Dow Jones Newswires -- April 29, 1997
Freeport-McMoRan Sheds Little Light On Busang Gold Trouble
By CARLOS TEJADA
Dow Jones News Services
NEW ORLEANS -- A defensive Freeport-McMoRan Copper & Gold Inc. (FCX) shed little light on the Busang gold debacle at its annual shareholders meeting Tuesday morning.
The copper and gold producer did report that shareholders defeated a proposal to hold off a planned expansion of the company's Grasberg mine, also in Indonesia. Freeport Chairman and Chief Executive James R. Moffett outlined at the meeting the scope of the expansion plans.
Moffett said little about Busang, the Indonesian gold deposit that Freeport had planned to mine. In a quick speech to shareholders, Moffett labeled Freeport's test results at Busang ''inconclusive'' - a word the company hasn't used in describing its tests. Company officials
declined to comment on his choice of words but said the description wasn't intended to contradict earlier statements.
The gold community has been focused on Freeport and Bre-X Minerals Ltd. (BXMNF), a Calgary, Alberta, gold prospector that discovered the Busang deposit. Last month, Freeport, which was to be the mine's operator and a 15% owner, announced that its testing had shown ''insignificant'' amounts of gold, causing Bre-X's shares to plunge. An independent test of the Busang deposit is expected later this week.
The shareholder meeting was carefully controlled. Reporters and shareholders were scanned for weapons before entering. The meeting was closed to the 15 reporters and camera operators who showed up, but they were allowed to watch on closed-circuit TV. Shareholders were limited to short statements and could comment only on proposals scheduled to be voted on. Moffett didn't answer further questions from shareholders or reporters.
A proposal from the Seattle Mennonite Church to halt expansion of the company's giant Grasberg mine, end cooperation with the Indonesian military and allow independent environmental monitoring won only 2.5% of shareholder votes. The church cited alleged human rights abuses by the Indonesian soldiers based around Freeport's operations and environmental concerns raised by independent studies. Underscoring the church's complaint was the refiling last week of a lawsuit in a Louisiana federal court on behalf of the indigenous people of Irian Jaya, where the Grasberg mine is located.
Freeport, of New Orleans, has repeatedly denied it participated in any human rights abuses and said environmental studies have cleared it of the worst pollution allegations. Freeport expects the expansion of its Grasberg mine to boost results. The expansion includes increasing the company's ore production to about 200,000 tons from 127,400 tons by 1998. The company also is seeking permission to eventually increase production to 300,000 tons a day. Moffett said the company's low production costs will offset lower prices.
Moffett refused to answer a shareholder question about his pay package. His 1996 compensation included $7 million in cash and $11.5 million in stock options. In 1996, the
company reported net income of $226.2 million, or 89 cents a share, on revenue of $1.9 billion. |
