Dated October 11, 1996






(1) P.T. FREEPORT INDONESIA COMPANY



(2) P.T. RTZ-CRA INDONESIA



            PARTICIPATION AGREEMENT
       with respect to the Contract Area





TABLE OF CONTENTS


1. 	DEFINITIONS 									 1
1.2 	Interpretation 									11
1.3 	Headings 										11

2. 	PURPOSES AND TERM 								11
2.1 	General 										11
2.2 	Purposes 										12
2.3 	Assignment of COW 								12
2.4 	Term 											13
2.5 	Termination 									13

3. 	RELATIONSHIP OF THE PARTICIPANTS 						14
3.1 	Contribution of Use of Assets 						14
3.2 	Obligations Several and Not Joint 						14
3.3 	Not a Partnership 								14
3.4 	No Authority to Act for other Participants 				15
3.5 	No Joint Receipt of Income 							15
3.6 	Area of Mutual Interest								15
3.7 	Other Business Opportunities 							17
3.8 	Waiver of Right to Partition 							17
3.9 	Employees 										17
3.10 	Title 										17

4. 	REPRESENTATIONS AND WARRANTIES 						18
4.1 	Capacity 										18
4.2 	PT-FI Representations and Warranties					18
4.3 	Disclosures										20

5.	EXPLORATION CONTRIBUTIONS BY PARTICIPANTS 				20
5.1 	Exploration Contribution by PT-RTZ 						20
5.2 	Additional Cash Contributions 						20

6. 	INTERESTS OF PARTICIPANTS 							21
6.1 	Participating Interests 							21
6.2 	Changes in Participating Interests 						21
6.3 	Default in Making Contributions 						22
6.4 	Continuing Liabilities Upon Adjustment of the Participating
	Interests										26

7. 	COVENANTS AND RIGHTS 								27
7.1 	Mutual Covenants 									27
7.2 	PT-FI Covenants 									28
7.3 	PT-RTZ Covenant 									30
7.4 	Power of Attorney 								30
7.5 	Retained PT-FI Rights 								31

8. 	COMMITTEES 										33
8.1 	Exploration Committees 								33
8.2 	Operating Committee 								33
8.3 	Other Committees 									34
8.4 	Quorum 										34
8.5 	Decisions 										34
8.6 	Meetings 										35
8.7 	Action Without Meeting 								36
8.8 	Close-down 										36

9. 	OPERATOR 										37
9.1 	Appointment 									37
9.2 	Powers and Duties of Operator 						37
9.3 	No Fee 										41
9.4 	Standard of Care 									41
9.5 	Resignation; Deemed Offer to Resign 					41
9.6 	Transactions With Affiliates 							43

10. 	FEASIBILITY STUDY INTO EXPANSION 						43

11. 	GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS 			45

12. 	SOLE RISK 										46

13. 	PROGRAMMES AND BUDGETS 								48

14. 	TAXATION IN INDONESIA								48

15. 	TRANSFER OF PARTICIPATING INTERESTS 					49
15.1	General 										49
15.2 	Limitations on Free Transferability 					49
15.3 	First Offer Right 								51
15.4 	Exceptions to First Offer Right 						51

16. 	GENERAL PROVISIONS 								52
16.1 	Notices 										52
16.2 	Waiver 										53
16.3 	Modification 									53
16.4 	Force Majeure 									54
16.5 	Governing Law 									55
16.6 	Penalties 										56
16.7 	Rule Against Perpetuities 							57
16.8 	Further Assurances 								57
16.9 	Confidentiality and Public Statements 					57
16.10 Entire Agreement; Successors and Assigns 					58
16.11 Severability 									59
16.12 Indonesian Law Waiver 								59
16.13 Tax Covenant 									59

SCHEDULE 1 											62
Privatisation Agreements 								62

SCHEDULE 2 											65
Deed of Assignment of Interest in COW 						65

SCHEDULE 3 											69
Exceptions to Representations and Warranties 					69

ANNEX A 											70
Product Schedule 										70

ANNEX B 											72
Financial and Accounting Procedures 						72

ATTACHMENT X 1

THIS AGREEMENT is made October 11, 1996

BETWEEN:

(1) P.T. FREEPORT INDONESIA COMPANY, a limited liability company
organised under the laws of the Republic of Indonesia and
domesticated in the State of Delaware, U.S.A. ("PT-FI") and

(2) P.T. RTZ-CRA INDONESIA, a company in formation under the laws
of the Republic of Indonesia ("PT-RTZ"),

WHEREAS

(A) By a Contract of Work dated 30 December 1991 made between The
Government of the Republic of Indonesia (the "Government") and
PT-FI, the Government appointed PT-FI as the sole contractor for
the Government with respect to the Contract Area, as defined in
the Contract of Work, with the sole rights to explore, mine,
process, store, transport, market, sell, and dispose of Products,
as defined below, in the Contract Area (defined as aforesaid)

(B) PT-FI desires PT-RTZ and PT-RTZ desires to participate in
operations under the COW (as defined below) on the terms and
conditions hereinafter appearing

IT IS HEREBY AGREED as follows:

1. DEFINITIONS

1.1 In this Agreement (including the Schedules and Annexes
hereto), unless the context otherwise requires, the following
terms shall have the following meanings:

1.1.1 "Affiliate" or "Affiliates" of any specified person means
any such other person, company, partnership,  joint venture, or
other form of enterprise which directly or indirectly controls,
or is controlled by or is under common control with, the
specified person and, in the case of RTZ, includes CRA Limited
and the Affiliates of CRA Limited.  The term "control" as used
herein means possession, directly or indirectly, of the power to
direct or cause direction of management and policies through
ownership of voting securities, contract, voting trust or
otherwise;

1.1.2 "Agreement" means this Participation Agreement, including
all amendments and modifications thereof, and all schedules and
annexes hereto, which are incorporated herein by this reference;

1.1.3 "Annual Budget Meeting" means the meeting defined in Clause
8.6;

1.1.4 "Approved Expansion Project" means any project of Expansion
in Contract Area Block A which has been approved by the boards of
directors of PT-FI, FCX and PT-RTZ or is otherwise an Approved
Expansion Project in  accordance with Clause 10.3;

1.1.5 "Approved Programme and Budget" means a Programme and
Budget which has been approved by the boards of directors of
PT-FI and PT-RTZ upon the recommendation of the relevant
Exploration Committee or the Operating Committee, as appropriate,
as provided in Clause 8.5 and paragraph 10.1 of the Financial and
Accounting Procedures;

1.1.6 "Area of Mutual Interest" has the meaning assigned to that
expression in Clause 3.6;

1.1.7 "Assignment" means the assignment referred to in Clause
2.3;

1.1.8 "board of directors" of PT-FI or PT-RTZ shall mean the
respective board of directors and/or board of commissioners (if
any) of such entity and, in the case of PT-RTZ during the period
prior to Completion of Formation, means the board of directors
and/or board of commissioners as constituted from time to time
pursuant to the Deed of Establishment of PT-RTZ, whichever is the
appropriate body (whether pursuant to its constitutional
documents or law) for the decision or action in question;

1.1.9 "Budget" means a detailed estimate of all costs to be
incurred by the Participants with respect to a Programme and an
estimated schedule of cash calls to be made therefor;

1.1.10 "Budgetary Period" means the budgetary period established
in a Programme and Budget;

1.1.11 "Chargeable Operations" has the meaning assigned to that
expression in the Financial and Accounting Procedures;

1.1.12 "Close-down" means a decision by the boards of directors
of PT-FI, FCX and PT-RTZ, upon the recommendation of the
Operating Committee, to cease all Mining and Processing in the
Contract Area;

1.1.13 "Committee" means whichever committee during the
applicable time (be that the Exploration Committee in respect of
either Contract Area Block A or Contract Area Block B or the
Operating Committee or a committee established pursuant to Clause
8.3) is responsible for the subject matter under this Agreement
as provided in Clause 8;

1.1.14 "Completion of Formation" has the meaning assigned to that
expression in the Early Closing Agreement;

1.1.15 "Confidential Information" means the confidential
information referred to in Clause 16.9;

1.1.16 "Contract Area" means the area defined as such under the
COW;

1.1.17 "Contract Area Block" means, as appropriate or as the
context requires, either Contract Area Block A or Contract Area
Block B;

1.1.18 "Contract Area Block A" has the meaning assigned to that
expression in the COW;

1.1.19 "Contract Area Block B" has the meaning assigned to that
expression in the COW;

1.1.20 "Cover Payment" means the payment described in Clause
6.3.2.1;

1.1.21 "COW" means the Contract of Work referred to in Recital
(A) of this Agreement and includes any other contract of work,
whenever granted, for the conduct of Exploration, Development or
Mining in all or any part of the Contract Area;

1.1.22 "Cut-off Date" means the last day of the final Year
covered in the Product Schedule, as the same may be extended
pursuant to Clause 16.4.2;

1.1.23 "Defaulting Participant" means the Participant referred to
in Clause 6.3;

1.1.24 "Development" has the meaning assigned to that expression
in the Financial and Accounting Procedures;

1.1.25 "Dispose" means, in relation to any relevant property, to
sell, transfer, assign, declare oneself a trustee of or part with
the use or benefit of or otherwise dispose of the relevant
property (or any interest therein);

1.1.26 "dollar" or "$" means a dollar being the lawful currency
of the United States of America;

1.1.27 "Early Closing Agreement" means the agreement dated as of
the date of this Agreement between PT-FI, FCX, PT-RTZ, RTZ, RTZ
Jersey Investments One Limited, RTZ Jersey Nominees Limited,
First Trust Of New York, National Association, as Trustee, The
Chase Manhattan Bank (formerly Chemical Bank), as Administrative
Agent, JAA Security Agent and Security Agent and The Chase
Manhattan Bank (as successor to The Chase Manhattan Bank
(National Association)), as Depositary and Documentary Agent;

1.1.28 "Effective Date" means the date of this Agreement;

1.1.29 "Encumbrance" means any mortgage, pledge, lien, charge,
power of attorney, assignment for the purpose of providing
security, hypothecation, security interest or trust arrangement
for the purpose of providing security and any other security
agreement or arrangement;

1.1.30 "Enterprise Operations" means all operations within the
Contract Area under the COW by or on behalf of PT-FI or by or on
behalf of PT-FI and PT-RTZ, including the Mining of the 10-K
Reserves and Joint Operations, but excluding Sole Risk Ventures;

1.1.31 "Expansion" means a Development which is designed to
increase the productive capacity of existing facilities (whether
comprising PT-FI Available Assets or Joint Account Assets and
whether Mining, milling and delivery facilities or related
infrastructure) for the obtaining of Products from the aggregate
resources in Contract Area Block A (being both the 10-K Reserves
and reserves other than the 10-K Reserves) at an aggregate rate
in excess of the then existing production capacity of such
facility;

1.1.32 "Exploration" has the meaning assigned to that expression
in the Financial and Accounting Procedures;

1.1.33 "Exploration Committee" means a committee established
under Clause 8.1;

1.1.34 "Exploration Costs" has the meaning assigned to that
expression in the Financial and Accounting Procedures as the same
may have been amended or clarified with respect to specific costs
as set out in the Memorandum of Understanding attached hereto and
marked X and with such further changes with respect to specific
costs as shall from time to time be approved in writing by the
Participants;

1.1.35 "Exploration Obligation" means the obligation on the part
of RTZ contained in Clause 6(1) of the Implementation Agreement
as the same may have been modified in the agreement of even date
herewith made between PT-FI, P.T. Irja Eastern Minerals
Corporation, FCX, RTZ and PT-RTZ, a copy of which is annexed
hereto and marked X and with such further changes as shall from
time to time be approved in writing by the Participants;

1.1.36 "FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation;

1.1.37 "Feasibility Study" means a report showing the economic
viability of a proposed Development project, which may relate to
Expansion, and shall include (i) reasonable assessment of the
size and quality of the minable reserves of Minerals, (ii)
reasonable assessments of the amenability of the Minerals to
metallurgical treatment, (iii) reasonable description of the
work, equipment, supplies and permitting, if any, required to
bring the prospective deposit of Minerals into commercial
production and the estimated costs thereof, (iv) conclusions
regarding the economic viability of bringing the prospective
deposit of Minerals into commercial production, (v) an analysis
of the impact which such project will have on the existing
Enterprise Operations and Sole Risk Programmes and (vi) such
other information as may be appropriate to allow banking and
other financial institutions familiar with the mining business to
make a firm decision whether or not to advance funds sufficient
to finance the Development in whole or in part;

1.1.38 "Financial and Accounting Procedures" means the document
so entitled, in the form attached to this Agreement as Annex B;

1.1.39 "Government" means the Government of the Republic of
Indonesia;

1.1.40 "Greenfield Project" means a Development project which
does not rely to any significant extent on PT-FI Available
Assets, the 10-K Reserves or the Joint Account Assets
constituting part of any prior approved project;

1.1.41 "Implementation Agreement" means the agreement so
designated between FCX and RTZ dated as of 2 May 1995;

1.1.42 "Incremental Expansion Cashflow" has the meaning assigned
to that expression in the Financial and Accounting Procedures;

1.1.43 "Incremental Expansion Revenues" has the meaning assigned
to that expression in the Financial and Accounting Procedures;

1.1.44 "Incremental Production" has the meaning assigned to that
expression in the Financial and Accounting Procedures;

1.1.45 "Joint Account Assets" means

(i) all Products (in whatever form) derived from Joint Operations
prior to their being sold and

(ii) all other real and personal property, tangible and
intangible, which is acquired as a joint asset of the
Participants or as a result or for the purpose of Joint
Operations or the funding thereof (other than any thereof which
is distributed to the Participants or either of them pursuant to
the provisions of this Agreement);

1.1.46 "Joint Operations" means the conduct of the following
activities:

(i) Approved Expansion Projects;

(ii) Exploration in the Contract Area;

(iii) Development and Mining in Contract Area Block B and, after
the Cut-off Date, if there has, before such Date, been a first
Approved Expansion Project, also in Contract Area Block A and

(iv) any other activities in or in relation to the Contract Area
which the Participants agree to conduct jointly under the terms
of this Agreement, including Joint Operations Greenfield
Projects,

but excluding Sole Risk Ventures;

1.1.47 "Liabilities" or "Liability" means any and all claims,
demands, investigations, judgements, losses, liabilities, costs
and expenses, including reasonable attorneys' fees;

1.1.48 "LIBOR" means a rate of interest which is equal to three
month U.S dollar Libor as published in the London Financial
Times;

1.1.49 "Memorandum Equity Account" means an account established
for each Participant pursuant to paragraph 2 of the Financial and
Accounting Procedures;

1.1.50 "Minerals" has the meaning assigned to that expression in
the COW;

1.1.51 "Mining" means the mining, extracting, producing,
handling, milling or other processing of Minerals and the
marketing and selling of Products therefrom;

1.1.52 "Non-defaulting Participant" means a Participant which is
not the Defaulting Participant as described in Clause 6.3;

1.1.53 "Operating Committee" means the committee established
under Clause 8.2;

1.1.54 "Operator" means the person or entity appointed under
Clause 9.1 or any successor Operator;

1.1.55 "Operator Replacement Agreement" means the agreement dated
as of the date of this Agreement between PT-FI, PT-RTZ, First
Trust of New York, National Association, as trustee under the
Trust Agreement and the Operator Selection Representative;

1.1.56 "Participation" means the business arrangement of the
Participants under this Agreement;

1.1.57 "Participants" means PT-FI and PT-RTZ and their respective
successors and permitted assigns and "Participant" means any one
of them;

1.1.58 "Participating Interest" means, at any time, with respect
to Contract Area Block A or Contract Area Block B, the percentage
interest then applicable to each Participant with respect to such
Contract Area Block determined in accordance with this Agreement
(including the Financial and Accounting Procedures), provided
that, if such expression is used with reference to assets, it
shall refer only to an interest in the Joint Account Assets and
Joint Operations, and if such expression is used with reference
to Products from Contract Area Block A, to Sales Revenues from
such Products or to revenues from Contract Area Block A, it
shall, until the Cut-off Date, refer only to Incremental
Production, or, as the case may be, Incremental Expansion
Revenues;

1.1.59 "Privatisation Agreements" means the agreements listed in
Schedule 1 to this Agreement;

1.1.60 "Processing" has the meaning assigned to that expression
in the COW;

1.1.61 "Product Schedule" means the Product Schedule annexed
hereto as  Annex  A, setting out the planned production of
Products for each Year from 1995 to 2021 as the same may be
amended pursuant to Clause 16.4.2;

1.1.62 "Products" has the meaning assigned to that expression in
the COW;

1.1.63 "Programme" means a description in reasonable detail of
Joint Operations or Sole Risk Ventures, as appropriate, to be
conducted for a Year or any longer period, which is prepared and
approved in accordance with paragraph 10.1 of the Financial and
Accounting Procedures;

1.1.64 "Proposing Participant" means the Participant referred to
in Clause 10.1;

1.1.65 "PT-FI Assets" means together

(i) the PT-FI Available Assets

(ii) the right, title and interest of PT-FI in and under the COW
and all authorisations issued pursuant to the COW and

(iii) all other real and personal assets, tangible and
intangible, of PT-FI, including without limitation, (A) cash,
accounts receivable, inventories and capital stock and
indebtedness of other corporations, including its interests in
the Gresik smelter and any assets in respect of Sole Risk
Ventures of PT-FI, but excluding (B) all Joint Account Assets or
interests therein;

1.1.66 "PT-FI Available Assets" means together

(i) all real and personal property, tangible and intangible, held
by PT-FI from time to time which are used or intended to be used
for Exploration, Development or Mining in the Contract Area,
including, without limitation, mills and infrastructure, but
excluding

(A) property which is produced by or acquired pursuant to (1)
Approved Expansion Projects or (2) Sole Risk Ventures of PT-RTZ
which is held in the name of PT-FI as Operator

(B) items specified in (i) and (iii)(A) of Clause 1.1.65 (the
definition of PT-FI Assets) and

(C) all Joint Account Assets or interests therein

(ii) the right, title and interest of PT-FI in and to the
Privatisation Agreements and;

(iii) except for the purpose of the Financial and Accounting
Procedures, capital replacements hereafter of physical property
subject to Privatisation Agreements or otherwise constituting
PT-FI Available Assets under (i) of this Clause 1.1.66;

1.1.67 "PT-RTZ Assets" means together

(i) the interest of PT-RTZ in and under the COW pursuant to the
Assignment

(ii) any assets in respect of Sole Risk Ventures of PT-RTZ and

(iii) all other real and personal assets, tangible and
intangible, of PT-RTZ, but excluding all Joint Account Assets or
interests therein;

1.1.68 "RTZ" means The RTZ Corporation PLC, an English company;

1.1.69 "RTZ Loan" has the meaning assigned to the expression
"Loan" in the RTZ Loan Agreement;

1.1.70 "RTZ Loan Agreement" means the facility agreement of even
date herewith between PT-FI and RTZ Indonesian Finance Limited
("RTZ Lender") whereby RTZ Lender agrees to make available to
PT-FI a facility of up to $450,000,000 to fund one or more
Approved Expansion Projects;

1.1.71 "Sales Revenues" has the meaning assigned to that
expression in the Financial and Accounting Procedures;

1.1.72 "Sharing Commencement Date" has the meaning assigned to
that expression in the Financial and Accounting Procedures;

1.1.73 "Sole Risk Programme" has the meaning assigned to it in
Clause 10.3;

1.1.74 "Sole Risk Venture" means any activity carried out by a
Participant in the Contract Area on its own account pursuant to
Clauses 10 and 12;

1.1.75 "Specified Area" means the area referred to as such in
Clause 10.1;

1.1.76 "subsidiary" has the meaning assigned to it in the
Implementation Agreement;

1.1.77 "Taxes" means all present and future income and other
taxes, levies, imposts, duties, charges, deductions and
withholdings whatsoever together with interest thereon and
penalties with respect thereto;

1.1.78 "10-K Reserves" means the proved and probable ore reserves
as at 31 December 1994 in Contract Area Block A being 1,125.6
million tonnes at an average grade of 1.30% copper, 1.42 grams of
gold per tonne and 4.06 grams of silver per tonne;

1.1.79 "Trust Agreement" means the amended and restated trust
agreement dated as of the date of this Agreement between, among
others, PT-FI, PT-RTZ, The Chase Manhattan Bank (as successor to
The Chase Manhattan Bank (National Association)), as Depositary,
First Trust of New York, National Association, as Trustee, and
certain Secured Creditors of PT-FI (as defined therein);

1.1.80 "Year" means a calendar year commencing on 1 January.

1.2 Interpretation  In this Agreement

1.2.1 References to any document or agreement, including the COW,
includes such document or agreement as amended, novated,
substituted, varied, supplemented or replaced from time to time.

1.2.2 References to any Act of Parliament, code, decree,
regulation or ordinance or to any provision thereof include any
modification or re-enactment thereof or any provision substituted
therefor and all statutory or other instruments issued
thereunder.

1.2.3 References to a party to this Agreement or any other
document or agreement include such party's successors or
permitted assigns.

1.3 Headings Headings to Clauses, sub-clauses, Schedules or
Annexes are for convenience only and shall not affect the
interpretation of this Agreement.

2. PURPOSES AND TERM

2.1 General PT-FI and PT-RTZ hereby agree that all of their
rights and obligations as between themselves relating to Joint
Operations, Sole Risk Ventures and other operations within the
Contract Area shall be subject to and governed by this Agreement.

2.2 Purposes This Agreement is entered into for the following
purposes and for no others, and shall serve as the exclusive
means by which the Participants, or either of them, accomplish
such purposes:

2.2.1 to conduct Exploration within the Contract Area, including
the evaluation of Development or Mining opportunities within the
Contract Area;

2.2.2 to engage in Development and Mining within the Contract
Area if so decided in the manner provided in this Agreement;

2.2.3 to engage in the Disposal of Products derived from Joint
Operations;

2.2.4 to allocate costs of and revenues derived from Joint
Operations;

2.2.5 to regulate as between the parties the conduct of Joint
Operations and Sole Risk Ventures in the Contract Area;

2.2.6 to regulate as between the parties to the extent provided
herein the conduct by PT-FI of its activities in the Contract
Area, other than in respect of Joint Operations, using the PT-FI
Available Assets, the Joint Account Assets, and the Participants'
right, title and interest in and under the COW and all
authorisations issued pursuant to the COW;

2.2.7 to regulate the procedures for making a Close-down decision
and for implementing that decision; and

2.2.8 to perform any other operation or activity necessary,
appropriate or incidental to any of the foregoing.

2.3 Assignment of COW Simultaneously with signature of this
Agreement, PT-FI and PT-RTZ shall execute an assignment of
interests in the COW in the form set out in Schedule 2 to this
Agreement or in such other form as PT-RTZ may reasonably require
provided that such interests shall be reassigned by PT-RTZ to
PT-FI in the circumstances provided for in Clause 6(2) of the
Implementation Agreement.

2.4 Term The term of this Agreement shall commence on the
Effective Date and shall continue until the occurrence of any of
the following events:

2.4.1 the termination of the COW and the termination of all
rights of the Participants to conduct Exploration, Development
and Mining in the Contract Area and completion of a final
accounting between the Participants as provided in Clause 2.5.2;
or

2.4.2 the agreement by the Participants permanently to cease
Joint Operations and terminate this Agreement and completion of a
final accounting between the Participants as provided in Clause

2.5.2; or

2.4.3 the reduction of the Participating Interest of one of the
Participants in both Contract Area Block A and Contract Area
Block B to zero (including a reduction pursuant to the operation
of the proviso to Clause 2.3); or

2.4.4 the Disposal of all Joint Account Assets and the completion
of a final accounting between the Participants as provided in
Clause 2.5.2; or

2.4.5 the bankruptcy, dissolution or withdrawal of any
Participant, unless all of the remaining Participants agree to
continue this Agreement, and completion of a final accounting
between the Participants as provided in Clause 2.5.2.

2.5 Termination Upon expiry of the term of this Agreement:

2.5.1 all unpaid Liabilities properly incurred arising out of
Joint Operations during the term of this Agreement shall be paid
by the Participants as provided in this Agreement

2.5.2 the Operator shall take all action necessary to wind up the
activities of the Participation, and all costs and expenses
incurred in connection with the termination of the Participation
shall be expenses chargeable to the Participants.  Where the term
of this Agreement expires pursuant to Clauses 2.4.1, 2.4.2, 2.4.4
or 2.4.5, the Joint Account Assets shall be paid, applied, or
distributed in satisfaction of all Liabilities of the
Participation arising out of Joint Operations to third parties.
Thereafter, all other Joint Account Assets shall be sold and the
proceeds, together with any remaining cash, shall be distributed
to the Participants in proportion to their Participating
Interests in Contract Area Block A or, as appropriate, Contract
Area Block B at the time of such distribution, subject as
provided in Clause 6.1 or the Financial and Accounting
Procedures, after first satisfying out of a Participant's share
any Liabilities owed by that Participant to the other

2.5.3 the Participants shall enter into such other agreements and
arrangements as may be necessary or appropriate in the
circumstances to regulate the conduct of any Sole Risk Ventures
in the Contract Area which are to continue after expiry of the
term of this Agreement.

3. RELATIONSHIP OF THE PARTICIPANTS

3.1 Contribution of Use of Assets

3.1.1 PT-FI agrees to make available in accordance with the terms
of this Agreement the PT-FI Available Assets, and each of PT-FI
and PT-RTZ agrees to make available in accordance with the terms
of this Agreement the Joint Account Assets, in each case for the
purposes of Enterprise Operations without charge to the
Participants except as otherwise provided in this Agreement.

3.1.2 PT-FI and PT-RTZ agree that their respective rights under
the COW will be made available to the Participants without charge
for the purposes of Joint Operations.

3.2 Obligations Several and Not Joint The liability of the
Participants shall be several and not joint nor joint and
several.  Each Participant shall be liable to the other only for
its obligations as set out in this Agreement.

3.3 Not a Partnership Nothing contained in this Agreement shall
be deemed to constitute either Participant the partner of the
other, nor, except as otherwise herein expressly provided, to
constitute either Participant the agent or legal representative
of the other or to create any fiduciary relationship between
them.

3.4 No Authority to Act for other Participants No Participant
shall have any authority to act for or to assume any obligation
or responsibility on behalf of the other Participant, except as
otherwise expressly provided herein.  Each Participant shall
indemnify, defend and hold harmless the other Participant and its
Affiliates (including, without limitation, direct and indirect
parent companies), and its or their respective directors,
commissioners, officers, shareholders, employees, agents and
attorneys, from and against any Liabilities which may be imposed
upon, asserted against or incurred by any of them and which arise
out of or result from any act of or any assumption of Liability
by the indemnifying Participant, or any of its directors,
commissioners, officers, shareholders, employees, agents,
attorneys and Affiliates, done or undertaken, or apparently done
or undertaken, on behalf of the other Participant, except
pursuant to the authority expressly granted herein or as
otherwise agreed in writing between the Participants.

3.5 No Joint Receipt of Income   The Participants acknowledge
that it is not their intention to receive income jointly as a
result of the Participation.

3.6 Area of Mutual Interest

3.6.1 General  Any exploration permit, contract of work, mineral
lease, right or interest, including an equity interest or option
to acquire an equity interest in an entity owning any of the
foregoing, including rights and interests which do not directly
involve Mining but which may be useful in connection with the
Joint Operations (collectively, "Mining Rights") acquired during
the term of this Agreement by or on behalf of a Participant or an
Affiliate of a Participant (the "Acquirer") which is situated in
the province of Irian Jaya, Indonesia (the "Area of Mutual
Interest") shall be subject to the terms and provisions of this
Clause 3.6, except Mining Rights acquired pursuant to an Approved
Programme and Budget or Sole Risk Ventures.

3.6.2 Notice  Within 30 days after acquisition of Mining Rights
or the right to acquire any Mining Rights wholly or partially
within the Area of Mutual Interest, the Participant being the
Acquirer or an Affiliate of the Acquirer ("Acquirer's
Participant") shall notify the other Participant of such
acquisition.  The Acquirer's Participant's notice shall describe
in detail the acquisition, the Mining Rights covered thereby and
the cost thereof and the Acquirer's Participant shall procure
that there is made available for inspection by the other
Participant any and all information available to the Acquirer
(subject to any confidentiality restrictions) concerning the
Mining Rights.

3.6.3 Option Exercised  Within 30 days after receiving the
Acquirer's Participant's notice, the other Participant shall
elect, by notice to the Acquirer's Participant, that an Affiliate
of such other Participant shall:

(a) accept an interest in the Mining Rights equal to the other
Participant's Participating Interest at the date of this
Agreement; or

(b) not acquire an interest in the Mining Rights.
If a Participant entitled to make an election under this Clause
3.6.3 fails to give notice within the time allotted, such failure
shall be deemed an election by such Participant not to accept an
interest in the Mining Rights and the Mining Rights shall not be
subject to the same terms, mutatis mutandis, as this Agreement.
If a Participant entitled to make an election under this Clause

3.6.3 makes a timely election to accept an interest in the Mining
Rights, the Acquirer's Participant shall procure that the
Acquirer shall, subject to all necessary Governmental consents,
convey to an Affiliate of the other Participant nominated by the
other Participant, by appropriate instrument, an undivided
interest in the Mining Rights equal to such Participant's
Participating Interest at the date of this Agreement.  If such
Participant has elected that an Affiliate shall accept an
interest in Mining Rights pursuant to this Clause 3.6.3, the
Mining Rights shall be held on the same terms as this Agreement,
mutatis mutandis to those with respect to Contract Area Block B,
unless the Participants agree otherwise.  The Participant which
is not the Acquirer's Participant shall procure that its
Affiliate acquiring the interest in the Mining Rights shall
promptly pay to the Acquirer its proportionate share of the
latter's actual out-of-pocket acquisition costs.

3.7 Other Business Opportunities Except as expressly provided in
Clause 3.6, each Participant shall have the right independently
to engage in and receive full benefits from business activities
outside the Contract Area, whether or not in competition with the
Enterprise Operations, without consulting the other.   Except as
expressly provided in Clause 3.6, no Participant shall have any
obligation to the other under this Agreement with respect to any
opportunity to acquire any property outside the Contract Area at
any time, or within the Contract Area after the termination of
this Agreement.  Except as otherwise agreed by the Participants,
whether in this Agreement or subsequently, neither Participant
shall conduct any activity inside the Contract Area other than
Enterprise Operations, Sole Risk Ventures and activities which do
not adversely affect the carrying out of the Enterprise
Operations and any Sole Risk Ventures, without the prior written
approval of the other.

3.8 Waiver of Right to Partition The Participants hereby waive
and release all rights of partition, or of sale in lieu thereof,
or other division of Joint Account Assets, including any rights
provided by law.

3.9 Employees Employees of one Participant are not and shall not
be employees of the other Participant or of the Participation.

3.10 Title All Joint Account Assets acquired by the Operator for
Joint Operations may be held in the name of PT-FI but, subject to
any mandatory provisions of applicable law, the beneficial
interest therein shall be for the benefit of PT-FI and PT-RTZ
severally in proportion to their respective Participating
Interests.  Subject to any mandatory provisions of applicable
law, each of the Participants agrees to execute appropriate
documents to reflect any changes in Participating Interests which
may occur hereunder from time to time and to execute, and
register with the appropriate Governmental authorities, the
necessary document(s) to effect the transfer of any property as
contemplated by this Agreement.

4. REPRESENTATIONS AND WARRANTIES

4.1 Capacity Subject, in the case of PT-RTZ, to the matters
stated in Schedule 3, each of the parties represents, warrants
and undertakes to the other(s) as follows:

4.1.1 it is a company duly incorporated and in good standing in
its place of incorporation and that it is qualified to do
business and is in good standing in those jurisdictions where
necessary in order to carry out the purposes of this Agreement;

4.1.2 it has the capacity to enter into and perform its
obligations under this Agreement and, in the case of PT-FI, the
Assignment and all transactions contemplated herein or (as
appropriate) therein and that all corporate and, except as
mentioned in Schedule 3 to this Agreement, other actions required
to authorise it to enter into and perform its obligations under
this Agreement and, in the case of PT-FI, the Assignment have
been properly and duly taken;

4.1.3 this Agreement constitutes, and, in the case of PT-FI, the
Assignment will constitute its legal, valid and binding
obligation, save as enforcement may be limited by bankruptcy,
reorganisation, insolvency, moratorium or other laws affecting
the enforcement of creditors' rights generally and subject to any
limitations acts and to general equitable principles;

4.1.4 the execution, delivery and performance by it of this
Agreement and, in the case of PT-FI, the Assignment and the
transactions implemented hereunder or (as appropriate) thereunder
do not and will not contravene, conflict with or constitute a
default under (a) any law or regulation or any official or
judicial order, judgment, injunction or decree applicable to it
or (b) its constitutional documents or (c) any agreement or
document to which it is a party or which is binding upon it or
any of its assets.

4.2 PT-FI Representations and Warranties Subject to the matters
stated in Schedule 3 and in addition to the representations,
warranties and undertakings contained in Clause 4.1, PT-FI
represents, warrants and undertakes to PT-RTZ as follows:

4.2.1 the shareholders in PT-FI are FCX, as to 81.28%, the
Government as to 9.36% and PT Indocopper Investama Corporation as
to 9.36%;

4.2.2 it has all authorisations, consents and licences necessary
to conduct its activities in the Contract Area as presently
conducted;

4.2.3 it is up to date on all payments, filings, or other
requirements in respect of the COW and there are no existing or
threatened actions, suits, claims or proceedings in relation
thereto, and PT-FI has not received any notice of violation or
claim alleging any violation of any law, rule, regulation, or
permit, including without limitation any environmental law, rule,
regulation or permit, in connection with the COW except any
thereof where such violation or claim would not, individually or
in the aggregate, have a material adverse effect on the rights of
PT-FI and PT-RTZ under the COW;

4.2.4 it has delivered to or made available to PT-RTZ or its
Affiliates all geological data and other similar information in
PT-FI's possession or control derived from its activities in the
Contract Area which any person interested in acquiring a
Participating Interest in the Contract Area would reasonably be
expected to wish to see and all other information or copies
thereof reasonably requested by them concerning the COW, its
operations in the Contract Area and the disposal of Products,
including, but not limited to, true and correct copies of all
contracts relating to the COW and the Contract Area of which
PT-FI has knowledge;

4.2.5 all activities by PT-FI under the COW up to the date of
this Agreement have in all material respects been in accordance
with the requirements of the Government and Indonesian law and
there has been no breach by PT-FI of any of the provisions of the
COW or of any other agreement binding upon it the breach of which
might have a material adverse effect on the ability of PT-FI to
carry out the Enterprise Operations;

4.2.6 there has been no material breach by the Government of any
of the provisions of the COW and PT-FI has not received any
indication from the Government that the Government is seeking to
re-negotiate any of the terms of the COW;

4.2.7 to the best of PT-FI's knowledge, there has been no
material breach by any third party of any material contract with
PT-FI in relation to PT-FI's activities under the COW or the sale
of Products;

4.2.8 there are no material litigation, arbitration or
administrative proceedings or claims currently in progress or, so
far as PT-FI is aware, pending or threatened against PT-FI or any
of its assets under the COW or any material contract to which
PT-FI is a party in relation to PT-FI's activities under the COW
or the sale of Products;

4.2.9 PT-FI is not a party to any agreement or under any other
obligation under or pursuant to which it has created or given or
permitted to subsist or is obliged or bound to create or give or
permit to subsist in favour of any third party any Encumbrance
over PT-RTZ's share of the Joint Account Assets or over any
revenues allocated to PT-RTZ (or to which PT-RTZ is entitled)
under this Agreement;

4.2.10 PT-RTZ's interest in the COW pursuant to the Assignment is
not subject to any Encumbrance created or given by PT-FI in
favour of any third party.

4.3 Disclosures Each of the parties represents and warrants to
the other(s) that it is unaware of any facts or circumstances
which have not been disclosed in this Agreement and which should
have been disclosed to the other party in order to prevent the
representations and warranties given by it in this Clause 4 from
being materially misleading.

5. EXPLORATION CONTRIBUTIONS BY PARTICIPANTS

5.1 Exploration Contribution by PT-RTZ PT-RTZ shall pay, in
accordance with paragraph 10.3 of the Financial and Accounting
Procedures, all Exploration Costs approved by an Exploration
Committee after the Effective Date until the Exploration
Obligation has been satisfied, including the expenditure of not
less than $40,000,000 in respect of Contract Area Block A.

5.2 Additional Cash Contributions After the Exploration
Obligation has been satisfied, the Participants shall contribute
funds for Approved Exploration Programmes and Budgets in
proportion to their respective Participating Interests, subject
to their rights to conduct Sole Risk Ventures.

6. INTERESTS OF PARTICIPANTS

6.1 Participating Interests

6.1.1 At the date of this Agreement, except as otherwise provided
in this Agreement (including the Financial and Accounting
Procedures), the Participating Interests of the Participants in
Contract Area Block A and in Contract Area Block B are:

PT-FI  sixty per cent (60%)
PT-RTZ forty per cent (40%).

 The Participating Interests of the Participants shall not be
changed except as provided in this Agreement (including the
Financial and Accounting Procedures) and each Participant's
Participating Interest in Contract Area Block A may, as provided
in this Agreement and the Financial and Accounting Procedures, be
different from its Participating Interest in Contract Area Block
B.

6.1.2 There shall be allocated to the Participants the revenues
and shares thereof calculated in accordance with the Financial
and Accounting Procedures.

6.1.3 All costs and liabilities incurred in or attributable to
Chargeable Operations in the Contract Area shall be allocated to
and borne by the Participants in accordance with the Financial
and Accounting Procedures.

6.1.4 Participating Interests shall be calculated to three
decimal places and rounded to two (e.g. 1.519% rounded to 1.52%).
Decimals of .005 and less shall be rounded down.

6.2 Changes in Participating Interests A Participant's
Participating Interest may be changed as follows:-

6.2.1 in the event of default by a Participant in making its
agreed upon contribution to an Approved Programme and Budget,
followed by an election by the other Participant to invoke Clause

6.3.2.3; or

6.2.2 transfer by a Participant of less than all its
Participating Interest in accordance with Clause 15; or

6.2.3 acquisition of less than all of the Participating Interest
of the other Participant, however arising.

 In the event of a change in a Participant's Participating
Interest with respect to either Contract Area Block A or Contract
Area Block B, there will, subject to obtaining any necessary
Governmental approval, be a corresponding and proportionate
change in the Participant's interest in the COW with respect to
Contract Area Block A (subject to PT-FI's rights with respect to
the 10-K Reserves and PT-FI Assets) or the COW with respect to
Contract Area Block B, as the case may be.

6.3 Default in Making Contributions If a Participant defaults in
its obligation to pay a contribution or cash call properly
payable or made under this Agreement (including the Financial and
Accounting Procedures), (such Participant being a "Defaulting
Participant"),

6.3.1 All rights of the Defaulting Participant to receive its
proportionate share of the Incremental Expansion Cashflow of
Approved Expansion Projects, or the revenues from Contract Area
Block B, Joint Operations Greenfield Projects in Contract Area
Block A or, as the case may be, in any Year after the Cut-off
Date, the revenues from Joint Operations, shall be suspended
until such time as the default has been remedied and until such
time, such proportionate share shall go to the Non-Defaulting
Participant(s), who shall apply such share of the relevant
revenues or (as the case may be) Incremental Expansion Cashflow
first, to make any contribution or meet any cash calls not made
or met by the Defaulting Participant or made or met on its
behalf, and second, to pay the indebtedness and unpaid and
accrued interest thereon then owing by the Defaulting Participant
to such Non-Defaulting Participant pursuant to Clause 6.3.2.  The
right of a Defaulting Participant to receive its proportionate
share of the relevant revenues or (as the case may be) the
Incremental Expansion Cashflow shall be reinstated at the first
time when such Participant is not in default in its obligation to
make a contribution or meet a cash call and all indebtedness and
interest thereon arising out of the making by the Non-Defaulting
Participant of Cover Payments has been paid in full.

6.3.2.1 The other Participant, by notice to the Defaulting
Participant, may at any time, but shall not be obliged to, elect
to make such contribution or meet such cash call on behalf of the
Defaulting Participant (a "Cover Payment").  If more than one
Cover Payment is made by the other Participant in relation to the
same Contract Area Block, such Cover Payments shall be aggregated
and the rights and remedies described herein pertaining to an
individual Cover Payment shall be read to apply to the aggregated
Cover Payments.

6.3.2.2 Each Cover Payment shall constitute indebtedness due from
the Defaulting Participant to the Non-Defaulting Participant,
which indebtedness, together with interest (calculated from the
date of the Cover Payment at the rate specified in paragraph

10.3.3 of the Financial and Accounting Procedures) shall be
payable upon demand.

6.3.2.3 If a Cover Payment shall have been made, upon the giving
of not less than 5 days' prior notice to the Defaulting
Participant, whether or not payment thereof has been demanded
under Clause 6.3.2.2, the Non-Defaulting Participant may, but
shall not be obliged to, elect to effect an adjustment of the
Defaulting Participant's Participating Interest in the relevant
Contract Area Block pursuant to this Clause 6.3.2.3;  provided,
however, that if within such 5 day period the Defaulting
Participant  shall evidence to the reasonable satisfaction of the
Non-Defaulting Participant that it will have the funds to, and
will, within 10 days of the expiry of such 5 day period, pay the
indebtedness constituted by the Cover Payment together with
interest accrued thereon pursuant to Clause 6.3.2.2 owing by the
Defaulting Participant to the Non-Defaulting Participant, then
such adjustment of Participating Interest may not be effected
until the end of such additional 10 day period.  If such election
is made and such indebtedness has not been paid, at the
expiration of such 5 day period, or, if applicable, at the end of
such additional 10 day period, an amount equal to 125% times the
Cover Payment shall be deducted from the Defaulting Participant's
relevant Memorandum Equity Account for the relevant Contract Area
Block and added to the relevant Memorandum Equity Account for
that Contract Area Block of the Non-Defaulting Participant and
the Participating Interests of the Participants shall be
recalculated based on the relevant adjusted Memorandum Equity
Accounts.

6.3.2.4 Notwithstanding anything to the contrary contained in
this Agreement, failure by PT-FI to make a contribution or
respond to a cash call shall not constitute a default hereunder
or give rise to any adjustment of PT-FI's or PT-RTZ's Memorandum
Equity Account if such failure occurs prior to the time an
aggregate sum of $750,000,000 has been spent on one or more
Approved Expansion Projects and is attributable to the failure by
PT-FI to receive advances under the RTZ Loan Agreement.

6.3.3 If as a consequence of the adjustment of a Defaulting
Participant's relevant Memorandum Equity Account under Clause

6.3.2.3 its recalculated Participating Interest in Contract Area
Block A or, as the case may be, Contract Area Block B is less
than 10% (such adjustment being a "Forced Sale Adjustment"), then

6.3.3.1 the Defaulting Participant shall be deemed to have
elected to withdraw from participation in Joint Operations in
Contract Area Block A or, as the case may be, Contract Area Block
B

6.3.3.2 the Defaulting Participant shall sell to the
Non-Defaulting Participant and the Non-Defaulting Participant
shall buy all of the Defaulting Participant's Participating
Interest in Contract Area Block A or, as the case may be,
Contract Area Block B for a price equal to the Fair Market Value
of the Defaulting Participant's Participating Interest in
Contract Area Block A or, as the case may be, Contract Area Block
B as at the date on which its Participating Interest first
reduces below 10%

6.3.3.3 completion of the sale and purchase under Clause 6.3.3.2
shall take place within 90 days after establishment of the Fair
Market Value.  The Defaulting Participant shall be liable for all
costs and expenses of the sale and purchase (other than the
purchase price) and shall indemnify the Non-Defaulting
Participant against all adverse tax consequences of the sale and
purchase

6.3.3.4 for the purposes of Clause 6.3.3.2, the Fair Market Value
of the Defaulting Participant's Participating Interest in
Contract Area Block A or, as the case may be, Contract Area Block
B means the amount determined by the Participants.  Should the
Participants be unable within 30 days after a Forced Sale
Adjustment to agree as to the Fair Market Value of the Defaulting
Participant's Participating Interest to be sold pursuant to
Clause 6.3.3.2, the Participants shall, within 10 days after the
expiration of such 30 day period, attempt to select one
reasonably acceptable, internationally recognised independent
investment bank to determine the Fair Market Value of the
Defaulting Participant's Participating Interest, which
determination shall be binding on all Participants.  Should the
Participants be unable to agree upon a mutually acceptable
investment bank within such 10 day period, each of the
Participants shall have 10 additional days to select one
internationally recognised investment bank to determine the Fair
Market Value of the Defaulting Participant's Participating
Interest.  Each such investment bank or, in default of selection
by either Participant, the sole investment bank so selected
shall, within 30 days of being requested to do so, determine the
Fair Market Value of the Defaulting Participant's Participating
Interest provided however that, where two such investment banks
are so selected, the Fair Market Value of such interest shall be
the average of their respective determinations if and only if the
lower of the two determinations is at least 90% of the higher of
the two determinations.  If it is not, then such two investment
banks shall select a third internationally recognised investment
bank to determine the Fair Market Value of the Defaulting
Participant's Participating Interest, and the Fair Market Value
of such interest (i) shall be such third determination if such
third determination is a figure between the two previous
determinations; (ii) shall be the lower of the two previous
determinations if the third determination is lower than both the
two previous determinations; and (iii) shall be the higher of the
two previous determinations if the third determination is higher
than both the two previous determinations.  The Participants
shall each pay 50% of the costs of the services and expenses of
the investment bank(s)

6.3.3.5 upon completion of the sale and purchase under Clause
6.3.3.2 the Defaulting Participant shall cease to conduct any
activities in Contract Area Block A or, as the case may be,
Contract Area Block B (other than then existing Sole Risk
Ventures and other than, in the case of PT-FI, PT-FI's rights
with respect to the 10-K Reserves and any retained rights
referred to in Clause 7.5) and shall surrender to the
Non-Defaulting Participant the right to conduct all such
activities

6.3.3.6 each of the Participants appoints the other its attorney,
such appointment becoming effective upon its becoming a
Defaulting Participant, with power in its name or otherwise to do
all such things and sign or execute all such deeds or documents
as may be necessary or desirable to complete any of the
transactions referred to in this Clause 6.3.3, and (without
limitation) for that purpose to appear in the name of the
Defaulting Participant before any notary or other Government
official in Indonesia; provided that such power of attorney shall
not be deemed to apply to each Participant's rights under Clause
6.3.3.4.

6.4 Continuing Liabilities Upon Adjustment of the Participating
Interests   Any reduction of a Participant's Participating
Interest under this Clause 6 shall not relieve such Participant
of its share of any Liability, whether it accrues before or after
such reduction, arising out of Joint Operations in Contract Area
Block A or, as the case may be, Contract Area Block B conducted
after the Effective Date and prior to such reduction.  For
purposes of this Clause 6, such Participant's share of such
Liability shall, subject to Clause 6.1 and the Financial and
Accounting Procedures, be equal to its Participating Interest in
the relevant Contract Area Block at the time such Liability was
incurred.  The increased Participating Interest accruing to a
Participant as a result of the reduction of the other
Participant's Participating Interest shall be free from
Encumbrances arising by, through or under such other Participant,
except those to which both Participants have given their written
consent or are otherwise subject (including, without limitation,
royalties payable under the COW).  Each Participant's
Participating Interest shall be shown in the books of the
Operator.

7. COVENANTS AND RIGHTS

7.1 Mutual Covenants Each of the Participants covenants and
agrees with the other that:

7.1.1 it will give prompt notice to the other Participant of any
notice of default, lawsuit, proceeding, action or damage of which
it becomes aware and which might affect the Joint Account Assets,
the Contract Area or the COW

7.1.2 it will only conduct operations within or relating to the
Contract Area in accordance with the provisions of the COW and
this Agreement and, without prejudice to the foregoing, not at
any time do or cause or permit to be done any act or omission
which results or might result in a breach of the provisions of
the COW, this Agreement or any other agreement binding upon it a
breach of which might have a material adverse effect on Joint
Operations.

7.1.3 to the extent required by any law, rule, regulation,
decree, consent, contractual arrangement or otherwise by any
Indonesian Governmental Agency, there shall be no sale or other
transfer of any interest in the Contract of Work by PT-FI or
PT-RTZ without the prior consent of the Ministry of Mines and
Energy of the Republic of Indonesia.

7.2 PT-FI Covenants PT-FI covenants and agrees with PT-RTZ that
it will:

7.2.1 At all times comply with and perform all its obligations
under the Privatisation Agreements and exercise its rights under
the Privatisation Agreements in consultation with PT-RTZ and in a
manner which does not adversely affect the carrying out of the
Joint Operations and will not enter into any other agreements in
the nature of Privatisation Agreements (other than as listed in
Schedule 1) except in consultation with PT-RTZ;

7.2.2 Prepare its annual financial statements in accordance with
accounting principles generally accepted in the U.S.A. except as
otherwise stated therein and based on accounting policies
consistently applied in all respects except as otherwise stated
therein and at the time of the issue thereof send to PT-RTZ
copies of the same;

7.2.3 As and when required by PT-RTZ furnish to PT-RTZ promptly
such financial or other information, data or maps relating to the
Contract Area and the Enterprise Operations therein and thereon
as PT-RTZ may from time to time require;

7.2.4 Furnish to PT-RTZ a copy of each material return and report
(and each other return and report requested specifically by
PT-RTZ) submitted to the Government under the COW and, with
respect to major returns and reports (as determined from time to
time by the Participants), do so within a reasonable time before
the latest day for such submission to permit time for review by
PT-RTZ provided that tax returns shall not be included in this
sub-Clause 7.2.4;

7.2.5 Not, without the prior written consent of PT-RTZ, create or
permit to exist any Encumbrance on or Dispose, except in the
ordinary course of business, of the whole or any part of the
PT-FI Available Assets or its right, title and interest in and
under the COW or any authorisations issued pursuant to the COW or
the Joint Account Assets, other than, with respect to
Dispositions, sales otherwise permitted by this Agreement and,
with respect to Encumbrances, (i) the security in favour of RTZ
Lender referred to in the RTZ Loan Agreement, (ii) Encumbrances
in favour of the existing bank lenders to PT-FI or the lenders
under any replacement or refinancing thereof, (iii) Encumbrances
in favour of lenders on PT-FI Available Assets or on PT-FI's
share of the Joint Account Assets or, with PT-RTZ's consent, on
all of the Joint Account Assets, (iv) Encumbrances on
replacements of assets under Privatisation Agreements and (v)
Encumbrances on replacements of PT-FI Available Assets provided
that the lenders holding Encumbrances referred to in (ii) and
(iii) above shall have executed documents recognising PT-RTZ's
rights to the same extent as have PT-FI's existing bank lenders
in connection with this Agreement;

7.2.6 Do and cause to be done all things necessary to preserve
and keep in full force and effect its rights and authorisations
with respect to the COW and the Contract Area, at all times
comply with and cause to be complied with all applicable laws,
the violation of which would be materially adverse to the
Enterprise Operations and obtain and maintain in full force and
effect all authorisations, approvals, consents, licences and
exemptions with respect to the COW and the Contract Area, in each
case where the failure to obtain or maintain which would be
materially adverse to Enterprise Operations, promptly effect all
filings, registrations and notarisations and promptly comply with
all other requirements in any such case which may at any time be
required with respect to or under this Agreement, the COW and
Enterprise Operations,  and the continued due performance of its
obligations hereunder or thereunder or the validity or
enforceability of this Agreement and the COW, and PT-RTZ shall
provide to PT-FI all such information in relation to PT-RTZ's
participation in Joint Operations as PT-FI may reasonably require
and which is not otherwise available to PT-FI in order to enable
PT-FI to fulfill its obligations under this Clause 7.2.6;

7.2.7 Notify PT-RTZ immediately upon becoming aware of the actual
or threatened revocation or variation of any such authorisation
as is referred to in Clause 7.2.6;

7.2.8 Without the prior written consent of PT-RTZ, not agree to
any waiver or amendment of the terms of the COW which would have
a material adverse effect on PT-RTZ's Participating Interest;

7.2.9 Not take any action, including actions using the PT-FI
Available Assets, which would prejudice either the institution,
completion or operation of any first Approved Expansion Project
as described in Clause 10.5 and any projects of Expansion
thereafter or any activity of PT-FI authorised hereunder;

7.2.10 Make available the PT-FI Available Assets and its right,
title and interest in and under the COW and all authorisations
issued pursuant to the COW for their use in Joint Operations on a
first priority basis with respect to any PT-FI Available Assets
which are not, at the time, being employed with respect to
activities permitted by Clause 7.5, and on a shared basis that
reflects equitably the needs of the parties with respect to other
PT-FI Available Assets;

7.2.11 Without prejudice to any other provisions of this
Agreement, not take any action or permit any action to be taken
which will affect materially and adversely PT-RTZ's Participating
Interest but PT-FI shall not be deemed to be in breach of this
Clause merely because it exercises any right contained in Clauses
6.3 and 15 of this Agreement.

7.3 PT-RTZ Covenant PT-RTZ covenants and agrees with PT-FI that,
without the prior written consent of PT-FI, it will not create or
permit to exist any Encumbrance on or Dispose, except in the
ordinary course of business, of the whole or any part of the
interests assigned in the Assignment or the Joint Account Assets,
or violate any applicable law if the effect thereof would be
materially adverse to the Enterprise Operations provided that
PT-RTZ may create Encumbrances in favour of project lenders on
PT-RTZ's share of the Joint Account Assets or, with PT-FI's
consent, on all of the Joint Account Assets.

7.4 Power of Attorney Each of the Participants hereby appoints
the other Participant its attorney in its name or otherwise to do
all such things and sign or execute all such deeds or documents
as may be necessary or desirable to cure any and each default by
that Participant under the COW or, in the case of PT-RTZ, its
assigned interest in the COW and (without limitation) to appear
in the name of the appointor before any notary or other
Government official in Indonesia.

7.5 Retained PT-FI Rights

7.5.1 Existing Operations

7.5.1.1 Subject to Clause 7.5.1.2, PT-FI shall have the right,
without the need to obtain the consent of PT-RTZ, to continue to
carry on Mining activities with the use of the PT-FI Available
Assets, including activities which, through optimisation or fine
tuning of its operations and facilities, may result in treatment
of ore at a rate in excess of 118,000 tonnes per day and shall
have the right to use and make changes to the PT-FI Available
Assets so long as such activities do not prejudice the
undertaking of the first Approved Expansion Project at the
current millsite, as described in Clause 10.5.

7.5.1.2 PT-FI will not undertake any Expansion project (as
opposed to optimisation or fine tuning) in Contract Area Block A
other than as part of Joint Operations or take any other action
which will prejudice the undertaking of the first Approved
Expansion Project at the current millsite, provided that, if no
project for Expansion which meets the criteria specified in, or
agreed pursuant to, Clause 10.5 has been proposed by PT-RTZ to
the Operating Committee before the tenth anniversary of the
Effective Date, the following provisions shall apply:

(i) the foregoing limitation on PT-FI's ability to enter into an
Expansion project other than as part of Joint Operations shall no
longer be applicable,

(ii) PT-FI shall be entitled to enter into such a project either
as a Sole Risk Venture or, if it elects at its option to offer
PT-RTZ a right of participation and PT-RTZ accepts such offer, as
part of Joint Operations, in which latter event, RTZ Lender shall
remain obliged to make available the loan funds contemplated by
the RTZ Loan Agreement, and

(iii) except as set out in the immediately preceding item (ii),
PT-RTZ will not have a right to participate in any revenues from
nor will it be obliged to contribute to any costs in respect of
Contract Area Block A, even after the Cut-off Date, except with
respect to Joint Operations Greenfield Projects and Sole Risk
Ventures in Contract Area Block A in which PT-RTZ has
participated.

7.5.1.3 PT-FI shall be entitled to receive and retain 100% of all
revenues, including Sales Revenues, from Contract Area Block A:

(i) prior to the Sharing Commencement Date, except for any
revenues from Joint Operations Greenfield Projects and Sole Risk
Ventures in which PT-RTZ shall have participated, and

(ii) from the Sharing Commencement Date until the Cut-Off Date,
except for Incremental Expansion Revenues and any revenues from
Joint Operations Greenfield Projects and Sole Risk Ventures in
which PT-RTZ shall have participated.

7.5.2 Privatisation Agreements  Without prejudice and subject to
the covenants on the part of PT-FI contained in Clause 7.2, PT-FI
shall have the right, without the need to obtain the consent of
PT-RTZ, to conduct activities in accordance with the
Privatisation Agreements existing on the Effective Date or
described in Schedule 1 provided that the consent of PT-RTZ shall
be obtained prior to any material change in the terms thereof
which results in an increase in the burdens of PT-FI thereunder,
other than as described in Schedule 1.  The Participants will
discuss the possibility of future agreements in the nature of
Privatisation Agreements on the basis of the financial
requirements of the Participants.  If PT-FI wishes to sell and
lease back further of the PT-FI Available Assets (as part of such
future agreements or otherwise) or to sell any part thereof
reasonably deemed by it to be surplus to its requirements in
relation to Enterprise Operations, it shall be permitted to do so
provided such action does not affect materially and adversely the
institution, completion or operation of any Approved Expansion
Projects or the availability of the use of such assets, if
required, for Joint Operations.

8. COMMITTEES

8.1 Exploration Committees The Participants will, not later than
thirty days after the Effective Date, establish both an
Exploration Committee for Contract Area Block A and an
Exploration Committee for Contract Area Block B, in each case to
determine overall policies, objectives, procedures, methods and
actions for incurring the Exploration Costs.  Until the
Exploration Obligation has been satisfied, each Participant may
appoint two members to each of the Exploration Committees.  Once
the Exploration Obligation has been satisfied, PT-FI may appoint
an additional member to each of the Exploration Committees.  Each
Participant may appoint one or more alternates to act in the
absence of a regular member.  Any alternate so acting shall be
deemed a member.  Appointments shall be made or changed by
written notice to the other Participant.

8.2 Operating Committee PT-FI shall establish an Operating
Committee to, among other things:

(i) receive reports on all operations within the Contract Area,
including Joint Operations,

(ii) design for presentation to the boards of directors of PT-FI
and PT-RTZ appropriate actions respecting the Joint Operations,

(iii) develop plans and make recommendations to the board of
directors of PT-FI,

(iv) monitor execution of plans approved by the board of
directors of PT-FI, and

(v) subject to the control of the board of directors of PT-FI, be
involved generally in directing day-to-day operations of the
business of PT-FI,

but will not determine policies, objectives, procedures, methods
and actions for incurring Exploration Costs, which will continue
to be determined by the relevant Exploration Committee.  The
Operating Committee will have three members, comprising the Chief
Operating Officer of PT-FI as Chairman, the General Manager
(Mining Operations) of PT-FI and one member appointed by PT-RTZ.
Each of PT-FI and PT-RTZ may appoint one or more alternates to
act in the absence of the regular member appointed by it.  Any
alternate so acting shall be deemed a member.  Appointments shall
be made or changed by written notice to the other Committee
members.

8.3 Other Committees A special Tax Committee will be established
to administer the provisions of Clause 16.13 of this Agreement.
Other committees may be established as required on which PT-FI
shall be entitled to have majority representation provided that,
on any committee established in respect of a Sole Risk Programme
undertaken by PT-RTZ, PT-RTZ shall be entitled to have majority
representation and that PT-FI and PT-RTZ shall be entitled to
have equal representation on the special Tax Committee.

8.4 Quorum At any Committee meetings, a quorum will exist if a
representative of each Participant is present at the meeting.  If
at the time a meeting is convened, a quorum is not present, the
meeting may, upon notice to the parties entitled to be
represented at the meeting, be adjourned to a date no sooner than
twenty nor later than thirty days following such originally
scheduled meeting.  Those members who attend the rescheduled
meeting shall be deemed to constitute a quorum and may adopt any
resolutions or take any other action not inconsistent with the
provisions of this Agreement.

8.5 Decisions Each party entitled to be represented, acting
through its appointed members, shall have a vote on a Committee.
Each member of a Committee shall have one vote.  With respect to
the approval of an Approved Expansion Project or of Programmes
and Budgets, the function of the Operating Committee will be to
recommend the same for the approval of the boards of directors
of, in the case of an Approved Expansion Project, PT-FI, FCX and
PT-RTZ and, in the case of Programmes and Budgets, PT-FI and
PT-RTZ.  No project for Expansion shall be an Approved Expansion
Project unless and until it has been approved by the boards of
directors of PT-FI, FCX and PT-RTZ (and each project of Expansion
shall be an Approved Expansion Project if and when it has been so
approved) or is otherwise an Approved Expansion Project in
accordance with Clause 10.3  and no Programme and Budget shall be
an Approved Programme and Budget unless and until it has been
approved by the boards of directors of PT-FI and PT-RTZ.  Subject
to the foregoing, all decisions of each Committee shall be taken
by simple majority vote of members present in person or by proxy
except that all decisions relating to Approved Expansion
Projects, including a decision regarding a material departure
from the scope or cost of any Approved Expansion Project, shall,
subject to Clause 10.3, require the approval of representatives
of both Participants.

8.6 Meetings The Operator shall call the first meetings of the
Exploration Committees within thirty days of the formation
thereof.  The purpose of such first meetings shall be to propose
and agree the first Programme and Budget for the remainder of
that Year provided that until such a first Programme and Budget
has been agreed, Exploration activities will be conducted in
accordance with the Exploration programme for 1995 in existence
at the date of the Implementation Agreement or, if this Agreement
is executed after 31 December 1995, the then existing Exploration
programme of PT-FI which does not cover a period in excess of 12
months.  Thereafter the Exploration Committees and the Operating
Committee shall hold at least four meetings per Year, one of
which shall be in December to propose the relevant Programme and
Budget for the subsequent calendar year (the "Annual Budget
Meeting").  The Operator shall give thirty days' notice to the
Participants of each meeting.  Additionally, any Participant or
the Operator may call a special meeting upon fifteen days' notice
to the other Participant(s) and to the Operator if the Operator
is not calling the meeting.  In case of emergency, reasonable
notice of a special meeting shall suffice.  All meetings shall be
held in a mutually agreed place, failing which in New Orleans.
Each notice of a meeting shall include an itemised agenda
prepared by the Operator in the case of a regular meeting, or by
the Participant calling the meeting in the case of a special
meeting, but any matters may be considered with the consent of
the Participants.  The Operator shall prepare minutes of all
meetings and shall distribute copies of such minutes to the
Participants within thirty days after the meeting.  The minutes,
when signed by all Participants (and no signature shall be
unreasonably withheld or delayed), shall be the official record
of the decisions made by a Committee and shall be binding on the
Participants and on the Operator.  Each of the Participants shall
bear its own costs of attendance at meetings of Committees.  The
Operator shall be entitled to be present at all meetings of a
Committee unless such Committee otherwise resolves but the
Operator shall not be counted in the quorum or be entitled to
vote in its capacity as Operator.

8.7 Action Without Meeting In lieu of meetings, a Committee may
hold telephone conferences, so long as all decisions are
immediately confirmed in writing and signed by all the parties
entitled to be represented at meetings of that Committee, and a
member appointed by each party entitled to be represented at
meetings of that Committee has a reasonable opportunity to be
included in any such conference.

8.8 Close-down

8.8.1 If either Participant shall determine that, in its best
judgment, Close-down shall occur within 11 years thereafter, it
shall notify the other Participant and the Operator.  Within 30
days after receipt of notice of such determination, the other
Participant shall notify the first Participant whether or not it
agrees with such determination.  If there is a disagreement as to
such determination, the Participants shall seek to achieve a
mutually agreed expected date of Close-down (an "Anticipated
Close-down Date").  In the absence of such an agreement, the
dispute shall be referred to the firm of independent mining
consultants which has most recently reviewed and confirmed the
reserves in the Contract Area for Form 10-K reporting purposes,
whose determination as to the Anticipated Close-down Date shall
be binding on both Participants.

8.8.2 Within 90 days after a final determination of the
Anticipated Close-down Date, the Operator shall deliver to the
Participants its best estimate of the anticipated Close-down
Costs.  In December of the Year in which such determination of
the Anticipated Close-down Date shall have been finally
determined, and in December of each of the nine subsequent Years,
each Participant shall secure the payment of 10% of the
Close-down Costs payable by such Participant (in accordance with
the Financial and Accounting Procedures), by such methods as
shall be determined by agreement of the Participants or, in the
absence of agreement, by (i) the purchase of bonds with an
investment rating of A (or the then equivalent rating) or better
and (ii) the delivery of such bonds to the Trustee under the
Trust Agreement or such other trustee as shall be agreed by the
Participants.  The proceeds of such bonds or other form of
security shall be made available, as required, to pay such
Close-down Costs.

8.8.3 In the case of a Sole Risk Venture, the Participant
undertaking the Sole Risk Venture shall provide for the
anticipated Close-down Costs as provided in Clauses 8.8.1 and

8.8.2, unless an alternate method of funding Close-down Costs has
been approved by the non-Participating Participant(s).

9. OPERATOR

9.1 Appointment Except as provided in Clauses 9.5 and 12.2, PT-FI
shall be the Operator for all operations under the COW or this
Agreement.  The Operator shall report to the Committees.

9.2 Powers and Duties of Operator Subject to the provisions of
this Agreement and other agreements which the Participants have
agreed to be binding with respect to all or part of Enterprise
Operations, the Operator shall, in addition to those powers and
duties contained elsewhere in this Agreement, have the following
powers and duties which shall be discharged in accordance with
each Programme and Budget:

9.2.1 The Operator shall manage, direct and conduct Enterprise
Operations.

9.2.2 The Operator shall prepare and present to each member of
the appropriate Committee proposed Programmes and Budgets in
accordance with paragraph 10.1 of the Financial and Accounting
Procedures.

9.2.3 The Operator shall make cash calls as provided in paragraph

10.3 of the Financial and Accounting Procedures and on receipt of
amounts from the Participants pursuant to paragraph 10.3 of the
Financial and Accounting Procedures shall make all expenditures
necessary to carry out Approved Programmes and Budgets and shall
promptly advise the relevant Committee if it lacks sufficient
funds to carry out its responsibilities under this Agreement.
Any payments made by the Operator pursuant to this Agreement
shall be for the account of the Participants and the Operator
shall not be required as Operator to advance its own funds for
the purposes of conducting Joint Operations.

9.2.4 The Operator shall make distributions of cashflow as
provided in this Agreement (including the Financial and
Accounting Procedures) and should the Operator default in making
any such distributions and the default continues for 30 days
after (i) (in the absence of any dispute or, in the event of a
dispute, as regards the undisputed amount) notice from any
Participant of non-payment or (ii) (in the event of a dispute, as
to the disputed amount) final determination of such amount as
provided in the Financial and Accounting Procedures, any
Participant shall have the right to declare an Allocation Event
(as defined in the Trust Agreement).

9.2.5 The Operator shall implement Approved Expansion Projects
and other Expansions.

9.2.6 The Operator shall sell on behalf of the Participants with
an interest in such Products, the Products derived from
Enterprise Operations on terms which shall be discussed with such
Participants.  In carrying out its obligations pursuant to Clause
9.2.6, the Operator shall conduct such hedging and other price
protection activities as are authorised by the relevant
Participant with an interest in such Products.  However, the
costs and benefits of such price protection activities shall be
specifically allocated to and borne solely by the authorising
Participant.

9.2.7 The Operator shall:

(a) purchase or otherwise acquire all material, supplies,
equipment, water, utility and transportation services required
for operations, such purchases and acquisitions to be made on
such terms as the Operator shall prudently approve, taking into
account all of the circumstances, including the existence of
prior agreements and arrangements;

(b) obtain such customary warranties and guarantees as are
available in connection with such purchases and acquisitions,
taking into account all of the circumstances; and

(c) keep the Joint Account Assets free and clear of all
Encumbrances, except for those existing at the time of, or
created concurrent with, the acquisition of such Joint Account
Assets and those which are otherwise permitted by this Agreement,
including Clause 7.2.5, or with the consent of the Participants.

9.2.8 The Operator shall: (a) make or arrange for all payments
required by the COW, leases, claims, grants, permits, licences,
concessions, contracts and other agreements related to the Joint
Account Assets; (b) pay all Taxes, assessments and like charges
on Enterprise Operations and Joint Account Assets except Taxes
determined or measured by a Participant's net income subject to
the provisions of Clause 14 and (c) do all other acts reasonably
necessary to maintain the Joint Account Assets and the COW.

9.2.9 The Operator shall:  (a) apply for all necessary permits,
licences and approvals; (b) comply with applicable laws and
regulations; (c) notify promptly the relevant Committee of any
allegations of substantial violation thereof; and (d) prepare and
file all reports or notices required for Joint Operations.  The
Operator shall not be in breach of this provision if a violation
has occurred in spite of the Operator's good faith efforts to
comply, and the Operator has in a timely manner cured or disposed
of such violation.

9.2.10 The Operator shall prosecute and defend, but shall not
initiate without consulting the Participants any litigation or
administrative proceedings arising out of Joint Operations.  The
Participants shall have the right to participate, at their own
expense, in such litigation or administrative proceedings.

9.2.11 The Operator shall maintain for the account of the
Participants with respect to the Joint Operations such basic
insurance as it shall reasonably deem to be necessary for prudent
operation (details of which it shall supply to each Participant)
and, to the extent practicable, shall also make available, at the
individual Participant's cost and for the individual
Participant's benefit, such additional insurance, including
business interruption insurance, as the individual Participants
shall desire.  The premium for such basic insurance will be a
charge to the Participation and for such additional insurance to
the Participant(s) requesting the same.  No other insurance shall
be provided for the benefit of the Participants.  However, after
consultation with the other Participant, any Participant may
procure and maintain at its cost and expense such other insurance
as it shall determine and such other insurance shall be solely
for the benefit of the Participant procuring the same and the
premium therefor shall not be a charge to the Participation.
Further, such insured Participant shall indemnify the other
Participants not named as insured in such additional insurance
policy against any claim of the insurer by subrogation or
otherwise.

9.2.12 Except where the Operator is expressly permitted to
Dispose of Joint Account Assets by the terms of this Agreement,
the Operator may not Dispose of Joint Account Assets, whether by
sale, assignment, abandonment or other transfer, except in the
ordinary course of business or with the agreement of the
Participants.

9.2.13 The Operator shall have the right (subject to Clause 9.6)
to carry out its responsibilities hereunder through agents,
Affiliates or independent contractors.

9.2.14 The Operator shall keep and maintain all accounting and
financial records in accordance with the Financial and Accounting
Procedures.

9.2.15 The persons employed in the Joint Operations will not be
employees of the Participation.

9.2.16 At all reasonable times, the Operator shall provide the
relevant Committee or the representative of any Participant, upon
request, access to, and the right to inspect and copy all
information acquired in Joint Operations, including, but not
limited to, maps, drill logs, core tests, reports, surveys,
assays, analyses, production reports, operations, technical,
accounting and financial records.  In addition, the Operator
shall allow each Participant, at its sole risk and expense, and
subject to reasonable safety regulations, to inspect the Joint
Account Assets and observe Enterprise Operations at all
reasonable times, so long as the inspecting Participant does not
unreasonably interfere with Enterprise Operations.

9.2.17 The Operator shall undertake all other activities
reasonably necessary to fulfill the foregoing.

 The Operator shall not be in default of its duties under this
Clause 9.2 if its inability to perform results from the failure
of either Participant to perform acts or to contribute amounts
required of it by this Agreement, but this shall not relieve any
Participant which is the Operator of any liability in its
capacity as a Participant.

9.3 No Fee Except as otherwise agreed or provided for in the
Financial and Accounting Procedures, the Operator shall not be
entitled to any fee or other compensation for acting as Operator.

9.4 Standard of Care The Operator shall conduct all Enterprise
Operations (including the marketing of Products) in a good,
workmanlike and efficient manner, in accordance with sound mining
and other applicable industry standards and practices, and in
accordance with applicable laws, the terms and provisions of the
COW and any leases, licences, permits, contracts and other
agreements pertaining to the Joint Account Assets.  Without
prejudice to the generality of the foregoing, the Operator shall
maintain in good working order all material assets taken as a
whole from time to time used in Enterprise Operations or Sole
Risk Ventures.  The Operator shall not be liable to any
Participant for any act or omission in its capacity as
Participant (insofar as such act or omission relates to conduct
of operations in the Contract Area) or as Operator resulting in
damage or loss except to the extent caused by or attributable to
its  wilful misconduct or gross negligence.

9.5 Resignation; Deemed Offer to Resign The Operator may resign
upon 90 days' prior notice.  In addition, the Operator shall be
deemed to have resigned forthwith upon an Event of Resignation,
as defined below and, as provided in the Operator Replacement
Agreement, PT-RTZ shall, if at the time of such Event of
Resignation, PT-RTZ is not the Operator and is an indirect or
direct subsidiary of RTZ, have the right to become substitute
Operator in succession to PT-FI with respect to the COW.
Similarly, if the Operator shall resign upon 90 days' prior
notice, PT-RTZ will have the right to become Operator in
succession to PT-FI with respect to the COW if PT-RTZ is not then
the Operator and shall at the time be a direct or indirect
subsidiary of RTZ.  For the purposes of this Agreement, an Event
of Resignation shall mean one of the following occurrences:

9.5.1 an Event of Default shall have occurred under an FI Credit
Document (as defined in the Trust Agreement) which gives the
Operator Selection Representative a right under the Operator
Replacement Agreement to cause PT-FI to resign as Operator and
such Operator Selection Representative has elected to exercise
such right; or

9.5.2 the Government has given PT-FI a notice of default under
Article 20 of the COW and PT-FI has not within 30 days (unless
the default relates to failure to make payments pursuant to
Article 12 or 13 of the COW, in which event 20 days) after
receipt thereof either corrected such default or obtained the
withdrawal or stay of such notice, unless the question has been
submitted to arbitration, in which event it shall be an Event of
Resignation if PT-FI has not corrected such default within 10
days after affirmation of such default by arbitration; or

9.5.3 FCX and its Affiliates shall cease to own at least such
number of shares of the capital stock of PT-FI as shall permit
FCX and its Affiliates to elect a majority of the board of
directors and of the board of commissioners of PT-FI; or
9.5.4 any person shall, except with the consent of RTZ, acquire
such number of shares of the capital stock of FCX as shall permit
such person to elect a majority of the board of directors of FCX;
or

9.5.5 a general meeting of shareholders of the Operator resolves
that the Operator be liquidated or the Operator suffers the
appointment of a receiver, liquidator, administrator, assignee,
custodian, trustee, sequestrator or similar official for a
substantial part of its assets in a proceeding brought against or
initiated by it, and such appointment is neither made ineffective
nor discharged within ninety days after the making thereof or
such appointment is consented to, requested by or acquiesced in
by it; or

9.5.6 the Operator commences a voluntary case under any
applicable bankruptcy, insolvency or similar law now or hereafter
in effect; or consents to the entry of an order of relief in an
involuntary case under any such law or to the appointment of or
taking possession by a receiver, liquidator, administrator,
assignee, custodian, trustee, sequestrator or other similar
official of any substantial part of its assets; or makes a
general assignment for the benefit of creditors; or

9.5.7 entry is made against the Operator of a judgment, decree or
order for relief by a court of competent jurisdiction in an
involuntary case commenced against the Operator under any
applicable bankruptcy, insolvency or other similar law of any
jurisdiction now or hereafter in effect.

9.6 Transactions With Affiliates If the Operator engages an
Affiliate of either Participant to provide services hereunder or
to perform any of the obligations of the Operator, it shall do so
on terms no more favourable to the Affiliate than would be the
case with an unrelated person in an arm's length transaction
provided that arrangements with Affiliates consistent with the
Management Services Agreement presently in existence between
Freeport-McMoRan Inc. and PT-FI or between FCX and PT-FI, and
substitute arrangements no more onerous to PT-FI, shall not
constitute a violation of the foregoing.

10. FEASIBILITY STUDY INTO EXPANSION

10.1 At such time (whether before or after the Effective Date) as
a Participant is of the good faith and reasonable opinion that an
economically viable project of Expansion or Development may be
possible in any area of the Contract Area (the "Specified Area")
(the "Expansion Project"), such Participant (the "Proposing
Participant") may propose that a Feasibility Study be prepared to
assess the economic viability of such Expansion Project.  Such
proposal (the "Proposal") shall be made to the Operating
Committee and shall detail the information upon which the
Proposing Participant has based its opinion.  The Specified Area
shall be defined in terms of a three-dimensional physical
description.

 Within 30 days following the Operating Committee's receipt of
the Proposal, the Operating Committee shall vote whether to
authorise the Operator to conduct a Feasibility Study relating to
such Proposal, except that, if the Proposal relates to an
Expansion Project which satisfies the criteria specified in, or
agreed pursuant to, Clause 10.5 and would be the first Approved
Expansion Project, such approval shall be deemed to have been
given.  If the Operating Committee approves the Proposal, the
Operator shall conduct a Feasibility Study relating thereto.  If
the Operating Committee does not approve the Proposal, the
Proposing Participant may, at its sole risk and expense, proceed
with the project as described in the Proposal as a Sole Risk
Programme, to which the provisions of this Agreement relating to
Sole Risk Programmes and Sole Risk Ventures shall apply.

10.2 Upon completion of any such Feasibility Study as is referred
to in Clause 10.1 (including any initiated before the Effective
Date and completed after the Effective Date), the Operator will
deliver a copy of the results thereof to the Operating Committee
and to the boards of directors of FCX, PT-FI and PT-RTZ
respectively.  Within 90 days following receipt of such results
or, if the Expansion Project does not involve project financing
on a joint basis and is not to be financed through the proceeds
of the RTZ Loan Agreement, then within such additional reasonable
period of time, not exceeding six months, as shall be necessary
for either Participant to receive assurance of necessary
financing, the boards of directors of FCX and PT-FI, on one hand,
and of PT-RTZ, on the other, shall either

10.2.1 approve, and authorise the commencement of construction
of, the Expansion Project in accordance with its terms;

10.2.2 agree in principle that the Expansion Project be carried
out as Joint Operations but disagree as to scope or related
Budget; or

10.2.3 decline to approve the Expansion Project.

10.3 Notwithstanding any other provision of this Agreement to the
contrary, for a period of ten years from the date hereof, PT-RTZ
shall have the sole right (i) to propose as the subject of a
Feasibility Study an Expansion Project which satisfies the
criteria specified in, or agreed pursuant to,  Clause 10.5 and
which would be the first Approved Expansion Project and (ii) to
determine that the Expansion Project which is the subject of such
Feasibility Study shall be the first Approved Expansion Project,
for which purpose the approval of the board of directors of PT-FI
shall be deemed to have been given.  Accordingly, whether or not
the board of directors of PT-FI or the board of directors of FCX
approve such Expansion Project, such Expansion Project shall,
provided it is approved by the board of directors of PT-RTZ, be
an Approved Expansion Project for all purposes of this Agreement.

10.4 Except in relation to the Expansion Project falling within
Clause 10.3 as to which the provisions of Clause 10.3 shall
apply, if the boards of directors of FCX, PT-FI and PT-RTZ do not
agree on the scope and Budget of an Expansion Project as
mentioned in Clause 10.2.2, the matter shall be left open for an
additional period of 30 days to allow for further discussion.  If
the boards of directors shall decline to approve the Expansion
Project within such 30 day period, the board of directors of the
Proposing Participant may, within a further period of 30 days
thereafter by notice to the other Participant and the Operator
elect, subject, in the case of PT-FI, to the limitation specified
in Clause 7.5.1.2, to carry out such Expansion Project as a sole
risk venture (a "Sole Risk Programme") and, unless the other
Participant, within a further period of 30 days after receipt of
the Proposing Participant's notice of election, elects by written
notice to the Proposing Participant and the Operator to join in
such Sole Risk Programme (in which case the Expansion Project
shall become part of Joint Operations), the Proposing Participant
shall have the right to carry out the Expansion Project as a Sole
Risk Venture provided that it commences work within one year
after the date of its written election to carry out such
Expansion Project as a Sole Risk Venture, and provided further
that, in the case of any Sole Risk Programme carried out by
PT-RTZ, unless PT-RTZ has obtained the prior written consent of
PT-FI, the Sole Risk Programme is not based to any significant
degree on the accelerated mining of the 10-K Reserves.

10.5 No project shall be capable of being the first Approved
Expansion Project  unless it is a project for Expansion which is
(a) based on the aggregate of (i) the 10-K Reserves and (ii) New
Reserves of not less than 400,000,000 tonnes containing an
average of 0.5% copper and 0.5 grammes/tonne of gold (or the
economic equivalent thereof), unless FCX and PT-RTZ shall agree
that a smaller reserve would suffice and (b) designed to result
in the treatment of ore mined from the aggregate resources in
Contract Area Block A (being both the 10-K Reserves and the
above-mentioned New Reserves) at an aggregate rate in excess of
118,000 tonnes per day.  In this Clause 10.5, "New Reserves"
means proved and probable ore reserves situated in Contract Area
Block A which are additional to the 10-K Reserves.

11. GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS

11.1 The Participants will plan together, in accordance with the
procedures set out in Clause 10, the Development of any new
Greenfield Project in Contract Area Block A or Contract Area
Block B, and any project of Expansion which is to be funded
wholly without the use of the proceeds of the RTZ Loan and the
related direct investment by PT-RTZ.  The procedures outlined in
Clause 10 and the Financial and Accounting Procedures will be
applicable.

11.2 If any project referred to in Clause 11.1 is to be developed
as part of Joint Operations, the financing of such project,
insofar as it is not to be funded by way of the RTZ Loan and the
related direct investment by PT-RTZ, will be either on a joint
basis, in which event the financing costs will be part of the
Operating Costs for purposes of the Financial and Accounting
Procedures, or on an individual basis, in which event each
Participant will be solely liable for its financing costs but
will be entitled to determine the form which such financing will
take, including, if such Participant so desires, sale and
leaseback transactions so long as such transactions relate solely
to such Participant's interest in the Joint Account Assets and do
not prejudice or unduly interfere with the carrying on of
Enterprise Operations or previously established Sole Risk
Ventures.  The costs and benefits of any such project carried on
as part of Joint Operations will, subject to the above provisions
of this Clause 11.2 and Clause 6.1 and the Financial and
Accounting Procedures, be borne by the Participants in proportion
to their respective Participating Interests in Contract Area
Block A or Contract Area Block B, as the case may be.

11.3 If, pursuant to the procedures set out in Clause 10, any
project referred to in Clause 11.1 is not to be developed as part
of Joint Operations, either Participant may treat the project as
a Sole Risk Venture under the provisions of Clauses 10 and 12.

12. SOLE RISK

12.1 If a Proposing Participant shall proceed with a Sole Risk
Programme and unless otherwise agreed by the Participants, for so
long as the Sole Risk Programme continues or the Proposing
Participant continues to conduct operations on its own account in
the Specified Area:

12.1.1 the Specified Area shall not be eligible for Joint
Operations and the Proposing Participant shall have the exclusive
right to carry out the Sole Risk Programme and any subsequent
work programmes as it may think fit in the Specified Area at its
sole risk and cost and the other Participant shall, to the extent
necessary and so far as it is able and without prejudice to the
existing Enterprise Operations, provide full rights of ingress,
egress and regress to, from and over the Specified Area and the
remainder of the Contract Area so that the Proposing Participant
may exercise such right.  Without prejudice to the generality of
the foregoing, to the extent that the Sole Risk Venture requires
the use of PT-FI Available Assets PT-FI support services or Joint
Account Assets, and the use of these assets and support services
does not prejudice then or later the conduct of Enterprise
Operations, each of PT-FI and PT-RTZ (as appropriate) will make
available and charge to the Sole Risk Venture the direct and
allocable costs of providing such assets and services;

12.1.2 the Participant which is not the Proposing Participant
shall cease to have any rights to the production of Minerals or
proceeds therefrom from operations in the Specified Area provided
that the rights of the Proposing Participant will relate solely
to the obtaining of exclusive rights to the proved and probable
reserves in the three-dimensional physical area of the Specified
Area, as described in the Feasibility Study with respect to the
project in question, to the extent such reserves constitute the
basis for the project, as presented to the Participants pursuant
to Clause 10, but will not thereby obtain rights with respect to
any other reserves.  Any further Expansion within the Specified
Area, but not constituting part of the Sole Risk Programme, will
be subject to the procedure provided in Clause 11 for approval of
Programmes, but with protections afforded to the holder of the
Sole Risk Programme which are comparable to those afforded PT-FI
with respect to the 10-K Reserves and the related PT-FI Available
Assets.

12.2 All Sole Risk Programmes shall be conducted by the Operator
appointed under this Agreement, unless it declines to act as
operator with respect thereto, in which event the operator with
respect thereto shall be the person designated as operator by the
Participant for whose account the Sole Risk Venture is being
conducted, subject to the reasonable approval of PT-FI.  The
Operator or other operator shall have, with respect to the Sole
Risk Venture, the same powers, rights and obligations as are
applicable to the Operator's activities with respect to
Enterprise Operations.  In the event of any conflict between the
conduct of Enterprise Operations and a Sole Risk Programme, the
Operator shall give priority to Enterprise Operations.

12.3 Should the Operator conduct a Sole Risk Programme on behalf
of a Participant which is not also the Operator, the charges
provided for in the Financial and Accounting Procedures with
respect to such Sole Risk Programme shall be payable or repayable
to the Operator upon demand.  The Operator shall be authorised to
establish such procedures as are reasonably necessary to obtain
such payments from revenues otherwise payable to such Participant
or to issue cash calls with respect thereto to such Participant.

12.4 Should the board of directors of any Participant determine,
in any Year, not to participate in the proposed Exploration
Programme for such Year as recommended by the Exploration
Committee, or if no Programme is recommended by the Committee,
the board of directors of either Participant may elect, upon 30
days' notice after having submitted a proposed Exploration
Programme to the other Participant, to carry out such Programme
as a Sole Risk Venture, unless within such period the other
Participant elects to join in such Programme.  If no such
election by the other Participant is made,

(a) if the proposed Programme is in Contract Area Block B, the
declining Participant shall not be entitled to participate in
that or any subsequent Exploration Programmes or in any
subsequent Development Projects in Contract Area Block B other
than any Development Projects already begun or pursuant to
Exploration Programmes and subsequent Development Projects based
on Feasibility Studies which have theretofore been approved, and

(b) if the proposed Programme is in Contract Area Block A, the
absence of any such election by the other Participant shall not
affect that other Participant's rights to participate in any
subsequent Exploration Programmes or in any subsequent
Development Projects except that if the Participant which carries
out the Programme as a Sole Risk Programme subsequently puts
forward a proposal for Development based on such Sole Risk
Programme, the other Participant shall not, in reaching a
decision whether or not to participate in such Development
Project, be entitled to see or use any data relating to such
Exploration Sole Risk Programme.

13. PROGRAMMES AND BUDGETS
Joint Operations shall be conducted, expenses shall be incurred
and Joint Account Assets shall be acquired pursuant only to
Approved Programmes and Budgets.  The Financial and Accounting
Procedures contains, among other things, provisions concerning
the preparation, review and approval of Programmes and Budgets.

14. TAXATION IN INDONESIA
It is the intention of the Participants that each of the
Participants should be liable for Indonesian Taxes on income
separately according to its participation in Joint Operations and
any of its Sole Risk Ventures (and with respect to PT-FI, its
interest in the 10-K Reserves and the other Enterprise
Operations).  Each Participant shall be directly responsible for
and shall directly pay all such Taxes applicable to such
Participant in Indonesia.

Each Participant shall individually and timely file its own
Indonesian Tax returns with the relevant authorities and
independently file pertinent claims and recover Tax credits to
the extent permitted by applicable law.  Each Participant shall
provide to the other promptly all such information reasonably
requested by the other to enable such other to comply with its
obligations under this Clause 14.

Failure by a Participant to make any payment of Indonesian Income
Tax which is due and payable by the Participant and which would
result in a default under the COW shall entitle the Operator
after 3 business days' notice to the Participant to make the
required payment on behalf of the Participant and withhold such
amount from sums otherwise due to such Participant under this
Agreement.

15. TRANSFER OF PARTICIPATING INTERESTS

15.1 General
 Subject to the provisions of this Clause 15, a Participant shall
have the right to transfer, grant, assign, and otherwise commit
or dispose (all such rights to be referred to as "transfer" in
this Clause 15) to any third party all or any part of its
Participating Interest.

15.2 Limitations on Free Transferability
 The transfer right of a Participant in Clause 15.1 shall be
subject to the following terms and conditions:
15.2.1 no transferee (other than a transferee taking the
Participating Interest or part thereof for the purpose of
securing the payment or repayment of any indebtedness, or
enforcement thereof, or the taking of title by a party secured
thereby or an Affiliate (including any representative thereof and
the Trustee acting on its behalf under the Restated Trust
Agreement), and prior to the assumption of the position of a
Participant in substitution for a Participant under the
Participation Agreement) of all or part of its Participating
Interest shall have the rights of a Participant unless and until
the transferring Participant has provided to the other
Participants notice of the transfer, and the transferee (other
than a transferee as aforesaid), as of the effective date of the
transfer, has committed in writing to be bound by this Agreement
to the same extent and nature as the transferring Participant;

15.2.2 no transfer permitted by this Clause 15 shall relieve the
transferring Participant of its share of any Liability, whether
accruing before or after such transfer, which arises out of Joint
Operations conducted after the Effective Date and prior to such
transfer;

15.2.3 the transferring Participant and (unless the transferee is
taking the Participating Interest or part thereof by way of
security) the transferee shall indemnify the other Participant
against all adverse tax consequences of the transfer;

15.2.4 no transfer shall be made of less than a 10% Participating
Interest (unless it is the balance of the transferor's
Participating Interest) and no such transfer shall result in the
transferring Participant retaining less than a 10% Participating
Interest provided that a Participant will be entitled, in
connection with the financing of a Sole Risk Programme or an
Approved Programme and Budget, subject to the other sub-clauses
of this Clause 15.2, to transfer a partial interest of less than
a 10% Participating Interest, or a partial interest that relates
only to a specific geographic area, so long as such transfer and
such financing do not materially and adversely affect any Joint
Operations;

15.2.5 no transfer shall be made to a person which is bankrupt,
insolvent, liable to be wound up, which is not of good financial
standing or which is otherwise objectionable on reasonable
grounds from the viewpoint of the interests of the Participation;

15.2.6 subject to Clause 15.4.4, such transfer shall be subject
to a first offer right in favour of the other Participant as
provided in Clause 15.3;

15.2.7 such transfer shall in no case affect the rights of the
non-transferring Participant under the COW;

15.2.8 such transfer shall include the right to receive revenues
from Enterprise Operations to the extent enjoyed by the
transferor, but shall not include the right to participate in any
Committees described in Clause 8 of this Agreement or in Clause 2
of the Implementation Agreement or to be an Operator as described
in Clause 9 of this Agreement, unless the non-transferring
Participants consent to the transfer of the right in question,
which consent may be withheld for any reason; and
15.2.9 such transfer shall be subject to prior Government
approval.

In addition, until the RTZ Loan has been repaid in full, no
transferee of the whole or any part of PT-FI's Participating
Interest in Incremental Expansion Cashflow (together with PT-FI's
related rights under the COW and agreements for the sale of
Products derived from Joint Operations) shall have the rights of
a Participant unless and until it has committed in writing to be
bound by the repayment provisions of the RTZ Loan Agreement and
acknowledged and consented to the Intercreditor Agreement (as
defined in the RTZ Loan Agreement).

15.3 First Offer Right
 Except as otherwise provided in Clause 15.4, if a Participant
desires to transfer all or any part of its Participating
Interest, including an interest therein that relates only to a
specific geographic area, it shall first offer to sell such part
to the other Participant on terms to be agreed.  The Participants
shall thereupon use all reasonable endeavours to agree the terms
of the sale.  If despite using all such reasonable endeavours,
the Participants fail to agree on the terms of the sale within a
period of 60 days after the date of the offer referred to in this
Clause 15.3, the Participant desiring to sell shall have the
right for the period of 180 days following the expiry of such 60
day period to sell such part of its Participating Interest to a
third party.  If the Participant desiring to sell shall fail to
consummate such a sale to any third party within 180 days after
such Participant shall become entitled hereunder to sell to such
third party, no sale or transfer may thereafter be made by such
Participant without again complying with the provisions of this
Clause 15.3.

15.4 Exceptions to First Offer Right
 Clause 15.3 shall not apply to the following transfers:

15.4.1 transfer by a Participant of all or any part of its
interest in this Agreement or any Participating Interest to an
Affiliate;

15.4.2 corporate merger, consolidation, amalgamation or
reorganisation of a Participant for the purposes of a financial
reconstruction;

15.4.3 transfers among Participants which are expressly required
or permitted by the provisions of this Agreement;

15.4.4 transfers by way of security or an enforcement or
foreclosure thereof or the taking of title by a secured party or
an Affiliate (including any representative thereof and the
Trustee acting on its behalf under the Restated Trust Agreement)
but not a subsequent transferee.

16. GENERAL PROVISIONS

16.1 Notices
 All notices, payments and other required communications
hereunder ("Notice") between the parties shall be in writing and
shall be addressed, respectively, as follows:  All Notices shall
be given (a) by personal delivery to each of the other parties,
or (b) by electronic communication, with a confirmation sent by
registered or certified mail, return receipt requested.  All
Notices shall be effective and shall be deemed delivered (i) if
by personal delivery on the date of delivery and (ii) if by
electronic communication on the date of receipt of the electronic
communication.  A party may change its address from time to time
by Notice to the other parties.

If to PT-FI: P. T. Freeport Indonesia Company
 1615 Poydras Street
 New Orleans, LA  70161
 Attention:  Treasurer
Tel.: (504) 582-4628
 Fax: (504) 582-4511


If to PT-RTZ: P.T. RTZ-CRA Indonesia
 14th floor, World Trade Centre
 Jalan Jend. Sudirman Kav. 29-31
Jakarta 12920
     Indonesia
     Tel:  (6221) 521 1752
     Fax: (6221) 521 1760

     Attention:  President Director

  with a copy to: The RTZ Corporation PLC
     6 St. James's Square
     London SW1Y 4LD
     England
     Tel:  0171 930 2399
     Fax: 0171 930 3249

     Attention:  The Secretary

16.2 Waiver
 The failure of a party to insist on the strict performance of
any provision of this Agreement or to exercise any right, power
or remedy upon a breach hereof shall not constitute a waiver of
any provision of this Agreement or limit the party's right
thereafter to enforce any provision or exercise any right.

16.3 Modification
 No modification or amendment of this Agreement shall be valid
unless made in writing and duly signed by all the parties.  If,
in the event of experience gained through the operation of this
Agreement, the parties agree that application of any of its
provisions results in a material inequity to (a) party(ies), then
the parties agree that they will meet to discuss possible changes
in such provision(s) proposed by one or more parties as a means
of obviating such inequity.

16.4 Force Majeure

16.4.1 The obligations of the Operator and of a Participant,
other than the payment of money provided hereunder, shall be
suspended and any period of time mentioned in this Agreement
shall be extended to the extent and for the period that
performance or the ability of the Operator or (as the case may
be) one or both of the Participants to exercise rights or carry
out obligations or otherwise act as permitted by or in accordance
with this Agreement is prevented by any cause, whether
foreseeable or unforeseeable, beyond its reasonable control,
including, without limitation, labour disputes (however arising
and whether or not employee demands are reasonable or within the
power of the Participant to grant); acts of God; laws,
regulations, orders, proclamations, instructions or requests of
any government or governmental entity; judgments or orders of any
court; inability to obtain on reasonably acceptable terms any
public or private exploration or exploitation, right, licence,
permit or concession; curtailment or suspension of activities to
remedy or avoid an actual or alleged, present or prospective
violation of federal, state or local environmental standards;
acts of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection
or rebellion; fire, explosion, earthquake, storm, flood, sink
holes, drought or other adverse weather condition; delay or
failure by suppliers or transporters of materials, parts
supplies, services or equipment or by contractors or
sub-contractors' shortage of, or inability to obtain, labour,
transportation, materials, machinery, equipment, supplies,
utilities, or services; accidents; breakdown of equipment,
machinery or facilities; or any other cause, whether similar or
dissimilar to the foregoing.  The affected Participant shall
promptly give notice to the other Participant of the suspension
of performance, stating therein the nature of the suspension, the
reasons therefor and the expected duration thereof.  The affected
Participant shall resume performance as soon as reasonably
possible.  During the period of suspension, the obligations of
the Participants to advance funds pursuant to paragraph 10.3  of
the Financial and Accounting Procedures shall be reduced to
levels consistent with the Joint Operations which are capable of
being carried on in the circumstances.

16.4.2 Should any of the causes referred to in Clause 16.4.1
result in the actual production of Products from Enterprise
Operations (other than Greenfield Projects) in Contract Area
Block A in any Year (the "Actual Production") falling short of
the planned production of such Products for the Year as shown in
the then current programme and budget (which, in the case of
Joint Operations, shall be the Approved Programme and Budget) for
that Year (the "Planned Production"), the Product Schedule shall
be amended as follows:

(i) The scheduled production of Products for the Year in question
as shown in the Product Schedule shall be reduced in accordance
with the following formula:

D = A/B x C,
 where D is the revised scheduled production for the Year in
question, A is the Actual Production, B is the Planned Production
and C is the scheduled production of Products for that Year as
shown in the Product Schedule prior to the occurrence of the
cause and the production which is D shall be substituted in the
Product Schedule as the scheduled production of Products for the
Year in question.

(ii) The shortfall in production being C - D (as defined in (i)
above) shall be added to the final Year of production as shown by
the Product Schedule prior to the occurrence of the cause or
causes.  If, in the final Year, the scheduled production as so
revised would exceed the production which would result from a
daily rate of 118,000 tonnes per day, the excess shall be carried
forward to the subsequent Year (and the Cut-off Date shall be
extended accordingly) and appropriate adjustments made to the
production of recovered metal for that Year.

16.5 Governing Law

16.5.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

16.5.2 Each of the parties irrevocably agrees that any suit,
action or proceedings (together in this Clause 16.5 referred to
as "Proceedings") arising out of or in connection with this
Agreement shall be brought in any United States Federal or New
York State court sitting in the borough of Manhattan, City of New
York and, except for the purposes of or Proceedings regarding
enforcement, which may take place in any relevant jurisdiction,
submits to the exclusive jurisdiction of the courts in such
borough.

16.5.3 Each of the parties irrevocably waives any objection which
it may have now or hereafter to the laying of venue of any
Proceedings in any such court as is referred to in this Clause

16.5 and any claim that any such Proceedings have been brought in
an inconvenient forum.  Each of the parties hereby to the fullest
extent permitted by law waives any right it may have to have any
Proceedings take the form of a trial by jury.

16.5.4 Each of the parties hereby irrevocably designates,
appoints and empowers, in the case of the United States Federal
Courts in New York and the New York State courts, CT Corporation
System, having offices at the date hereof at 1633 Broadway, New
York, N.Y. 10019, U.S.A. to receive, for and on behalf of itself,
service of process in such jurisdictions in any legal action or
proceedings with respect to this Agreement or any judgment in
connection herewith and agrees that failure by such process agent
to give notice of such service of process to it shall not impair
or affect the validity of such service or of any judgment based
thereon.

16.6 Penalties
 It is agreed between the parties that, while the percentage and
rate set out in Clause 6.3.2.3 and paragraph 10.3.3 of the
Financial and Accounting Procedures are considered fair and
reasonable and a genuine pre-estimate of the loss to the
non-Defaulting Participants, if it should be found that either of
such percentage and rate be unenforceable as going beyond what is
fair and reasonable or a genuine pre-estimate in the
circumstances and if by substituting a different percentage or
rate for the percentage or rate set out in Clause 6.3.2.3 or
paragraph 10.3.3 of the Financial and Accounting Procedures it
would be enforceable, then there shall be substituted such next
high percentage or rate as shall render Clause 6.3.2.3 or
paragraph 10.3.3 of the Financial and Accounting Procedures valid
and enforceable.

16.7 Rule Against Perpetuities
 Any right or option to acquire any interest in real or personal
property under this Agreement must be exercised, if at all, so as
to vest such interest in the acquirer within twenty-one years
less one day after the death of the last known descendent of
Queen Victoria alive on the Effective Date.

16.8 Further Assurances
 Each of the Participants agrees that it shall take from time to
time such actions and sign or execute such additional instruments
as may be reasonably necessary or convenient to implement and
carry out the intent and purpose of this Agreement.

16.9 Confidentiality and Public Statements
 Except as otherwise provided in this Clause 16.9, the terms and
conditions of this Agreement, and all data, reports, records and
other information of any kind whatsoever developed or acquired by
any Participant in connection with this Participation, shall be
treated by the Participants as confidential (hereinafter called
"Confidential Information"), and no Participant shall reveal or
otherwise disclose such Confidential Information to third parties
without the prior written consent of the other Participant(s).
The foregoing restrictions shall not apply to the disclosure of
Confidential Information (i) pursuant to the terms of the COW or
the request of the Government, the laws, rules and regulations
administered by the Securities & Exchange Commission or the rules
of any stock or securities exchange on which the shares or stock
of  either of the Participants or any of its Affiliates may from
time to time be listed or (ii) to any Affiliate, to any public or
private financing agency or institution, to any contractors or
subcontractors which the Participants may engage and to employees
and consultants of the Participants or to any third party to
which a Participant contemplates the transfer, sale, assignment,
encumbrance or other disposition of all or part of its
Participating Interest pursuant to Clause 15; provided that, in
any such case under this (ii), only such Confidential Information
as such third party shall have a legitimate business need to know
shall be disclosed, and the person or company to whom disclosure
is made shall first undertake in writing to protect the
confidential nature of such information at least to the same
extent as the parties are obligated under this Clause 16.9.  In
addition, (a) the foregoing restrictions shall not apply to
Confidential Information which otherwise comes into the public
domain and (b) notwithstanding anything to the contrary in this
Clause 16.9, each Participant is permitted to use and disclose
data arising from the Participation in its annual audited
financial statements and notes thereto.

 In the event that a Participant is required to disclose
Confidential Information to any government and appropriate
agencies and departments thereof, to the extent required by law
or in response to a legitimate request for such Confidential
Information, the Participant so required shall immediately and
prior to any disclosure notify the other Participants hereto of
such requirement and the terms thereof prior to such submission.

 The provisions of this Clause 16.9 shall apply during the term
of this Agreement and shall continue to apply to any Participant
which forfeits, surrenders, assigns, transfers or otherwise
disposes of its Participating Interest for one year following the
date of such occurrence.

 Except as may be required by applicable law or any listing
agreement with any national securities exchange or the rules of
any stock exchange on which the shares or stock of either of the
Participants or any of its Affiliates may from time to time be
listed, no party to this Agreement shall issue any press release
or make any public announcement or public disclosure with regard
to the Participation or its financial performance or condition,
including Confidential and non-Confidential Information, unless
either (i) a draft of the proposed press release has been
provided to the other party hereto at least twenty-four hours
prior to its proposed release in order to permit such party to
comment thereon or (ii) such press release or other public
statement contains factual information (or discussion or analysis
of or comment based upon such factual information) previously
provided to such party by the other party provided that neither
will present projections or forward-looking information that is
attributed to the other party or any of its Affiliates without
the prior written consent of the other party.
16.10 Entire Agreement; Successors and Assigns

 This Agreement, together with the Implementation Agreement and
the other documents referred to therein and the Early Closing
Agreement and the other documents referred to therein, contains
the entire understanding of the parties and supersedes all prior
agreements and understandings between the parties relating to the
subject matter hereof.  This Agreement shall be binding upon and
inure to the benefit of the respective successors and permitted
assigns of the parties.

16.11 Severability
 If part of this Agreement is rendered illegal, invalid or
unenforceable under applicable law, the remaining clauses of this
Agreement shall continue in force.

16.12 Indonesian Law Waiver
 Each of the Participants waives those provisions of Article 1266
of the Civil Code of the Republic of Indonesia (if and to the
extent that, notwithstanding Clause 16.5, that Article is
applicable to this Agreement) which would otherwise require the
order of a court as a precondition to termination of this
Agreement.

16.13 Tax Covenant
 In recognition of the fact that the Participants and the
transactions contemplated by this Agreement may be affected
adversely over the life of the Chargeable Operations, by the
interaction of the laws relating to Taxes under multiple taxing
jurisdictions, the Participants agree that they will cooperate
with a view to minimizing the adverse tax impact of the various
jurisdictions on the Participants to the extent such can be
accomplished without material adverse affect on the conduct of
the Chargeable Operations and the other Participant.  The
Participants will consult and work together to ensure that
neither party takes any action which prejudices the Tax position
of the other.  The Participants hereby agree that each will
endeavour to make such adjustments in the way in which Chargeable
Operations are conducted, or in the terms of this Agreement, or
in their other relationships, as may be reasonably requested by
the other Participant to avoid or minimize any adverse tax impact
on such Participant while taking into account any adverse tax or
operational impact on Chargeable Operations and on the other
Participant.

(Signature pages follow)

IN WITNESS WHEREOF the authorised representatives of the parties
hereto have signed this Agreement as of the date first above
written.

P.T. FREEPORT INDONESIA COMPANY

By:  _____________________________
Name:
Title:

P.T. RTZ-CRA INDONESIA


By:  _____________________________
Name:
Title:

In anticipation of the completion of formation of P.T. RTZ-CRA
Indonesia under the laws of the Republic of Indonesia, this
Agreement is also executed by RTZ Jersey Investments One Limited
and RTZ Jersey Nominees Limited, jointly and severally, the
founding shareholders.

RTZ JERSEY INVESTMENTS ONE LIMITED


By:   ________________________________
Name:
Title:

RTZ JERSEY NOMINEES LIMITED


By:   ________________________________
Name:
Title:

SCHEDULE 1

Privatisation Agreements

1. Joint Venture Agreement dated as of March 11, 1993 between
P.T. ALatieF Nusakarya Corporation ("ANC") and PT-FI (the
"ALatief J.V. Agreement").
The ALatief J.V. Agreement provides for the sale and purchase of
US$270 million of infrastructure assets consisting primarily of
warehouses, a hotel, housing (single and multi-family and
dormitories), and food service, medical, retail and recreational
facilities.

Master Services Agreement, dated December 15, 1993 between
Alatief Freeport Infrastructure Corporation ("AFIC") and PT-FI
regarding the operation and management of certain non-mining
infrastructure assets for the benefit of PT-FI, as amended April
15, 1994 and April 19, 1994.

Master Services Agreement, dated August 11, 1994, between AFIC
and PT-FI regarding the operation and management of certain
non-mining infrastructure assets for the benefit of PT-FI.
Master Services Agreement, dated August 11, 1994 between Alatief
Freeport Hotel Corporation ("AFHC") and PT-FI regarding the
provision of hotel management services for the Sheraton Inn at
Timika.

Management Contract, dated October 28, 1993 between PT-FI and
Indo-Pacific Sheraton Limited regarding the management of the
Sheraton Inn at Timika which was assigned by Indo-Pacific
Sheraton Limited to Sheraton Overseas Management Corporation on
October 28, 1993.  By Assignment, dated August 11, 1994 PT-FI
assigned its rights and obligations under such Contract and other
hotel privatisation agreements to AFHC.

As of February 1996, transactions involving the sale of
approximately US$198 million of infrastructure assets have been
closed with P.T. ALatief Freeport Infrastructure Company ("AFIC")
purchasing approximately US$156 million and P.T. ALatief Freeport
Hotel Company ("AFHC") purchasing US$42 million.  AFIC and AFHC
are each owned 2/3rds by ANC and 1/3rd by PT-FI.

ANC and PT-FI are currently discussing amending the ALatief J.V.
Agreement to add additional infrastructure assets, thereby
increasing the total amount of the infrastructure sales provided
for in the ALatief J.V. Agreement to approximately US$350-450
million, and to restructure financing for the transaction on more
favourable terms.

2. Asset Purchase Agreement dated as of December 26, 1994 between
P.T. Puncakjaya Power ("PTPJP") and PT-FI (the "Asset Purchase
Agreement").

The Asset Purchase Agreement provides for the sale and purchase
of US$215 million of infrastructure assets consisting primarily
of electric power generation and transmission facilities.  The
final closing under the Asset Purchase Agreement occurred in
December 1995.

Power Sales Agreement, dated as of December 27, 1994 between P.T.
Puncakjaya Power ("Seller") and P.T. Freeport Indonesia Company
("Buyer") providing for Seller to make available, sell and
deliver to Buyer and to certain designees of Buyer, and for Buyer
to purchase from Seller, certain electric capacity and
electricity.

Operation, Maintenance and Management Agreement, dated and
effective as of January 30, 1995, between P.T. Puncakjaya Power
("Owner") and P.T. Nusantara Power Services ("Operator")
providing for Operator to furnish certain services to Owner on a
cost reimburable basis for the operation, maintenance and
management of the Mill Site Facility, the Timika Facility, the
New Town Facility, the Milepost 38/39 Facility and the Port Site
Facility.

3. Purchase and Sale Agreement dated as of March 22, 1995 between
ANC, P&O Singapore Pte. Ltd., P.T. ALatief P&O Port Development
Company and PT-FI (the "Purchase and Sale Agreement").
Master Services Agreement, dated March 22, 1995 between P.T.
Alatief P & O Port Development Company ("PTAPPDC") and PT-FI
regarding the operation and management of the port, marine and
logistics assets by PTAPPDC for the benefit of PT-FI.

The Purchase and Sale Agreement provides for the purchase and
sale of US$100 million of infrastructure assets consisting
primarily of tugboats, motorised barges, wharfs and warehouses,
cranes and other cargo handling equipment, concentrate drying
equipment, heavy trucks and maintenance facilities.  This
transaction was closed on March 22, 1995.

4. Joint Venture Agreement dated as of March 18, 1994 among P.T.
Airfast Indonesia, P.T. Giga Haksa and PT-FI (the "Aviation J.V.
Agreement").

The Aviation J.V. Agreement provides for the sale and purchase of
approximately US$48 million of infrastructure assets consisting
primarily of aircraft and helicopters, spare parts and aviation
support facilities.  This transaction was closed in 1995.

5. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of infrastructure assets
constituting essentially all of PT-FI's potable water treatment
and distribution facilities and sewerage treatment and collection
facilities.  PT-FI expects to enter into agreements resulting in
the closing of a sale of such assets in 1996 or 1997.

6. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of infrastructure assets
constituting essentially all of PT-FI's solid waste treatment,
storage and disposal facilities.  PT-FI expects to enter into
agreements resulting in the closing of a sale of such assets in
1996 or 1997.

7. PT-FI is currently negotiating with certain Indonesian
companies concerning the sale and purchase of infrastructure
assets constituting a steel fabrication shop and industrial gases
plant.  PT-FI expects to enter into agreements resulting in the
closing of a sale of such assets in 1996 or 1997.

8. PT-FI has formed a service company named P.T. Mining Services
International Company ("MSIC").  It is expected that in 1996 MSIC
will enter into agreements for the provision of certain mining
related services to PT-FI, PT-IRJA, other related companies, and
potentially third parties.  It is not anticipated that any
significant amount of assets will be transferred to the MSIC,
although PT-FI personnel may be transferred to MSIC.

9. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of its existing and proposed new
beef production and processing facilities and its proposed new
poultry and egg production and processing facilities.  PT-FI
expects to enter into agreements resulting in the closing of a
sale of such assets in 1996 or 1997.

10. PT-FI is currently negotiating with various persons
concerning the sale and purchase of its existing and proposed
single and multi-family housing facilities and certain existing
and proposed retail and commercial facilities located at Kuala
Kencana.  PT-FI expects to enter into a series of agreements
resulting in the closing of sales of such assets in 1996 through
2000.

SCHEDULE 2

Deed of Assignment of Interest in COW

ASSIGNMENT OF INTEREST

THIS AGREEMENT is made the 11th day of October, 1996 between P.T.
Freeport Indonesia Company, a corporation organised and existing
under the laws of Indonesia (hereinafter referred to as the
"Assignor") and P.T. RTZ-CRA INDONESIA, a company in formation
under the laws of the Republic of Indonesia (hereinafter referred
to as the "Assignee").

WHEREAS, the Assignor has a 100% undivided ownership interest in
and to the Contract of Work made 30 December 1991 between the
Minister of Mines and Energy of the Republic of Indonesia, acting
for and on behalf of the Government of the Republic of Indonesia,
and the Assignor (hereinafter referred to as the "Contract of
Work");

AND WHEREAS, under the terms of the Contract of Work the Assignor
is now conducting certain development, mining and processing
activities in the Contract Area Block A (as defined in the
Contract of Work) and is implementing a plan for expansion of the
capacity of its facilities for treatment of ore mined from
Contract Area Block A to a design rate of 118,000 metric tonnes
per day (hereinafter, together with all assets and rights
reserved to PT-FI pursuant to the terms of the Participation
Agreement (including Clause 7.5.1.3 thereof), referred to as the
"Existing Project");

AND WHEREAS under the terms of a Participation Agreement made
October 11, 1996, between the Assignor and the Assignee
(hereinafter called the "Participation Agreement") the Assignee
is entitled at this time to an assignment of a 40% undivided
ownership interest in and to the Contract of Work excluding the
Existing Project, subject to adjustment from time to time as set
out in the Participation Agreement.

NOW, THEREFORE THIS AGREEMENT WITNESSES that, in consideration of
the mutual covenants and agreements herein contained and subject
to the terms and conditions hereinafter set out, the Parties
hereto agree as follows:

1. The Assignor does hereby assign, set over, transfer and convey
unto the Assignee a 40% undivided ownership interest in and to
the Contract of Work and all benefit and advantage derived or to
be derived therefrom (excluding the Existing Project), subject to
adjustment from time to time, as set out in the Participation
Agreement (hereinafter called the "Assigned Interest"), to have
and to hold the same unto the Assignee on the terms, conditions
and obligations contained in the Contract of Work insofar as they
relate to the Assigned Interest.  This Assignment is subject to
all terms and conditions of the Participation Agreement.

2. The Assignee hereby accepts the assignment of the Assigned
Interest and covenants and  agrees that it shall, at all times
hereafter be bound by, observe and perform all of the provisions
of the Contract of Work to be observed and performed by the
Assignor, insofar as they relate to the Assigned Interest, to the
same extent as if the Assignee had been a party thereto in the
place and stead of the Assignor in respect of the Assigned
Interest.

3. The Assignor shall remain responsible to the Government of the
Republic of Indonesia for the conduct of all operations under the
Contract of Work and for all communications with the Government
of the Republic of Indonesia under the Contract of Work on behalf
of itself and the Assignee.

4. The undivided ownership interest in and to the Contract of
Work as at the Effective Date after giving effect to the
assignment of the Assigned Interest and subject to the rights and
obligations of the parties in relation to the Existing Project as
set out in the Participation Agreement shall be as follows:

(i) P.T. Freeport Indonesia Company   60%

(ii) P.T. RTZ-CRA Indonesia    40%

5. Each of the Assignor and the Assignee covenants and agrees
with the other of them that at the request of the other it will
execute such further assurances and do all such further acts as
may reasonably required for the purpose of vesting the Assigned
Interest in the Assignee.

6. The address of the Assignee for notices shall be:

 14th floor, World Trade Centre
 Jalan Jend. Sudirman Kav. 29-31
 Jakarta 12920
 Indonesia

7. This Assignment shall enure to the benefit of and be binding
on the Parties hereto and their respective successors and
assigns.

(Signature page follows)

IN WITNESS WHEREOF the authorised representatives of the parties
hereto have signed this Agreement as of the date first above
written.

P.T. FREEPORT INDONESIA COMPANY

By:  _____________________________
Name:
Title:

P.T. RTZ-CRA INDONESIA


By:  _____________________________
Name: Michael A. Noakes
Title: President Director

In anticipation of the completion of formation of P.T. RTZ-CRA
Indonesia  under the laws of the Republic of Indonesia, this
assignment is also executed by RTZ Jersey Investments One Limited
and RTZ Jersey Nominees Limited, jointly and severally, the
founding shareholders.

RTZ JERSEY INVESTMENTS ONE LIMITED


By:   ________________________________
Name:
Title:

RTZ JERSEY NOMINEES LIMITED


By:   ________________________________
Name:
Title:
SCHEDULE 3
Exceptions to  Representations and Warranties

A. PT-FI

4.2.3

1. Tom Beanal v. Freeport-McMoRan Inc. and Freeport-McMoRan
Copper & Gold Inc., Civ. No. 96-1474 (E.D. La. filed Apr. 29,
1996) and Yosefa Alomang v. Freeport-McMoRan Inc. and
Freeport-McMoRan Copper & Gold Inc., Civ. No. 96-9962 (Orleans
Civ. Dist. Ct. La. filed June 19, 1996) and Civ. No. 96-2139
(E.D. La. removed June 24, 1996).

 In both actions, the plaintiffs allege substantially identical
environmental, human rights and social/cultural violations in
Indonesia.  Tom Beanal seeks $6 billion in monetary damages and
other equitable relief and Yosefa Alomang seeks unspecified
monetary damages and other equitable relief. FCX denies the
allegations, which have been refuted by a series of independent
examinations of the Indonesian mining operations of PT-FI. FCX
believes that the actions are baseless and will vigorously defend
such actions.

4.2.9 and 4.2.10

1. Assignment of the Contract of Work pursuant to the Trust
Agreement dated as of May 15, 1970, as amended and restated,
between PT-FI and First Trust, National Association (successor to
Morgan Guaranty Trust Company of New York).

2. Assignment to Privatisation counterparties specified in
Schedule 1 of rights to use, occupy and construct facilities on
certain parcels of land on which infrastructure assets are
situated which have been sold by PT-FI to such entities, and
rights to pass over other land as reasonably necessary to gain
ingress and egress to such parcels.

B. PT-RTZ

4.1.1, 4.1.2 and 4.1.3

1. Qualified, in the case of PT-RTZ, as to its status as being in
formation.



ANNEX A
Product Schedule

 	 Recovered Metal in Concentrate
 Year	 Cu (mil. lbs)	 Au (000 oz.)	 Ag (000 oz.)
 1995	 	1,029	        		1,318	      		2,872
 1996	 	1,085	 	       	1,379	      		2,828
 1997	 	1,140	        		1,791	      		2,969
 1998	 	1,033	 	       	1,365	      		3,275
 1999	 	1,165	        		1,503	      		3,822
 2000	 	1,069	 	       	1,262	      		4,103
 2001	 	1,132	        		1,397	      		3,943
 2002	 	1,090	        		1,375	      		3,795
 2003	 	1,082	 	       	1,610	      		4,045
 2004	 	1,052	 	       	1,657	      		3,703
 2005	 	1,082	 	       	1,695	      		3,730
 2006	 	1,099		        	1,653	      		3,934
 2007	 	1,099	 	       	1,631	 	     	4,045
 2008	 	1,110	 	       	1,614	 	     	4,158
 2009	 	1,107	        		1,589	 	     	4,203
 2010	 	1,099	 	       	1,567	 	     	4,296
 2011	 	1,049	 		       1,269	      		4,138
 2012	 	1,035	 	       	1,283	 		     4,010
 2013	 	1,066	        		1,471	 	     	4,268
 2014	 	1,066	 	       	1,461	 	     	4,277
 2015	 	1,057	 	       	1,493	      		4,156
 2016	 	1,044	 	       	1,529	 	     	3,768
 2017	 	1,008	 	       	1,589	 	     	3,359
 2018	 	1,008	        		1,589	 	     	3,359
 2019	 	1,024	 	       	1,589	 	     	3,396
 2020	 	1,027	        		1,593	 	     	3,405
 2021	    219	        		  344	    	  	  716
 TOT   28,076	 	       39,616	 	     98,573


ANNEX B

Financial and Accounting Procedures

1. Accounting Definitions
Terms which are not defined in this Annex shall have the meaning
ascribed to them in the Agreement of which this Annex B is a
part.

1.1 Definitions Applicable to Contract Area Block A and Contract
Area Block B

A. "AFE" means an authorisation for expenditures in relation to a
capital expenditure project.

B. "Capital Costs" means all expenditures incurred in connection
with or allocable to a capital project including fully loaded
labour, materials, equipment and contractors' costs, engineering,
procurement, including freight costs and handling, construction
and management costs, allocated owners' cost, infrastructure and
logistic support, support costs, Taxes other than those imposed
on net income of the Participants, general and administrative
costs, land acquisition and preparation costs (if any), legal and
regulatory costs, pre-stripping and pre-production costs, initial
fill, spares and consumables, capitalised finance costs, and any
associated working capital, but excluding depreciation, non-cash
charges, interest (other than capitalised finance costs),
payments in the nature of principal and interest under
Privatisation Agreements, and accounting provisions and reserves.
Capital Costs shall not include any Exploration Costs.

C. "Chargeable Operations" means operations, including support
activities, related to Mining and Processing of Minerals and
marketing and delivery of Products produced from the Contract
Area and excluding (i) any operations or activities of PT-FI not
related to or associated with the Contract Area and (ii) any
operations or activities of parties subject to the Privatisation
Agreements to the extent that they are operations or activities
of third parties unconnected with Enterprise Operations.

D. "Close-down Costs" means all costs incurred in or allocable to
Close-down, including without limitation, rehabilitation of the
environment, the removal of buildings, equipment, infrastructure
and other tangible property, costs incurred in terminating
equipment, supply, service and employment contracts, and costs
incurred in terminating and surrendering the COW.  Close-down
Costs shall include all such costs incurred within the period ten
Years prior to the Anticipated Close-down Date and prior to such
date all such costs shall be treated as Operating Costs.

E. "Development" means all preparation for the removal and
recovery of Products, including the construction or installation
of a mine or heap leach facilities, ore and waste handling
facilities, mining equipment, or any other improvement to be used
for Mining, handling, transportation or milling of Minerals or
other processing or marketing of Products, including
infrastructure and logistic support facilities associated
therewith.  It is acknowledged that certain expenditures may
involve activities that relate to both Exploration and
Development.  In such cases, the primary purpose of the activity
related to such expenditure shall govern its classification as
Exploration or Development.

F. "Eastern Minerals COW" means the contract of work dated 15
August 1994 made between the Government and P.T. IRJA Eastern
Minerals Corporation with respect to the Contract Area as therein
defined.

G. "Exploration" means all activities, excluding Development and
Mining, directed towards ascertaining or appraising the
existence, location, quantity, quality or commercial value of
deposits of Minerals (other than the 10-K Reserves) and the
feasibility of Development or Mining in relation to those
deposits.  It is acknowledged that certain expenditures may
involve activities that relate to both Exploration and
Development.  In such cases, the primary purpose of the activity
related to such expenditure shall govern its classification as
Exploration or Development.

H. "Exploration Costs" means all labour, supplies, equipment,
contract costs and other costs directly attributable or allocable
to Exploration including fully loaded labour, logistical support
costs, facility and other miscellaneous costs required to support
these activities.

I. "Operating Costs" means the aggregate of:

(a) expenditure, adjusted for changes in inventory, that is
either directly incurred or allocable to Chargeable Operations,
including but not limited to production, maintenance and repair
costs, logistical support and freight and handling costs,
infrastructure and support facility costs (including similar
expenditures under Privatisation Agreements), Taxes (other than
those imposed on net income of the Participants), and general and
administrative costs of the kind identified in PT-FI's annual
financial statements for the period ended 31 December 1994 under
the heading "General and Administrative Costs", but excluding
depreciation, non-cash charges, interest, payments in the nature
of principal and interest under Privatisation Agreements, and
accounting provisions and reserves;

(b) Replacement Capital Costs in carrying out Chargeable
Operations (including such expenditures under Privatisation
Agreements); and

(c) the cash element of specific accounting provisions incurred
in the normal course of business in conducting Chargeable
Operations.

 Exploration Costs, Taxes on net income of the Participants, and
financing costs in connection with any financing arrangement
entered into separately by a Participant (including without
limitation, payments in the nature of principal and interest
under Privatisation Agreements undertaken separately) shall not
be treated as Operating Costs incurred in carrying out Chargeable
Operations.  Financing costs (including without limitation,
payments in the nature of principal and interest under
Privatisation Agreements) in connection with any financing
arrangement entered into jointly by the Participants shall be
included in Operating Costs.

J. "Replacement Capital Costs" means Capital Costs incurred other
than for Expansion, a Greenfield Project or a Sole Risk Venture.

K. "Sales Revenues" means the value of Products sold based on
actual prices realised (or which would have been realised but for
any hedging and other price protection activities), net of
smelting and refining charges, royalties and other selling
expenses.

1.2 Definitions Applicable to Approved Expansion Projects Only

A. "Expansion Share of Costs" in any Year means that proportion
of the Operating Costs in respect of Contract Area Block A in
that Year which is represented by a fraction the numerator of
which is the Incremental Expansion Revenues for that Year and the
denominator of which is Total Sales Revenues from Contract Area
Block A in that Year, and in any Year where Incremental Expansion
Revenues is nil or deemed to be nil, "Expansion Share of Costs"
shall be nil or be deemed to be nil.

 Operating Costs and Sales Revenues from Greenfield Projects and
Sole Risk Ventures shall be excluded from this calculation.

B. "Incremental Expansion Cashflow" in any Year means Incremental
Expansion Revenues in that Year less Expansion Share of Costs in
that Year.

C. "Incremental Expansion Revenues" in any Year means the Sales
Revenues in respect of Incremental Production sold in that Year
or part thereof in which sales of Incremental Production
occurred, with sales from inventory deemed to be sold on a
first-in, first-out basis, and any negative value of "Incremental
Expansion Revenues" in any Year shall be deemed to be nil with
respect to such period but shall be carried forward to the next
Year in which there are Incremental Expansion Revenues.

D. "Incremental Production" in any Year means the excess of:

(i) the actual production in that Year of Products from Contract
Area Block A, including actual production resulting from Approved
Expansion Projects, but excluding actual production resulting
from Greenfield Projects and Sole Risk Ventures; over

(ii) the scheduled production of Products for such Year as shown
in the Product Schedule (as such schedule may be adjusted
pursuant to Clause 16.4.2 of the Agreement).

 Production of Products from Contract Area Block A at any time
prior to the Sharing Commencement Date shall not be treated as
Incremental Production.

E. "Sharing Commencement Date" means the date following the
commissioning of the first Approved Expansion Project on which
the first Sales Revenues from such project are accrued.

F. "Total Sales Revenues" in any Year means the Sales Revenues of
all Products produced from Contract Area Block A (excluding
Greenfield Projects and Sole Risk Ventures) sold in that Year.

2. Memorandum Equity Accounts
A separate Memorandum Equity Account will be established by the
Operator for each Participant for each of Contract Area Block A
and Contract Area Block B.  Each such Memorandum Equity Account
shall be credited with such Participant's contribution to Capital
Costs (other than Replacement Capital Costs and Capital Costs for
Sole Risk Ventures) attributable to such Contract Area Block.
The Memorandum Equity Account of each Participant shall be
credited with such Participant's contributions to Capital Costs,
regardless of how such contributions were financed by a
Participant (it being understood that PT-FI will be credited with
contributions funded under the RTZ Loan), but such Memorandum
Equity Accounts shall not be credited for contributions to
Capital Costs financed jointly by the Participants through
project financing which encumbers the interests of both
Participants.  Specifically:

(A) Approved Expansion Projects up to $750,000,000.  The first
$750,000,000 of Capital Costs incurred pursuant to AFE's for
Approved Expansion Projects shall be credited 60% to PT-FI's
Memorandum Equity Account and 40% to PT-RTZ'S Memorandum Equity
Account, with funding for PT-FI's proportionate share of such
Capital Costs being provided pursuant to the RTZ Loan.

(B) Approved Expansion Projects in Excess of $750,000,000.  All
Capital Costs incurred pursuant to AFE's for Approved Expansion
Projects in excess of $750,000,000 shall be credited to the
Memorandum Equity Account of each Participant in proportion to
its contribution to such Capital Costs.

3. Exploration Activities

3.1 General  Separate accounts will be maintained for Exploration
Costs incurred in respect of Contract Area Block A and Contract
Area Block B and in respect of the Contract Area as defined in
the Eastern Minerals COW ("Eastern Area").

3.2 Joint Operations Exploration Costs  PT-RTZ will pay all
Exploration Costs approved by the relevant Exploration Committee
for Exploration in Contract Area Block A and Contract Area Block
B until the Exploration Obligation has been satisfied, including
the expenditure of not less than $40,000,000 in respect of
Contract Area Block A.  Thereafter, the Participants will pay all
Exploration Costs in proportion to their respective Participating
Interests in Contract Area Block A and Contract Area Block B.

3.3 Exploration Costs for Sole Risk Ventures  All Exploration
Costs for a Sole Risk Venture in Exploration shall be paid by the
Participant undertaking such Sole Risk Venture.

3.4 Statements of Exploration Costs  Monthly statements of Joint
Operations Exploration Costs and Sole Risk Venture Exploration
Costs will be prepared by the Operator and submitted to the
Exploration Committee or the Participant undertaking the Sole
Risk Venture, as appropriate, so that actual Exploration Costs
may be monitored.

3.5 Payment for Exploration Costs  Exploration Costs will be
included in the monthly cash calls made pursuant to paragraph

10.3 of this Annex.

4. Feasibility Studies

4.1 General  Separate accounts will be maintained for each
Feasibility Study and will be reported by the Operator to the
relevant Exploration Committee or Operating Committee, or to the
Participant undertaking a Sole Risk Venture, as appropriate.

4.2 Joint Operations Feasibility Studies  Prior to the date any
AFE is approved as a result of a Feasibility Study, the costs of
the Feasibility Study shall be Exploration Costs.  In the event
that an AFE is approved as a result of the  Feasibility Study,
then from and after the date that such AFE is approved, any
additional Feasibility Study costs shall be Capital Costs of the
project rather than Exploration Costs.

4.3 Sole Risk Feasibility Studies  All costs of a Feasibility
Study of a Sole Risk Venture shall be paid by the Participant
undertaking the Feasibility Study as a Sole Risk Venture.  There
shall however be no reimbursement to the non-participating
Participant of previously incurred costs.

4.4 Statements of Feasibility Study Costs  Monthly statements of
the costs of each Joint Operations Feasibility Study and Sole
Risk Venture Feasibility Study will be prepared by the Operator
and submitted to the relevant Exploration Committee or Operating
Committee or the Participant undertaking the Sole Risk Venture,
as appropriate, so that actual costs of the Feasibility Study may
be monitored.

4.5 Payment of Feasibility Study Costs  The costs of each
Feasibility Study will be included as Exploration Costs or, as
appropriate, Capital Costs, in the monthly cash calls made
pursuant to paragraph 10.3 of this Annex.

5. Joint Operations in Contract Area Block A

5.1 Pre-Expansion Period  "Pre-Expansion Period" means the period
commencing on the Effective Date and continuing until the date
that the first Approved Expansion Project in Contract Area Block
A has been approved by the boards of directors of FCX, PT-FI, and
PT-RTZ or, pursuant to Clause 10.3, approved by the board of
directors of PT-RTZ.

 During the Pre-Expansion Period, all revenues from and all
Capital Costs and Operating Costs in respect of Contract Area
Block A are attributable 100% to PT-FI except for revenues,
Capital Costs and Operating Costs in respect of Joint Operations
Greenfield Projects (as to which paragraphs 5.4 and 6 of this
Annex shall apply) and Sole Risk Ventures undertaken by PT-RTZ,
if any (as to which, subject to any express provision to the
contrary in this Annex or the Agreement, PT-RTZ shall be entitled
to all revenues attributable).

5.2 Development Period

5.2.1 "Development Period" means the period commencing with the
date that the first Approved Expansion Project in Contract Area
Block A has been approved by the boards of directors of FCX,
PT-FI and PT-RTZ or, pursuant to Clause 10.3, approved by the
board of directors of PT-RTZ and continuing until the Sharing
Commencement Date.

 During the Development Period, all revenues from Contract Area
Block A are attributable 100% to PT-FI except for revenues in
respect of Joint Operations Greenfield Projects (as to which
paragraphs 5.4 and 6 of this Annex shall apply) and Sole Risk
Ventures undertaken by PT-RTZ, if any (as to which, subject to
any express provision to the contrary in this Annex or the
Agreement, PT-RTZ shall be entitled to all revenues
attributable).

 During the Development Period, all Capital Costs and all
Operating Costs in respect of Contract Area Block A are
attributable 100% to PT-FI except for:

(i) all Capital Costs attributable to Approved Expansion
Projects, as to which the provisions of 5.2.2 of this Annex shall
apply

(ii) all Capital Costs and Operating Costs attributable to or in
respect of Joint Operations Greenfield Projects as to which the
provisions of paragraphs 5.4 and 6 of this Annex shall apply

(iii) all costs of Sole Risk Ventures undertaken by PT-RTZ, all
of which shall, subject to any express provision to the contrary
in this Annex or the Agreement, belong to and be borne by PT-RTZ.

5.2.2 Approved Expansion Projects

5.2.2.1 General  For each Approved Expansion Project, an AFE will
be prepared detailing budgeted expenditures of Capital Costs
anticipated to be incurred.  Separate accounts will be maintained
for each AFE.

5.2.2.2 Allocation of Approved Expansion Project Development
Costs

(a) Approved Expansion Projects up to $750,000,000  Until such
time as aggregate Capital Costs for Approved Expansion Projects
reach $750,000,000, these Capital Costs will be allocated to and
be borne by the Participants in proportion to their respective
Participating Interests in Contract Area Block A and PT-FI's
share will be funded through the RTZ Loan.

(b) Approved Expansion Projects in Excess of $750,000,000
Capital Costs for Approved Expansion Projects after aggregate
Capital Costs for Approved Expansion Projects exceed $750,000,000
will be allocated to and be borne by the Participants in
proportion to their respective Participating Interests in
Contract Area Block A.

5.2.3 Statements of Approved Expansion Project Development Costs
Monthly statements of Approved Expansion Project Development
costs will be prepared by the Operator and submitted to the
Operating Committee so that actual Development costs may be
monitored.

5.2.4 Payment for Development Costs  Payment for Development
costs will be included in the monthly cash calls made pursuant to
paragraph 10.3 of this Annex.

5.3 Production Period

5.3.1 "Production Period" means the period commencing on the
Sharing Commencement Date for the first Approved Expansion
Project and continuing thereafter for so long as Joint Operations
are producing Products from Contract Area Block A.

 During the Production Period, the revenues from Contract Area
Block A shall be allocated between the Participants as follows:

(a) until and including the Cut-off Date PT-RTZ shall be entitled
to such share as is proportionate to its Participating Interest
in Contract Area Block A of all Incremental Expansion Revenues
and of revenues related to Joint Operations Greenfield Projects
as provided in paragraphs 5.4 and 6 of this Annex

(b) after the Cut-off Date, PT-RTZ shall be entitled to such
share as is proportionate to its Participating Interest in
Contract Area Block A of all revenues derived from Joint
Operations in Contract Area Block A

(c) PT-RTZ shall be entitled to all revenues attributable to Sole
Risk Ventures undertaken by PT-RTZ

(d) PT-FI shall be entitled, as between the Participants, to all
revenues from Contract Area Block A other than those allocated to
PT-RTZ pursuant to sub-paragraphs (a), (b) and (c) above.

 During the Production Period, the costs of or attributable to
Contract Area Block A (other than Exploration Costs as to which
paragraph 3 shall apply) shall be allocated to and borne by the
Participants as between themselves as follows:

(i) until and including the Cut-off Date, PT-RTZ shall be obliged
to contribute such share of the following costs as is
proportionate to its Participating Interest in Contract Area
Block A:

(A) Expansion Share of Costs

(B) Capital Costs of Approved Expansion Projects only

(C) Joint Operations Greenfield Projects

(ii) after the Cut-off Date, PT-RTZ shall be obliged to
contribute such share of Operating Costs and of Capital Costs of
Joint Operations in Contract Area Block A other than Sole Risk
Ventures as is proportionate to its Participating Interest in
Contract Area Block A

(iii) the costs of or attributable to each Sole Risk Venture in
Contract Area Block A undertaken by PT-RTZ shall be allocated to
and borne by PT-RTZ

(iv) all costs of or attributable to operations in Contract Area
Block A other than those allocated to and borne by PT-RTZ
pursuant to sub-paragraphs (i), (ii) or (iii) above shall, as
between the Participants, be allocated to and borne by PT-FI.
5.3.2 General  Each month during the Production Period prior to
the Cut-off Date, Incremental Expansion Cashflow shall be
computed by the Operator and distributed to the Participants in
proportion to their Participating Interests in Contract Area
Block A; provided however, PT-FI shall assign to RTZ Lender all
of its interest in such distributions of Incremental Expansion
Cashflow pursuant to the RTZ Loan Agreement until such RTZ Loan
has been repaid (including, for the avoidance of doubt, all
interest under the RTZ Loan Agreement).  Each month during the
Production Period from and after the Cut-off Date, all revenues
and costs in respect of Joint Operations in Contract Area Block A
shall be considered in determining the amount to be distributed
to the Participants in proportion to their Participating
Interests in Contract Area Block A.

(a) Incremental Expansion Revenue  Each month during the
Production Period, Incremental Expansion Revenue will be computed
by the Operator and included in the computation of Incremental
Expansion Cashflow for such month.

(b) Expansion Share of Costs  Each month during the Production
Period, Expansion Share of Costs will be computed by the Operator
and included in the computation of Incremental Expansion Cashflow
for such month.

(c) Incremental Expansion Cashflow  Each month during the
Production Period, Incremental Expansion Cashflow will be
computed by the Operator and distributed to the Participants or,
in the case of PT-FI, its assignee for the time being, in the
proportions attributable to each not later than the 20th business
day after the end of the month.  The amount distributed will be
based on the best estimate of Incremental Expansion Revenue less
Expansion Share of Costs for such month.

(d) Statements of Incremental Expansion Cashflow  Monthly
statements will be prepared by the Operator showing details of
the Incremental Expansion Cashflow computation.  A copy of the
statements will be distributed to the Participants not later than
the 20th business day after the end of the month.

(e) Adjustment  Any adjustment that is determined to be required
at any time shall be included in the next monthly statement.

(f) Annual Adjustment  Not later than 45 business days after the
end of each Year during the Production Period, a statement of the
previous Year's Incremental Expansion Cashflow shall be prepared
by the Operator and distributed.  If the annual settlement
statement indicates an overpayment of Incremental Expansion
Cashflow, each Participant shall pay the Operator its share of
such overpayment within 30 business days.  If the annual
settlement statement indicates an underpayment of Incremental
Expansion Cashflow, the Operator shall pay to each Participant
its share of such underpayment within 30 business days.
5.4 Joint Operations Greenfield Projects in Contract Area Block A
Joint Operations Greenfield Projects in Contract Area Block A
will be accounted for in a manner comparable to that provided in
paragraph 6 of this Annex in respect of Joint Operations in
Contract Area Block B.  All costs, including allocable costs, of
and revenue related to Greenfield Projects in Contract Area Block
A will be excluded from costs of and revenues derived from other
operations in Contract Area Block A.

6. Joint Operations in Contract Area Block B

6.1 Development Phase  "Development Phase" means the period
commencing with the date on which the first Joint Operations
Greenfield Project in Contract Area Block B has been approved by
the boards of directors of PT-FI and PT-RTZ and continuing until
the date following commissioning of such project on which the
first Sales Revenues from such project are accrued.

6.1.1 General  For each Joint Operations Development project, an
AFE will be prepared by the Operator detailing budgeted
expenditures of Capital Costs anticipated to be incurred.
Separate accounts will be maintained for each AFE.

6.1.2 Allocation of Joint Operations Development Costs  All
Capital Costs incurred in Joint Operations in Contract Area Block
B will be allocated to and borne by the Participants in
proportion to their respective Participating Interests in
Contract Area Block B and included in monthly cash calls made
pursuant to paragraph 10.3 of this Annex.

6.1.3 Statements of Development Costs  Monthly statements will be
prepared by the Operator showing details of Joint Operations
Development costs.  These statements will be submitted to the
Operating Committee not later than the 20th business day after
the end of the month so that actual Joint Operations Development
costs may be monitored.

6.1.4 Payment for Development Costs  Payment for Development
costs will be included in the monthly cash calls made pursuant to
paragraph 10.3 of this Annex.

6.2 Production Phase  "Production Phase" means the period
commencing on the date following commissioning of the first Joint
Operations Greenfield Project on which the first Sales Revenues
from such project are accrued and continuing for so long as Joint
Operations are producing Products from Contract Area Block B.

6.2.1 General  During the Production Phase, all revenues and
costs in respect of Joint Operations in Contract Area Block B
shall be allocated to and be borne by the Participants in
proportion to their Participating Interests in Contract Area
Block B.  All revenues and costs in respect of Joint Operations
in Contract Area Block B shall be considered in determining the
amount to be distributed to the Participants in proportion to
their respective Participating Interests in Contract Area Block
B.

(a) Revenue  Each month during the Production Phase, the revenues
that result from Joint Operations in Contract Area Block B will
be computed by the Operator and included in the computation of
cashflow from Joint Operations in Contract Area Block B for such
month.

(b) Operating Costs  Each month during the Production Phase, the
Operating Costs that result from Joint Operations in Contract
Area Block B will be computed by the Operator and included in the
computation of cashflow from Joint Operations in Contract Area
Block B for such month.

(c) Cashflow  Each month during the Production Phase, the
cashflow will be computed by the Operator by subtracting
Operating Costs that result from Joint Operations in Contract
Area Block B from revenues that result from Joint Operations in
Contract Area Block B and the net amount of this calculation will
be distributed to the Participants in the proportions to which
they are entitled not later than the 20th business day after the
end of the month.  The amount distributed will be based on the
best estimate of revenues and Operating Costs from Contract Area
Block B for such month.

(d) Statements of Cashflow  Monthly statements will be prepared
by the Operator showing details of the cashflow computation and
delivered to the Participants not later than the 20th business
day after the end of the month.

(e) Adjustment  Any adjustment that is determined to be required
at any time shall be included in the next monthly statement.

(f) Annual Adjustment  Not later than 45 business days after the
end of each Year during the Production Phase, a statement of the
previous Year's cashflow shall be prepared by the Operator and
distributed.  If the annual settlement statement indicates an
overpayment of cashflow, each Participant shall pay the Operator
its share of such overpayment within 30 business days.  If the
annual settlement statement indicates an underpayment of
cashflow, the Operator shall pay to each Participant its share of
such underpayment within 30 business days.

7. Accounting for Sole Risk Ventures

7.1 Conduct of Operations  Upon the establishment of a Sole Risk
Venture, the Operator, as determined pursuant to the Agreement,
or some other entity selected as operator of the Sole Risk
Venture in accordance with the Agreement (also in this Annex
referred to as the Operator), will be responsible for the conduct
of the operations of such venture, including its accounting
requirements, and will be paid a reasonable fee for such services
by the applicable Participant.

7.2 Determination of Costs and Revenues  Separate accounts will
be maintained for each Sole Risk Venture.  All costs, including
allocable costs, of and revenue related to Sole Risk Ventures
will be excluded from the costs of and revenues derived from
Enterprise Operations.

7.3 Use of PT-FI Available Assets  To the extent that the Sole
Risk Venture requires the use of PT-FI Available Assets, PT-FI
support services or Joint Account Assets, and the use of these
assets and support services does not prejudice then or later the
conduct of Enterprise Operations, each of PT-FI and PT-RTZ (as
appropriate) will make available and charge to the Sole Risk
Venture the full direct and allocable costs, including financing
and capital costs, under Privatisation Agreements, of providing
such assets and services.

7.4 Sole Risk Venture Revenues and Costs  All revenues and costs
derived from any Sole Risk Venture will be directly attributed by
the Operator to the Participant undertaking the Sole Risk
Venture.  The net amount of revenues less costs will be included
in the monthly cash call made pursuant to paragraph 10.3 of this
Annex for settlement (in the case of a negative amount) or
distribution (in the case of a positive amount) to the
Participant undertaking the Sole Risk Venture as appropriate.

7.5 Sole Risk Venture Reports  The Operator will summarise each
month all costs, including charges associated with the use of
PT-FI Available Assets and support services, and revenues derived
from the Sole Risk Venture during that month and deliver this
report to the Participant undertaking the Sole Risk Venture not
later than the 20th business day after the end of the month.

7.6 Programmes and Budgets  Programme and Budgets for Sole Risk
Ventures shall be approved and administered in a manner
comparable to that provided in paragraph 10.1 of this Annex.

7.7 Co-operation  Each Participant shall provide in a timely
manner to the Operator all information that is within such
Participant's knowledge, possession or control which the Operator
may require in order to perform its accounting responsibilities
for Sole Risk Ventures.

 If the Operator is not PT-FI, the Operator shall provide in a
timely manner to PT-FI all information that is within such
Operator's knowledge, possession or control which PT-FI may
require in connection with fulfilling its obligations under the
COW.

8. Accounting for Hedging Activities
The revenues allocated to the Participants shall be adjusted to
allocate to the authorising Participant the costs and benefits of
any hedging and other price protection activities authorised by
either Participant pursuant to Clause 9.2.6 of the Agreement.
Prior to entering into any hedging or other price protection
activities authorised in writing by any Participant, the
Participant authorising such activities shall make appropriate
arrangements, satisfactory to the Operator, whereby the Operator
is protected from and assured that it will never be required to
use its own funds in connection with the placing or maintaining
of any such hedging or other price protection activities.

9. Accounting Records, Inspection of Books

9.1 Required Records & Accounts

(A) The Operator shall keep comprehensive and accurate records
and accounts of all Exploration Costs, Operating Costs, costs in
respect of Feasibility Studies, and costs in respect of
Development which are capable of separate identification, with
respect to:

(i) Approved Expansion Projects,

(ii) Joint Operations with respect to Contract Area Block A,

(iii) Joint Operations Greenfield Projects with respect to
Contract Area Block A,

(iv) Joint Operations with respect to Contract Area Block B,

(v) Sole Risk Ventures,

(vi) Chargeable Operations and any other operations within the
Contract Area any part of the costs of which are borne by either
Participant.

 The costs of support and infrastructure facilities and
activities shall be allocated to the activities for which they
are utilised.  The costs of support and infrastructure facilities
and activities which are located in one Contract Area Block, but
utilised in support of activities in one or more Contract Area
Block, shall be allocated to the activities in the Contract Area
Blocks in accordance with actual utilisation.

(B) The records and accounts in respect of activities in Contract
Area Block A shall be capable of identifying Incremental
Expansion Revenue and other revenues, those attributable to Joint
Operations other than Approved Expansion Projects and those
attributable to all other activities in Contract Area Block A,
and costs attributable to the activities, sub-divided as above.

 The records and accounts in respect of activities in Contract
Area Block B shall show separately the costs and revenues of each
project.

 Activity attributable to Sole Risk Ventures by either
Participant within the Contract Area shall likewise be separately
identifiable within the records and accounts.

 The records and accounts in respect of Greenfield Projects in
Contract Area Block A, activities in Contract Area Block B and
Sole Risk Ventures will separately identify direct costs of these
projects from costs otherwise allocated thereto.

(C) All records and accounts referred to above shall be prepared
and maintained in accordance with generally accepted accounting
principles in the United States.

 Accordingly, revenues recognised and costs incurred shall
include, in the normal course of business, accruals to
appropriately reflect the operations of the business conducted
during a given month or year.

 All accounting terms used in this Annex will, except to the
extent otherwise expressly provided for, be determined in
accordance with generally accepted accounting principles in the
United States.

(D) Subject to compliance with the express provisions of this
Annex, the Operator's basic accounting systems and accounting
practices, policies and procedures will apply.

(E) All such records and accounts shall be retained for a period
of 10 years or as required for compliance with tax or other
regulatory requirements or as otherwise agreed to by the
Participants.

9.2 Audits

(A) The Operator shall order an annual examination of the
accounting and financial records kept by it in respect of
activities in the Contract Area for each Year.

(B) The audits shall be conducted by a firm of accountants of
international standing selected by the Operator and approved by
the Operating Committee and such accountants shall provide
certification that the records and accounts have been properly
maintained in accordance with the provisions of this Agreement
and that the revenues and costs have been properly calculated and
allocated to the Participants in accordance with the provisions
of this Annex and the Agreement.

9.3 Right of Participants to Inspect Records Without prejudice to
any other provision of this Annex or the Agreement, and subject
in any case to Clause 16.9 of the Agreement, representatives of
each Participant (including for this purpose its accountants or
another appointed firm of accountants and the Secured Creditors
(as defined in the Trust Agreement)) shall be entitled upon
reasonable prior notice at all reasonable times during normal
working hours to inspect and obtain copies of all documents,
records and accounts under the control of the Operator relating
to Enterprise Operations or the Participation provided always
that the frequency and duration of inspections shall be without
undue hindrance to the proper conduct of Enterprise Operations or
the activities of the Operator.  Without prejudice to the above,
but subject to the proviso, the Operator shall also give to the
Participants and their accountants during normal working hours
such access to the Operator's books and records and such
explanation of the same as the Participants or their accountants
may reasonably require in order to verify the revenues from Sole
Risk Ventures undertaken by such Participants, Contract Area
Block B, Incremental Expansion Cashflow, Joint Operations
Greenfield Projects in Contract Area Block A and, after the
Cut-off Date, revenues from Joint Operations in the Contract Area
and costs attributable to the same.

9.4 Right of Participants to Conduct Audit

(A) Without prejudice to any other provision of this Annex or the
Agreement, and subject in any case to Clause 16.9 of the
Agreement, representatives of each Participant (including for
this purpose its accountants or another appointed firm of
accountants and the Secured Creditors (as defined in the Trust
Agreement)) will be entitled, upon reasonable notice and at its
own cost, to conduct an audit of the accounting and financial
records of operations to which these Financial and Accounting
Procedures apply for any Year, provided, however, that any such
audit shall be conducted within eighteen months after the end of
the Year to which the audit pertains and any claim for an
adjustment must be made within thirty-six months after the end of
the Year to which such adjustment pertains.

(B) Should such audit reveal an alleged error in the statement of
revenues and costs or in the calculation of the revenues and
costs allocated to each Participant, notice of the alleged error
shall be given promptly to each Participant and the Participants
shall thereupon use all reasonable endeavours to reconcile any
differences.

(C) Should the Participants be unable to reconcile the
differences to their mutual satisfaction within a period of 60
days following the notice referred to above, the dispute shall be
referred to an independent firm of accountants of international
standing appointed by agreement between the Participants or in
default of such agreement within a period of 30 days following
the expiry of the period of 60 days referred to above, by the
President for the time being of the American Institute of
Certified Public Accountants on the application of either of the
Participants.

(D) Such independent firm of accountants shall act as an expert
and not as an arbitrator and it shall be directed to find for one
Participant or the other.  Its costs shall be borne by the
Participant losing the issue in question and its determination
shall be final and binding upon the Participants and the
Operator.

(E) If it is agreed between the Participants or determined by the
expert that an error has been made to the calculation of the
revenues and costs from operations to which these Financial and
Accounting Procedures apply, such payments or reimbursements as
shall be appropriate to correct such error shall be made by the
Participants and the Operator shall make any and all necessary
entries and corrections to the relevant Memorandum Equity
Accounts of each Participant.

9.5 Fair clause The Participants agree that if any of the methods
for determining charges and credits applicable to operations
under the Agreement set out above prove to be unfair or
inequitable to either party, the Participants will in good faith
endeavour to agree on changes deemed necessary.

10. Other Financial and Accounting Matters

10.1 Programmes and Budgets

10.1.1 Joint Operations Pursuant to Programmes and Budgets  Joint
Operations shall be conducted, expenses shall be incurred and
Joint Account Assets shall be acquired only pursuant to Approved
Programmes and Budgets.

10.1.2 Preparation of Programmes and Budgets  The Operator shall,
not less than one month prior to the Annual Budget Meeting (which
shall be held annually in December as provided in Clause 8.6 of
the Agreement), prepare and submit to the relevant Committee for
recommendation to the boards of directors of the Participants for
the next ensuing Budgetary Period separate proposed Programmes
and Budgets for Exploration and for Development and Mining.  Any
Programme which includes the undertaking of an Approved Expansion
Project (or the relevant part of it) shall be based upon the
programme for implementation thereof contained in the Feasibility
Study relating thereto.

 Each Programme and/or Budget, as proposed and approved, shall
contain, as appropriate, a breakdown on a quarterly basis of the
following:

(a) a reasonably detailed description of the Joint Operations to
be undertaken with respect to each of Contract Area Block A and
Contract Area Block B;

(b) an itemised estimate of the Capital Costs and Operating Costs
to be incurred, distinguishing between Replacement Capital Costs
and new Capital Costs and between Exploration and Development and
Mining and between Contract Area Block A and Contract Area Block
B;

(c) itemised schedules of estimated production of Products;

(d) itemised estimates of revenues;

(e) estimates of the amounts and timing of expected cash
requirements from the Participants; and

(f) such other items as the Operator may deem necessary or
desirable or as either Participant may reasonably require.

10.1.3 Review and Approval of Proposed Programmes and Budgets

(a) At the Annual Budget Meeting, the relevant Exploration
Committee or Operating Committee shall review the Operator's
proposed Programme and Budget and either submit it unchanged to
the boards of directors of PT-FI and PT-RTZ for their approval or
instruct the Operator to make specified revisions and submit the
revised proposal to such boards for their approval.

(b) Revisions, modifications and amendments to Programmes and
Budgets may be initiated by the Operator, the relevant
Exploration or Operating Committee or the board of directors of
PT-FI or PT-RTZ, provided that no material revision, modification
or amendment shall be made without the approval of both such
boards of directors.

(c) Any Programme and Budget, or any revision modification and
amendment thereto, shall be deemed to be approved by any board of
directors which does not, within thirty days after receipt,
disapprove the same and notify the other board of directors and
relevant Exploration or Operating Committee of its disapproval
(including explanation thereof in reasonable detail).

(d) Except as otherwise specified in the Agreement or this Annex,
unbudgeted AFEs, and budgeted AFEs in excess of amounts fixed
from time to time by the relevant Exploration or Operating
Committee, shall be submitted by the Operator and subject to the
approval by such Committee, provided that any AFE which is in
excess of amounts fixed from time to time by the boards of
directors of PT-FI and PT-RTZ or which requires unbudgeted
expenditure in excess of 5% of any Programme and Budget (whether
individually or as part of a group of related expenditures) shall
also be subject to the approval of such boards of directors in
the manner set out in paragraph 10.1.3(c).

(e) Except as provided in Clause 10.3 of the Agreement, should
the board of directors of PT-FI or PT-RTZ disapprove any
Programme and Budget or any revision, modification or amendment
thereto, both boards of directors and the relevant Exploration
Committee or Operating Committee shall endeavour in good faith to
resolve the difference(s) and reach mutual agreement on the
applicable Programme and Budget as soon as possible.

10.1.4 Budget Overruns; Programme Changes  The Operator shall
immediately notify the relevant Committee of any material
departure from an Approved Programme and Budget.  As soon as
practicable following the Operator becoming aware that the costs
to be incurred under an Approved Budget are likely to be exceeded
by more than 10%, then unless such excess is directly caused by
an emergency or unexpected expenditure made pursuant to paragraph

10.2 of this Annex or otherwise authorised by the Participants,
the Operator shall prepare a revised Programme and Budget for
that Year and submit it as soon as practicable to the relevant
Committee for review, and if needed, for recommendation for
approval by the boards of directors of the Participants.

10.2 Emergency or Unexpected Expenditures  In case of emergency,
the Operator may take such action it deems necessary to protect
life, limb or property, to protect the Enterprise Operations or
Sole Risk Ventures or to comply with law or government
regulation.  Likewise, the Operator may make expenditures for
unexpected events which are beyond its reasonable control and
which do not result from a breach by it of its standard of care.
In the case of either an emergency or unexpected expenditures,
the Operator shall promptly notify the Participants of the
emergency or unexpected expenditure, and the Operator shall be
reimbursed therefor by the Participants as provided in Clause 6.1
of the Agreement and this Annex.

10.3 Cash Calls

10.3.1 On the basis of the Approved Programme and Budget or
revision thereof, the Operator shall submit to each Participant
prior to the fifth business day of each calendar month, a billing
for estimated cash requirements for the next following calendar
month, taking into consideration any cash the Operator has on
hand from Joint Operations and any timing differences of actual
expenditures from the Approved Programme and Budget, and
identifying the separate contribution obligations of each
Participant in accordance with the provisions of this Annex and
the Agreement and any reimbursement obligations under Clause 12
of the Agreement relating to Sole Risk Ventures.

10.3.2 Prior to the first business day of the month for which the
funds are requested, each Participant shall pay to the Operator
by wire transfer to the bank account designated by the Operator,
its share of the estimated amount as is shown in the billing
unless the share of the amount shown therein is manifestly
incorrect.

10.3.3 Time is of the essence of payment of each billing.  A
Participant that fails to meet cash calls in the amount and at
the times specified in this paragraph 10.3 shall be in default,
and the amount of the defaulted cash call shall bear interest
from the date due at an annual rate equal to 5% above LIBOR as
published in the London Financial Times on the business day
immediately prior to the date of default.

10.3.4 All funds in excess of immediate cash requirements shall
be invested in interest-bearing accounts, for the benefit of the
Participants provided that (i) all funds representing the
Exploration Obligation shall be so invested solely for the
benefit of PT-RTZ and (ii) funds for any Sole Risk Venture shall
be so invested solely for the benefit of the applicable
Participant.

10.3.5 Should the Operator be required to pay large sums of money
on behalf of the Participants which were unforeseen at the time
of providing the monthly cash call, the Operator may make written
request for special advances which shall be payable not later
than the fifth business day after receipt of such notice.

10.4 Close-down Costs

10.4.1 Close-down Costs directly attributable to a Sole Risk
Venture shall be allocated to and borne by the Participant
undertaking the Sole Risk Venture.

10.4.2 Notwithstanding any other provision to the contrary in
this Annex or the Agreement but subject to paragraph 10.4.1
above, each Participant agrees to pay and shall be liable to pay
in respect of Close-down, that proportion of Close-down Costs
which the value of Products sold by or for such Participant over
the life of the COW bears to the value of all Products sold by or
for the Participants over the life of the COW.

 Final salvage shall be credited to the Participants in the same
proportion as Close-down Costs are allocated to them.

10.4.3 For purposes of paragraph 10.4.2, "value" is determined by
reference to the actual realised price of Products sold (or which
would have been realised but for any price protection
activities), adjusted for inflation, net of smelting and refining
charges, royalties, and other selling expenses.


ATTACHMENT X