CONTINGENCIES AND COMMITMENTS

Environmental. FCX's mining, exploration, production and historical operating activities are subject to stringent laws and regulations governing the protection of the environment. FCX reviews changes in facts and circumstances associated with its environmental and reclamation obligations at least quarterly. There have been no material changes to FCX's environmental and reclamation obligations since year-end 2011. However, updated cost assumptions, including increases and decreases to cost estimates, changes in the anticipated scope and timing of remediation activities and settlement of environmental matters may result in revisions to certain environmental obligations. As a result, FCX recorded adjustments to environmental obligations totaling net credits of $82 million in third-quarter 2012 and $36 million during the first nine months of 2012, and net charges of $31 million in third-quarter 2011 and $35 million during the first nine months of 2011.

Gilt Edge Mine Site. On July 12, 2010, FCX was notified by the U.S. Department of Justice, acting at the request of the U.S. Environmental Protection Agency (EPA), that it was preparing to file suit in federal court against two of its wholly owned subsidiaries (Cyprus Mines Corporation and Cyprus Amax Minerals Company) and several other parties to recover costs incurred or to be incurred by the U.S. in remediating hazardous substances at the Gilt Edge mine site in Lawrence County, South Dakota. In September 2011, FCX reached an agreement in principle to settle this matter for an amount that is not material to FCX and less than the amount included for this matter in FCX's aggregate environmental obligations. The consent decree was finalized and approved by the court on October 10, 2012.

Asset Retirement Obligations (AROs). During third-quarter 2012, Cerro Verde updated its closure plan and increased its ARO by $77 million to reflect revised cost estimates and accelerated timing of certain closure activities.

Litigation. There have been no material updates to previously reported legal proceedings included in Note 13 of FCX's 2011 Annual Report and in Note 8 of FCX's quarterly reports on Form 10-Q for the periods ended March 31, 2012, and June 30, 2012.

Other Contingencies. The Indonesian tax authorities issued assessments for various audit exceptions on

PT Freeport Indonesia's income tax returns as follows (in millions):



Date of assessment	Tax return year	Tax assessment		Interest assessment		Total
October 2010	2005	$	106	$	52	$	158
November 2011	2006	22		10		32
March 2012	2007	91		44		135
Total		$	219	$	106	$	325

PT Freeport Indonesia has filed objections to the assessments. During first-quarter 2012, PT Freeport Indonesia's objections to the assessments related to 2005 were substantially all rejected by the Indonesian tax authorities and, in May 2012, appeals were filed with the Indonesian Tax Court. As of September 30, 2012, PT Freeport Indonesia has paid $158 million (of which $124 million is included in long-term receivables) for the disputed tax assessments related to 2005, 2006 and 2007.

Mining Contracts. Effective March 26, 2012, the Democratic Republic of Congo (DRC) government issued a Presidential Decree approving the modifications to TFM's bylaws. As a result, FCX's effective ownership interest in TFM was reduced from 57.75 percent to 56.0 percent and $50 million of TFM's intercompany loans payable to FMC were converted to equity.