3,240
Chile	2,242		1,892		1,519
Spain	257		266		277
Others	68		48		50
Total	$	21,697	$	19,205	$	18,090

a. Long-lived assets exclude deferred tax assets and intangible assets.

Major Customers

Sales to PT Smelting totaled $2.3 billion in 2011 and 2010 (11 percent and 12 percent, respectively, of FCX’s consolidated revenues) and $1.9 billion (13 percent of FCX's consolidated revenues) in 2009. Refer to Note 2 for further discussion of FCX’s investment in PT Smelting.

Business Segments

Business segments data for the years ended December 31 are presented in the following tables.

Business Segments

	North America Copper Mines								South America						Indonesia			Africa
	Morenci		Other Mines			Total			Cerro Verde		Other Mines		Total		Grasberg			Tenke Fung-urume		Molyb- denum		Rod & Refining		Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2011
Revenues:
Unaffiliated customers	$	418	$	180		$	598		$	2,115	$	2,457	$	4,572	$	4,504	a	$	1,282	$	1,424	$	5,523	$	2,969		$	8		$	20,880
Intersegment	1,697		3,338			5,035			417		269		686		542			7		—		26		15			(6,311		)	—
Production and delivery	984		1,645			2,629			827		1,078		1,905		1,902			591		1,036		5,527		2,991			(6,683		)	9,898
Depreciation, depletion and amortization	116		163			279			135		123		258		215			140		60		8		40			22			1,022
Selling, general and administrative expenses	2		2			4			4		3		7		124			8		15		—		22			235			415
Exploration and research expenses	7		—			7			—		—		—		—			—		3		—		—			261			271
Environmental and shutdown expenses	4		(15		)	(11		)	—		—		—		—			—		—		1		—			144			134
Operating income (loss)	1,002		1,723			2,725			1,566		1,522		3,088		2,805			550		310		13		(69		)	(282		)	9,140
Interest expense, net	2		6			8			1		—		1		8			6		—		—		15			274			312
Provision for income taxes	—		—			—			553		522		1,075		1,256			120		—		—		—			636			3,087
Total assets at December 31, 2011	2,006		5,086			7,092			5,110		3,604		8,714		5,349			3,890		2,434		259		1,109			3,223			32,070
Capital expenditures	95		400			495			198		405		603		648			193		461		10		32			92			2,534
Year Ended December 31, 2010
Revenues:
Unaffiliated customers	$	59	$	52		$	111		$	1,957	$	2,449	$	4,406	$	5,230	a	$	1,106	$	1,205	$	4,444	$	2,473		$	7		$	18,982
Intersegment	1,465		2,597			4,062			453		132		585		1,147			—		—		26		18			(5,838		)	—
Production and delivery	691		1,361			2,052			705		973		1,678		1,904			488		784		4,442		2,470			(5,483		)	8,335
Depreciation, depletion and amortization	134		139			273			148		102		250		257			128		51		8		38			31			1,036
Selling, general and administrative expenses	—		—			—			—		—		—		117			—		11		—		20			233			381
Exploration and research expenses	—		—			—			—		—		—		—			—		2		—		—			141			143
Environmental and shutdown expenses	—		—			—			—		—		—		—			—		—		1		—			18			19
Operating income (loss)	699		1,149			1,848			1,557		1,506		3,063		4,099			490		357		19		(37		)	(771		)	9,068
Interest expense, net	4		10			14			—		—		—		—			5		—		—		10			433			462
Provision for income taxes	—		—			—			516		483		999		1,709			118		—		—		—			157			2,983
Total assets at December 31, 2010	1,940		4,477			6,417			4,272		3,263		7,535		6,048			3,640		1,897		311		1,317			2,221			29,386
Capital expenditures	47		186			233			106		364		470		436			100		89		7		28			49			1,412

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $2.3 billion in 2011 and 2010.

	North America Copper Mines						South America						Indonesia				Africa
	Morenci		Other Mines		Total		Cerro Verde		Other Mines		Total		Grasberg				Tenke Fung-urume				Molyb- denum			Rod & Refining			Atlantic Copper Smelting & Refining			Corporate, Other & Elimi- nations			FCX Total
Year Ended December 31, 2009
Revenues:
Unaffiliated customers	$	68	$	94	$	162	$	1,491	$	1,950	$	3,441	$	4,972		a	$	389			$	847		$	3,328		$	1,892		$	9		$	15,040
Intersegment	1,074		2,028		3,102		286		112		398		936				—				—			28			—			(4,464		)	—
Production and delivery	623		1,288		1,911		648		915		1,563		1,505				315			b	660			3,336			1,895			(4,179		)	7,006
Depreciation, depletion and amortization	142		138		280		153		122		275		275				66				49			8			36			25			1,014
Selling, general and administrative expenses	—		—		—		—		—		—		94				—				11			—			17			199			321
Exploration and research expenses	—		—		—		—		—		—		—				—				2			—			—			88			90
Environmental and shutdown expensesc	26		27		53		—		—		—		—				—				(1		)	(2		)	—			56			106
Operating income (loss)	351		669		1,020		976		1,025		2,001		4,034				8				126			14			(56		)	(644		)	6,503
Interest expense, net	3		12		15		—		2		2		(3		)		10				—			—			5			557			586
Provision for (benefit from) income taxes	—		—		—		313		337		650		1,697				(15		)		—			—			—			(25		)	2,307
Total assets at December 31, 2009	1,934		4,207		6,141		3,937		2,515		6,452		4,974				3,386				1,731			291			991			2,030			25,996
Capital expenditures	46		299		345		103		61		164		266				659				82			9			31			31			1,587

a. Includes PT Freeport Indonesia's sales to PT Smelting totaling $1.9 billion.

b. Includes charges totaling $50 million associated with Tenke Fungurume's project start-up costs.

c. Includes charges totaling $23 million associated with net restructuring charges, primarily at the Morenci mine.

XML

STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Stock Award Plans) (Details)	12 Months Ended
	Dec. 31, 2011
Award Detail [Line Items]
Expiration period of stock options and SARs	10 years
Annual vesting percentage of stock options and SARs (in hundredths)	25.00%
Minimum Five Year Return Required For Restricted Stock Units To Vest Over Three Years	6.00%
Percent Reduction In Restrcited Stock Units If Performance Is Below Level Defined In Agreement	20.00%
2003 stock incentive plan [Member]
Award Detail [Line Items]
Number of common shares available for issuance under each of the stock award plans	16,000,000
2006 stock incentive plan [Member]
Award Detail [Line Items]
Number of common shares available for issuance under each of the stock award plans	74,000,000
Shares available for grant under the plan	37,200,000
Phelps dodge acquisition [Member]
Award Detail [Line Items]
Number of stock options under the stock plan of an entity acquired through a business combination converted into the entities common shares	1,613,190
Number of restricted stock awards under the stock award plan of an entity acquired through a business combination converted into the entities restricted stock awards	174,782
Maximum term of the stock options acquired in a business combination	10 years
Number of stock options vested upon close of the business combination (in shares)	1,344,268
Number of stock options vesting ratably over a period of time following the close of the business combination (in shares)	268,922
Vesting period for options acquired through a business combination (in years)	three
Vesting period of restricted stock units acquired through a business combination (in years)	five
Percentage of shares vesting on third and fourth anniversaries (in hundredths)	25.00%
Percentage of shares vesting on fifth anniversary (in hundredths)	50.00%
Executive Officers Performance Based [Member]
Award Detail [Line Items]
Maximum period over which restricted stock units vest (in years)	3
Outside Directors [Member]
Award Detail [Line Items]
Minimum period over which restricted stock units vest (in years)	retirement
Maximum period over which restricted stock units vest (in years)	4
Maximum [Member] | 2003 stock incentive plan [Member]
Award Detail [Line Items]
Shares available for grant under the plan	500

XML

CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Debt Instrument [Line Items]
Mandatory convertible preferred stock dividend rate percentage (in hundredths)		6.75%	6.75%
Convertible perpetual preferred stock dividend rate percentage (in hundredths)			5.50%
Defined benefit plans:
Taxes on defined benefit plans' net gain (loss) during period	$ 61	$ 19	$ 51
Convertible Senior Notes Due 2011 [Member]
Debt Instrument [Line Items]
Convertible senior notes due 2011 interest rate percentage (in hundreths)		7.00%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010	Dec. 31, 2009
Cash flow from operating activities:
Net income	$ 5,747	[1]	$ 5,544	$ 3,534
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	1,022		1,036	1,014
Stock-based compensation	117		121	102
Charges for reclamation and environmental obligations, including accretion	208		167	191
Payments of reclamation and environmental obligations	(170)		(196)	(104)
Losses on early extinguishment of debt	68		81	48
Deferred income taxes	523		286	135
Increase in long-term mill and leach stockpiles	(262)		(103)	(96)
Changes in other assets and liabilities	(76)		79	201
Other, net	(96)		92	142
(Increases) decreases in working capital:
Accounts receivable	1,246		(680)	(962)
Inventories	(431)		(593)	(159)
Other current assets	(57)		(24)	87
Accounts payable and accrued liabilities	(387)		331	(438)
Accrued income and other taxes	(832)		132	702
Net cash provided by operating activities	6,620		6,273	4,397
Capital expenditures:
North America copper mines	(495)		(233)	(345)
South America	(603)		(470)	(164)
Indonesia	(648)		(436)	(266)
Africa	(193)		(100)	(659)
Molybdenum	(461)		(89)	(82)
Other	(134)		(84)	(71)
Investment in McMoRan Exploration Co.	25		(500)	0
Other, net	(26)		43	(14)
Net cash used in investing activities	(2,535)		(1,869)	(1,601)
Cash flow from financing activities:
Repayments of debt	(1,313)		(1,724)	(1,380)
Proceeds from debt	48		70	330
Cash dividends and distributions paid:
Common stock	(1,423)		(885)	0
Preferred Stock	0		(95)	(229)
Noncontrolling interests	(391)		(816)	(535)
Net proceeds from sale of common stock	0		0	740
Contributions from noncontrolling interests	62		28	57
Net proceeds from stock-based awards	3		81	6
Excess tax benefit from stock-based awards	23		19	3
Other, net	(10)		0	(4)
Net cash used in financing activities	(3,001)		(3,322)	(1,012)
Net increase in cash and cash equivalents	1,084		1,082	1,784
Cash and cash equivalents at beginning of year	3,738		2,656	872
Cash and cash equivalents at end of year	$ 4,822		$ 3,738	$ 2,656

[1] Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

XML

EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2011

Employee Benefits [Abstract]

Employee benefits

EMPLOYEE BENEFITS

Pension Plans.  Following is a discussion of FCX’s pension plans.

FMC Plans. FMC has trusteed, non-contributory pension plans covering substantially all of its U.S. employees and some employees of its international subsidiaries hired before 2007. The applicable FMC plan design determines the manner in which benefits are calculated for any particular group of employees. For certain of these plans, benefits are calculated based on final average monthly compensation and years of service. In the case of other plans, benefits are calculated based on a fixed amount for each year of service. Participants in the FMC plans generally vest in their accrued benefits after five years of service. Non-bargained FMC employees hired after December 31, 2006, are not eligible to participate in the FMC U.S. pension plan.

FCX’s funding policy for these plans provides that contributions to pension trusts shall be at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, for U.S. plans; or, in the case of international plans, the minimum legal requirements that may be applicable in the various countries. Additional contributions also may be made from time to time.

FCX’s policy for determining asset-mix targets for the Freeport-McMoRan Corporation Defined Benefit Master Trust (Master Trust) includes the periodic development of asset/liability studies to determine expected long-term rates of return and expected risk for various investment portfolios. FCX’s retirement plan administration and investment committee considers these studies in the formal establishment of asset-mix targets. FCX’s investment objective emphasizes the need to maintain a well-diversified investment program through both the allocation of the Master Trust assets among asset classes and the selection of investment managers whose various styles are fundamentally complementary to one another and serve to achieve satisfactory rates of return. Diversification, by asset class and by investment manager, is FCX’s principal means of reducing volatility and exercising prudent investment judgment. FCX’s present target asset allocation approximates 54 percent equity investments (43 percent global equities, 7 percent emerging markets equities and 4 percent U.S. equities), 35 percent fixed income (18 percent U.S. fixed income, 5 percent international fixed income, 5 percent high yield, 4 percent treasury inflation-protection securities and 3 percent emerging markets fixed income) and 11 percent alternative investments (5 percent private equity, 3 percent private real estate and 3 percent real estate investment trusts).

The expected rate of return on plan assets is evaluated at least annually, taking into consideration asset allocation, historical returns on the types of assets held in the Master Trust and the current economic environment. Based on these factors, FCX expects the pension assets will earn an average of 7.5 percent per annum during the 10 years beginning January 1, 2012. The 7.5 percent estimation was based on a passive return on a compound basis of 7.0 percent and a premium for active management of 0.5 percent reflecting the target asset allocation and current investment array.

For estimation purposes, FCX assumes the long-term asset mix for these plans generally will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension income or expense, the funded status of the plans and the need for future cash contributions. A lower-than-expected return on assets also would decrease plan assets and increase the amount of recorded pension expense in future years. When calculating the expected return on plan assets, FCX uses the market value of assets.

Among the assumptions used to estimate the benefit obligation is a discount rate used to calculate the present value of expected future benefit payments for service to date. The discount rate assumption for FCX’s U.S. plans is designed to reflect yields on high-quality, fixed-income investments for a given duration. The determination of the discount rate for these plans is based on expected future benefit payments for service to date together with the Mercer Pension Discount Curve. The Mercer Pension Discount Curve consists of spot (i.e., zero coupon) interest rates at one-half year increments for each of the next 30 years and is developed based on pricing and yield information for high-quality corporate bonds. Prior to December 31, 2010, FCX determined its discount rate based on expected future benefit payments for service to date together with the Citigroup Pension Discount Curve. Changes in the discount rate are reflected in FCX’s benefit obligation and, therefore, in future pension costs.

Other FCX Plans. In February 2004, FCX established an unfunded Supplemental Executive Retirement Plan (SERP) for its two most senior executive officers. The SERP provides for retirement benefits payable in the form of a joint and survivor annuity or an equivalent lump sum. The annuity will equal a percentage of the executive’s highest average compensation for any consecutive three-year period during the five years immediately preceding the earlier of the executive’s retirement or completion of 25 years of credited service. The SERP benefit will be reduced by the value of all benefits paid or due under any defined benefit or defined contribution plan sponsored by FM Services Company, FCX’s wholly owned subsidiary, FCX or its predecessor, but not including accounts funded exclusively by deductions from participant’s pay. FCX also has an unfunded pension plan for its directors and an excess benefits plan for its executives, both of which no longer accrue benefits.

PT Freeport Indonesia Plan. PT Freeport Indonesia has a defined benefit pension plan denominated in Indonesian rupiah covering substantially all of its Indonesian national employees. PT Freeport Indonesia funds the plan and invests the assets in accordance with Indonesian pension guidelines. The pension obligation was valued at an exchange rate of 9,060 rupiah to one U.S. dollar on December 31, 2011, and 8,990 rupiah to one U.S. dollar on December 31, 2010. Indonesian labor laws enacted in 2003 require that companies provide a minimum level of benefits to employees upon employment termination based on the reason for termination and the employee’s years of service. PT Freeport Indonesia’s pension benefit disclosures include benefits related to this law. PT Freeport Indonesia’s expected rate of return on plan assets is evaluated at least annually, taking into consideration its historical yield and the long-range estimated return for the plan based on the asset mix. Based on these factors, PT Freeport Indonesia expects pension assets will earn an average of 8.5 percent per annum.

Atlantic Copper Plan. Atlantic Copper has a contractual obligation denominated in euros to supplement amounts paid to certain retired Spanish national employees. As required by Spanish law, beginning in August 2002, Atlantic Copper began funding 7.2 million euros ($9 million based on a December 31, 2011, exchange rate of $1.29 per euro) annually for 15 years to an approved insurance company for its estimated 72 million euro contractual obligation to the retired employees. The insurance company invests the plan assets in accordance with Spanish regulations, and Atlantic Copper has no control over these investments.

Plan Information. FCX uses a measurement date of December 31 for its plans. In some plans, the plan assets exceed the accumulated benefit obligations, while in the remainder, the accumulated benefit obligations exceed the plan assets. Information for those plans where the accumulated benefit obligations exceed the plan assets follows:

	December 31,
	2011		2010
Projected benefit obligation	$	2,055	$	1,662
Accumulated benefit obligation	1,874		1,581
Fair value of plan assets	1,261		1,122

Information on the FCX (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia and Atlantic Copper plans as of December 31 follows:

	FCX						PT Freeport Indonesia						Atlantic Copper
	2011			2010			2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning
of year	$	1,598		$	1,472		$	135		$	80		$	71		$	79
Service cost	24			26			13			8			—			—
Interest cost	83			82			11			8			3			3
Actuarial losses	172			104			55			41			—			—
Foreign exchange losses (gains)	(1		)	(1		)	(1		)	4			(1		)	(4		)
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Benefit obligation at end of year	1,791			1,598			206			135			65			71
Change in plan assets:
Fair value of plan assets at
beginning of year	1,112			1,067			97			78			23			21
Actual return on plan assets	88			126			9			13			—			—
Employer contributionsa	26			5			9			8			11			9
Foreign exchange gains (losses)	—			(1		)	(1		)	4			—			—
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Fair value of plan assets at end
of year	1,141			1,112			107			97			26			23
Funded status	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)
Accumulated benefit obligation	$	1,701		$	1,517		$	115		$	68		$	65		$	71
Weighted-average assumptions
used to determine benefit obligations:
Discount rateb	4.60		%	5.40		%	7.00		%	8.50		%	6.77		%	6.77		%
Rate of compensation increasec	3.75		%	3.75		%	8.00		%	8.00		%	NA			NA
Balance sheet classification of
funded status:
Other assets	$	6		$	6		$	—		$	—		$	—		$	—
Accounts payable and
accrued liabilities	(4		)	(4		)	—			—			—			—
Other liabilities	(652		)	(488		)	(99		)	(38		)	(39		)	(48		)
Total	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)

a. Employer contributions for 2012 are expected to approximate $97 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar) and $9 million for the Atlantic Copper plan (based on a December 31, 2011, exchange rate of $1.29 per euro).

b. The discount rate shown in 2011 and 2010 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2011 and 2010 was 4.00 percent.

c. The rate of compensation increase shown for the FCX plans only relates to the FMC plans. The rate of compensation increase shown for the PT Freeport Indonesia plan relates to the years after 2012. For the PT Freeport Indonesia plan, the rate of compensation increase for 2012 ranges from 10 percent to 13 percent.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans (FMC’s plans; and FCX’s SERP, director and excess benefits plans) for the years ended December 31 follows:

	2011			2010			2009
Weighted-average assumptions:
Discount rate:
FCX SERP	4.00		%	4.00		%	4.00		%
FMC plans	5.40		%	5.80		%	6.10		%
Expected return on plan assetsa	8.00		%	8.50		%	8.50		%
Rate of compensation increasea	3.75		%	4.25		%	4.25		%
Service cost	$	24		$	26		$	26
Interest cost	83			82			85
Expected return on plan assets	(86		)	(87		)	(73		)
Amortization of prior service cost	(1		)	(1		)	—
Amortization of net actuarial losses	19			22			26
Curtailments and special retirement
benefits	—			—			(4		)
Net periodic benefit cost	$	39		$	42		$	60

a. The assumptions shown only relate to the FMC plans.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT Freeport Indonesia’s and Atlantic Copper’s pension plans for the years ended December 31 follows:

	PT Freeport Indonesia
	2011			2010			2009
Weighted-average assumptions:
Discount rate	8.50		%	10.50		%	12.00		%
Expected return on plan assets	9.25		%	8.25		%	10.00		%
Rate of compensation increase	8.00		%	8.00		%	8.00		%
Service cost	$	13		$	8		$	5
Interest cost	11			8			7
Expected return on plan assets	(9		)	(7		)	(5		)
Amortization of prior service cost	1			1			1
Amortization of net actuarial loss	3			—			1
Net periodic benefit cost	$	19		$	10		$	9

	Atlantic Copper
	2011			2010			2009
Weighted-average assumption:
Discount rate	6.77		%	6.77		%	6.77		%
Interest cost	$	3		$	3		$	4
Amortization of net actuarial loss	1			1			1
Net periodic benefit cost	$	4		$	4		$	5

Included in accumulated other comprehensive income (loss) are the following amounts that have not been recognized in net periodic pension cost: unrecognized prior service credits of $2 million ($1 million net of tax and noncontrolling interests) and unrecognized actuarial losses of $642 million ($390 million net of tax and noncontrolling interests) at December 31, 2011; and unrecognized prior service credits of $2 million ($1 million net of tax and noncontrolling interests) and unrecognized actuarial losses of $440 million ($267 million net of tax and

noncontrolling interests) at December 31, 2010. The amounts expected to be recognized in net periodic pension cost for 2012 are less than $1 million for prior service credits and $40 million ($25 million net of tax and noncontrolling interests) for actuarial losses.

FCX does not expect to have any plan assets returned to it in 2012.

Plan assets are classified within 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), then to significant observable inputs (Level 2) and the lowest priority to significant unobservable inputs (Level 3). For further discussion of the different levels of the fair value hierarchy, refer to Note 16.

A summary of the fair value hierarchy for pension plan assets associated with the FCX plans follows:

	Fair Value at December 31, 2011
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	408		$	—	$	408	$	—
U.S. real estate securities	52			—		52		—
U.S. small-cap equity	45			—		45		—
Real estate property	35			—		—		35
Short-term investments	22			—		22		—
Open-ended mutual funds:
Government bonds	50			50		—		—
Emerging markets equity	36			36		—		—
Corporate bonds	22			22		—		—
Mutual funds:
Foreign bonds	43			43		—		—
Emerging markets bond	32			32		—		—
Emerging markets equity	24			24		—		—
Fixed income:
Government bonds	233			—		233		—
Corporate bonds	73			—		73		—
Private equity investments	50			—		—		50
Other investments	23			—		23		—
Total investments	1,148			$	207	$	856	$	85
Cash and receivables	6
Payables	(13		)
Total pension plan net assets	$	1,141

	Fair Value at December 31, 2010
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
U.S. large-cap equity	$	134		$	—	$	134	$	—
U.S. small-cap equitya	101			—		101		—
International equity	71			—		71		—
U.S. real estate securitiesa	47			—		47		—
Real estate property	28			—		—		28
Short-term investmentsa	19			—		19		—
Open-ended mutual funds:
Emerging markets equity	46			46		—		—
Government bonds	38			38		—		—
Corporate bonds	30			30		—		—
Mutual funds:
Foreign bonds	38			38		—		—
Emerging markets bond	30			30		—		—
Emerging markets equity	29			29		—		—
Equity securities:
U.S. large-cap equity	161			161		—		—
International equity	57			57		—		—
Fixed income:
Government bonds	147			—		147		—
Corporate bonds	74			—		74		—
Private equity investments	46			—		—		46
Other investments	28			1		27		—
Total investments	1,124			$	430	$	620	$	74
Cash and receivables	81
Payables	(93		)
Total pension plan net assets	$	1,112

a. At the end of 2011, FCX reevaluated its level determinations, including those reported at December 31, 2010. While the majority of the underlying investments consists of publicly traded securities with actively quoted market values, the reported fair value of the investment vehicle containing these securities is based on net asset values that are not published publicly; therefore, FCX concluded these investments are more appropriately classified within Level 2 of the fair value hierarchy.

Following is a description of the pension plan asset categories and the valuation techniques used to measure fair value. There have been no changes in the techniques used at December 31, 2011.

Commingled/collective funds are managed by several fund managers and are valued at the net asset value per unit of the fund. For most of these funds, the majority of the underlying assets are actively traded equity securities; however, the unit level is considered to be at the fund level and, as such, are classified within Level 2 (except the real estate property funds) of the fair value hierarchy. These funds require less than a month's notice for redemptions. Real estate property funds are valued at net realizable value using information from independent appraisal firms, who have knowledge and expertise about the current market values of real property in the same vicinity as the investments and, as such, are classified within Level 3 of the fair value hierarchy. Redemptions of the real estate property funds are allowed once per quarter, subject to available cash.

Open-ended mutual funds are managed by registered investment companies and are valued at the daily published net asset value of shares/units held. Because redemptions and purchases of shares/units occur at the net asset value without any adjustments to the published net asset value that is provided on an ongoing basis (active-market criteria is met), these investments are classified within Level 1 of the fair value hierarchy.

Mutual funds and 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.

Fixed income investments include government and corporate bonds held directly by us or through commingled funds. Fixed income securities are valued using a bid evaluation or a mid evaluation and, as such, are classified within Level 2 of the fair value hierarchy. 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.

Private equity investments are valued at net realizable value using information from general partners and, as such, are classified within Level 3 of the fair value hierarchy because of the inherent restrictions on redemptions that may affect the ability to sell the investments at their net asset value in the near term.

A summary of changes in the fair value of FCX’s Level 3 pension plan assets for the years ended December 31, follows:

	Private Equity Investments			Real Estate Property		Total
Balance at January 1, 2010	$	40		$	25	$	65
Actual return on plan assets:
Realized gains	—			2		2
Net unrealized gains related to
assets still held at the end of the year	2			1		3
Purchases	7			—		7
Settlements, net	(3		)	—		(3		)
Balance at December 31, 2010	46			28		74
Actual return on plan assets:
Realized gains (losses)	(2		)	2		—
Net unrealized gains related to
assets still held at the end of the year	5			5		10
Purchases	5			—		5
Settlements, net	(4		)	—		(4		)
Balance at December 31, 2011	$	50		$	35	$	85

A summary of the fair value hierarchy for pension plan assets associated with the PT Freeport Indonesia plan follows:

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	22		22		—		—
Total investments	51		$	51	$	—	$	—
Cash and receivablesa	56
Total pension plan net assets	$	107

	Fair Value at December 31, 2010
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	19		19		—		—
Total investments	48		$	48	$	—	$	—
Cash and receivablesa	49
Total pension plan net assets	$	97

a. Cash consists primarily of short-term time deposits.

Following is a description of the valuation techniques used for pension plan assets measured at fair value associated with the PT Freeport Indonesia plan. There have been no changes in the techniques used at December 31, 2011.

Common stocks and government bonds are valued at the closing price reported on the active market on which the individual securities are traded.

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 the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Atlantic Copper’s plan is administered by a third-party insurance company, and Atlantic Copper is not provided asset allocations.

The expected benefit payments for FCX’s (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia’s and Atlantic Copper’s pension plans follows:

	FCX		PT Freeport Indonesiaa		Atlantic Copperb
2012	$	88	$	16	$	7
2013	88		11		7
2014	90		11		7
2015	91		13		7
2016	94		14		7
2017 through 2021	515		123		36

a. Based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar.

b. Based on a December 31, 2011, exchange rate of $1.29 per euro.

Postretirement and Other Benefits.  FCX also provides postretirement medical and life insurance benefits for certain U.S. employees and, in some cases, employees of certain international subsidiaries. These postretirement benefits vary among plans, and many plans require contributions from retirees. The expected cost of providing such postretirement benefits is accrued during the years employees render service.

The discount rate for FCX’s postretirement medical and life insurance benefit plans was determined on the same basis as FCX’s pension plans.

Information on the postretirement benefit plans as of December 31 follows:

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	240		$	265
Service cost	1			1
Interest cost	11			13
Actuarial gains	(7		)	(13		)
Benefits paid, net of employee and partner contributions,
and Medicare Part D subsidy	(22		)	(26		)
Benefit obligation at end of year	223			240
Change in plan assets:
Fair value of plan assets at beginning of year	—			—
Employer and partner contributions	25			30
Employee contributions	12			11
Benefits paid	(37		)	(41		)
Fair value of plan assets at end of year	—			—
Funded status	$	(223	)	$	(240	)
Discount rate assumption	4.20		%	4.90		%
Balance sheet classification of funded status:
Accounts payable and accrued liabilities	$	(23	)	$	(26	)
Other liabilities	(200		)	(214		)
Total	$	(223	)	$	(240	)

Included in accumulated other comprehensive income (loss) are amounts not recognized in net periodic benefit cost for unrecognized actuarial losses of $4 million ($3 million net of tax and noncontrolling interests) at December 31, 2011, and $3 million ($2 million net of tax and noncontrolling interests) at December 31, 2010. No amount is expected to be recognized in net periodic benefit cost in 2012 for unrecognized actuarial losses.

Expected benefit payments for these plans total $23 million for 2012, $21 million for 2013, $20 million for 2014, $19 million for 2015, $18 million for 2016 and $82 million for 2017 through 2021.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s postretirement benefits for the years ended December 31 follow:

	2011			2010			2009
Weighted-average assumptions:
Discount rate	4.90		%	5.20		%	6.30		%
Service cost	$	1		$	1		$	1
Interest cost	11			13			15
Curtailments and special retirement benefits	—			—			(1		)
Net periodic benefit cost	$	12		$	14		$	15

The assumed medical-care trend rates at December 31 follow:

	2011		2010
Medical-care cost trend rate assumed for
the next year	8.00	%	8.25	%
Rate to which the cost trend rate is assumed
to decline (the ultimate trend rate)	4.50	%	4.75	%
Year that the rate reaches the ultimate trend rate	2026		2025

The effect of a one-percent increase or decrease in the medical-care cost trend rates assumed for postretirement medical benefits would result in increases or decreases of less than $1 million in the aggregate service and interest cost components; for the postretirement benefit obligation, the effect of a one-percent increase is approximately $8 million and the effect of a one-percent decrease is approximately $7 million.

FCX has a number of postemployment plans covering severance, long-term disability income, continuation of health and life insurance coverage for disabled employees or other welfare benefits. The accumulated postemployment benefit consisted of a current portion of $7 million (included in accounts payable and accrued liabilities) and a long-term portion of $57 million (included in other liabilities) at December 31, 2011, and a current portion of $8 million (included in accounts payable and accrued liabilities) and a long-term portion of $53 million (included in other liabilities) at December 31, 2010.

FCX also sponsors savings plans for the majority of its U.S. employees. The plans allow employees to contribute a portion of their pre-tax income in accordance with specified guidelines. These savings plans are principally qualified 401(k) plans for all U.S. salaried and non-bargained hourly employees. In these plans, participants exercise control and direct the investment of their contributions and account balances among various investment options. FCX matches a percentage of employee pre-tax deferral contributions up to certain limits, which vary by plan.

During 2000, FCX and FM Services Company enhanced their primary savings plan for substantially all their employees following their decision to terminate their defined benefit pension plans. Subsequent to the enhancement, FCX and FM Services Company contribute amounts to individual accounts totaling either 4 percent or 10 percent of each employee’s pay, depending on a combination of each employee’s age and years of service as of June 30, 2000. For employees whose eligible compensation exceeds certain levels, FCX provides an unfunded defined contribution plan. The balance of this liability totaled $56 million on December 31, 2011, and $49 million on December 31, 2010.

FMC had a defined contribution plan for its eligible employees hired on or after January 1, 2007, which was merged into the FCX savings plan effective January 1, 2009. Subsequent to January 1, 2009, FMC contributes enhanced amounts for its eligible employees hired on or after January 1, 2007, totaling 4 percent of each eligible employee’s earnings, regardless of years of service. However, most eligible FMC employees who were receiving more than 4 percent of their eligible earnings under the previous FMC defined contribution plan will continue to receive this higher percentage of their eligible earnings.

The costs charged to operations for employee savings plans and defined contribution plans totaled $35 million in 2011, $36 million in 2010 and $30 million in 2009.

FCX has other employee benefit plans, certain of which are related to FCX’s financial results, which are recognized in operating costs.

XML

BUSINESS SEGMENTS (Segment Reporting) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended									12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Revenues:
Unaffiliated customers	$ 4,162		$ 5,195	$ 5,814	$ 5,709	$ 5,603	$ 5,152	$ 3,864	$ 4,363	$ 20,880	[1]	$ 18,982	[1]	$ 15,040	[1]
Intersegment
Production and delivery										9,898		8,335		7,006
Depreciation, depletion and amortization										1,022		1,036		1,014
Selling, general and administrative expenses										415		381		321
Exploration and research expenses										271		143		90
Environmental and shutdown expenses										134		19		106	[2]
Operating income (loss)	1,297	[3]	2,150	2,757	2,936	3,097	2,499	1,424	2,048	9,140	[3]	9,068		6,503
Interest expense, net										312		462		586
Provision for (benefit from) income taxes										3,087		2,983		2,307
Total assets	32,070					29,386				32,070		29,386		25,996
Capital expenditures										2,534		1,412		1,587
Start up costs associated with Tenke Fungurume's project														50
Restructuring Charges														23
North America Copper Mines [Member] | Morenci [Member]
Revenues:
Unaffiliated customers										418		59		68
Intersegment										1,697		1,465		1,074
Production and delivery										984		691		623
Depreciation, depletion and amortization										116		134		142
Selling, general and administrative expenses										2
Exploration and research expenses										7
Environmental and shutdown expenses										4				26	[2]
Operating income (loss)										1,002		699		351
Interest expense, net										2		4		3
Provision for (benefit from) income taxes
Total assets	2,006					1,940				2,006		1,940		1,934
Capital expenditures										95		47		46
North America Copper Mines [Member] | Other North America Mines [Member]
Revenues:
Unaffiliated customers										180		52		94
Intersegment										3,338		2,597		2,028
Production and delivery										1,645		1,361		1,288
Depreciation, depletion and amortization										163		139		138
Selling, general and administrative expenses										2
Exploration and research expenses
Environmental and shutdown expenses										(15)				27	[2]
Operating income (loss)										1,723		1,149		669
Interest expense, net										6		10		12
Provision for (benefit from) income taxes
Total assets	5,086					4,477				5,086		4,477		4,207
Capital expenditures										400		186		299
North America Copper Mines [Member] | Total North America Mines [Member]
Revenues:
Unaffiliated customers										598		111		162
Intersegment										5,035		4,062		3,102
Production and delivery										2,629		2,052		1,911
Depreciation, depletion and amortization										279		273		280
Selling, general and administrative expenses										4
Exploration and research expenses										7
Environmental and shutdown expenses										(11)				53	[2]
Operating income (loss)										2,725		1,848		1,020
Interest expense, net										8		14		15
Provision for (benefit from) income taxes
Total assets	7,092					6,417				7,092		6,417		6,141
Capital expenditures										495		233		345
South America [Member] | Cerro Verde [Member]
Revenues:
Unaffiliated customers										2,115		1,957		1,491
Intersegment										417		453		286
Production and delivery										827		705		648
Depreciation, depletion and amortization										135		148		153
Selling, general and administrative expenses										4
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										1,566		1,557		976
Interest expense, net										1
Provision for (benefit from) income taxes										553		516		313
Total assets	5,110					4,272				5,110		4,272		3,937
Capital expenditures										198		106		103
South America [Member] | Other South America Mines [Member]
Revenues:
Unaffiliated customers										2,457		2,449		1,950
Intersegment										269		132		112
Production and delivery										1,078		973		915
Depreciation, depletion and amortization										123		102		122
Selling, general and administrative expenses										3
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										1,522		1,506		1,025
Interest expense, net														2
Provision for (benefit from) income taxes										522		483		337
Total assets	3,604					3,263				3,604		3,263		2,515
Capital expenditures										405		364		61
South America [Member] | Total South America Mines [Member]
Revenues:
Unaffiliated customers										4,572		4,406		3,441
Intersegment										686		585		398
Production and delivery										1,905		1,678		1,563
Depreciation, depletion and amortization										258		250		275
Selling, general and administrative expenses										7
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										3,088		3,063		2,001
Interest expense, net										1				2
Provision for (benefit from) income taxes										1,075		999		650
Total assets	8,714					7,535				8,714		7,535		6,452
Capital expenditures										603		470		164
Indonesia - Grasberg [Member]
Revenues:
Unaffiliated customers										4,504	[4]	5,230	[4]	4,972	[5]
Intersegment										542		1,147		936
Production and delivery										1,902		1,904		1,505
Depreciation, depletion and amortization										215		257		275
Selling, general and administrative expenses										124		117		94
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										2,805		4,099		4,034
Interest expense, net										8				(3)
Provision for (benefit from) income taxes										1,256		1,709		1,697
Total assets	5,349					6,048				5,349		6,048		4,974
Capital expenditures										648		436		266
Africa - Tenke [Member]
Revenues:
Unaffiliated customers										1,282		1,106		389
Intersegment										7
Production and delivery										591		488		315	[6]
Depreciation, depletion and amortization										140		128		66
Selling, general and administrative expenses										8
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										550		490		8
Interest expense, net										6		5		10
Provision for (benefit from) income taxes										120		118		(15)
Total assets	3,890					3,640				3,890		3,640		3,386
Capital expenditures										193		100		659
Molybdenum [Member]
Revenues:
Unaffiliated customers										1,424		1,205		847
Production and delivery										1,036		784		660
Depreciation, depletion and amortization										60		51		49
Selling, general and administrative expenses										15		11		11
Exploration and research expenses										3		2		2
Environmental and shutdown expenses														(1)	[2]
Operating income (loss)										310		357		126
Interest expense, net
Provision for (benefit from) income taxes
Total assets	2,434					1,897				2,434		1,897		1,731
Capital expenditures										461		89		82
Rod & Refining [Member]
Revenues:
Unaffiliated customers										5,523		4,444		3,328
Intersegment										26		26		28
Production and delivery										5,527		4,442		3,336
Depreciation, depletion and amortization										8		8		8
Selling, general and administrative expenses
Exploration and research expenses
Environmental and shutdown expenses										1		1		(2)	[2]
Operating income (loss)										13		19		14
Interest expense, net
Provision for (benefit from) income taxes
Total assets	259					311				259		311		291
Capital expenditures										10		7		9
Atlantic Copper Smelting & Refining [Member]
Revenues:
Unaffiliated customers										2,969		2,473		1,892
Intersegment										15		18
Production and delivery										2,991		2,470		1,895
Depreciation, depletion and amortization										40		38		36
Selling, general and administrative expenses										22		20		17
Exploration and research expenses
Environmental and shutdown expenses															[2]
Operating income (loss)										(69)		(37)		(56)
Interest expense, net										15		10		5
Provision for (benefit from) income taxes
Total assets	1,109					1,317				1,109		1,317		991
Capital expenditures										32		28		31
Corporate, Other & Eliminations [Member]
Revenues:
Unaffiliated customers										8		7		9
Intersegment										(6,311)		(5,838)		(4,464)
Production and delivery										(6,683)		(5,483)		(4,179)
Depreciation, depletion and amortization										22		31		25
Selling, general and administrative expenses										235		233		199
Exploration and research expenses										261		141		88
Environmental and shutdown expenses										144		18		56	[2]
Operating income (loss)										(282)		(771)		(644)
Interest expense, net										274		433		557
Provision for (benefit from) income taxes										636		157		(25)
Total assets	3,223					2,221				3,223		2,221		2,030
Capital expenditures										92		49		31
PT Smelting [Member]
Segment Reporting Information [Line Items]
Sales PT Smelting										$ 2,300		$ 2,300		$ 1,900

[1] Revenues are attributed to countries based on the location of the customer.

[2] Includes charges totaling $23 million associated with net restructuring charges, primarily at the Morenci mine

[3] Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

[4] Includes PT Freeport Indonesia's sales to PT Smelting totaling $2.3 billion in 2011 and 2010.

[5] Includes PT Freeport Indonesia's sales to PT Smelting totaling $1.9 billion.

[6] Includes charges totaling $50 million associated with Tenke Fungurume's project start-up costs

XML

BUSINESS SEGMENTS (Long Lived Assets by Geographic Area) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	$ 21,697	[1]	$ 19,205	[1]	$ 18,090	[1]
United States [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	7,899	[1]	7,101	[1]	6,499	[1]
Indonesia [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	4,469	[1]	3,475	[1]	3,298	[1]
Democratic Republic Of Congo [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	3,497	[1]	3,220	[1]	3,207	[1]
Peru [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	3,265	[1]	3,203	[1]	3,240	[1]
Chile [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	2,242	[1]	1,892	[1]	1,519	[1]
Spain [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	257	[1]	266	[1]	277	[1]
Others [Member]
Long Lived assets by geographic area of customer [Line Items]
Long-Lived Assets	$ 68	[1]	$ 48	[1]	$ 50	[1]

[1] Long-lived assets exclude deferred tax assets and intangible assets.

XML

Document And Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Feb. 15, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	FREEPORT MCMORAN COPPER & GOLD INC
Entity Central Index Key	0000831259
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 50.1
Entity Common Stock, Shares Outstanding		948,358,926
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false

XML

STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note [Abstract]

Stockholders' Equity and Stock-Based Compensation

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock.  FCX’s authorized shares of capital stock total 1.85 billion shares, consisting of 1.8 billion shares of common stock and 50 million shares of preferred stock.

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. Common shareholders of record at the close of business on January 15, 2011, received one additional share of common stock for every share they owned as of that date. The additional shares were issued on February 1, 2011, and increased the number of shares outstanding to approximately 945 million from approximately 472 million. The par value of FCX’s common stock remains at $0.10 per share. FCX’s common stock began trading on a post-split basis on February 2, 2011. All references to shares of common stock and per share amounts have been retroactively adjusted to reflect the two-for-one stock split, unless otherwise noted.

In February 2009, FCX completed a public offering of 53.6 million shares of FCX common stock at an average price of $14.00 per share, which generated gross proceeds of $750 million (net proceeds of approximately $740 million).

In July 2008, FCX’s Board of Directors approved an increase in the open-market share purchase program for up to 30 million shares. During 2008, on a pre-split basis, FCX acquired 6.3 million shares for $500 million ($79.15 per share average) and 23.7 million shares remain available under this program. During September 2008, because of the financial turmoil and the decline in copper and molybdenum prices, FCX suspended its purchases of shares under its open-market share purchase program. The timing of future purchases of FCX’s common stock is dependent on many factors, including FCX’s operating results, cash flows and financial position; copper, molybdenum and gold prices; the price of FCX’s common stock; and general economic and market conditions.

In December 2008, FCX’s Board of Directors suspended the cash dividend on FCX’s common stock; accordingly, there were no common stock dividends paid in 2009. In October 2009, FCX’s Board of Directors reinstated a cash dividend on FCX’s common stock at an annual rate of $0.30 per share beginning in 2010. FCX’s Board of Directors authorized an increase in the cash dividend on FCX’s common stock to an annual rate of $0.60 per share in April 2010 and then to an annual rate of $1.00 per share in October 2010. In December 2010, FCX's Board of Directors declared a supplemental common stock dividend of $0.50 per share, which was paid on December 30, 2010, to common shareholders of record at the close of business on December 20, 2010. In April 2011, FCX's Board of Directors declared a supplemental common stock dividend $0.50 per share, which was paid on June 1, 2011, to common shareholders of record at the close of business on May 15, 2011. On December 28, 2011, FCX declared a regular quarterly dividend of $0.25 per share, which was paid on February 1, 2012, to common shareholders of record at the close of business on January 13, 2012. The Board of Directors will continue to review FCX’s financial policy on an ongoing basis.

Preferred Stock.  On March 28, 2007, FCX sold 28.75 million shares of 6¾% Mandatory Convertible Preferred Stock, with a liquidation preference of $100 per share, for net proceeds of $2.8 billion. The 6¾% Mandatory Convertible Preferred Stock were automatically converted on May 1, 2010, into shares of FCX common stock. The conversion rate was adjustable upon the occurrence of certain events, including the payment in any quarter of common stock dividends exceeding $0.15625 per share, and, for shares converted on May 1, 2010, depended on the applicable average market price of FCX’s common stock over the 20-trading-day period ending on the third trading day prior to May 1, 2010. Holders could elect to convert at any time prior to May 1, 2010, at a conversion rate equal to 2.7432 shares of FCX common stock. During 2010, a total of 28,749,560 outstanding shares of FCX’s 6¾% Mandatory Convertible Preferred Stock were converted into 78.9 million shares of FCX common stock (conversion rate equal to 2.7432 shares of FCX common stock).

In March 2004, FCX sold 1.1 million shares of 5½% Convertible Perpetual Preferred Stock for net proceeds of $1.1 billion. The conversion rate was adjustable upon the occurrence of certain events, including the payment in any quarter of common stock dividends exceeding $0.10 per share. As a result of the quarterly and supplemental common stock dividends paid through August 31, 2009, each share of preferred stock was convertible into 43.061 shares of FCX common stock, equivalent to a conversion price of approximately $23.22 per common share. In December 2008, through privately negotiated transactions, FCX induced conversion of 268,331 shares of its 5½% Convertible Perpetual Preferred Stock with a liquidation preference of $268 million into 11.5 million shares of FCX common stock. To induce conversion of these shares, FCX issued to the holders an additional 2.0 million shares of FCX common stock valued at $22 million, which was recorded as losses on induced conversions in the consolidated statements of operations. In September 2009, FCX called for redemption the remaining outstanding shares of its 5½% Convertible Perpetual Preferred Stock. Of the 831,554 shares outstanding at the time of the call, 830,529 shares were converted into 35.8 million shares of FCX common stock, and the remaining 1,025 shares were redeemed for approximately $1 million in cash.

Stock Award Plans.  FCX currently has awards outstanding under its stock-based compensation plans, including two FMC plans resulting from the acquisition. As of December 31, 2011, only two of the plans, both of which are stockholder approved (which are discussed below), have awards available for grant.

The 2003 Stock Incentive Plan (the 2003 Plan) provides for the issuance of stock options, SARs, restricted stock, restricted stock units and other stock-based awards. The 2003 Plan allows FCX to grant awards for up to 16 million common shares to eligible participants. In 2006, FCX’s stockholders approved the 2006 Stock Incentive Plan (the 2006 Plan), and FCX’s stockholders approved amendments to the plan in 2007 primarily to increase the number of shares available for grants and in 2010 to permit grants to outside directors. The 2006 Plan provides for the issuance of stock options, SARs, restricted stock, restricted stock units and other stock-based awards for up to 74 million common shares. As of December 31, 2011, shares available for grant totaled 37.2 million under the 2006 Plan and less than 500 shares under the 2003 Plan.

In connection with the FMC acquisition, former FMC stock options and restricted stock awards were converted into 1,613,190 FCX stock options and 174,782 FCX restricted stock awards, which retain the terms by which they were originally granted under FMC’s plans. The stock options carry a maximum term of 10 years with 1,344,268 stock options vested upon the acquisition of FMC and 268,922 stock options that vested ratably over a three-year period or the period until the participant became retirement-eligible, whichever was shorter. Restricted stock awards generally became fully vested in five years, with a majority of these shares having graded-vesting features in which 25 percent of the shares would vest on the third and fourth anniversaries of the award and the remaining 50 percent in the fifth year. In February 2010, the former FMC restricted stock agreements were amended to accelerate the vesting period of the restricted stock awards that were converted upon the acquisition of FMC; therefore, these restricted stock awards (excluding the cash portion that resulted from the conversion of these restricted stock awards at the time of the acquisition) became fully vested. The fair value of the restricted stock awards was determined based on the quoted market price at the time of the acquisition.

Stock-Based Compensation Cost. Compensation cost charged against earnings for stock-based awards for the years ended December 31 follows:

	2011			2010			2009
Stock options awarded to employees (including directors)	$	84		$	84		$	67
Stock options awarded to nonemployees	1			5			5
Restricted stock units awarded to employees
(including directors)	32			30			29
Restricted stock awards to employees	—			1			2
SARs	(2		)	2			4
Total stock-based compensation costa	115			122			107
Tax benefit	(42		)	(45		)	(41		)
Noncontrolling interests’ share	(4		)	(3		)	(3		)
Impact on net income	$	69		$	74		$	63

a. Amounts are before Rio Tinto’s share of the cost of employee exercises of in-the-money stock options, which decreased consolidated selling, general and administrative expenses by $3 million in 2011, $4 million in 2010 and $2 million in 2009.

FCX did not capitalize any stock-based compensation costs to property, plant, equipment and development costs during the years ended December 31, 2011, 2010 and 2009.

Options and SARs. Stock options and SARs granted under the plans generally expire 10 years after the date of grant and vest in 25 percent annual increments beginning one year from the date of grant. The plans and award agreements provide that participants will receive the following year’s vesting after retirement and provide for accelerated vesting if there is a change in control (as defined in the plans). Therefore, FCX accelerates one year of amortization for retirement-eligible employees.

A summary of options outstanding as of December 31, 2011, including 69,672 SARs, and changes during the year ended December 31, 2011, follows:

	Number of Options		Weighted- Average Option Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	26,930,444		$	30.22
Granted	4,230,500		55.43
Exercised	(3,044,174	)	21.88
Expired/Forfeited	(149,625	)	37.61
Balance at December 31	27,967,145		34.90		6.9	$	152
Vested and exercisable at December 31	13,560,645		$	33.10	5.7	$	65

Summaries of options outstanding, including SARs, and changes during the years ended December 31 follow:

	2010				2009
	Number of Options		Weighted- Average Option Price		Number of Options		Weighted- Average Option Price
Balance at January 1	24,921,594		$	27.59	19,705,894		$	32.49
Granted	8,303,000		36.15		7,302,000		12.94
Exercised	(6,081,650	)	27.54		(1,571,874	)	20.15
Expired/Forfeited	(212,500	)	30.29		(514,426	)	30.29
Balance at December 31	26,930,444		30.22		24,921,594		27.59

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Expected volatility is based on implied volatilities from traded options on FCX’s common stock and historical volatility of FCX’s common stock. FCX uses historical data to estimate future option exercises, forfeitures and expected life of the options. When appropriate, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected dividend rate is calculated using the annual dividend (excludes supplemental dividends) at the date of grant. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option at the grant date. The weighted-average assumptions used to value stock option awards during the years ended December 31 follow:

	2011		2010		2009
Expected volatility	50.9	%	51.9	%	70.6	%
Expected life of options (in years)	4.34		4.61		4.37
Expected dividend rate	1.8	%	0.8	%	—	%
Risk-free interest rate	1.6	%	2.2	%	1.5	%

The weighted-average grant-date fair value of options granted was $20.58 per option during 2011, $15.33 per option during 2010 and $7.14 per option during 2009. The total intrinsic value of options exercised was $101 million during 2011, $129 million during 2010 and $24 million during 2009. The total fair value of options vested was $89 million during 2011, $61 million during 2010 and $70 million during 2009. As of December 31, 2011, FCX had $101 million of total unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted-average period of 1.5 years.

The following table includes amounts related to exercises of stock options and SARs and vesting of restricted stock units and restricted stock awards during the years ended December 31:

	2011		2010		2009
FCX shares tendered to pay the exercise price
and/or the minimum required taxesa	936,811		934,099		542,786
Cash received from stock option exercises	$	48	$	109	$	18
Actual tax benefit realized for tax deductions	45		50		21
Amounts FCX paid for employee taxes	45		28		12
Amounts FCX paid for exercised SARs	1		1		1

a. Under terms of the related plans, upon exercise of stock options and vesting of restricted stock units and restricted stock awards, employees may tender FCX shares to FCX to pay the exercise price and/or the minimum required taxes.

Restricted Stock Units. FCX has an annual incentive plan for its executive officers that requires a portion of each executive officer's annual bonus be paid in restricted stock units. The maximum annual incentive award pool is a percentage of FCX’s consolidated operating cash flows adjusted for working capital for the preceding year and funding of the pool is subject to a performance condition. Grants of restricted stock units before 2012 vest ratably over three years and provide that the FCX executive officers will receive the following year’s vesting upon retirement provided the performance condition is met. The fair value of these restricted stock unit grants was estimated based on projected operating cash flows for the applicable year and was charged to expense ratably over three years, beginning with the year during which the cash flows were generated as performance of services commenced in the calendar year preceding the date of grant. In February 2012, the terms of restricted stock unit awards under the annual incentive plan were revised. Beginning with 2012 grants, the level of restricted stock units granted will continue to be based on FCX's consolidated operating cash flows adjusted for working capital for the preceding year, but the award will vest after three years subject to FCX attaining a five-year average return on investment (a performance condition defined in the award agreement) of at least six percent. The awards will also be subject to a 20 percent reduction if FCX performs below a group of its peers as defined in the award agreement. The fair value of the awards is estimated using an appropriate valuation model. The awards continue to vest after the recipients retirement or death; therefore, since all of FCX's executive officers are retirement eligible, FCX charges the cost of these awards to expense in the year the cash flows are generated as performance of services is only required in the calendar year preceding the date of grant.

FCX also granted other restricted stock units that vest over a period of up to five years. The plans and award agreements provide for accelerated vesting of all restricted stock units if there is a change of control (as defined in the plans) and provide that participants will receive the following year’s vesting after retirement (except for the restricted stock units with five year vesting that do not allow acceleration because of retirement). Dividends and interest on restricted stock units accrue and are paid upon the award’s vesting.

FCX grants restricted stock units to its directors. The restricted stock units vest over four years. The fair value of the restricted stock units is amortized over the four-year vesting period or the period until the director becomes retirement-eligible, whichever is shorter. Upon a director’s retirement, all of their unvested restricted stock units immediately vest. For retirement-eligible directors, the fair value of restricted stock units is recognized in earnings on the date of grant.

A summary of outstanding restricted stock units as of December 31, 2011, and activity during the year ended December 31, 2011, follows:

	Number of Restricted Stock Units		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Balance at January 1	2,140,914
Granted	381,636
Vested	(1,257,274	)
Forfeited	—
Balance at December 31	1,265,276		1.4	$	47

The total grant-date fair value of restricted stock units granted during the year ended December 31, 2011, was $21 million. The total intrinsic value of restricted stock units vested was $69 million during 2011, $50 million during 2010 and $22 million during 2009. As of December 31, 2011, FCX had $2 million of total unrecognized compensation cost related to unvested restricted stock units expected to be recognized over a weighted-average period of less than one year.

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COMMITMENTS AND GUARANTEES (Mining Contracts) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Indonesia [Member]
Contractual obligations mining contracts [line items]
Period For Option To Extend Mining Contract	two 10-year periods
Number Of Years Working With Foreign Government	40 years
Copper Royalty Rate Payable Minimum (in hundredths)	1.50%
Copper Royalty Rate Payable Maximum (in hundredths)	3.50%
Price Of Copper Per Pound Low Range	$0.90 or less per pound
Price Of Copper Per Pound High Range	$1.10 or more per pound
Gold And Silver Sales Royalty Rate (in hundredths)	1.00%
Quantity of ore produced subject to additional royalties	above 200,000 metric tons of ore per day
Royalty Expense	$ 137	$ 156	$ 147
Tenke [Member]
Contractual obligations mining contracts [line items]
Royalty Rate Payable Under Amended And Restated Mining Convention (in hundredths)	2.00%
Royalty Expense Due Under Amended And Restated Mining Convention	24	20	7
Income tax rate (in hundredths)	30.00%
Mining royalty rate (in hundredths)	2.00%
Export fee (in hundredths)	1.00%
Government ownership percentage (in hundredths)	17.50%
Proposed governement ownership percentage (in hundredths)	20.00%
Percentage of mining property owned by the company (in hundredths)	57.75%
Percentage of proposed mining property owned by the company (in hundredths)	56.00%
Current ownership percentage by noncontrolling interest (in hundredths)	24.75%
Proposed ownership percentage by noncontrolling interest (in hundredths)	24.00%
Additional royal amount	$1.2 million for each 100,000 metric tons of proven and probable copper reserves above 2.5 million metric tons
Proposed additional production payments	30
Amount Of 6 Equal Installments Required Per Mining Contract	5
Conversion of intercompany loans	50
Surface area fees	5
Proposed annual ongoing surface area fees	$ 0.8
Current annual interest rate on advances from shareholders	LIBOR plus 2 percent
Proposed annual interest rate on advances from shareholders	LIBOR plus 6 percent

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BUSINESS SEGMENTS (Revenues by Geographic Area of Customer) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Revenues by geographic area of customer [Line Items]
Revenues	$ 4,162	$ 5,195	$ 5,814	$ 5,709	$ 5,603	$ 5,152	$ 3,864	$ 4,363	$ 20,880	[1]	$ 18,982	[1]	$ 15,040	[1]
United States [Member]
Revenues by geographic area of customer [Line Items]
Revenues									7,176	[1]	5,295	[1]	4,890	[1]
Japan [Member]
Revenues by geographic area of customer [Line Items]
Revenues									2,501	[1]	3,428	[1]	3,093	[1]
Indonesia [Member]
Revenues by geographic area of customer [Line Items]
Revenues									2,266	[1]	2,266	[1]	1,937	[1]
Spain [Member]
Revenues by geographic area of customer [Line Items]
Revenues									1,643	[1]	1,483	[1]	986	[1]
Switzerland [Member]
Revenues by geographic area of customer [Line Items]
Revenues									1,219	[1]	1,063	[1]	379	[1]
China [Member]
Revenues by geographic area of customer [Line Items]
Revenues									942	[1]	795	[1]	496	[1]
India [Member]
Revenues by geographic area of customer [Line Items]
Revenues									878	[1]	690	[1]	566	[1]
Chile [Member]
Revenues by geographic area of customer [Line Items]
Revenues									741	[1]	759	[1]	563	[1]
Korea [Member]
Revenues by geographic area of customer [Line Items]
Revenues									561	[1]	745	[1]	475	[1]
Others [Member]
Revenues by geographic area of customer [Line Items]
Revenues									$ 2,953	[1]	$ 2,458	[1]	$ 1,655	[1]

[1] Revenues are attributed to countries based on the location of the customer.

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 4,822		$ 3,738
Trade accounts receivable	892		2,132
Other accounts receivable	250		293
Inventories:
Materials and supplies, net	1,354	[1]	1,169	[1]
Product	1,226		1,316
Mill and leach stockpiles	1,289		949
Other current assets	214		254
Total current assets	10,047		9,851
Property, plant, equipment and development costs, net	18,449		16,785
Long-term mill and leach stockpiles	1,686	[2]	1,425	[2]
Long-term receivables	675		200
Intangible assets, net	325		328
Other assets	888		797
Total assets	32,070		29,386
Current liabilities:
Accounts payable and accrued liabilities	2,252		2,441
Dividends payable	240		240
Current portion of reclamation and environmental obligations	236		207
Accrued income taxes	163		648
Rio Tinto share of joint venture cash flows	45		132
Current portion of debt	4		95
Total current liabilities	2,940		3,763
Long-term debt, less current portion	3,533		4,660
Deferred income taxes	3,255		2,873
Reclamation and environmental obligations, less current portion	2,138		2,071
Other liabilities	1,651		1,459
Total liabilities	13,517		14,826
FCX stockholders' equity:
Common stock, par value $ 0.10, 1,071 shares and 1,067 shares issued, respectively	107		107
Capital in excess of par value	19,007		18,751
Retained earnings (accumulated deficit)	546		(2,590)
Accumulated other comprehensive loss	(465)		(323)
Common stock held in treasury - 123 shares and 122 shares, respectively, at cost	(3,553)		(3,441)
Total FCX stockholders' equity	15,642		12,504
Noncontrolling interests	2,911		2,056
Total equity	18,553		14,560
Total liabilities and equity	$ 32,070		$ 29,386

[1] Materials and supplies inventory is net of obsolescence reserves totaling $26 million at December 31, 2011 and 2010.

[2] Metals in stockpiles not expected to be recovered within the next 12 months.

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INTANGIBLE ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2011

Intangible Assets and Liabilities [Abstract]

Intangible Assets and Liabilities

INTANGIBLE ASSETS AND LIABILITIES

The components of intangible assets and intangible liabilities (included in other liabilities) follow:

	December 31, 2011
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	239	$	—		$	239
Patents and process technology	48		(14		)	34
Royalty payments	37		(21		)	16
Power contracts	25		(18		)	7
Other intangibles	38		(9		)	29
Total intangible assets	$	387	$	(62	)	$	325
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(30	)	$	22

	December 31, 2010
	Gross Carrying Value		Accumulated Amortization			Net Book Value
Indefinite-lived water rights	$	245	$	—		$	245
Patents and process technology	48		(11		)	37
Royalty payments	37		(18		)	19
Power contracts	25		(17		)	8
Other intangibles	25		(6		)	19
Total intangible assets	$	380	$	(52	)	$	328
Intangible liabilities:
Treatment and refining terms in
sales contracts	$	52	$	(25	)	$	27

FCX performs its annual impairment testing of indefinite-lived intangible assets in the fourth quarter of each year. No material impairments were recorded during the three-year period ended December 31, 2011.

Amortization of intangible assets recognized in production and delivery costs was $10 million in 2011 and 2010, and $16 million in 2009. Amortization of intangible liabilities recognized in revenues was $5 million in 2011, $4 million in 2010 and $6 million in 2009. The estimated net amortization expense for the next five years is considered to be immaterial.

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PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment, Net [Abstract]

Property, Plant, Equipment and Development Costs, Net

PROPERTY, PLANT, EQUIPMENT AND DEVELOPMENT COSTS, NET

The components of net property, plant, equipment and development costs follow:

	December 31,
	2011			2010
Proven and probable reserves	$	4,572		$	4,503
VBPP	1,071			1,100
Development and other	3,447			3,188
Buildings and infrastructure	3,151			2,815
Machinery and equipment	8,171			7,523
Mobile equipment	2,859			2,365
Construction in progress	2,704			1,885
Property, plant, equipment and
development costs	25,975			23,379
Accumulated depreciation, depletion and
amortization	(7,526		)	(6,594		)
Property, plant, equipment and
development costs, net	$	18,449		$	16,785

FCX recorded $2.2 billion for VBPP in connection with the FMC acquisition in 2007 and transferred to proven and probable reserves $23 million during 2011, $197 million during 2010 and $542 million prior to 2010. Cumulative impairments of VBPP total $477 million, of which $6 million was recorded in 2011, and none in 2010 and 2009.

FCX capitalized interest totaling $109 million in 2011, $66 million in 2010 and $78 million in 2009. Capitalized interest primarily related to the development projects at the Climax, Cerro Verde and Candelaria mines, and in the Grasberg minerals district in Indonesia in 2011; at the Climax and El Abra mines in 2010; and at the Tenke Fungurume mine in 2009.

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FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENT

Fair value accounting guidance includes a 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).

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

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

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	4,007	$	4,007	$	—	$	—
Trust assets:
Government mortgage-backed securities	47		—		47		—
U.S. core fixed income fund	46		—		46		—
Government bonds and notes	21		—		21		—
Corporate bonds	19		—		19		—
Money market funds	9		9		—		—
Asset-backed securities	9		—		9		—
Municipal bonds	1		—		1		—
Total trust assets	152		9		143		—
Available-for-sale securities:
Equity securities	9		9		—		—
Money market funds	2		2		—		—
Total available-for-sale securities	11		11		—		—

Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	72			—			72			—
Copper futures and swap contracts	3			3			—			—
Copper forward contracts	2			1			1			—
Total derivative assets	77			4			73			—
Total assets	$	4,247		$	4,031		$	216		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contracts	$	(82	)	$	—		$	(82	)	$	—
Copper futures and swap contracts	(13		)	(11		)	(2		)	—
Total derivative liabilities	$	(95	)	$	(11	)	$	(84	)	$	—

	Fair Value at December 31, 2010
	Total			Level 1			Level 2			Level 3
Assets
Cash equivalents:
Money market funds	$	3,584		$	3,584		$	—		$	—
Trust assets:
U.S. core fixed income fund	42			—			42			—
Government mortgage-backed securities	35			—			35			—
Corporate bonds	23			—			23			—
Asset-backed securities	22			—			22			—
Money market funds	15			15			—			—
Government bonds and notes	10			—			10			—
Municipal bonds	1			—			1			—
Total trust assets	148			15			133			—
Available-for-sale securities:a
Equity securities	9			9			—			—
Money market funds	6			6			—			—
Total available-for-sale securities	15			15			—			—
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	357			—			357			—
Copper futures and swap contracts	18			18			—			—
Total derivative assets	375			18			357			—
Total assets	$	4,122		$	3,632		$	490		$	—
Liabilities
Derivatives:
Embedded derivatives in provisional sales/purchases
contractsb	$	(115	)	$	—		$	(115	)	$	—
Copper forward contracts	(10		)	(1		)	(9		)	—
Total derivative liabilities	$	(125	)	$	(1	)	$	(124	)	$	—

a. Excluded were $19 million of time deposits.

b. At the end of 2011, FCX reevaluated its level determination for its embedded derivatives in provisional sales/purchases contracts, including those reported at December 31, 2010. Although the critical input in these measurements are quoted market prices for copper, gold and molybdenum, the contracts themselves are not traded on an exchange and, therefore, are more appropriately classified within Level 2 of the fair value hierarchy.

Valuation Techniques

Money market 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, U.S. core fixed income fund, corporate bonds and asset-backed securities) 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 have critical inputs of quoted monthly LME or COMEX forward prices (copper) and the London Bullion Market Association forward price (gold) at each reporting date based on the month of maturity; however, FCX's contracts themselves are not traded on an exchange, as such, these derivatives are classified within Level 2 of the fair value hierarchy. FCX’s embedded derivatives on provisional molybdenum purchases have critical inputs based on the latest average weekly Metals Week Molybdenum Dealer Oxide prices; however, FCX's contracts themselves are not traded on an exchange, as such, these derivatives are classified within Level 2 of the fair value hierarchy.

FCX’s derivative financial instruments for copper futures and swap contracts and forward contracts that are traded on the respective exchanges are classified within Level 1 of the fair value hierarchy because they are valued using quoted monthly COMEX or LME forward prices at each reporting date based on the month of maturity (refer to Note 15 for further discussion). Certain of these contracts are traded on the over-the-counter market and are classified as Level 2 of the fair value hierarchy.

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 December 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 as of December 31 follows:

	2011						2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalentsa	$	4,822		$	4,822		$	3,738		$	3,738
MMR cost investmentb	475			507			500			623
Net embedded derivatives included in accounts
receivable or payable	(10		)	(10		)	242			242
Trust assets (current and long-term)a, c	152			152			148			148
Available-for-sale securities (current and
long-term)a, c	11			11			34			34
Derivative assetsa, d	5			5			18			18
Derivative liabilitiesa, e	(13		)	(13		)	(10		)	(10		)
Debt (including amounts due within one year)f	(3,537		)	(3,797		)	(4,755		)	(5,146		)

a. Recorded at fair value.

b. Recorded at cost and included in other assets. At December 31, 2011, these securities were not actively trading; as such, fair value was based on a pricing simulation model using MMR's publicly traded common stock as the most significant observable input. At December 31, 2010, fair value was 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. Included in accounts payable and accrued liabilities.

f. Recorded at cost except for long-term debt acquired in the FMC 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.

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INCOME TAXES

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Geographic sources of income before income taxes and equity in affiliated companies’ net earnings for the years ended December 31 consist of the following:

	2011		2010		2009
United States	$	2,112	$	1,307	$	98
Foreign	6,706		7,205		5,718
Total	$	8,818	$	8,512	$	5,816

FCX’s provision for income taxes for the years ended December 31 consists of the following:

	2011			2010			2009
Current income taxes:
Federal	$	394		$	207		$	19
State	21			27			7
Foreign	1,948			2,500			2,172
Total current	2,363			2,734			2,198
Deferred income taxes (benefits):
Federal	82			20			(70		)
State	(19		)	(10		)	79
Foreign	661			239			100
Total deferred	724			249			109
Provision for income taxes	$	3,087		$	2,983		$	2,307

A reconciliation of the U.S. federal statutory tax rate to FCX’s effective income tax rate for the years ended December 31 follows:

	2011					2010					2009
	Amount			Percent		Amount			Percent		Amount			Percent
U.S. federal statutory tax rate	$	3,086		35	%	$	2,979		35	%	$	2,036		35	%
Foreign tax credit limitation	163			2		93			1		112			2
Percentage depletion	(283		)	(3	)	(263		)	(3	)	(168		)	(3	)
Withholding taxes	170			2		174			2		228			4
Valuation allowance on minimum
tax credits	(47		)	(1	)	18			—		104			2
State income taxes	—			—		17			—		(2		)	—
Other items, net	(2		)	—		(35		)	—		(3		)	—
Provision for income taxes	$	3,087		35	%	$	2,983		35	%	$	2,307		40	%

FCX paid federal, state, local and foreign income taxes totaling $3.4 billion in 2011, $2.6 billion in 2010 and $1.6 billion in 2009. FCX received refunds of federal, state, local and foreign income taxes of $15 million in 2011, $26 million in 2010 and $193 million in 2009.

The components of deferred taxes follow:

	December 31,
	2011			2010
Deferred tax assets:
Foreign tax credits	$	2,011		$	1,837
Net operating loss carryforwards	356			442
Minimum tax credits	406			413
Accrued expenses	962			931
Employee benefit plans	245			215
Inventory	161			164
Other	276			224
Deferred tax assets	4,417			4,226
Valuation allowances	(2,393		)	(2,226		)
Net deferred tax assets	2,024			2,000
Deferred tax liabilities:
Property, plant, equipment and development costs	(4,227		)	(3,874		)
Undistributed earnings	(1,010		)	(917		)
Other	(72		)	(28		)
Total deferred tax liabilities	(5,309		)	(4,819		)
Net deferred tax liabilities	$	(3,285	)	$	(2,819	)

At December 31, 2011, FCX had U.S. foreign tax credit carryforwards of $2.0 billion that will expire between 2012 and 2021, and U.S. minimum tax credits carryforwards of $406 million that can be carried forward indefinitely, but may be used only to the extent that regular tax exceeds the alternative minimum tax in any given year.

At December 31, 2011, FCX had (i) DRC net operating loss carryforwards of $560 million that can be carried forward indefinitely, (ii) U.S. net state operating loss carryforwards of $468 million million that expire between 2012 and 2031, and (iii) Spanish net operating loss carryforwards of $541 million that expire between 2012 and 2026.

On the basis of available information at December 31, 2011, FCX has provided valuation allowances for certain of its deferred tax assets where FCX believes it is more likely than not that some portion or all of such assets will not be realized. Valuation allowances totaled $2.4 billion at December 31, 2011, and $2.2 billion at December 31, 2010, and covered all of FCX’s U.S. foreign tax credit carryforwards, and a portion of its foreign net operating loss carryforwards, U.S. state net operating loss carryforwards and U.S. minimum tax credit carryforwards. These valuation allowances include $80 million at December 31, 2011, and $59 million at December 31, 2010, for tax benefits that, if recognized, would be credited directly to other comprehensive income.

The $167 million increase in the valuation allowance during 2011 was primarily a result of an increase in foreign tax credit carryforwards, partly offset by a decrease in minimum tax credit carryforwards.

In December 2011, the U.S. Treasury Department issued temporary and proposed regulations on the treatment of amounts paid for repair and maintenance costs of fixed assets. These regulations generally apply to tax years beginning on or after January 1, 2012. Transition rules providing procedural guidance are anticipated to be published during 2012. FCX is currently evaluating the impact of the new regulations on its operating results; however, this evaluation will not be completed until the additional procedural guidance is issued. Neither the regulations nor the additional procedural guidance are expected to have a material impact on FCX's results of operations or financial condition.

In September 2011, Peru enacted a new mining tax and royalty regime. Under the new regime, companies that do not have stability agreements will be subject to a revised royalty and a special mining tax. Cerro Verde operates under a stability agreement and, therefore, is not subject to the revised royalty and special mining tax until its stability agreement expires on December 31, 2013. The Peruvian government has also created a special mining burden that companies with stability agreements can elect to pay. The special mining burden is levied on profits and is based on a sliding scale of 4 to 13 percent, with a maximum effective tax rate of 8.79 percent. Cerro Verde will elect to pay this special mining burden during the remaining term of its stability agreement. As a result, FCX recognized additional current and deferred tax expense of $53 million ($49 million net of noncontrolling interests) for the year 2011. The deferred portion of this accrual relates primarily to the assets recorded in connection with the 2007 acquisition of FMC.

In October 2010, the Chilean legislature approved an increase in mining royalty taxes to help fund earthquake reconstruction activities, education and health programs. Mining royalty taxes at FCX’s El Abra and Candelaria mines were stabilized through 2017 at a rate of 4 percent. However, under the legislation, FCX opted to transfer from its stabilized rate to the sliding scale of 4 to 9 percent (depending on a defined operational margin) for the years 2010 through 2012 and will return to its 4 percent rate for the years 2013 through 2017. Beginning in 2018 and through 2023, rates will move to a sliding scale of 5 to 14 percent.

A summary of the activities associated with FCX’s reserve for unrecognized tax benefits, interest and penalties follows:

	Unrecognized Tax Benefits			Interest			Penalties
Balance at January 1, 2010	$	253		$	34		$	—
Additions:
Prior year tax positions	9			*			*
Current year tax positions	24			*			*
Interest and penalties	—			2			—
Decreases:
Prior year tax positions	(26		)	*			*
Current year tax positions	—			*			*
Lapse of statute of limitations	(60		)	*			*
Interest and penalties	—			(3		)	—
Balance at December 31, 2010	200			33			—
Additions:
Prior year tax positions	25			*			*
Current year tax positions	16			*			*
Interest and penalties	—			7			—
Decreases:
Prior year tax positions	(34		)	*			*
Current year tax positions	(8		)	*			*
Lapse of statute of limitations	(53		)	*			*
Interest and penalties	—			(6		)	—
Balance at December 31, 2011	$	146		$	34		$	—

* Amounts not allocated.

The reserve for unrecognized tax benefits of $146 million at December 31, 2011, includes $101 million ($25 million net of income tax benefits) that, if recognized, would reduce FCX’s provision for income taxes.

The net decrease in FCX's reserve for unrecognized tax benefits primarily results from expiration of the applicable statute of limitations that occurred in connection with reaching final settlements with taxing authorities. There continues to be uncertainty related to the timing of settlements with taxing authorities, but if additional settlements are agreed upon during the year 2012, FCX could experience a change in its reserve for unrecognized tax benefits.  

FCX or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years for FCX and its significant subsidiaries that remain subject to examination are as follows:

Jurisdiction	Years Under Examination	Additional Open Years
U.S. Federal	Short Year Ending December 31, 2007 2008-2010	2011
Indonesia	2005-2008	2009-2011
Peru	2007-2008	2002-2006, 2009-2011
Chile	2010	2011
Arizona	2003-2007	2008-2011
New Mexico	—	2003-2011

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FINANCIAL INSTRUMENTS (Unsettled Derivatives) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Derivatives, Fair Value [Line Items]
Paid to brokers associated with margin requirements	$ 31		$ 3
Received from customers associated with margin requirements	3
Received from brokers associated with margin requirements			8
Derivatives designated as hedging instruments [Member] | FMC's Copper Futures and Swap Contracts [Member] | Other current assets [Member]
Derivatives, Fair Value [Line Items]
Asset position	3	[1],[2]	18	[1],[2]
Derivatives designated as hedging instruments [Member] | FMC's Copper Futures and Swap Contracts [Member] | Accounts payable and accrued liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability position	(13)	[1],[3]	0	[1],[3]
Derivatives not designated as hedging instruments [Member] | Embedded derivatives in provisional sales purchases contracts [Member] | Net accounts receivable [Member]
Derivatives, Fair Value [Line Items]
Asset position	72	[4]	357	[4]
Derivatives not designated as hedging instruments [Member] | Embedded derivatives in provisional sales purchases contracts [Member] | Net accounts payable [Member]
Derivatives, Fair Value [Line Items]
Liability position	(82)	[4]	(115)	[4]
Derivatives not designated as hedging instruments [Member] | Atlantic Copper's copper forward contracts [Member] | Other current assets [Member]
Derivatives, Fair Value [Line Items]
Asset position	2	[2]	0	[2]
Derivatives not designated as hedging instruments [Member] | Atlantic Copper's copper forward contracts [Member] | Accounts payable and accrued liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability position	$ 0	[3]	$ (10)	[3]

[1] FCX had paid $31 million to brokers at December 31, 2011, and $3 million at December 31, 2010, for margin requirements (recorded in other current assets). In addition, FCX held $3 million in margin funding from customers at December 31, 2011, and $8 million from brokers at December 31, 2010, associated with margin requirements (recorded in accounts payable and accrued liabilities).

[2] Amounts recorded in other current assets.

[3] Amounts recorded in accounts payable and accrued liabilities.

[4] Amounts recorded either as a net accounts receivable or a net accounts payable.

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OTHER LIABILITIES

12 Months Ended

Dec. 31, 2011

Other Liabilities, Noncurrent [Abstract]

Other Liabilities

OTHER LIABILITIES

Additional information regarding other liabilities follows:

	December 31,
	2011		2010
Pension, postretirement, postemployment and other
employment benefitsa	$	1,277	$	1,074
Reserve for uncertain tax benefits	128		133
Insurance claim reserve	50		58
Atlantic Copper contractual obligation to
insurance company (refer to Note 10)	39		48
Other	157		146
Total other liabilities	$	1,651	$	1,459

a.  Refer to Note 7 for short-term portion and Note 10 for further discussion.

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DEBT (Details) (USD $)	3 Months Ended					12 Months Ended					12 Months Ended				1 Months Ended		12 Months Ended						12 Months Ended						12 Months Ended			1 Months Ended	12 Months Ended			1 Months Ended	3 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended							1 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2010 Long-term Debt [Member]	Mar. 31, 2007 8.375% Senior Notes due 2017 [Member]	Dec. 31, 2011 8.375% Senior Notes due 2017 [Member] Long-term Debt [Member]	Dec. 31, 2010 8.375% Senior Notes due 2017 [Member] Long-term Debt [Member]	Dec. 31, 2009 8.375% Senior Notes due 2017 [Member] Long-term Debt [Member]	Mar. 31, 2007 Senior Floating Rates Notes Due 2015 [Member]	Apr. 30, 2010 Senior Floating Rates Notes Due 2015 [Member] Long-term Debt [Member]	Apr. 30, 2011 8.25% Senior Notes due 2015 [Member] Long-term Debt [Member]	Dec. 31, 2011 8.25% Senior Notes due 2015 [Member] Long-term Debt [Member]	Dec. 31, 2010 8.25% Senior Notes due 2015 [Member] Long-term Debt [Member]	Dec. 31, 2009 8.25% Senior Notes due 2015 [Member] Long-term Debt [Member]	Mar. 31, 2007 8.25% Senior Notes due 2015 [Member] Long-term Debt [Member]	Dec. 31, 2011 9.5% Senior Notes due 2031 [Member] Long-term Debt [Member]	Dec. 31, 2011 8.75% Senior Notes Due 2011 [Member] Long-term Debt [Member]	Dec. 31, 2009 Total of Senior Notes in connection with financing Phelps Dodge acquisition [Member] Long-term Debt [Member]	Dec. 31, 2007 Total of Senior Notes in connection with financing Phelps Dodge acquisition [Member] Long-term Debt [Member]	Dec. 31, 2011 Senior Revolving Credit Facility [Member]	Dec. 31, 2010 Senior Revolving Credit Facility [Member]	Dec. 31, 2011 Acquisition Financing Debt [Member] 8.375% Senior Notes due 2017 [Member]	Dec. 31, 2010 Acquisition Financing Debt [Member] 8.375% Senior Notes due 2017 [Member]	Dec. 31, 2011 Acquisition Financing Debt [Member] Senior Floating Rates Notes Due 2015 [Member]	Dec. 31, 2011 Acquisition Financing Debt [Member] 8.25% Senior Notes due 2015 [Member]	Dec. 31, 2010 Acquisition Financing Debt [Member] 8.25% Senior Notes due 2015 [Member]	Mar. 31, 2007 Assumed Debt [Member] 9.5% Senior Notes due 2031 [Member]	Dec. 31, 2011 Assumed Debt [Member] 9.5% Senior Notes due 2031 [Member]	Dec. 31, 2010 Assumed Debt [Member] 9.5% Senior Notes due 2031 [Member]	Dec. 31, 2008 Assumed Debt [Member] 9.5% Senior Notes due 2031 [Member]	Mar. 31, 2007 Assumed Debt [Member] 8.75% Senior Notes Due 2011 [Member]	Jun. 30, 2011 Assumed Debt [Member] 8.75% Senior Notes Due 2011 [Member]	Dec. 31, 2009 Assumed Debt [Member] 8.75% Senior Notes Due 2011 [Member]	Dec. 31, 2011 Assumed Debt [Member] 8.75% Senior Notes Due 2011 [Member]	Dec. 31, 2010 Assumed Debt [Member] 8.75% Senior Notes Due 2011 [Member]	Mar. 31, 2007 6.125% Senior Notes due 2034 [Member]	Dec. 31, 2011 6.125% Senior Notes due 2034 [Member]	Dec. 31, 2007 6.125% Senior Notes due 2034 [Member]	Dec. 31, 2010 6.125% Senior Notes due 2034 [Member]	Mar. 31, 2007 7.125% Debentures due 2027 [Member]	Dec. 31, 2011 7.125% Debentures due 2027 [Member]	Dec. 31, 2010 7.125% Debentures due 2027 [Member]	Feb. 29, 2004 6.875% Senior Notes due 2014 [Member]	Dec. 31, 2011 6.875% Senior Notes due 2014 [Member]	Dec. 31, 2009 6.875% Senior Notes due 2014 [Member]	Aug. 31, 2009 6.875% Senior Notes due 2014 [Member]	Dec. 31, 2004 6.875% Senior Notes due 2014 [Member]	Dec. 31, 2011 Other debt (including equipment capital leases and short-term borrowings) [Member]	Dec. 31, 2010 Other debt (including equipment capital leases and short-term borrowings) [Member]	Dec. 31, 2011 Maximum [Member]	Feb. 28, 2012 Issuance of Debt [Member]
Debt Instruments [Line Items]
Long-term Debt, Gross			$ 4,755,000,000			$ 3,537,000,000	$ 4,755,000,000																		$ 0	$ 0	$ 3,011,000,000	$ 3,011,000,000		$ 0	$ 1,079,000,000		$ 131,000,000	$ 175,000,000					$ 0	$ 85,000,000		$ 115,000,000		$ 115,000,000		$ 115,000,000	$ 115,000,000						$ 165,000,000	$ 175,000,000
Less current portion of long-term debt and short-term borrownings			95,000,000			4,000,000	95,000,000
Debt instrument carrying amount																																	107,000,000									124,000,000				115,000,000
Long-term debt			4,660,000,000			3,533,000,000	4,660,000,000
Debt Instrument Maturity Date						Mar. 19, 2012					Apr. 30, 2017						Apr. 30, 2015												Apr. 30, 2015				Jun. 30, 2031									Mar. 31, 2034				Nov. 30, 2027			Feb. 28, 2014
Loss On Extinguishment Of Debt, Gross		7,000,000				68,000,000	81,000,000	48,000,000	55,000,000						22,000,000		55,000,000						33,000,000										6,000,000	4,000,000	6,000,000			1,000,000												14,000,000
Net proceeds from sale of senior notes																								5,900,000,000																								344,000,000
Revolving Credit Facility, Expiration Date						March 30, 2016
Revolving Credit Facility, Maximum Borrowing Capacity						1,500,000,000
Amount of revolving credit facility available to PT Freeport Indonesia						500,000,000
Letters of Credit Outstanding, Amount						44,000,000
Revolving Credit Facility, Remaining Borrowing Capacity						1,500,000,000
Remaining borrowing capacity available for letters of credit at period end						956,000,000
Debt Instrument, Basis Spread on Variable Rate																									1.75%
Debt Instrument, Description of Variable Rate Basis																									LIBOR
Face amount of senior notes sold										3,500,000,000				1,000,000,000						1,500,000,000																												350,000,000
Debt Instrument, Interest Rate, Stated Percentage (in hundredths)											8.375%						8.25%				9.50%	8.75%																				6.125%				7.125%			6.875%
Debt Instrument, Semi-Annual Interest Payment Dates											April 1 and October 1																						June 1 and December 1									March 15 and September 15				May 1 and November 1
Current initial make-whole redemption price prior to redemption date (in hundreths)											104.188%
Loss on early extinguishment of debt, effect on net income attributable to common stockholders	54,000,000	6,000,000	3,000,000	42,000,000	23,000,000	60,000,000	71,000,000		48,000,000						20,000,000		49,000,000						29,000,000										5,000,000	3,000,000	5,000,000			1,000,000												13,000,000
Current redeemable period for note at make-whole redemption price prior to the redemption date											12 months beginning on April 1, 2012
Debt Instrument, Redemption Date															Apr. 01, 2010	Apr. 01, 2011
Loss on early extinguishment of debt, effect on net income per diluted share (in dollars per share)	$ 0.06	$ 0.01	$ 0.01	$ 0.05	$ 0.02	$ 0.06	$ 0.07		$ 0.05						$ 0.02		$ 0.05						$ 0.03												$ 0.01															$ 0.01
Proceeds from Issuance of Long-term Debt																																																								2,971,000,000
Debt Instrument Face Amount At Retirement												329,000,000	160,000,000		1,000,000,000	1,100,000,000		218,000,000	203,000,000														35,000,000	18,000,000	33,000,000		84,000,000	24,000,000					26,000,000								340,000,000	10,000,000
Early Repayment Of Senior Debt												358,000,000	172,000,000					237,000,000	218,000,000														49,000,000	26,000,000	46,000,000			26,000,000													352,000,000
Amount of assumed debt																																197,000,000				109,000,000					150,000,000				115,000,000
Fair value increase (decrease) of assumed debt																																43,000,000				11,000,000					(11,000,000)
Loss on early extinguishment of debt, less than $0.01 effect on net income per diluted share (in dollars per share)																																	less than $0.01 per diluted share	less than $0.01 per diluted share				less than $0.01 per diluted share
Redemption price percentage to principal amount (in hundredths)															101.00%	104.125%																																			103.439%
Long-term Debt, by Maturity [Abstract]
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months						4,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Two																																																							1,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Three						0
Long-term Debt, Maturities, Repayments of Principal in Year Four						0
Long-term Debt, Maturities, Repayments of Principal in Year Five						0
Long-term Debt, Maturities, Repayments of Principal after Year Five						$ 3,533,000,000

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LONG-TERM RECEIVABLES AND OTHER ASSETS

12 Months Ended

Dec. 31, 2011

Other Assets, Noncurrent [Abstract]

Long-term Receivables and Other Assets

LONG-TERM RECEIVABLES AND OTHER ASSETS

The components of long-term receivables follow:

	December 31,
	2011		2010
Income taxes	$	295	$	—
Loan to a DRC public electric utility	138		110
Disputed tax assessments (refer to Note 13)	109		—
Loan to La Générale des Carrières et des Mines (related party)	30		—
Other	103		90
Total long-term receivables	$	675	$	200

The components of other assets follow:

	December 31,
	2011		2010
Cost-method investments:
McMoRan Exploration Co. (MMR)a	$	475	$	500
Other	2		3
Equity-method investments:
PT Smeltingb	125		11
Other	47		43
Trust assetsc, d	152		140
Debt issue costs	40		58
Available-for-sale securities	9		28
Other	38		14
Total other assets	$	888	$	797

a. In December 2010, FCX purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million.The Preferred Stock is initially convertible into 62.5 shares of MMR common stock per share of Preferred Stock (an aggregate of 31.25 million shares of MMR common stock), at an initial conversion price of $16 per share of MMR common stock. Dividends received are recorded as a return of investment because of MMR's reported losses. Several of FCX’s directors and executive officers also serve as directors or executive officers of MMR.

b. Amounts are reduced by unrecognized profits on sales from PT Freeport Indonesia to PT Smelting totaling $2 million at December 31, 2011, and $113 million at December 31, 2010.

c. Includes $151 million in 2011 and $137 million in 2010 of legally restricted funds for AROs at the Chino, Tyrone and Cobre mines (refer to Note 13 for further discussion).

d. The current portion, which is included in other current assets, totaled $8 million at December 31, 2010, and none at December 31, 2011.

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2011

Accounts Payable and Accrued Liabilities, Current [Abstract]

Accounts Payable and Accrued Liabilities

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Additional information regarding accounts payable and accrued liabilities follows:

	December 31,
	2011		2010
Accounts payable	$	1,353	$	1,272
Salaries, wages and other compensation	257		244
Pension, postretirement, postemployment and other
employee benefitsa	180		156
Current deferred tax liability	103		61
Other accrued taxes	92		152
Accrued interestb	69		92
Deferred revenue	69		180
Community development programs	19		148
Other	110		136
Total accounts payable and accrued liabilities	$	2,252	$	2,441

a. Refer to Note 8 for long-term portion and Note 10 for further discussion.

b. Third-party interest paid, net of capitalized interest, was $284 million in 2011, $421 million in 2010 and $504 million in 2009.

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DEBT

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

Debt

DEBT

The components of debt follow:

	December 31,
	2011			2010
Revolving Credit Facility	$	—		$	—
Senior Notes:
8.375% Senior Notes due 2017	3,011			3,011
8.25% Senior Notes due 2015	—			1,079
9½% Senior Notes due 2031	131			175
61/8% Senior Notes due 2034	115			115
71/8% Debentures due 2027	115			115
8¾% Senior Notes due 2011	—			85
Other (including equipment capital leases and
short-term borrowings)	165			175
Total debt	3,537			4,755
Less current portion of debt	(4		)	(95		)
Long-term debt	$	3,533		$	4,660

Revolving Credit Facility.  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. FCX recognized a loss on early extinguishment of debt totaling $7 million ($6 million to net income attributable to FCX common stockholders or $0.01 per diluted share) during 2011 associated with these transactions. The new 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 December 31, 2011, FCX had no borrowings and $44 million of letters of credit issued under the revolving credit facility, resulting in availability of approximately $1.5 billion, of which $956 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 1.75 percent, subject to an increase or decrease in the interest rate margin based on the credit ratings assigned to FCX's senior unsecured debt by Standard & Poor’s Rating Services and Moody’s Investors Service.

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.

Senior Notes.  In March 2007, in connection with financing FCX’s acquisition of FMC, FCX sold $3.5 billion of 8.375% Senior Notes due April 2017, $1.5 billion of 8.25% Senior Notes due April 2015 and $1.0 billion of Senior Floating Rate Notes due April 2015 for total net proceeds of $5.9 billion. Interest on the 8.375% Senior Notes is payable semiannually on April 1 and October 1. The 8.25% Senior Notes and the Senior Floating Rate Notes have been fully redeemed as further discussed below. The 8.375% Senior Notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price prior to the redemption date, and afterwards at stated redemption prices initially starting at 104.188 percent for 12 months beginning on April 1, 2012.

During 2009, FCX purchased in open-market transactions $203 million of the 8.25% Senior Notes for $218 million and $160 million of the 8.375% Senior Notes for $172 million. These open-market purchases resulted in losses on early extinguishment of debt totaling $33 million ($29 million to net income attributable to FCX common stockholders or $0.03 per diluted share). During 2010, FCX purchased in open-market transactions $218 million of the 8.25% Senior Notes for $237 million and $329 million of the 8.375% Senior Notes for $358 million, which resulted in losses on early extinguishment of debt totaling $55 million ($48 million to net income attributable to FCX common stockholders or $0.05 per diluted share). On April 1, 2010, FCX redeemed all of its $1 billion of outstanding Senior Floating Rates Notes for which holders received 101 percent of the principal amount together with accrued and unpaid interest. As a result of this redemption, FCX recorded a loss on early extinguishment of debt totaling $22 million ($20 million to net income attributable to FCX common stockholders or $0.02 per diluted share) during 2010. On April 1, 2011, FCX redeemed all its remaining $1.1 billion of outstanding 8.25% Senior Notes for which holders received 104.125 percent of the principal amount together with accrued and unpaid interest. As a result of this redemption, FCX recorded a loss on early extinguishment of debt totaling $55 million ($49 million to net income attributable to FCX common stockholders of $0.05 per diluted share) during 2011.

The 9½% Senior Notes due June 2031 bear interest payable semiannually on June 1 and December 1. These notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these senior notes with a stated value of $197 million, which was increased by $43 million to reflect the fair market value of these obligations at the acquisition date. The increase in value is being amortized over the term of the notes and recorded as a reduction of interest expense. In 2008, FCX purchased in an open-market transaction $33 million of these senior notes for $46 million and recorded losses on early extinguishment of debt totaling $6 million ($5 million to net loss attributable to FCX common stockholders or $0.01 per diluted share). In 2010, FCX purchased in an open-market transaction $18 million of these senior notes for $26 million and recorded losses on early extinguishment of debt totaling $4 million ($3 million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). In 2011, FCX purchased in an open-market transaction $35 million of these senior notes for $49 million and recorded losses on early extinguishment of debt totaling $6 million ($5 million million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). At December 31, 2011, the outstanding principal amount of these senior notes was $107 million.

The 6¹/8 % Senior Notes due March 2034 bear interest payable semiannually on March 15 and September 15. These notes are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these senior notes with a stated value of $150 million, which was reduced by $11 million to reflect the fair market value of these obligations at the acquisition date. The decrease in value is being amortized over the term of the notes and recorded as additional interest expense. During 2007, FCX purchased in an open-market transaction $26 million of these notes. At December 31, 2011, the outstanding principal amount of these senior notes was $124 million.

The 7¹/8 % Debentures due November 2027 bear interest payable semiannually on May 1 and November 1. The debentures are redeemable in whole or in part, at the option of FCX, at a make-whole redemption price. In March 2007, in connection with the acquisition of FMC, FCX assumed these debentures with a stated and fair value of $115 million. At December 31, 2011, the outstanding principal amount of these debentures was $115 million.

In March 2007, in connection with the acquisition of FMC, FCX assumed the 8¾% Senior Notes due June 2011 with a stated value of $109 million, which was increased by $11 million to reflect the fair market value of these obligations at the acquisition date. The increase in value was amortized over the term of the notes and recorded as a reduction of interest expense. In 2009, FCX purchased in an open-market transaction $24 million of these senior notes for $26 million and recorded losses on early extinguishment of debt totaling $1 million ($1 million to net income attributable to FCX common stockholders or less than $0.01 per diluted share). On the maturity date in June 2011, FCX paid the outstanding principal amount of $84 million on these senior notes.

In February 2004, FCX sold $350 million of 6.875% Senior Notes due February 2014 for net proceeds of $344 million. During 2004, FCX purchased in open-market transactions $10 million of its 6.875% Senior Notes. On August 20, 2009, FCX redeemed the remaining $340 million of these notes for $352 million or a redemption price of 103.439 percent of the principal amount (plus accrued and unpaid interest) and recorded losses on early extinguishment of debt totaling $14 million ($13 million to net income attributable to FCX common stockholders or $0.01 per diluted share).

All of FCX’s senior notes are unsecured.

In February 2012, FCX issued $3.0 billion in senior notes in three tranches (see Note 20 for further discussion).

Restrictive Covenants. FCX's credit facility and senior notes contain certain restrictive covenants. The credit facility includes covenants that are typical for investment-grade companies, including limitations on liens and subsidiary debt. The credit facility also includes financial ratios governing maximum total leverage and minimum interest coverage. If the rating is downgraded below investment grade by both Standard & Poor's Rating Services and Moody's Investors Service, these covenants would become effective. The 8.375% Senior Notes and other senior notes contain limitations on liens that are generally typical for investment-grade companies.

Maturities.  Maturities of debt instruments based on the amounts and terms outstanding at December 31, 2011, total $4 million in 2012, less than $1 million in 2013, none for the years 2014 through 2016, and $3.5 billion thereafter.

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EMPLOYEE BENEFITS (Schedule of FV of Financial Assets for Pension Plans) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
FCX plans [Abstract]
Cash and Receivables In Plan Assets	$ 6		$ 81
Payables In Plan Assets	(13)		(93)
Total [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	1,148		1,124
Total [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	207		430
Total [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	856		620
Total [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	85		74
Commingled And Collective Funds [Member] | Global equity core [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	408
Commingled And Collective Funds [Member] | Global equity core [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0
Commingled And Collective Funds [Member] | Global equity core [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	408
Commingled And Collective Funds [Member] | Global equity core [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0
Commingled And Collective Funds [Member] | U.S. small cap equity [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	45		101	[1]
Commingled And Collective Funds [Member] | U.S. small cap equity [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Commingled And Collective Funds [Member] | U.S. small cap equity [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	45		101	[1]
Commingled And Collective Funds [Member] | U.S. small cap equity [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Commingled And Collective Funds [Member] | Real Estate Property [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	35		28
Commingled And Collective Funds [Member] | Real Estate Property [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Commingled And Collective Funds [Member] | Real Estate Property [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Commingled And Collective Funds [Member] | Real Estate Property [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	35		28
Commingled And Collective Funds [Member] | Short-term Investments [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	22		19	[1]
Commingled And Collective Funds [Member] | Short-term Investments [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Commingled And Collective Funds [Member] | Short-term Investments [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	22		19	[1]
Commingled And Collective Funds [Member] | Short-term Investments [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Commingled And Collective Funds [Member] | U.S. large cap equity [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			134
Commingled And Collective Funds [Member] | U.S. large cap equity [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Commingled And Collective Funds [Member] | U.S. large cap equity [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			134
Commingled And Collective Funds [Member] | U.S. large cap equity [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Commingled And Collective Funds [Member] | International Equity Core [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			71
Commingled And Collective Funds [Member] | International Equity Core [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Commingled And Collective Funds [Member] | International Equity Core [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			71
Commingled And Collective Funds [Member] | International Equity Core [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Commingled And Collective Funds [Member] | Real Estate Funds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	52		47	[1]
Commingled And Collective Funds [Member] | Real Estate Funds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Commingled And Collective Funds [Member] | Real Estate Funds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	52		47	[1]
Commingled And Collective Funds [Member] | Real Estate Funds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0	[1]
Open Ended Mutual Funds [Member] | Government bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	50		38
Open Ended Mutual Funds [Member] | Government bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	50		38
Open Ended Mutual Funds [Member] | Government bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Open Ended Mutual Funds [Member] | Government bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Open Ended Mutual Funds [Member] | Emerging Markets Equity [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	36		46
Open Ended Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	36		46
Open Ended Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Open Ended Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Open Ended Mutual Funds [Member] | Corporate bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	22		30
Open Ended Mutual Funds [Member] | Corporate bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	22		30
Open Ended Mutual Funds [Member] | Corporate bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Open Ended Mutual Funds [Member] | Corporate bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Emerging Markets Equity [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	24		29
Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	24		29
Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Emerging Markets Equity [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Foreign Bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	43		38
Mutual Funds [Member] | Foreign Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	43		38
Mutual Funds [Member] | Foreign Bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Foreign Bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Emerging Markets Bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	32		30
Mutual Funds [Member] | Emerging Markets Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	32		30
Mutual Funds [Member] | Emerging Markets Bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Mutual Funds [Member] | Emerging Markets Bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Equity securities [Member] | U.S. large cap equity [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			161
Equity securities [Member] | U.S. large cap equity [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			161
Equity securities [Member] | U.S. large cap equity [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Equity securities [Member] | U.S. large cap equity [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Equity securities [Member] | International Equity Value [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			57
Equity securities [Member] | International Equity Value [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			57
Equity securities [Member] | International Equity Value [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Equity securities [Member] | International Equity Value [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement			0
Fixed income securities [Member] | Government bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	233		147
Fixed income securities [Member] | Government bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Fixed income securities [Member] | Government bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	233		147
Fixed income securities [Member] | Government bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Fixed income securities [Member] | Corporate bonds [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	73		74
Fixed income securities [Member] | Corporate bonds [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Fixed income securities [Member] | Corporate bonds [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	73		74
Fixed income securities [Member] | Corporate bonds [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Private Equity Investments [Member] | Private Equity Investments [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	50		46
Private Equity Investments [Member] | Private Equity Investments [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Private Equity Investments [Member] | Private Equity Investments [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Private Equity Investments [Member] | Private Equity Investments [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	50		46
Other Investments [Member] | Others [Member] | Total [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	23		28
Other Investments [Member] | Others [Member] | Fair Value, Inputs, Level 1 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		1
Other Investments [Member] | Others [Member] | Fair value, inputs, Level 2 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	23		27
Other Investments [Member] | Others [Member] | Fair value, inputs, Level 3 [Member]
FCX plans [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | FCX [Member]
FCX plans [Abstract]
Defined Benefit Plan, Fair Value of Plan Assets	1,141		1,112		1,067
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member]
FCX plans [Abstract]
Cash and Receivables In Plan Assets	56	[2]	49	[2]
Defined Benefit Plan, Fair Value of Plan Assets	107		97		78
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Total [Member] | Total [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	51		48
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Total [Member] | Fair Value, Inputs, Level 1 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	51		48
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Total [Member] | Fair value, inputs, Level 2 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Total [Member] | Fair value, inputs, Level 3 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Equity securities [Member] | Common stocks [Member] | Total [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	29		29
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Equity securities [Member] | Common stocks [Member] | Fair Value, Inputs, Level 1 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	29		29
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Equity securities [Member] | Common stocks [Member] | Fair value, inputs, Level 2 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Equity securities [Member] | Common stocks [Member] | Fair value, inputs, Level 3 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Fixed income securities [Member] | Government bonds [Member] | Total [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	22		19
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Fixed income securities [Member] | Government bonds [Member] | Fair Value, Inputs, Level 1 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	22		19
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Fixed income securities [Member] | Government bonds [Member] | Fair value, inputs, Level 2 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	0		0
Pension plan [Member] | Investment In Subsidiary Pt Freeport Indonesia [Member] | Fixed income securities [Member] | Government bonds [Member] | Fair value, inputs, Level 3 [Member]
PT Freeport Indonesia plan [Abstract]
Fair value of plan assets measurement	$ 0		$ 0

[1] At the end of 2011, FCX reevaluated its level determinations, including those reported at December 31, 2010. While the majority of the underlying investments consists of publicly traded securities with actively quoted market values, the reported fair value of the investment vehicle containing these securities is based on net asset values that are not published publicly; therefore, FCX concluded these investments are more appropriately classified within Level 2 of the fair value hierarchy.

[2] Cash consists primarily of short-term time deposits.

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FINANCIAL INSTRUMENTS (Derivative) (Details)	Dec. 31, 2011 Derivatives designated as hedging instruments [Member] FMC's copper futures and swap contracts [Member] lb	Dec. 31, 2011 Derivatives not designated as hedging instruments [Member] Embedded derivatives in provisional sales contracts - Copper [Member] lb	Dec. 31, 2011 Derivatives not designated as hedging instruments [Member] Embedded derivatives in provisional sales contracts - Gold [Member] oz	Dec. 31, 2011 Derivatives not designated as hedging instruments [Member] Embedded derivatives in provisional purchase contracts - Copper [Member] lb	Dec. 31, 2011 Derivatives not designated as hedging instruments [Member] Embedded derivatives in provisional purchase contracts - Molybdenum [Member] lb	Dec. 31, 2011 Derivatives not designated as hedging instruments [Member] Atlantic Copper Copper Forward Commodity Contracts [Member] lb	Mar. 31, 2009 Derivatives not designated as hedging instruments [Member] PT Freeport Indonesia's copper forward contracts [Member] lb
Derivative [Line Items]
Derivative held (in lbs except gold in oz)	73,000,000	388,000,000	52,000	376,000,000	33,000	18,000,000	355,000,000
Average contract price	3.58	3.55	1,676	3.56	11.80	3.35	1.86
Average market price		3.44	1,576	3.45	11.78
Maturities	April 2013	June 2012	February 2012	April 2012	January 2012	March 2012

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STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Details) (USD $)	1 Months Ended						12 Months Ended							13 Months Ended
	Apr. 30, 2011	Dec. 31, 2010	Oct. 31, 2010	Apr. 30, 2010	Oct. 31, 2009	Feb. 28, 2009	Dec. 31, 2011 years		Dec. 31, 2010		Dec. 31, 2009		Dec. 31, 2008	Jul. 31, 2008
Stockholders' Equity Note [Abstract]
FCX's authorized shares of capital stock													1,850,000,000
FCX's authorized shares of common stock													1,800,000,000
FCX's authorized shares of preferred stock													50,000,000
Number of shares outstanding as a result of stock split							945,000,000
Number of shares outstanding prior to stock split							472,000,000
Par value of common stock (in dollars per share)		$ 0.10					$ 0.10		$ 0.10
Number of shares authorized under open-market share purchase program														30,000,000
Shares acquired during 2008													6,300,000
Cost to acquire shares during 2008													$ 500,000,000
Average cost per share acquired during 2008													$ 79.15
Remaining shares available under the program													23,700,000
Public offering of FCX common stock						53,600,000
Average price used in the public offering of common stock						$ 14.00
Gross proceeds of the public offering of common stock						750,000,000
Net proceeds of the public offering of common stock						740,000,000	0		0		740,000,000
Authorized Annual Rate Of Common Stock Dividend			$ 1.00	$ 0.60	$ 0.30
Supplemental common stock dividend	$ 0.50	$ 0.50
Authorized Quarterly Rate Of Common Stock Dividend							$ 0.25
Stock-Based Compensation Cost [Abstract]
Stock options awarded to employees (including directors)							84,000,000		84,000,000		67,000,000
Stock options awarded to nonemployees							1,000,000		5,000,000		5,000,000
Restricted stock units awarded to employees (including directors)							32,000,000		30,000,000		29,000,000
Restricted stock awards to employees							0		1,000,000		2,000,000
Stock appreciation rights							(2,000,000)		2,000,000		4,000,000
Total stock-based compensation cost							115,000,000	[1]	122,000,000	[1]	107,000,000	[1]
Tax benefit							(42,000,000)		(45,000,000)		(41,000,000)
Noncontrolling interests' share							(4,000,000)		(3,000,000)		(3,000,000)
Impact on net income (loss)							69,000,000		74,000,000		63,000,000
Amount of joint venture partner share of the cost of employee stock option exercises							3,000,000		4,000,000		2,000,000
Stock appreciation rights outstanding and included in stock options							69,672
Stock options and stock appreciation rights [Roll Forward]
Balance at beginning of period (in number of options)							26,930,444		24,921,594		19,705,894
Granted (in number of options)							4,230,500		8,303,000		7,302,000
Exercised (in number of options)							(3,044,174)		(6,081,650)		(1,571,874)
Expired/Forfeited (in number of options)							(149,625)		(212,500)		(514,426)
Balance at end of period (in number of options)		26,930,444					27,967,145		26,930,444		24,921,594		19,705,894
Stock options and stock appreciation rights, additional disclosures [Abstract]
Weighted-average exercise price at beginning of period (in dollars per option)							$ 30.22		$ 27.59		$ 32.49
Granted (in dollars per option)		$ 36.15					$ 55.43		$ 36.15		$ 12.94
Exercised (in dollars per option)		$ 27.54					$ 21.88		$ 27.54		$ 20.15
Expired/Forfeited (in dollars per option)							$ 37.61		$ 30.29		$ 30.29
Weighted-average exercise price at end of period (in dollars per option)		$ 30.22					$ 34.90		$ 30.22		$ 27.59		$ 32.49
Weighted-average remaining contractual term (in years)							6.9
Aggregate intrinsic value of outstanding							152,000,000
Vested and exercisable at end of period (in options)							13,560,645
Weighted-average option price of vested and exercisable (in dollars per option)							$ 33.10
Weighted-average remaining contractual term of vested and exercisable (in years)							5.7
Aggregate intrinsic value of vested and exercisable							65,000,000
Fair value assumptions and methodology [Abstract]
Weighted-average expected volatility (in hundredths)							50.90%		51.90%		70.60%
Expected life of options (in years)							4.3400		4.6100		4.3700
Weighted-average expected dividend rate (in hundredths)							1.80%		0.80%		0.00%
Risk free interest rate (in hundredths)							1.60%		2.20%		1.50%
Weighted-average grant-date fair value (in dollars per option)							$ 20.58		$ 15.33		$ 7.14
Total intrinsic value of options exercised							101,000,000		129,000,000		24,000,000
Fair value of options vested							89,000,000		61,000,000		70,000,000
Total unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted-average period							101,000,000
Weighted-average period used in calculating unrecognized compensation cost, stock options							1.5
Summary of amounts related to exercises of stock options and SARs and vesting of restricted stock units and restricted stock awards [Abstract]
Shares tendered to pay exercise price and minimum required taxes (in shares)							936,811	[2]	934,099	[2]	542,786	[2]
Cash received from exercise of stock options							48,000,000		109,000,000		18,000,000
Actual tax benefit realized for tax deductions							45,000,000		50,000,000		21,000,000
Amount paid for employee taxes							45,000,000		28,000,000		12,000,000
Amount paid for exercised stock appreciation rights							1,000,000		1,000,000		1,000,000
Restricted Stock Units [Roll Forward]
Balance, beginning of period (in RSUs)							2,140,914
Granted (in RSUs)							381,636
Vested (in RSUs)							(1,257,274)
Forfeited (in RSUs)							0
Balance, end of period (in RSUs)		2,140,914					1,265,276		2,140,914
Weighted-average remaining contractual term for restricted stock units (in years)							1.4
Restricted Stock Units Outstanding Intrinsic Value							47,000,000
Total grant-date fair value of restricted stock units granted							21,000,000
Total intrinsic value of restricted stock units vested							69,000,000		50,000,000		22,000,000
Total unrecognized compensation cost related to unvested restricted stock units expected to be recognized over a weighted-average period							$ 2,000,000
Weighted-average period used in calculating unrecognized compensation costs, restricted stock units							less than one year

[1] Amounts are before Rio Tinto’s share of the cost of employee exercises of in-the-money stock options, which decreased consolidated selling, general and administrative expenses by $3 million in 2011, $4 million in 2010 and $2 million in 2009.

[2] Under terms of the related plans, upon exercise of stock options and vesting of restricted stock units and restricted stock awards, employees may tender FCX shares to FCX to pay the exercise price and/or the minimum required taxes.

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EMPLOYEE BENEFITS (Schedule of Disclosures) (Details) In Millions, unless otherwise specified	12 Months Ended															12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2011 Pension plan [Member] USD ($)	Dec. 31, 2010 Pension plan [Member] USD ($)	Dec. 31, 2011 Pension plan [Member] Postretirement Medical And Life Insurance [Member] USD ($)	Dec. 31, 2010 Pension plan [Member] Postretirement Medical And Life Insurance [Member] USD ($)	Dec. 31, 2009 Pension plan [Member] Postretirement Medical And Life Insurance [Member] USD ($)	Dec. 31, 2011 Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member] USD ($)		Dec. 31, 2010 Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member] USD ($)		Dec. 31, 2009 Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member] USD ($)	Dec. 31, 2011 Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member] IDR	Dec. 31, 2010 Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member] IDR	Dec. 31, 2011 Pension plan [Member] Atlantic Copper [Member] USD ($)		Dec. 31, 2010 Pension plan [Member] Atlantic Copper [Member] USD ($)		Dec. 31, 2009 Pension plan [Member] Atlantic Copper [Member] USD ($)	Dec. 31, 2011 Pension plan [Member] FCX [Member] USD ($)		Dec. 31, 2010 Pension plan [Member] FCX [Member] USD ($)		Dec. 31, 2009 Pension plan [Member] FCX [Member] USD ($)	Dec. 31, 2011 Pension plan [Member] FCX [Member] FCX SERP Plan [Member]	Dec. 31, 2010 Pension plan [Member] FCX [Member] FCX SERP Plan [Member]	Dec. 31, 2009 Pension plan [Member] FCX [Member] FCX SERP Plan [Member]	Dec. 31, 2011 Pension plan [Member] FCX [Member] FMC Plans [Member]		Dec. 31, 2010 Pension plan [Member] FCX [Member] FMC Plans [Member]		Dec. 31, 2009 Pension plan [Member] FCX [Member] FMC Plans [Member]		Dec. 31, 2011 Pension plan [Member] Postretirement Medical Insurance [Member] USD ($)	Dec. 31, 2010 Pension plan [Member] Postretirement Medical Insurance [Member]	Dec. 31, 2011 Other Benefits [Member] USD ($)	Dec. 31, 2010 Other Benefits [Member] USD ($)	Dec. 31, 2011 Minimum [Member] Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member]	Dec. 31, 2011 Maximum [Member] Pension plan [Member] Investment In Subsidiary Pt Freeport Indonesia [Member]
Schedule of disclosures of defined benefit plans [Line Items]
Exchange Rate Of Rupiah To Dollars														9,060	8,990
Defined benefit plan, expected return on plan assets (in hundredths)	7.50%								8.50%
Change in benefit obligation [Roll Forward]
Benefit obligation at beginning of year						$ 240	$ 265		$ 135		$ 80					$ 71		$ 79			$ 1,598		$ 1,472
Service cost						1	1	1	13		8		5			0		0			24		26		26
Interest cost						11	13	15	11		8		7			3		3		4	83		82		85
Actuarial losses (gains)						(7)	(13)		55		41					0		0			172		104
Foreign exchange losses (gains)									(1)		4					(1)		(4)			(1)		(1)
Benefits paid						(37)	(41)		(7)		(6)					(8)		(7)			(85)		(85)
Defined Benefit Plan Benefits Paid Net Of Employee And Partner Contributions and Medicare Part D Subsidy						(22)	(26)
Curtailments and special retirement benefits						0	0	(1)													0		0		(4)
Benefits obligation at end of year						223	240	265	206		135		80			65		71		79	1,791		1,598		1,472
Change in plan assets [Roll Forward]
Fair value of plan assets at beginning of year						0	0		97		78					23		21			1,112		1,067
Actual return on plan assets									9		13					0		0			88		126
Employer contributions						25	30		9	[1]	8	[1]				11	[1]	9	[1]		26	[1]	5	[1]
Employee contributions						12	11
Foreign exchange gains (losses)									(1)		4					0		0			0		(1)
Benefits paid						(37)	(41)		(7)		(6)					(8)		(7)			(85)		(85)
Fair value of plan assets at end of year						0	0	0	107		97		78			26		23		21	1,141		1,112		1,067
Funded status at end of year						(223)	(240)		(99)		(38)					(39)		(48)			(650)		(486)
Accumulated benefit obligation									115		68					65		71			1,701		1,517
Weighted-average assumptions used to determine benefit obligations [Abstract]
Discount rate (in hundredths)						4.20%	4.90%		7.00%	[2]	8.50%	[2]				6.77%	[2]	6.77%	[2]		4.60%	[2]	5.40%	[2]
Rate of compensation increase (in hundredths)									8.00%	[3]	8.00%	[3]									3.75%	[3]	3.75%	[3]															10.00%	13.00%
Balance sheet classification of funded status: [Abstract]
Other assets									0		0					0		0			6		6
Accounts payable and accrued liabilities						(23)	(26)		0		0					0		0			(4)		(4)														(7)	(8)
Other liabilities						(200)	(214)		(99)		(38)					(39)		(48)			(652)		(488)														(57)	(53)
Total						(223)	(240)		(99)		(38)					(39)		(48)			(650)		(486)
Estimated future employer contributions in next fiscal year									14							9					97
Number of years Mercer Pension Discount Curve consists of spot interest rates at half-year increments																													30 years
Years of service required for annuity to equal percentage of executive's highest average compensation for any consecutive three-year period during the preceeding five years before retirement																										25 years
Weighted-average assumptions used to determine benefit obligations [Abstract]
Discount rate (in hundredths)						4.90%	5.20%	6.30%	8.50%		10.50%		12.00%			6.77%		6.77%		6.77%						4.00%	4.00%	4.00%	5.40%		5.80%		6.10%
Expected return on plan assets (in hundredths)									9.25%		8.25%		10.00%																8.00%	[4]	8.50%	[4]	8.50%	[4]
Rate of compensation increase (in hundredths)									8.00%		8.00%		8.00%																3.75%	[4]	4.25%	[4]	4.25%	[4]
Components of net periodic benefit (income) cost and other amounts recognized in other comprehensive income [Abstract]
Service cost						1	1	1	13		8		5			0		0			24		26		26
Interest cost						11	13	15	11		8		7			3		3		4	83		82		85
Benefits paid						(37)	(41)		(7)		(6)					(8)		(7)			(85)		(85)
Expected return on plan assets									(9)		(7)		(5)								(86)		(87)		(73)
Amortization of prior service cost									1		1		1								(1)		(1)		0
Amortization of net actuarial losses									3		0		1			1		1		1	19		22		26
Curtailments and special retirement benefits						0	0	(1)													0		0		(4)
Net periodic benefit cost						12	14	15	19		10		9			4		4		5	39		42		60
Amounts recognized in other comprehensive loss (income) [Abstract]
Prior service (credit) cost				2	2
Prior service (credit) cost, net of tax				1	1
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax				642	440	4	3
Actuarial net loss (gain), net of tax	(157)	(69)	9	390	267	3	2
Estimated prior service (credit) cost in next fiscal year				1
Estimated actuarial net loss (gain) in next fiscal year				40
Estimated actuarial net loss (gain) in next fiscal year, net of tax				25
Assumed health care cost trend rates abstract
Health care cost trend rates for the next fiscal year (in hundreds)																																			8.00%	8.25%
Ultimate health care cost trend rate (in hundreds)																																			4.50%	4.75%
Year that rate reaches ultimate trend rate																																			2026	2025
Effect of a one-percentage point change in assumed health care cost trend rates [Abstract]
Effect of a one-percentage point increase on service and interest cost components																																			1
Effect of a one-percentage point decrease on service and interest cost components																																			1
Effect of a one-percentage point increase on post-retirement benefit obligation																																			8
Effect of a one-percentage point decrease on post-retirement benefit obligation																																			7
Expected cash flows for benefit plans [Abstract]
2012						23			16	[5]						7	[6]				88
2013						21			11	[5]						7	[6]				88
2014						20			11	[5]						7	[6]				90
2015						19			13	[5]						7	[6]				91
2016						18			14	[5]						7	[6]				94
2017-2021						$ 82			$ 123	[5]						$ 36	[6]				$ 515

[1] Employer contributions for 2012 are expected to approximate $97 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar) and $9 million for the Atlantic Copper plan (based on a December 31, 2011, exchange rate of $1.29 per euro).

[2] The discount rate shown in 2011 and 2010 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2011 and 2010 was 4.00 percent.

[3] The rate of compensation increase shown for the FCX plans only relates to the FMC plans. The rate of compensation increase shown for the PT Freeport Indonesia plan relates to the years after 2012. For the PT Freeport Indonesia plan, the rate of compensation increase for 2012 ranges from 10 percent to 13 percent.

[4] The assumptions shown only relate to the FMC plans.

[5] Based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar.

[6] Based on a December 31, 2011, exchange rate of $1.29 per euro.

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BUSINESS SEGMENTS (Revenue by Major Customers) (Details) (PT Smelting [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
PT Smelting [Member]
Entity-Wide Revenue, Major Customer [Line Items]
Revenues to major customers	$ 2,300	$ 2,300	$ 1,900
Percent of revenues to major customers as compared to total consolidated revenues (in hundredths)	11.00%	12.00%	13.00%

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LONG-TERM RECEIVABLES AND OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2011

Other Assets, Noncurrent [Abstract]

Schedule of long term receivables

The components of long-term receivables follow:

	December 31,
	2011		2010
Income taxes	$	295	$	—
Loan to a DRC public electric utility	138		110
Disputed tax assessments (refer to Note 13)	109		—
Loan to La Générale des Carrières et des Mines (related party)	30		—
Other	103		90
Total long-term receivables	$	675	$	200

Schedule of other assets

The components of other assets follow:

	December 31,
	2011		2010
Cost-method investments:
McMoRan Exploration Co. (MMR)a	$	475	$	500
Other	2		3
Equity-method investments:
PT Smeltingb	125		11
Other	47		43
Trust assetsc, d	152		140
Debt issue costs	40		58
Available-for-sale securities	9		28
Other	38		14
Total other assets	$	888	$	797

a. In December 2010, FCX purchased 500,000 shares of MMR’s 5¾% Convertible Perpetual Preferred Stock (the Preferred Stock) for an aggregate purchase price of $500 million.The Preferred Stock is initially convertible into 62.5 shares of MMR common stock per share of Preferred Stock (an aggregate of 31.25 million shares of MMR common stock), at an initial conversion price of $16 per share of MMR common stock. Dividends received are recorded as a return of investment because of MMR's reported losses. Several of FCX’s directors and executive officers also serve as directors or executive officers of MMR.

b. Amounts are reduced by unrecognized profits on sales from PT Freeport Indonesia to PT Smelting totaling $2 million at December 31, 2011, and $113 million at December 31, 2010.

c. Includes $151 million in 2011 and $137 million in 2010 of legally restricted funds for AROs at the Chino, Tyrone and Cobre mines (refer to Note 13 for further discussion).

d. The current portion, which is included in other current assets, totaled $8 million at December 31, 2010, and none at December 31, 2011.

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OWNERSHIP IN SUBSIDIARIES, JOINT VENTURES AND INVESTMENT IN PT SMELTING (Details) (USD $)			12 Months Ended										12 Months Ended					12 Months Ended									12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Investment In Subsidiary FMC [Member] lb	Dec. 31, 2010 Investment In Subsidiary FMC [Member] lb	Dec. 31, 2009 Investment In Subsidiary FMC [Member] lb	Dec. 31, 2011 Other North America Mines [Member]	Dec. 31, 2011 Henderson [Member]	Dec. 31, 2011 Cerro Verde [Member]	Dec. 31, 2011 El Abra [Member]	Dec. 31, 2011 Candelaria [Member]	Dec. 31, 2011 Ojos Del Salado [Member]	Dec. 31, 2011 Tenke [Member]	Dec. 31, 2011 Subsidiary PT Freeport Indonesia [Member] lb oz	Dec. 31, 2011 Subsidiary PT Indocopper Investama [Member]	Dec. 31, 2011 Subsidiary Atlantic Copper [Member]	Dec. 31, 2011 Subsidiary PT Puncakjaya Power [Member]	Dec. 31, 2010 Subsidiary PT Puncakjaya Power [Member]	Dec. 31, 2021 Rio Tinto's Share in Joint Venture [Member]	Dec. 31, 2011 Rio Tinto's Share in Joint Venture [Member]	Dec. 31, 2010 Rio Tinto's Share in Joint Venture [Member]	Dec. 31, 1996 Rio Tinto's Share in Joint Venture [Member]	Dec. 31, 2011 FCX [Member]	Dec. 31, 2011 PT Smelting [Member] MT	Dec. 31, 2010 PT Smelting [Member]	Dec. 31, 2006 PT Smelting [Member]	Dec. 31, 2011 Climax [Member]	Dec. 31, 2011 Morenci [Member] Investment In Subsidiary FMC [Member]	Dec. 31, 2011 Morenci [Member] Sumitomo's Share in Joint Venture [Member]
Summary of investment holdings [Line Items]
Percentage Of Undivided Interest Owned By Company																											85.00%
Company's direct ownership percentage (in hundredths)						100.00%	100.00%	53.56%	51.00%	80.00%	80.00%	57.75%	81.28%	100.00%	100.00%	85.71%							25.00%			100.00%
Company's indirect ownership percentage of a subsidiary through another wholly owned subsidiary (in hundredths)														9.36%
Net Assets in Subsidiary			$ 14,900,000,000										$ 3,200,000,000		$ (43,000,000)
FCX loans outstanding			109,000,000										0		586,000,000
Retained earnings (accumulated deficit) of subsidiary			13,100,000,000										3,100,000,000		(437,000,000)
Infrastructure financing payable to subsidiary by another subsidiary																81,000,000
Subsidiary's accounts payable including joint venture partner's share																106,000,000
Accounts receivable on consolidated balance sheet for joint venture parnter's share of subsidiaries receivable																23,000,000	25,000,000
Portion of accounts receivable included in other receivables																3,000,000	2,000,000
Portion of accounts receivable included in long-term assets																20,000,000	23,000,000
Percentage interest in joint venture contract of work by third party (in hundredths)																			40.00%
Percentage of optional participation of any other future exploration costs shared by joint venture (in hundredths)													100.00%						40.00%
Percent interest in certain assets and future production per terms of the joint venture agreement																		40.00%	40.00%
Percentage of cash flows from specified annual amounts of copper, gold and silver calculated by reference to proven and probable reserves as of 12/31/1994 (in hundredths)													100.00%
Percentage of remaining cash flows (in hundredths)													60.00%
Reduction in Specified Copper Production Resulting from Labor and Pipeline Disruptions													228,000,000
Reduction in Specified Gold Production Resulting from Labor and Pipeline Disruptions													224,000
Payable to joint venture interests for its share of cash flows																			45,000,000	132,000,000
Joint venture partner funding for approved exploration costs																					100,000,000
Percentage of agreed-upon exploration costs shared as part of the joint venture (in hundredths)																					40.00%	60.00%
Percentage of undivided interest owned by third party (in hundredths)																												15.00%
Number of pounds of copper purchased from Sumitomo			67,000,000	66,000,000	75,000,000
Dollar value of pounds purchased from Sumitomo			268,000,000	223,000,000	175,000,000
Net receivable from Sumitomo			12,000,000	8,000,000
Production capacity, following the expansion, of smelter and refinery (in metric tons of copper)																									275,000
Production capacity, before the expansion, of smelter and refinery (in metric tons of copper)																									250,000
Percentage of copper concentrate requirements supplied by PT Freeport Indonesia to PT Smelting																							100.00%
PT Smelting production requirements (in metric tons of copper)																							205,000
Years That Treatment and Refining Charges Will Approximate Market Rates																							15 years
PT Freeport Indonesia's Share of Profits on Sales to PT Smelting still in PT Smeltings's inventory	2,000,000	113,000,000																					2,000,000	113,000,000
Maximum rate to determine payable																							0.30
FCX Investment in Net Assets of Subidiary																							125,000,000	11,000,000
Project-specific nonrecourse debt																							320,000,000	180,000,000
Trade receivable due from equity method investee																							$ 116,000,000	$ 455,000,000

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COMMITMENTS AND GUARANTEES

12 Months Ended

Dec. 31, 2011

Commitments and Guarantees [Abstract]

Commitments and Guarantees

COMMITMENTS AND GUARANTEES

Operating Leases.  FCX leases various types of properties, including offices and equipment. A summary of future minimum rentals under non-cancelable leases at December 31, 2011, follows:

2012	$	24
2013	18
2014	15
2015	15
2016	12
Thereafter	116
Total payments	$	200

Minimum payments under operating leases have not been reduced by aggregate minimum sublease rentals, which are minimal. Total aggregate rental expense under operating leases was $70 million in 2011, $64 million in 2010 and $74 million in 2009.

Contractual Obligations.  Based on applicable prices at December 31, 2011, FCX has unconditional purchase obligations of $2.1 billion, primarily comprising the procurement of copper concentrates and cathodes ($1.1 billion), electricity ($338 million), transportation services ($293 million) and oxygen ($128 million) that are essential to its operations worldwide. Some of FCX’s unconditional purchase obligations are settled based on the prevailing market rate for the service or commodity purchased. In some cases, the amount of the actual obligation may change over time because of market conditions. Obligations for copper concentrates and cathodes provide for deliveries of specified volumes, at market-based prices, to Atlantic Copper and the North America copper mines. Electricity obligations are primarily for contractual minimum demand at the South America and Tenke Fungurume mines. Transportation obligations are primarily for South America contracted ocean freight and for North America rail freight. Oxygen obligations provide for deliveries of specified volumes, at fixed prices, primarily to Atlantic Copper.

FCX’s future commitments associated with unconditional purchase obligations total $1.3 billion in 2012, $311 million in 2013, $86 million in 2014, $61 million in 2015, $52 million in 2016 and $237 million thereafter. During 2011, 2010 and 2009, FCX fulfilled its minimum contractual purchase obligations or negotiated settlements in those situations in which it terminated an agreement containing an unconditional obligation.

Mining Contracts.Indonesia. FCX is entitled to mine in Indonesia under the Contract of Work between PT Freeport Indonesia and the Government of Indonesia. The original Contract of Work was entered into in 1967 and was replaced with a new Contract of Work in 1991. The initial term of the current Contract of Work expires in 2021, but can be extended by PT Freeport Indonesia for two 10-year periods, subject to Indonesian government approval, which pursuant to the Contract of Work cannot be withheld or delayed unreasonably. Given the importance of contracts of work under the Indonesian legal system and PT Freeport Indonesia’s approximately 40 years of working with the Indonesian government, which included entering into the Contract of Work in 1991 well before the expiration of the 1967 Contract of Work, PT Freeport Indonesia fully expects that the government will approve the extensions as long as it continues to comply with the terms of the Contract of Work.

In July 2004, FCX received a request from the Indonesian Department of Energy and Mineral Resources that it offer to sell shares in PT Indocopper Investama to Indonesian nationals at fair market value. In response to this request and in view of the potential benefits of having additional Indonesian ownership in the operations, FCX agreed, at the time, to consider a potential sale of an interest in PT Indocopper Investama at fair market value. Neither its Contract of Work nor Indonesian law requires FCX to divest any portion of its ownership in PT Freeport Indonesia or PT Indocopper Investama. In May 2008, FCX signed a Memorandum of Understanding with the Papua provincial government (the Province) whereby the parties agreed to work cooperatively to determine the feasibility of an acquisition by the Province of the PT Indocopper Investama shares at market value.

The copper royalty rate payable by PT Freeport Indonesia under its Contract of Work varies from 1.5 percent of copper net revenue at a copper price of $0.90 or less per pound to 3.5 percent at a copper price of $1.10 or more per pound. The Contract of Work royalty rate for gold and silver sales is at a fixed rate of 1.0 percent.

A large part of the mineral royalties under Government of Indonesia regulations is designated to the provinces from which the minerals are extracted. In connection with its fourth concentrator mill expansion completed in 1998, PT Freeport Indonesia agreed to pay the Government of Indonesia additional royalties (royalties not required by the Contract of Work) to provide further support to the local governments and the people of the Indonesian province of Papua. The additional royalties are paid on production exceeding specified annual amounts of copper, gold and silver expected to be generated when PT Freeport Indonesia’s milling facilities operate above 200,000 metric tons of ore per day. The additional royalty for copper equals the Contract of Work royalty rate, and for gold and silver equals twice the Contract of Work royalty rates. Therefore, PT Freeport Indonesia’s royalty rate on copper net revenues from production above the agreed levels is double the Contract of Work royalty rate, and the royalty rates on gold and silver sales from production above the agreed levels are triple the Contract of Work royalty rates.

The combined royalties, including the additional royalties that became effective January 1, 1999, totaled $137 million in 2011, $156 million in 2010 and $147 million in 2009.

In 2009, Indonesia enacted a new mining law, which will operate under a licensing system as opposed to the contract of work system that applies to PT Freeport Indonesia. In 2011 and 2010, the Government of Indonesia promulgated regulations under the 2009 mining law and certain provisions that address existing contracts of work. The laws and regulations provide that contracts of work will continue to be honored until their expiration. However, the regulations attempt to apply certain provisions of the new law to existing contracts of work and may seek to apply the licensing system to any extension periods of contract of work, even though PT Freeport Indonesia’s Contract of Work provides for two 10-year extension periods, subject to Indonesian government approval, which pursuant to the Contract of Work cannot be withheld or delayed unreasonably. In February 2012, a new regulation was adopted that would require mining companies in Indonesia to process all minerals domestically and possibly ban export of concentrates and other unrefined minerals. However, PT Freeport Indonesia's existing Contract of Work includes specific provisions that define PT Freeport Indonesia's rights to export product and obligate it to develop domestic smelting facilities, if commercially feasible, or to contract with other domestic smelters on a market basis. In connection with the obligations under its Contract of Work, in 1995, PT Freeport Indonesia constructed the only copper smelter and refinery in Indonesia (which is owned and operated by PT Smelting - refer to Note 2 for further discussion).

Indonesian government officials have periodically undertaken reviews regarding our compliance with Indonesian environmental laws and regulations and the terms of the Contracts of Work. In January 2012, the President of Indonesia issued a decree calling for the creation of a team to evaluate contracts of work for adjustment to the 2009 Mining Law, and accordingly, to take steps to assess and negotiate size of work areas, government revenues, and domestic processing of minerals. The team's assignment runs through December 2013 and the group is expected to provide progress reports to the President every six months. FCX intends to continue to work cooperatively with the Government of Indonesia to complete this review and to seek extension of the Contract of Work beyond 2021, as provided under the terms of the Contract of Work. The Contract of Work can only be modified by mutual agreement between PT Freeport Indonesia and the Government of Indonesia.

Africa. FCX is entitled to mine in the DRC under an Amended and Restated Mining Convention (ARMC) between TFM and the Government of the DRC. The original Mining Convention was entered into in 1996, was replaced with the ARMC in 2005 and further amended in 2011. The current ARMC will remain in effect for as long as the Tenke Fungurume concession is exploitable. The royalty rate payable by TFM under the ARMC is 2 percent of net revenue. These mining royalties totaled $24 million in 2011, $20 million in 2010 and $7 million in 2009.

In February 2008, the Ministry of Mines, Government of the DRC, sent a letter seeking comment on proposed material modifications to the mining contracts for the Tenke Fungurume concession, including the amount of

transfer payments payable to the government, the government’s percentage ownership and involvement in the management of the mine, regularization of certain matters under DRC law and the implementation of social plans. In October 2010, the Government of the DRC concluded its review of TFM’s existing mining contracts and confirmed that they are in good standing. TFM’s key fiscal terms, including a 30 percent income tax rate, a 2 percent mining royalty rate and a 1 percent export fee, will continue to apply and are consistent with the rates in the DRC’s current Mining Code. In connection with the review, TFM made several commitments, which have been reflected in amendments to its mining contracts, including (1) an increase in the ownership interest of La Générale des Carrières et des Mines (Gécamines), which is wholly owned by the government of the DRC, from 17.5 percent (non-dilutable) to 20.0 percent (non-dilutable), resulting in a decrease of FCX’s effective ownership interest from 57.75 percent to 56.0 percent and Lundin Mining Corporation’s effective ownership interest from 24.75 percent percent to 24.0 percent; (2) an additional royalty of $1.2 million for each 100,000 metric tons of proven and probable copper reserves above 2.5 million metric tons at the time new reserves are established by FCX; (3) additional payments totaling $30 million to be paid in six equal installments of $5 million upon reaching certain production milestones; (4) conversion of $50 million in intercompany loans to equity; (5) a payment of approximately $5 million for surface area fees and ongoing surface area fees of approximately $0.8 million annually; (6) incorporating clarifying language stating that TFM’s rights and obligations are governed by its ARMC; and (7) expanding Gécamines’ participation in TFM management. TFM has also reiterated its commitment to the use of local services and DRC employment. In connection with the modifications, the annual interest rate on advances from TFM shareholders increases from a rate of LIBOR plus 2 percent to LIBOR plus 6 percent. In December 2010, the addenda to TFM’s ARMC and Amended and Restated Shareholders’ Agreement were signed by the parties. 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. In addition, the change in FCX’s effective ownership interest in the Tenke Fungurume minerals district and the conversion of intercompany loans to equity will be effected after receiving the required government approval of the modifications to TFM’s bylaws that reflect the agreement with the Government of the DRC.

Community Development Programs.  FCX has adopted policies that govern its working relationships with the communities where it operates. These policies are designed to guide its practices and programs in a manner that respects basic human rights and the culture of the local people impacted by FCX’s operations. FCX continues to make significant expenditures on community development, education, training and cultural programs.

In 1996, PT Freeport Indonesia established the Freeport Partnership Fund for Community Development (Partnership Fund) through which PT Freeport Indonesia has made available funding and technical assistance to support community development initiatives in the area of health, education and economic development of the area. PT Freeport Indonesia has committed through 2016 to provide one percent of its annual revenue for the development of the local people in its area of operations through the Partnership Fund. PT Freeport Indonesia charged $50 million in 2011, $64 million in 2010 and $59 million in 2009 to cost of sales for this commitment.

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, which expired in 2010, was equal to 3.75 percent of after-tax profits, of which 2.75 percent was contributed to a local mining fund and 1.00 percent to a regional mining fund. The charge to cost of sales for these local mining fund contributions totaled $41 million in 2010 and $28 million in 2009. Cerro Verde's final contribution to these funds was made in early 2011.

TFM has committed to assist the communities living within its concession in the Katanga province of the DRC. TFM will contribute 0.3 percent of net sales revenue from production to a community development fund to assist the local communities with development of local infrastructure and related services, such as those pertaining to health, education and economic development. TFM charged $4 million in 2011, $3 million in 2010 and $1 million in 2009 to cost of sales for this commitment.

Guarantees.  FCX provides certain financial guarantees (including indirect guarantees of the indebtedness of others) and indemnities.

At its Morenci mine in Arizona, FCX has a venture agreement dated February 7, 1986, with Sumitomo, which includes a put and call option guarantee clause. FCX holds an 85 percent undivided interest in the Morenci complex. Under certain conditions defined in the venture agreement, Sumitomo has the right to sell its 15 percent share to FCX. Likewise, under certain conditions, FCX has the right to purchase Sumitomo’s share of the venture. At December 31, 2011, the maximum potential payment FCX is obligated to make to Sumitomo upon exercise of the put option (or FCX’s exercise of its call option) totaled approximately $123 million based on calculations defined in the venture agreement. At December 31, 2011, FCX had not recorded any liability in its consolidated financial statements in connection with this guarantee as FCX does not believe, based on information available, that it is probable that any amounts will be paid under this guarantee as the fair value of Sumitomo’s 15 percent share is in excess of the exercise price.

Prior to its acquisition by FCX, FMC and its subsidiaries have, as part of merger, acquisition, divestiture and other transactions, from time to time, indemnified certain sellers, buyers or other parties related to the transaction from and against certain liabilities associated with conditions in existence (or claims associated with actions taken) prior to the closing date of the transaction. As part of these transactions, FMC indemnified the counterparty from and against certain excluded or retained liabilities existing at the time of sale that would otherwise have been transferred to the party at closing. These indemnity provisions generally now require FCX to indemnify the party against certain liabilities that may arise in the future from the pre-closing activities of FMC for assets sold or purchased. The indemnity classifications include environmental, tax and certain operating liabilities, claims or litigation existing at closing and various excluded liabilities or obligations. Most of these indemnity obligations arise from transactions that closed many years ago, and given the nature of these indemnity obligations, it is impossible to estimate the maximum potential exposure. Except as described in the following sentence, FCX does not consider any of such obligations as having a probable likelihood of payment that is reasonably estimable, and accordingly, has not recorded any obligations associated with these indemnities. With respect to FCX’s environmental indemnity obligations, any expected costs from these guarantees are accrued when potential environmental obligations are considered by management to be probable and the costs can be reasonably estimated.

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QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Data [Abstract]

Quarterly Financial Information

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Year
2011
Revenues	$	5,709		$	5,814		$	5,195		$	4,162		$	20,880
Operating income	2,936			2,757			2,150			1,297		a	9,140		a
Net income	1,861			1,726			1,294		b	866			5,747		b
Net income attributable to noncontrolling
interests	362			358			241			226			1,187
Net income attributable to FCX common
stockholders	1,499		c	1,368		c	1,053		b	640		a	4,560		a,b,c
Basic net income per share attributable
to FCX common stockholders	1.58			1.44			1.11			0.67			4.81
Diluted net income per share attributable
to FCX common stockholders	1.57		c	1.43		c	1.10		b	0.67		a	4.78		a,b,c
2010
Revenues	$	4,363		$	3,864		$	5,152		$	5,603		$	18,982
Operating income	2,048			1,424			2,499			3,097			9,068
Net income	1,215			832			1,533			1,964			5,544
Net income attributable to noncontrolling
interests	270			168			355			415			1,208
Net income attributable to FCX common
stockholders	897		d	649		d	1,178			1,549		d	4,273		d
Basic net income per share attributable
to FCX common stockholders	1.04			0.71			1.25			1.64			4.67
Diluted net income per share attributable
to FCX common stockholders	1.00		d	0.70		d	1.24			1.63		d	4.57		d

All references to income or losses per share are on a diluted basis.

a. Includes charges totaling $116 million ($50 million to net income attributable to common stock or $0.05 per share) for the fourth quarter and the year primarily associated with bonuses for new labor agreements and other employee costs at PT Freeport Indonesia, Cerro Verde and El Abra.

b. Includes additional taxes of $57 million ($50 million net of noncontrolling interests or $0.05 per share) in the third quarter and $53 million ($49 million net of noncontrolling interests or $0.05 per share) for the year associated with Peru's new mining tax and royalty regime. Refer to Note 12 for for further discussion.

c. Includes losses on early extinguishment of debt totaling $6 million ($0.01 per share) in the first quarter, $54 million ($0.06 per share) in the second quarter and $60 million ($0.06 per share) for the year. Refer to Note 9 for further discussion.

d. Includes losses on early extinguishment of debt totaling $23 million ($0.02 per share) in the first quarter, $42 million ($0.05 per share) in the second quarter, $3 million (less than $0.01 per share) in the fourth quarter and $71 million ($0.07 per share) for the year. Refer to Note 9 for further discussion.

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SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED) (Recoverable Reserves) (Details)	Dec. 31, 2011 oz lb
North America [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	40,600,000,000	[1]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	400,000
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	2,710,000,000
South America [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	39,100,000,000	[1]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	1,300,000
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	710,000,000
Indonesia [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	31,600,000,000	[1]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	32,200,000
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	0
Africa [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	8,400,000,000	[1]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	0
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	0
Consolidated basis [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	119,700,000,000	[1],[2],[3],[4]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	33,900,000	[2],[3],[4]
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	3,420,000,000	[2],[3],[4]
Estimated Recoverable Proven And Probable Cobalt Reserves (in pounds)	860,000,000
Estimated Recoverable Proven and Probable Silver Reserves (in ounces)	330,300,000
Net Equity Interest [Member]
Estimated Recoverable Proven and Probable Reserves [Line Items]
Estimated Recoverable Proven and Probable Copper Reserves (in pounds)	96,100,000,000	[1],[4],[5],[6]
Estimated Recoverable Proven And Probable Gold Reserves (in ounces)	30,600,000	[4],[5],[6]
Estimated Recoverable Proven And Probable Molybdenum Reserves (in pounds)	3,090,000,000	[4],[5],[6]
Estimated Recoverable Proven And Probable Cobalt Reserves (in pounds)	490,000,000
Estimated Recoverable Proven and Probable Silver Reserves (in ounces)	272,100,000

[1] Consolidated recoverable copper reserves include 3.1 billion pounds in leach stockpiles and 1.3 billion pounds in mill stockpiles.

[2] Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.86 billion pounds of cobalt at Tenke Fungurume and 330.3 million ounces of silver in Indonesia, South America and North America.

[3] Consolidated basis reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district in Indonesia.

[4] Includes estimated recoverable metals contained in stockpiles.

[5] Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership.

[6] Net equity interest reserves represent estimated consolidated basis metal quantities further reduced for noncontrolling interest ownership. Excluded from the table above are FCX’s estimated recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke Fungurume and 272.1 million ounces of silver in Indonesia, South America and North America.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property Plant and Equipment) (Details)	12 Months Ended
	Dec. 31, 2011 years
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum (in years)	30
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Minimum (in years)	3
Property, Plant and Equipment, Useful Life, Maximum (in years)	20
Mobile equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Minimum (in years)	3
Property, Plant and Equipment, Useful Life, Maximum (in years)	20

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CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2011

Contingencies [Abstract]

Environmental Loss Contingency Disclosure

A summary of changes in environmental obligations for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	1,422		$	1,464		$	1,401
Accretion expensea	88			97			102
Additions	132			19			40
Reductions	(68		)	—			(3		)
Spending	(121		)	(158		)	(76		)
Balance at end of year	1,453			1,422			1,464
Less current portion	(205		)	(138		)	(168		)
Long-term portion	$	1,248		$	1,284		$	1,296

a. Represents accretion of the fair value of environmental obligations assumed in the acquisition of FMC, which were determined on a discounted cash flow basis.

Asset Retirement Obligation Disclosure

A summary of changes in FCX’s AROs for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	856		$	731		$	712
Liabilities incurred	9			5			12
Revisions to cash flow estimates	48			105			(17		)
Accretion expense	58			54			52
Spending	(49		)	(38		)	(28		)
Foreign currency translation adjustment	(1		)	(1		)	—
Balance at end of year	921			856			731
Less current portion	(31		)	(69		)	(46		)
Long-term portion	$	890		$	787		$	685

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
FCX stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares issued (in shares)	1,071	1,067
Common stock held in treasury - shares (in shares)	123	122

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BUSINESS SEGMENTS (Mine Production and Purchase Percentages) (Details)	12 Months Ended
	Dec. 31, 2011
Mining Segment Reporting Information [Line Items]
Percentage of Atlantic Copper's annual concentrate requirements purchased from PT Freeport Indonesia (in hundredths)	17.00%
Percentage of Atlantic Copper's annual concentrate requirements purchased from FCX's South America mines (in hundredths)	30.00%
Mines Individually Classified As Reportable Segments [Member] | Morenci [Member]
Mining Segment Reporting Information [Line Items]
Percentage of Division's Copper Production (in hundredths)	42.00%
Mines Individually Classified As Reportable Segments [Member] | Cerro Verde [Member]
Mining Segment Reporting Information [Line Items]
Percentage of Division's Copper Production (in hundredths)	50.00%

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INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

12 Months Ended

Dec. 31, 2011

Inventories, Including Long Term Mill and Leach Stockpiles [Abstract]

Inventories, Including Long-Term Mill And Leach Stockpiles

INVENTORIES, INCLUDING LONG-TERM MILL AND LEACH STOCKPILES

The components of inventories follow:

	December 31,
	2011		2010
Mining Operations:a
Raw materials	$	1	$	1
Finished goodsb	769		704
Atlantic Copper:
Raw materials (concentrates)	260		336
Work-in-process	187		266
Finished goods	9		9
Total product inventories	1,226		1,316
Total materials and supplies, netc	1,354		1,169
Total inventories	$	2,580	$	2,485

a. FCX's mining operations also have work-in-process inventories (i.e., mill and leach stockpiles), which have been summarized below.

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

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

A summary of mill and leach stockpiles follows:

	December 31, 2011
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	40	$	11	$	18	$	—	$	69
Leach stockpiles	963		216		—		41		1,220
Total current mill and leach
stockpiles	$	1,003	$	227	$	18	$	41	$	1,289
Long-term:a
Mill stockpiles	$	—	$	535	$	—	$	—	$	535
Leach stockpiles	718		284		—		149		1,151
Total long-term mill and leach
stockpiles	$	718	$	819	$	—	$	149	$	1,686

	December 31, 2010
	North America		South America		Indonesia		Africa		Total
Current:
Mill stockpiles	$	15	$	29	$	24	$	—	$	68
Leach stockpiles	749		98		—		34		881
Total current mill and leach
stockpiles	$	764	$	127	$	24	$	34	$	949
Long-term:a
Mill stockpiles	$	—	$	470	$	—	$	—	$	470
Leach stockpiles	622		250		—		83		955
Total long-term mill and leach
stockpiles	$	622	$	720	$	—	$	83	$	1,425

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

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Accounts Payable and Accrued Liabilities, Current [Abstract]
Accounts payable	$ 1,353		$ 1,272
Salaries, wages and other compensation	257		244
Pension, postretirement, postemployment and other employee benefits	180	[1]	156	[1]
Current deferred tax liability	103		61
Other accrued taxes	92		152
Accrued interest	69	[2]	92	[2]
Deferred revenue	69		180
Community development programs	19		148
Other	110		136
Total accounts payable and accrued liabilities	2,252		2,441
Cash interest paid, net	$ 284		$ 421		$ 504

[1] Refer to Note 8 for long-term portion and Note 10 for further discussion.

[2] Third-party interest paid, net of capitalized interest, was $284 million in 2011, $421 million in 2010 and $504 million in 2009.

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COMMITMENTS AND GUARANTEES (Financial Guarantees) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
FCX [Member]
Financial guarantees [line items]
Maximum potential payment the company is obligated to make to Sumitomo upon exercise of the put option	$ 123
Morenci [Member] | Sumitomo [Member]
Financial guarantees [line items]
Percentage of share Sumitomo has the right to sell to company (in hundredths)	15.00%
Percentage of undivided interest owned by third party (in hundredths)	15.00%
Morenci [Member] | FCX [Member]
Financial guarantees [line items]
Percentage of undivided interest in the Morenci complex (in hundredths)	85.00%

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INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income before income taxes and equity in affiliated companies' net earnings [Abstract]
United States	$ 2,112,000,000	$ 1,307,000,000	$ 98,000,000
Foreign	6,706,000,000	7,205,000,000	5,718,000,000
Income before income taxes and equity in affiliated companies' net earnings	8,818,000,000	8,512,000,000	5,816,000,000
Current income taxes: [Abstract]
Federal	394,000,000	207,000,000	19,000,000
State	21,000,000	27,000,000	7,000,000
Foreign	1,948,000,000	2,500,000,000	2,172,000,000
Total current	2,363,000,000	2,734,000,000	2,198,000,000
Deferred income taxes (benefits): [Abstract]
Federal	82,000,000	20,000,000	(70,000,000)
State	(19,000,000)	(10,000,000)	79,000,000
Foreign	661,000,000	239,000,000	100,000,000
Total deferred	724,000,000	249,000,000	109,000,000
Provision for income taxes	3,087,000,000	2,983,000,000	2,307,000,000
Income tax expense (benefit), reconciliation [Abstract]
U.S. federal statutory tax rate	3,086,000,000	2,979,000,000	2,036,000,000
Foreign tax credit limitation	163,000,000	93,000,000	112,000,000
Percentage depletion	(283,000,000)	(263,000,000)	(168,000,000)
Withholding taxes	170,000,000	174,000,000	228,000,000
Valuation allowance on minimum tax credits	(47,000,000)	18,000,000	104,000,000
State income taxes	0	17,000,000	(2,000,000)
Other items, net	(2,000,000)	(35,000,000)	(3,000,000)
Provision for income taxes	3,087,000,000	2,983,000,000	2,307,000,000
Effective income tax rate, reconciliation [Abstract]
U.S. federal statutory tax rate (in hundredths)	35.00%	35.00%	35.00%
Foreign tax credit limitation (in hundredths)	2.00%	1.00%	2.00%
Percentage depletion (in hundredths)	(3.00%)	(3.00%)	(3.00%)
Withholding taxes (in hundredths)	2.00%	2.00%	4.00%
Valuation allowance on minimum tax credits (in hundredths)	(1.00%)	0.00%	2.00%
State income taxes (in hundredths)	0.00%	0.00%	0.00%
Other items, net (in hundredths)	0.00%	0.00%	0.00%
Provision for income taxes (in hundredths)	35.00%	35.00%	40.00%
Total income taxes paid to all jurisdictions	3,400,000,000	2,600,000,000	1,600,000,000
Tax refunds received from all jurisdictions	15,000,000	26,000,000	193,000,000
Deferred tax assets: [Abstract]
Foreign tax credits	2,011,000,000	1,837,000,000
Net operating loss carryforwards	356,000,000	442,000,000
Minimum tax credits	406,000,000	413,000,000
Accrued expenses	962,000,000	931,000,000
Employee benefit plans	245,000,000	215,000,000
Inventory	161,000,000	164,000,000
Other	276,000,000	224,000,000
Deferred tax assets	4,417,000,000	4,226,000,000
Valuation allowances	(2,393,000,000)	(2,226,000,000)
Net deferred tax assets	2,024,000,000	2,000,000,000
Deferred tax liabilities: [Abstract]
Property, plant, equipment and development costs	(4,227,000,000)	(3,874,000,000)
Undistributed earnings	(1,010,000,000)	(917,000,000)
Other	(72,000,000)	(28,000,000)
Total deferred tax liabilities	(5,309,000,000)	(4,819,000,000)
Net deferred tax liabilities	(3,285,000,000)	(2,819,000,000)
Amount of valuation allowance, that if recognized, would be recorded directly to other comprehensive	80,000,000	59,000,000
Valuation allowance on deferred tax asset increase (decrease) during period	$ 167,000,000

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On February 7, 2012, the Board of Directors authorized an increase in the cash dividend on FCX's common stock from an annual rate of $1.00 per share to $1.25 per share ($0.3125 per share quarterly), with the first quarterly dividend expected to be paid on May 1, 2012.

In February 2012, FCX sold $500 million of 1.40% Senior Notes due 2015, $500 million of 2.15% Senior Notes due 2017 and $2.0 billion of 3.55% Senior Notes due 2022 for total net proceeds of $2,971 million. Interest on the 1.40% Senior Notes is payable semiannually on February 13 and August 13 commencing on August 13, 2012. Interest on the 2.15% Senior Notes and the 3.55% Senior Notes is payable semiannually on March 1 and September 1 commencing on September 1, 2012. The unsecured senior notes rank equally with FCX's other existing and future unsecured and unsubordinated indebtedness. FCX intends to use the proceeds from this offering plus cash on hand to redeem the remaining $3.0 billion of its 8.375% Senior Notes due 2017.

On February 13, 2012, FCX announced its intent to redeem the remaining $3.0 billion of the 8.375% Senior Notes due 2017 on March 14, 2012. Holders will receive the principal amount together with the make-whole premium and accrued and unpaid interest to the redemption date. FCX expects to record a loss on early extinguishment of debt of approximately $168 million (approximately $147 million to net income attributable to FCX common stockholders) in the first quarter of 2012 in connection with this redemption.

FCX evaluated events after December 31, 2011, and through the date the 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 financial statements.

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CONTINGENCIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Contingencies [Abstract]
Aggregate environmental capital expenditures and other environmental costs including joint venture partners' share	$ 387,000,000		$ 372,000,000		$ 289,000,000
Minimum number of active remediation projects in the United States (in number of projects)	100
Approximate number of states with active remediation projects (in number of states)	27
Summary of changes in environmental obligations [Roll Forward]
Balance at beginning of year	1,422,000,000		1,464,000,000		1,401,000,000
Accretion expense	88,000,000	[1]	97,000,000	[1]	102,000,000	[1]
Additions	132,000,000		19,000,000		40,000,000
Reductions	(68,000,000)		0		(3,000,000)
Spending	(121,000,000)		(158,000,000)		(76,000,000)
Balance at end of year	1,453,000,000		1,422,000,000		1,464,000,000
Less current portion	(205,000,000)		(138,000,000)		(168,000,000)
Long-term portion	1,248,000,000		1,284,000,000		1,296,000,000
Estimated environmental cash payments (on an undiscounted and unescalated basis) [Abstract]
2012	205,000,000
2013	130,000,000
2014	80,000,000
2015	76,000,000
2016	43,000,000
Thereafter	1,800,000,000
Recorded environmental obligations for most significant sites	1,200,000,000
Financial assurance obligations associated with closure and reclamation costs	899,000,000
Financial assurance obligations associated with closure and reclamation costs, in form of parent company guarantees and financial capability demonstrations	565,000,000
Trust assets, legally restricted to fund a portion of asset retirement obligations for Chino, Tyrone and Cobre	151,000,000		137,000,000
Letters of credit and bank guarantees	110,000,000
Total surety bonds	148,000,000
Amount of surety bonds associated with reclamation and closure	127,000,000
Amount of surety bonds associated with self-insurance bonds primarily for workers' compensation	19,000,000
Other surety bonds	2,000,000
Insurance reserves, total	58,000,000
Insurance reserves, current portion, included in accounts payable and accrued liabilities	8,000,000
Insurance reserves, long-term portion, included in other liabilities	50,000,000
Estimated Environmental Obligations on an Undiscounted and Unescalated Basis	2,300,000,000
Estimated environmental obligations discounted on Fair Value basis	1,500,000,000
Minimum range for environmental obligations (undiscounted and unescalated)	2,200,000,000
Maximum range for environmental obligations (undiscounted and unescalated)	$ 3,100,000,000

[1] Represents accretion of the fair value of environmental obligations assumed in the acquisition of FMC, which were determined on a discounted cash flow basis.

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EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 31, 2011

Employee Benefits [Abstract]

Schedule of defined benefit plans disclosure

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s postretirement benefits for the years ended December 31 follow:

	2011			2010			2009
Weighted-average assumptions:
Discount rate	4.90		%	5.20		%	6.30		%
Service cost	$	1		$	1		$	1
Interest cost	11			13			15
Curtailments and special retirement benefits	—			—			(1		)
Net periodic benefit cost	$	12		$	14		$	15

The assumed medical-care trend rates at December 31 follow:

	2011		2010
Medical-care cost trend rate assumed for
the next year	8.00	%	8.25	%
Rate to which the cost trend rate is assumed
to decline (the ultimate trend rate)	4.50	%	4.75	%
Year that the rate reaches the ultimate trend rate	2026		2025

Information on the postretirement benefit plans as of December 31 follows:

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	240		$	265
Service cost	1			1
Interest cost	11			13
Actuarial gains	(7		)	(13		)
Benefits paid, net of employee and partner contributions,
and Medicare Part D subsidy	(22		)	(26		)
Benefit obligation at end of year	223			240
Change in plan assets:
Fair value of plan assets at beginning of year	—			—
Employer and partner contributions	25			30
Employee contributions	12			11
Benefits paid	(37		)	(41		)
Fair value of plan assets at end of year	—			—
Funded status	$	(223	)	$	(240	)
Discount rate assumption	4.20		%	4.90		%
Balance sheet classification of funded status:
Accounts payable and accrued liabilities	$	(23	)	$	(26	)
Other liabilities	(200		)	(214		)
Total	$	(223	)	$	(240	)

FCX uses a measurement date of December 31 for its plans. In some plans, the plan assets exceed the accumulated benefit obligations, while in the remainder, the accumulated benefit obligations exceed the plan assets. Information for those plans where the accumulated benefit obligations exceed the plan assets follows:

	December 31,
	2011		2010
Projected benefit obligation	$	2,055	$	1,662
Accumulated benefit obligation	1,874		1,581
Fair value of plan assets	1,261		1,122

Information on the FCX (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia and Atlantic Copper plans as of December 31 follows:

	FCX						PT Freeport Indonesia						Atlantic Copper
	2011			2010			2011			2010			2011			2010
Change in benefit obligation:
Benefit obligation at beginning
of year	$	1,598		$	1,472		$	135		$	80		$	71		$	79
Service cost	24			26			13			8			—			—
Interest cost	83			82			11			8			3			3
Actuarial losses	172			104			55			41			—			—
Foreign exchange losses (gains)	(1		)	(1		)	(1		)	4			(1		)	(4		)
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Benefit obligation at end of year	1,791			1,598			206			135			65			71
Change in plan assets:
Fair value of plan assets at
beginning of year	1,112			1,067			97			78			23			21
Actual return on plan assets	88			126			9			13			—			—
Employer contributionsa	26			5			9			8			11			9
Foreign exchange gains (losses)	—			(1		)	(1		)	4			—			—
Benefits paid	(85		)	(85		)	(7		)	(6		)	(8		)	(7		)
Fair value of plan assets at end
of year	1,141			1,112			107			97			26			23
Funded status	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)
Accumulated benefit obligation	$	1,701		$	1,517		$	115		$	68		$	65		$	71
Weighted-average assumptions
used to determine benefit obligations:
Discount rateb	4.60		%	5.40		%	7.00		%	8.50		%	6.77		%	6.77		%
Rate of compensation increasec	3.75		%	3.75		%	8.00		%	8.00		%	NA			NA
Balance sheet classification of
funded status:
Other assets	$	6		$	6		$	—		$	—		$	—		$	—
Accounts payable and
accrued liabilities	(4		)	(4		)	—			—			—			—
Other liabilities	(652		)	(488		)	(99		)	(38		)	(39		)	(48		)
Total	$	(650	)	$	(486	)	$	(99	)	$	(38	)	$	(39	)	$	(48	)

a. Employer contributions for 2012 are expected to approximate $97 million for the FCX plans, $14 million for the PT Freeport Indonesia plan (based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar) and $9 million for the Atlantic Copper plan (based on a December 31, 2011, exchange rate of $1.29 per euro).

b. The discount rate shown in 2011 and 2010 for the FCX plans relates to all plans except the SERP plan. The SERP plan’s discount rate in 2011 and 2010 was 4.00 percent.

c. The rate of compensation increase shown for the FCX plans only relates to the FMC plans. The rate of compensation increase shown for the PT Freeport Indonesia plan relates to the years after 2012. For the PT Freeport Indonesia plan, the rate of compensation increase for 2012 ranges from 10 percent to 13 percent.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans (FMC’s plans; and FCX’s SERP, director and excess benefits plans) for the years ended December 31 follows:

	2011			2010			2009
Weighted-average assumptions:
Discount rate:
FCX SERP	4.00		%	4.00		%	4.00		%
FMC plans	5.40		%	5.80		%	6.10		%
Expected return on plan assetsa	8.00		%	8.50		%	8.50		%
Rate of compensation increasea	3.75		%	4.25		%	4.25		%
Service cost	$	24		$	26		$	26
Interest cost	83			82			85
Expected return on plan assets	(86		)	(87		)	(73		)
Amortization of prior service cost	(1		)	(1		)	—
Amortization of net actuarial losses	19			22			26
Curtailments and special retirement
benefits	—			—			(4		)
Net periodic benefit cost	$	39		$	42		$	60

a. The assumptions shown only relate to the FMC plans.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT Freeport Indonesia’s and Atlantic Copper’s pension plans for the years ended December 31 follows:

	PT Freeport Indonesia
	2011			2010			2009
Weighted-average assumptions:
Discount rate	8.50		%	10.50		%	12.00		%
Expected return on plan assets	9.25		%	8.25		%	10.00		%
Rate of compensation increase	8.00		%	8.00		%	8.00		%
Service cost	$	13		$	8		$	5
Interest cost	11			8			7
Expected return on plan assets	(9		)	(7		)	(5		)
Amortization of prior service cost	1			1			1
Amortization of net actuarial loss	3			—			1
Net periodic benefit cost	$	19		$	10		$	9

	Atlantic Copper
	2011			2010			2009
Weighted-average assumption:
Discount rate	6.77		%	6.77		%	6.77		%
Interest cost	$	3		$	3		$	4
Amortization of net actuarial loss	1			1			1
Net periodic benefit cost	$	4		$	4		$	5

The expected benefit payments for FCX’s (including FMC’s plans; and FCX’s SERP, director and excess benefits plans), PT Freeport Indonesia’s and Atlantic Copper’s pension plans follows:

	FCX		PT Freeport Indonesiaa		Atlantic Copperb
2012	$	88	$	16	$	7
2013	88		11		7
2014	90		11		7
2015	91		13		7
2016	94		14		7
2017 through 2021	515		123		36

a. Based on a December 31, 2011, exchange rate of 9,060 Indonesian rupiah to one U.S. dollar.

b. Based on a December 31, 2011, exchange rate of $1.29 per euro.

Schedule of fair value of financial assets for pension and postretirement benefits

A summary of the fair value hierarchy for pension plan assets associated with the FCX plans follows:

	Fair Value at December 31, 2011
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
Global equity	$	408		$	—	$	408	$	—
U.S. real estate securities	52			—		52		—
U.S. small-cap equity	45			—		45		—
Real estate property	35			—		—		35
Short-term investments	22			—		22		—
Open-ended mutual funds:
Government bonds	50			50		—		—
Emerging markets equity	36			36		—		—
Corporate bonds	22			22		—		—
Mutual funds:
Foreign bonds	43			43		—		—
Emerging markets bond	32			32		—		—
Emerging markets equity	24			24		—		—
Fixed income:
Government bonds	233			—		233		—
Corporate bonds	73			—		73		—
Private equity investments	50			—		—		50
Other investments	23			—		23		—
Total investments	1,148			$	207	$	856	$	85
Cash and receivables	6
Payables	(13		)
Total pension plan net assets	$	1,141

	Fair Value at December 31, 2010
	Total			Level 1		Level 2		Level 3
Commingled/collective funds:
U.S. large-cap equity	$	134		$	—	$	134	$	—
U.S. small-cap equitya	101			—		101		—
International equity	71			—		71		—
U.S. real estate securitiesa	47			—		47		—
Real estate property	28			—		—		28
Short-term investmentsa	19			—		19		—
Open-ended mutual funds:
Emerging markets equity	46			46		—		—
Government bonds	38			38		—		—
Corporate bonds	30			30		—		—
Mutual funds:
Foreign bonds	38			38		—		—
Emerging markets bond	30			30		—		—
Emerging markets equity	29			29		—		—
Equity securities:
U.S. large-cap equity	161			161		—		—
International equity	57			57		—		—
Fixed income:
Government bonds	147			—		147		—
Corporate bonds	74			—		74		—
Private equity investments	46			—		—		46
Other investments	28			1		27		—
Total investments	1,124			$	430	$	620	$	74
Cash and receivables	81
Payables	(93		)
Total pension plan net assets	$	1,112

a. At the end of 2011, FCX reevaluated its level determinations, including those reported at December 31, 2010. While the majority of the underlying investments consists of publicly traded securities with actively quoted market values, the reported fair value of the investment vehicle containing these securities is based on net asset values that are not published publicly; therefore, FCX concluded these investments are more appropriately classified within Level 2 of the fair value hierarchy.

A summary of the fair value hierarchy for pension plan assets associated with the PT Freeport Indonesia plan follows:

	Fair Value at December 31, 2011
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	22		22		—		—
Total investments	51		$	51	$	—	$	—
Cash and receivablesa	56
Total pension plan net assets	$	107

	Fair Value at December 31, 2010
	Total		Level 1		Level 2		Level 3
Common stocks	$	29	$	29	$	—	$	—
Government bonds	19		19		—		—
Total investments	48		$	48	$	—	$	—
Cash and receivablesa	49
Total pension plan net assets	$	97

a. Cash consists primarily of short-term time deposits.

Summary of changes in the fair value of level 3 pension plan assets

A summary of changes in the fair value of FCX’s Level 3 pension plan assets for the years ended December 31, follows:

	Private Equity Investments			Real Estate Property		Total
Balance at January 1, 2010	$	40		$	25	$	65
Actual return on plan assets:
Realized gains	—			2		2
Net unrealized gains related to
assets still held at the end of the year	2			1		3
Purchases	7			—		7
Settlements, net	(3		)	—		(3		)
Balance at December 31, 2010	46			28		74
Actual return on plan assets:
Realized gains (losses)	(2		)	2		—
Net unrealized gains related to
assets still held at the end of the year	5			5		10
Purchases	5			—		5
Settlements, net	(4		)	—		(4		)
Balance at December 31, 2011	$	50		$	35	$	85

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CONTINGENCIES

12 Months Ended

Dec. 31, 2011

Contingencies [Abstract]

Contingencies

CONTINGENCIES

Environmental. FCX incurred environmental capital expenditures and other environmental costs (including joint venture partners’ share) to comply with applicable environmental laws and regulations that affect its operations totaling $387 million in 2011, $372 million in 2010 and $289 million in 2009.

FCX subsidiaries that operate in the U.S. are subject to various federal, state and local environmental laws and regulations that govern emissions of air pollutants; discharges of water pollutants; and generation, handling, storage and disposal of hazardous substances, hazardous wastes and other toxic materials. FCX subsidiaries that operate in the U.S. also are subject to potential liabilities arising under CERCLA or similar state laws that impose responsibility on persons who arranged for the disposal of hazardous substances, and on current and previous owners and operators of a facility for the cleanup of hazardous substances released from the facility into the environment, including damages to natural resources, irrespective of when the damage to the environment occurred or who caused it. That liability often is shared on a joint and several basis with all other owners and operators, meaning that each owner or operator of the property is fully responsible for the cleanup, although in many cases some or all of the other historical owners or operators no longer exist, do not have the financial ability to respond or cannot be found. As a result, because of FCX’s acquisition of FMC in 2007, many of the subsidiary companies FCX now owns are responsible for a wide variety of environmental remediation projects throughout the U.S. FCX expects to spend substantial sums annually for many years to address those remediation issues. Certain FCX subsidiaries have been advised by the U.S. Environmental Protection Agency (EPA), the Department of the Interior, the Department of Agriculture and several state agencies that, under CERCLA or similar state laws and regulations, they may be liable for costs of responding to environmental conditions at a number of sites that have been or are being investigated to determine whether releases of hazardous substances have occurred and, if so, to develop and implement remedial actions to address environmental concerns. As of December 31, 2011, FCX had more than 100 active remediation projects in the U.S. in 27 states. FCX is also subject to claims where the release of hazardous substances is alleged to have damaged natural resources.

A summary of changes in environmental obligations for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	1,422		$	1,464		$	1,401
Accretion expensea	88			97			102
Additions	132			19			40
Reductions	(68		)	—			(3		)
Spending	(121		)	(158		)	(76		)
Balance at end of year	1,453			1,422			1,464
Less current portion	(205		)	(138		)	(168		)
Long-term portion	$	1,248		$	1,284		$	1,296

a. Represents accretion of the fair value of environmental obligations assumed in the acquisition of FMC, which were determined on a discounted cash flow basis.

Estimated environmental cash payments (on an undiscounted and unescalated basis) total $205 million in 2012, $130 million in 2013, $80 million in 2014, $76 million in 2015, $43 million in 2016 and $1.8 billion thereafter. The amounts and timing of these estimated payments could change as a result of changes in regulatory requirements, changes in scope and costs of remediation activities, and as actual spending occurs.

As a result of the acquisition of FMC, FCX was required to record FMC’s environmental obligations at fair value on the acquisition date in accordance with business combination accounting guidance. Significant adjustments to these obligations may occur in the future. New environmental obligations will be recorded as described in Note 1 under “Environmental Expenditures.” At December 31, 2011, FCX’s environmental obligations totaled $2.3 billion on an undiscounted and unescalated basis ($1.5 billion, which included environmental obligations assumed in the FMC acquisition at fair value), and FCX estimates it is reasonably possible that these obligations could range between $2.2 billion and $3.1 billion on an undiscounted and unescalated basis.

FCX believes that there may be potential claims for recovery from other third parties, including the U.S. government and other PRPs. These potential recoveries are not recognized unless realization is considered probable.

At December 31, 2011, the most significant environmental obligations were associated with the Pinal Creek site in Arizona; the Newtown Creek site in New York City; the Gilt Edge mine site in South Dakota; several historical smelter sites principally located in Arizona, Kansas, Oklahoma and Pennsylvania; and uranium mining sites in the western U.S. The recorded environmental obligations for these sites totaled $1.2 billion at December 31, 2011. A discussion of these sites follows.

Pinal Creek. The Pinal Creek site was listed under the Arizona Department of Environmental Quality’s (ADEQ) Water Quality Assurance Revolving Fund program in 1989 for contamination in the shallow alluvial aquifers within the Pinal Creek drainage near Miami, Arizona. Since that time, environmental remediation was performed by members of the Pinal Creek Group (PCG), consisting of FMC Miami, Inc. (Miami), a wholly owned subsidiary of FMC, and two other companies. In 1998, the District Court approved a Consent Decree between the PCG members and the state of Arizona resolving all matters related to an enforcement action contemplated by the state of Arizona against the PCG members with respect to groundwater contamination. The Consent Decree committed the PCG members to complete the remediation work outlined in the Consent Decree, and that work continues at this time and is expected to continue for many years in the future. Miami also was a party to litigation entitled Pinal Creek Group, et al. v. Newmont Mining Corporation, et al., United States District Court, District of Arizona, Case No. CIV 91-1764 PHX DAE (LOA), filed on May 1, 1991. Pursuant to a settlement in 2010, Miami paid $40 million to certain members of the PCG to settle the allocation of previously incurred costs, and agreed to take full responsibility for future groundwater remediation at the Pinal Creek site, with limited exceptions. The settlement did not result in a change to the obligation, which was estimated at fair value when assumed in the FMC acquisition. During 2011, the obligations was increased by $31 million to reflect changes in remediation capping designs that incorporate best practices for side slope regrading and cap thickness.

Newtown Creek. From the 1930s until 1964, Phelps Dodge Refining Corporation (PDRC), a subsidiary of FMC, operated a smelter, and from the 1930s until 1984, it operated a refinery on the banks of Newtown Creek (the creek), which is a 3.5-mile-long waterway that forms part of the boundary between Brooklyn and Queens in New York City. Heavy industrialization along the banks of the creek and discharges from the City of New York’s sewer system over more than a century resulted in significant environmental contamination of the waterway. The New York Attorney General previously notified several companies, including PDRC, about possible obligations to clean up contaminated sediments in the creek. In March and April 2010, EPA notified PDRC and five others that EPA considers them to be PRPs under CERCLA. The notified parties began working with EPA to identify other PRPs, and EPA proposed that the notified parties perform a Remedial Investigation/Feasibility Study (RI/FS) at their expense and reimburse EPA for its oversight costs. EPA is not expected to propose a remedy until after an RI/FS is completed, which is expected to take several years. On September 29, 2010, EPA designated the creek as a Superfund site. Effective July 18, 2011, PDRC and five other parties entered an Administrative Order on Consent to perform a RI/FS to assess the nature and extent of environmental contamination in the creek and identify potential remedial options. FCX's financial obligation for this matter was estimated at fair value when it was assumed in the FMC acquisition and is included in FCX's aggregate environmental obligations. The actual costs of fulfilling this remedial obligation and the allocation of costs among PRPs are uncertain and subject to change based on the results of the RI/FS, the remediation remedy ultimately selected by EPA and related allocation determinations. Depending on the overall cost and the portion allocated to PDRC, that share could be material to FCX.

Gilt Edge Mine Site. On July 12, 2010, FCX was notified by the U.S. Department of Justice, acting at the request of EPA, that it was preparing to file suit in federal court against two of its wholly owned subsidiaries (Cyprus Mines Corporation and Cyprus Amax Minerals Company) and several other parties to recover costs incurred or to be incurred by the U.S. in remediating hazardous substances at the Gilt Edge mine site in Lawrence County, South Dakota. The letter stated that the U.S. would assert that the Cyprus entities are jointly and severally liable with the other parties for all response costs incurred by the U.S. at this site under CERCLA. The letter asserted that the U.S. had incurred approximately $91 million in response costs and expected to incur significant additional response costs in the future.

In September 2011, FCX reached an agreement in principle to settle this matter, and is currently negotiating the terms of a proposed consent decree with the U.S. If a settlement is finalized that is consistent with the agreement in principle, the amount paid would be financially immaterial to FCX and less than the amount currently included for this matter in FCX's aggregate environmental obligations. If the settlement is not finalized and the U.S. government files suit, FCX intends to vigorously defend this matter.

Historical Smelter Sites. FMC and its predecessors at various times owned or operated copper and zinc smelters in several states, including Arizona, Kansas, Oklahoma and Pennsylvania. For some of these smelter sites, certain FCX subsidiaries have been advised by EPA or state agencies that they may be liable for costs of investigating and, if appropriate, remediating environmental conditions associated with the smelters. At other sites, certain FCX subsidiaries have entered into state voluntary remediation programs to investigate and, if appropriate, remediate site conditions associated with the smelters. The historical smelter sites are in various stages of assessment and remediation. The two most significant environmental obligations for historical smelter sites relate to Blackwell, Oklahoma, and Bisbee, Arizona. In 2011, FCX increased the environmental obligations for historical smelter sites, which were estimated at fair value when assumed in the FMC acquisition, by $36 million, primarily at the Blackwell, Oklahoma, site (refer to discussion below).

Blackwell. From 1916 to 1974, Blackwell Zinc Company, Inc. (BZC), an indirect subsidiary of FCX, owned and operated a zinc smelter in Blackwell, Oklahoma. In 1974, the smelter was demolished and the property deeded to the Blackwell Industrial Authority. Pursuant to an administrative order with the state of Oklahoma, BZC undertook remedial actions in Blackwell in 1996 and 1997, including sampling the nearby residential and commercial properties, and removing soils on properties that were found to have metal concentrations above state-established cleanup standards. From 1997 to 2003, BZC investigated the nature and extent of groundwater contamination potentially attributable to the former smelter and evaluated options for remedying such contamination. In 2003, the state of Oklahoma adopted a cleanup plan requiring the installation of a groundwater extraction and treatment system and the closure of domestic groundwater wells within the groundwater plume area. BZC completed the construction of a groundwater extraction and treatment system, with system startup and initial discharge of treated water occurring in October 2010.

In 2007, FCX, on behalf of BZC, commenced a voluntary community outreach program by inviting property owners in and around Blackwell to have their properties sampled for the presence of smelter-related contaminants, and offering to remediate properties whose soils were found to have metal concentrations above state-established

cleanup standards. As of January 1, 2012, residential yard cleanups associated with this outreach effort are essentially complete, although it is possible that additional property owners in the surrounding area could request sampling and remediation of their properties. All of these soil sampling and remediation activities are being coordinated with, and supervised by, the state of Oklahoma.

On April 14, 2008, a purported class action was filed against FCX and several of its direct and indirect subsidiaries, including BZC, entitled Coffey, et al., v. Freeport-McMoRan Copper & Gold, Inc., et al., Kay County, Oklahoma District Court, Case No. CJ-2008-68. The suit alleges that the operations of BZC’s zinc smelter in Blackwell, Oklahoma, from 1918 to 1974 resulted in contamination of soils and groundwater in Blackwell. The complaint seeks unspecified compensatory and injunctive relief and punitive damages on behalf of current property owners as of December 19, 2011, for alleged environmental contamination and other damages to real property. On December 19, 2011, the parties submitted a proposed class settlement to the court for approval, and the court entered a preliminary approval order. Because this is a class action, the settlement requires public notice, opportunity for class members to object or opt out, and a judicial fairness hearing, which is scheduled for March 22, 2012. There is some community opposition to the settlement, so it is possible that it will not be completed as agreed. If the settlement is approved, FCX will pay approximately $70 million (of which the relevant amount is included in environmental obligations and the remaining portion in accounts payable and accrued liabilities) for monetary payments to class members, additional environmental remediation of certain properties in the class area, class counsel's attorneys' fees and settlement administration expenses.

On December 7, 2009, 18 individuals filed a related suit, entitled Brown et al. v. Freeport-McMoRan Copper & Gold Inc., et al., Kay County, Oklahoma District Court, Case No. CJ-2009-213, alleging personal injuries resulting from exposure to lead and seeking compensatory and punitive damages. The case was settled in December 2011 for an immaterial amount.

In January 2012, FCX was advised by representatives of Kay County, Oklahoma (the county where the BZC smelter was located), of plans to assert claims for damages against BZC for permitting large quantities of smelter waste to be used as road building and fill material throughout Kay County over a period of decades. Kay County claims that it will seek financial assistance for removing or covering much of the material and damages for the alleged public nuisance created by the presence of the material. FCX is in the process of assessing these claims.

Bisbee. From the 1880s until 1975, FMC and certain predecessor and subsidiary entities operated a copper mine near Bisbee, Arizona. A series of smelters operated in Bisbee from approximately 1879 through 1908. In 2000, FMC entered the Bisbee area into the Arizona Voluntary Remediation Program (VRP) administered by ADEQ. In 2008, FMC expanded the VRP project to include other communities near Bisbee and commenced a voluntary community outreach program inviting property owners to have soils at their properties sampled for the presence of smelter and mine-related metals. For property owners whose soils are found to have metal concentrations above ADEQ-established cleanup standards, FMC has offered to remove the impacted soils and replace them with clean soils. As a result, FCX increased its environmental obligation for Bisbee soil cleanup by $31 million in 2009. For those property owners that requested sampling, approximately 42 percent require some level of cleanup. As of December 31, 2011, approximately 30 percent of the currently known residential cleanups were completed.

Uranium Mining Sites. During a period between 1940 and the early 1970s, certain FMC predecessor entities were involved in uranium exploration and mining in the western U.S. Similar exploration and mining activities by other companies have caused environmental impacts that have warranted remediation, and EPA and local authorities are currently evaluating the need for significant cleanup activities in the region. To date, FMC has undertaken remediation at a limited number of sites associated with these predecessor entities. An initiative to gather additional information about sites in the region is ongoing, and information gathered under this initiative was submitted to EPA Region 9 during the second and third quarters of 2008 and the fourth quarter of 2009 in response to an information request by EPA regarding uranium mining activities on Navajo Nation properties. FCX utilized the results of FMC’s remediation experience, in combination with historical and updated information to initially estimate the fair value of uranium-related liabilities assumed in the FMC acquisition. During 2011, FCX decreased the environmental obligations estimate by $53 million, to reflect the remedial approaches and timing decisions from EPA and the Navajo Nation on sites that are associated with other parties. These obligations are included in FCX's aggregate environmental obligations.

Asset Retirement Obligations (AROs). FCX’s ARO cost estimates are reflected on a third-party cost basis and comply with FCX’s legal obligation to retire tangible, long-lived assets.

A summary of changes in FCX’s AROs for the years ended December 31 follows:

	2011			2010			2009
Balance at beginning of year	$	856		$	731		$	712
Liabilities incurred	9			5			12
Revisions to cash flow estimates	48			105			(17		)
Accretion expense	58			54			52
Spending	(49		)	(38		)	(28		)
Foreign currency translation adjustment	(1		)	(1		)	—
Balance at end of year	921			856			731
Less current portion	(31		)	(69		)	(46		)
Long-term portion	$	890		$	787		$	685

ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. ARO activities and expenditures generally are made over an extended period of time commencing near the end of the mine life; however, certain reclamation activities may be accelerated if legally required or if determined to be economically beneficial.

During 2011 and 2010, the revisions to cash flow estimates are primarily related to increased costs of near-term closure activities at the Chino mine in New Mexico. Additionally, accelerated timing of closure activities at the Chino mine resulted in revisions to cash flow estimates during 2010.

Legal requirements in New Mexico, Arizona and Colorado require financial assurance to be provided for the estimated costs of reclamation and closure, including groundwater quality protection programs. FCX has satisfied financial assurance requirements by using a variety of mechanisms, such as performance guarantees, financial capability demonstrations, trust funds, surety bonds, letters of credit and collateral. The applicable regulations specify financial strength tests that are designed to confirm a company’s or guarantor’s financial capability to fund estimated reclamation and closure costs. The amount of financial assurance FCX is required to provide will vary with changes in laws, regulations and reclamation and closure requirements and cost estimates. At December 31, 2011, FCX’s financial assurance obligations associated with these closure and reclamation costs totaled $899 million, of which approximately $565 million was in the form of parent company guarantees and financial capability demonstrations. At December 31, 2011, FCX had trust assets totaling $151 million, which are legally restricted to fund a portion of its AROs for the Chino, Tyrone and Cobre mines as required by New Mexico regulatory authorities.

New Mexico Environmental and Reclamation Programs. FCX’s New Mexico operations are regulated under the New Mexico Water Quality Act and regulations adopted under that act by the Water Quality Control Commission (WQCC). The New Mexico Environment Department (NMED) has required each of these operations to submit closure plans for NMED’s approval. The closure plans must include measures to assure meeting groundwater quality standards following the closure of discharging facilities and to abate any groundwater or surface water contamination. In March 2009, the Tyrone operation appealed the WQCC Final Order, dated February 4, 2009, regarding location of the “places of withdrawal of water,” which provides the statutory basis for determining where groundwater quality standards must be met at FCX’s New Mexico mining sites. In December 2010, Tyrone entered into a settlement agreement with NMED that calls for a two-year stay of the appeal while NMED and the WQCC complete several administrative actions, including renewal of Tyrone’s closure permit consistent with the terms of the settlement, review and approval of a groundwater abatement plan and adoption of alternative abatement standards, and adoption of new groundwater discharge permit rules for copper mines. If the administrative actions are concluded consistent with the terms of the settlement agreement within the two-year period of the stay, then Tyrone will move to dismiss the appeal. Finalized closure plan requirements, including those resulting from the actions to be taken under the settlement agreement, could result in increases in the Tyrone, Chino and Cobre closure costs.

FCX’s New Mexico operations also are subject to regulation under the 1993 New Mexico Mining Act (the Mining Act) and the related rules that are administered by the Mining and Minerals Division (MMD) of the New Mexico Energy, Minerals and Natural Resources Department. Under the Mining Act, mines are required to obtain approval of plans describing the reclamation to be performed following cessation of mining operations. At December 31, 2011, FCX had accrued reclamation and closure costs of $424 million for its New Mexico operations. As stated above, additional accruals may be required based on the state’s review of FCX’s updated closure plans and any resulting permit conditions, and the amount of those accruals could be material.

Arizona Environmental and Reclamation Programs. FCX’s Arizona properties are subject to regulatory oversight in several areas. ADEQ has adopted regulations for its aquifer protection permit (APP) program that require permits for certain facilities, activities and structures used for mining, concentrating and smelting and require compliance with aquifer water quality standards at an applicable point of compliance well or location. The APP program also may require mitigation and discharge reduction or elimination of some discharges.

An application for an APP requires a description of a closure strategy that will meet applicable groundwater protection requirements following cessation of operations and an estimate of the cost to implement the closure strategy. An APP may specify closure requirements, which may include post-closure monitoring and maintenance. A more detailed closure plan must be submitted within 90 days after a permitted entity notifies ADEQ of its intent to cease operations. A permit applicant must demonstrate its financial ability to meet the closure costs estimated in the APP.

Portions of Arizona mining facilities that operated after January 1, 1986, also are subject to the Arizona Mined Land Reclamation Act (AMLRA). AMLRA requires reclamation to achieve stability and safety consistent with post-mining land use objectives specified in a reclamation plan. Reclamation plans must be approved by the State Mine Inspector and must include an estimate of the cost to perform the reclamation measures specified in the plan.

During 2008 and 2009, FCX updated its closure approaches at the Sierrita, Tohono and Bagdad mines to address site-specific regulatory obligations; during 2010, FCX updated its closure approaches for certain facilities at the Bagdad and Morenci mines. During 2011, FCX updated its closure approaches for certain facilities at the Sierrita mine. FCX will continue to evaluate options for future reclamation and closure activities at its other operating and non-operating sites, which are likely to result in additional adjustments to FCX’s ARO liabilities. At December 31, 2011, FCX had accrued reclamation and closure costs of $220 million for its Arizona operations.

Chilean Reclamation and Closure Programs. In July 2011, the Chilean senate passed legislation regulating mine closure, which establishes new requirements for closure plans and becomes effective in November 2012. FCX's Chilean operations will be required to update closure plans and provide financial assurance for these obligations. FCX cannot predict at this time the cost of these closure plans or the levels or forms of financial assurance that may be required. At December 31, 2011, FCX had accrued reclamation and closure costs of $49 million for its Chilean operations.

PT Freeport Indonesia Reclamation and Closure Programs. The ultimate amount of reclamation and closure costs to be incurred at PT Freeport Indonesia’s operations will be determined based on applicable laws and regulations and PT Freeport Indonesia’s assessment of appropriate remedial activities in the circumstances, after consultation with governmental authorities, affected local residents and other affected parties and cannot currently be projected with precision. Estimates of the ultimate reclamation and closure costs PT Freeport Indonesia will incur in the future involve complex issues requiring integrated assessments over a period of many years and are subject to revision over time as more complete studies are performed. Some reclamation costs will be incurred during mining activities, while most closure costs and the remaining reclamation costs will be incurred at the end of mining activities, which are currently estimated to continue for approximately 30 years. At December 31, 2011, PT Freeport Indonesia had accrued reclamation and closure costs of $140 million and a long-term receivable for Rio Tinto’s share of the obligation of $14 million (included in long-term receivables).

In 1996, PT Freeport Indonesia began contributing to a cash fund ($15 million balance at December 31, 2011) designed to accumulate at least $100 million (including interest) by the end of its Indonesia mining activities. PT Freeport Indonesia plans to use this fund, including accrued interest, to pay mine closure and reclamation costs. Any costs in excess of the $100 million fund would be funded by operational cash flow or other sources.

In December 2010, the President of Indonesia issued a regulation regarding mine reclamation and closure, which requires a company to provide a mine closure guarantee in the form of a time deposit placed in a state-owned bank in Indonesia. In accordance with its Contract of Work, PT Freeport Indonesia is working with the Department of Energy and Mineral Resources to review these requirements, including discussion of other options for the mine closure guarantee. In December 2009, PT Freeport Indonesia submitted its revised mine closure plan to the Department of Energy and Mineral Resources for review and has addressed comments received during the course of this review process.

Litigation. FCX is involved in numerous legal proceedings that arise in the ordinary course of business or are associated with environmental issues arising from legacy operations conducted over the years by FMC and its affiliates as discussed in this note under “Environmental.” FCX is also involved periodically in other reviews, investigations and proceedings by government agencies, some of which may result in adverse judgments, settlements, fine, penalties, injunctions or other relief. Management does not believe, based on currently available information, that the outcome of any legal proceeding reported below will have a material adverse effect on FCX's financial condition, although individual outcomes could be material to FCX's operating results for a particular period, depending on the nature and magnitude of the outcome and the operating results for the period. Refer to Note 1 for further discussion of FCX's accounting policy for litigation contingencies.

Asbestos Claims.Since approximately 1990, FMC and various subsidiaries have been named as defendants in a large number of lawsuits that claim personal injury either from exposure to asbestos allegedly contained in electrical wire products produced or marketed many years ago or from asbestos contained in buildings and facilities located at properties owned or operated by FMC affiliates, or from alleged asbestos in talc products. Many of these suits involve a large number of codefendants. Based on litigation results to date and facts currently known, FCX believes there is a reasonable possibility that losses may have been incurred related to these matters; however, FCX also believes that the amounts of any such losses, individually or in the aggregate, are not material to its consolidated financial statements. There can be no assurance, however, that future developments will not alter this conclusion.

Columbian Chemicals Company (Columbian) Claims. Columbian, formerly a subsidiary of FMC, has notified FCX of various indemnification claims arising out of the 2005 agreement pursuant to which Columbian was sold. The principal outstanding claims relate to (1) multiple mass tort suits pending against Columbian in West Virginia state court for alleged personal injury and property damage resulting from exposure to carbon black (the Carbon Black claims) and (2) an investigation being conducted by EPA of potential Clean Air Act violations during the period Columbian was owned by FMC (the Clean Air Act matter). Although FMC believes it is reasonably possible that a loss may be incurred, it believes that its indemnity obligations, if any, for both of these matters are subject to an aggregate cap under the 2005 agreement of approximately $110 million. Columbian disagrees with that position and asserts that FMC's liability for the Carbon Black claims is uncapped. FMC believes Columbian’s exposure, if any, for the Clean Air Act matter is below that aggregate limit, but FMC cannot estimate Columbian’s exposure for the Carbon Black claims. Columbian filed suit in New York state court in April 2010 (Columbian Chemicals Company and Columbian Chemicals Acquisition LLC v. Freeport-McMoRan Corporation f/k/a Phelps Dodge Corporation, County of New York, Supreme Court of the State of New York, Index No. 600999/2010), alleging, among other things, that the Carbon Black claims are the responsibility of FMC, and are not subject to the approximately $110 million cap. FMC is opposing that assertion. FMC intends to meet its obligations under the 2005 agreement, but will vigorously defend against any effort by Columbian to expansively interpret those obligations.

Cerro Verde Tax Proceeding. SUNAT, the Peruvian national tax authority, has assessed mining royalties on materials processed by the Cerro Verde concentrator that commenced operations in late 2006. These assessments cover the period October 2006 to December 2007 and the years 2008 and 2009. SUNAT has issued rulings denying Cerro Verde’s protest of the assessments. Cerro Verde has appealed these decisions and currently has three cases pending before the Peruvian Tax Tribunal. Cerro Verde is challenging these royalties because it believes its stability agreement provides an exemption for all minerals extracted from its mining concession, irrespective of the method used for processing those minerals. Although FCX believes its interpretation of the stability agreement is correct, if Cerro Verde is ultimately found responsible for these assessments, it will also be liable for interest, which accrues at rates that range from approximately 7 to 18 percent based on the year accrued and the currency in which the amounts would be payable. At December 31, 2011, the aggregate amount of the assessments, including interest and penalties, totaled $190 million. SUNAT may continue to assess mining royalties annually until this matter is resolved by the Peruvian Tax Tribunal.

Letters of Credit, Bank Guarantees and Surety Bonds.  Letters of credit and bank guarantees totaled $110 million at December 31, 2011, primarily for reclamation and environmental obligations, workers’ compensation insurance programs, tax and customs obligations, and other commercial obligations. In addition, FCX had surety bonds totaling $148 million at December 31, 2011, associated with reclamation and closure ($127 million – see discussion above), self-insurance bonds primarily for workers’ compensation ($19 million) and other bonds ($2 million).

Insurance.  FCX purchases a variety of insurance products to mitigate potential losses. The various insurance products typically have specified deductible amounts or self-insured retentions and policy limits. FCX generally is self-insured for U.S. workers’ compensation, but purchases excess insurance up to statutory limits. An actuarial analysis is performed twice a year for various FCX casualty programs, including workers’ compensation, to estimate required insurance reserves. Insurance reserves totaled $58 million at December 31, 2011, which consisted of a current portion of $8 million (included in accounts payable and accrued liabilities) and a long-term portion of $50 million (included in other liabilities).

Other. In October 2010, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $106 million and interest of $52 million related to various audit exceptions for 2005. In November 2011, PT Freeport Indonesia received an assessment from the Indonesian tax authorities for additional taxes of $22 million and interest of $10 million related to various audit exceptions in 2006. PT Freeport Indonesia has paid $109 million (which is included in long-term receivables) for these disputed tax assessments and filed objections to these assessments because it believes it has properly paid all taxes. PT Freeport Indonesia is working with the Indonesian tax authorities to resolve these matters and expects to receive additional assessments from the Indonesian tax authorities for their audit of its 2007 tax return.

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 such taxes and related penalties under this view would be significant. PT Freeport Indonesia believes that, pursuant to the terms of its COW, it is only required to pay value added taxes on these types of goods imported after December 30, 2009. PT Freeport Indonesia has not received a formal assessment and is working with the applicable government authorities to resolve this matter.