Freeport Objects To Norway Fund Exclusion

Freeport objects to Norway fund exclusion

by Carole Vaporean, NEW YORK (Reuters)

6th June 2006

Freeport-McMoRan Copper & Gold Inc. said on Tuesday it believes its exclusion from a Norwegian fund because of environmental damage was a result of misinformation, and that it has a strong commitment to environmental protection in its mining process.

Noting that shareholders, financial institutions and companies are more concerned than ever with environmental and social issues, Freeport CEO Richard Adkerson told Reuters at its Global Mining and Steel Summit in New York that he was discouraged by Norway's move and by what he called misinformation about its Indonesian mining operations.

"It was discouraging they focused on the river we used to transport out tailings," said Adkerson. He said the tailings are non-toxic and contain no chemicals, nor heavy metals.

Norway on Tuesday said its more than $240 billion oil fund would no longer invest in companies it said were "serious and systematic" abusers of human rights or the environment.

The Norwegian government said it decided to exclude shares in Freeport-McMoRan from the fund for environmental reasons.

It blamed Freeport-McMoRan for using a natural river system for disposal of tailings from a huge copper mine in Indonesia.

Company spokesman, Bill Collier, said Freeport has a strong commitment to environmental protection and aims to conduct its operations with the least environmental impact possible.

CEO Adkerson said Freeport does not use cyanide or mercury in the separation process.

Instead, Freeport uses a physical separation or flotation process, in which the economically valuable minerals or metals float out, and the reagents evaporate quickly. Even a short distance from the mill, the reagents are already undetectable.

"The tailings themselves are nontoxic. They are simply ground up rock, natural rock," Collier said.

Norway's central bank contacted Freeport before taking the action to exclude the copper and gold miner.

"They did contact us. We furnished them with our information, but we feel this reflects a misunderstanding," Collier said.

Adkerson said Freeport has large demonstration projects at the Indonesian site, where it conducts comprehensive monitoring of the water in the river and the area where the tailings are deposited, including sediment, plant species and aquatic organisms, and it has never detected a problem.

In addition, Freeport hires an independent environmental consultant to run audits every three years, starting in 1996.

"We just had one published on our Web site by Montgomery, Watson, Harza, and they reaffirmed that this tailings system is the best system for our circumstances," said Adkerson."

The firm found no human health issues, said the affects are reclaimable after mining activity was complete, and the water meets U.S. drinking standards once the sediment settles.

"It has an environmental impact, but it's not toxic and it can naturally be reclaimed or can be used for farmland with appropriate nutrients added to it. And we've got demonstration projects going on right now," said Adkerson.