Freeport-McMoRan

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Freeport-McMoRan Copper & Gold Inc., (NYSE: FCX) often called simply Freeport, is the world's lowest-cost [CITATION REQUIRED] copper producer and one of the world's largest producers of gold. It was formerly based in New Orleans, Louisiana but recently moved its headquarters to Phoenix, Arizona, after acquiring copper producer Phelps Dodge Corp. in 2007. In addition to Phelps Dodge, its subsidiaries include PT Freeport Indonesia, PT Irja Eastern Minerals and Atlantic Copper, S.A. Freeport is the largest publicly traded copper producer in the world.

Best known for its Grasberg mine in Papua province, Indonesia, the company is the largest taxpayer to the Indonesian government; it mines and mills ore containing copper, gold, and silver for the world market.

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[edit] History

The company was founded by Langbourne Williams Snr. as Freeport Texas in 1912 in the sulphur mining industry, in 1929 Langbourne Williams Jnr. collaborated with Payne Whitney to regain control of the company. In 1935 the Board of Directors included chairman John Hay Whitney, Kidder, Peabody & Co., Eugene L. Norton, Langbourne M. Williams Jr. (president), Monro B. Lanier, Chauncey Stillman, Godfrey Stillman Rockefeller, David M. Goodrich. The company change name to Freeport Sulphur in December 1936. Other directors have included Augustus Long, Robert Lovett, Charles Wight from 1947, Benno Schmidt 1954-1997, Jean Mauzé, Robert W. Bruce III, Robert C. Hills, Paul W. Douglas 1981-1983 after serving on Freeport Minerals 1975-1981, Henry A. Kissinger 1988-1995, George Putnam, and J. Taylor Wharton.

The company committed itself to Ertsberg copper and gold project in West New Guinea during 1961, the company's wealth now stemming from a mining license agreement signed with General Suharto. The original 1967 license included mining rights for 30 km² and a 30 year exclusive mining license for the region from the official opening of the mine in 1981, although the mine actually began operations in 1972. Freeport now operates under a 1991 contract for a period of 30 years, with provisions for two 10-year extensions to 2041. In 1989 the mining license was extended to include 100 km² (25000 acres}. Freeport also holds exploration rights in three areas that total 2.2 million acres. However, this is only the right to explore for, not develop, minerals; if further deposits are found, Freeport would have to apply for government permission to exploit them.

In 1997 the company exposed the Bre-X Gold Scandal. Brought in by the Indonesian government, Freeport was not able to correlate Bre-X's fraudulent claims to finding the largest gold mine ever discovered; Bre-X subsequently went bankrupt.

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In 2003, only after being forced to release documentation by the Security Exchange, the company admitted it had been paying the local Indonesian military and police to keep the native landowners away from the lands it develops under the current Indonesian government contract; Freeport argues that this is necessary to provide security to its employees, both local and foreign.

In 2005, the New York Times reported that company records showed the total amount paid between 1998 and 2004 amounted to nearly 20 million USD, distributed among both officers and units, with one individual receiving up to 150,000 USD. The company response was that there was "no alternative to our reliance on the Indonesian military and police in this regard", and that the support provided was not for individuals, but rather for infrastructure, food, housing, fuel, travel, vehicle repairs and allowances to cover incidental and administrative costs.

In contending that the money went to the government and not to individual officers, "the statements amount to a knowingly misleading representation by Freeport," the comptroller of the New York City Pension Funds said. While in Indonesia, Juwono Sudarsono, the civilian defense minister, said that it is illegal under Indonesian law for foreign companies to pay soldiers.

The New York City comptroller has charged that Freeport-McMoRan knowingly made "false or misleading" statements about payments to the Indonesian military and might have filed false proxy statements in violation of the Securities Exchange Act. He has also stated that he believed the company might have violated the Foreign Corrupt Practices Act, which forbids U.S. companies to bribe foreign officials. The Securities and Exchange Commission and the Justice Department are currently investigating these claims.

Freeport-McMoRan's close ties with the authoritarian Indonesian militia along with the military's heavy-handed tactics in dealing with natives has attracted the attention of many human rights advocates and organizations. However, by the late 1990s, after over twenty five years operating in Papua without recognising the land rights of the traditional peoples it finally announced recognition and established agreements with various Papuan tribes.

Denise Leith has written a comprehensive history of Freeport's influence, impact, and role in Indonesia entitled "The Politics of Power: Freeport in Suharto's Indonesia" (2003: University of Hawai'i Press), detailing Freeport's relationship with the corrupt Suharto regime, the military and the traditional peoples.

[edit] Operations[1]

North American sites:

South American sites:

  • Candelaria/Ojos del Salado, Chile 80% (copper)
  • El Abra, Chile 51% (copper)
  • Cerro Verde, Peru 53.6% (copper, molybdenum)

African sites:

Asian sites:


[edit] External links

[edit] References

  1. ^ Freeport-McMoRan Copper & Gold Inc. - corporate web site