Freeport-McMoRan Copper & Gold, Inc.

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Freeport-McMoRan Copper & Gold, Inc.

1615 Poydras Street
New Orleans, Louisiana 70112
U.S.A.
Telephone: (504) 582-4000
Fax: (504) 582-1847
Web site: http://www.fcx.com

Public Company
Incorporated: 1912 as Freeport Sulphur Company
Employees: 10,100
Sales: $1.91 billion (2002)
Stock Exchanges: New York
Ticker Symbol: FCX
NAIC: 212234 Copper Ore and Nickel Ore Mining; 212221 Gold Ore Mining; 212222 Silver Ore Mining

Freeport-McMoRan Copper & Gold, Inc. is engaged in exploring, mining, producing, processing, and marketing metals. It is one of the world’s largest and lowest-cost producers of copper, and it controls the single largest gold reserve in the world. Its principal asset is its Grasberg mine, in Papua (formerly Irian Jaya), the western half of the island of New Guinea, in Indonesia. This huge mine has proven copper and gold reserves expected to last for some 30 years. The mine is partially owned by Freeport’s principal subsidiary, FT Freeport Indonesia.

Roots in the Early 20th Century

Freeport McMoRan began in 1912 under the name of Freeport Sulphur Company. It pioneered the use of the Frasch invention in the United States as an engineering method to mine sulfur. Prior to the Frasch invention, Italy monopolized the sulfur market because of its cheap labor. Herman Frasch’s invention, which utilized machinery rather than manual labor, allowed U.S. companies to produce the element at competitive world prices. The process involved flushing large quantities of hot water into pipelines sunk inward toward the sulfur find. As the ore melted, it was pumped to the surface in liquid form. The process initially had been engineered on a find near Lake Charles, Louisiana, in 1894. Frasch, along with a group of financiers, established the Union Sulphur Company in 1896 and acquired title to the Lake Charles site, as well as mineral rights and control over the Frasch patents.

Subsequently, sulfur was discovered at the Bryanmound site on the gulf coast of Texas near the Brazos River. Francis R. Pemberton, an entrepreneur, together with other investors, took an option on leases covering the Bryanmound property. Because the expiration of the patent that covered the major components of the Frasch process was imminent, Pemberton brought the find to the attention of several investors. Eric P. Swenson, vice-president of National City Bank in New York and a native Texan who retained strong financial ties throughout Texas, showed interest and visited the find in 1911. When Swenson saw the site, he realized that he could also develop a duty-free port nearby. Upon returning to New York, he formed the Vanderlip-Swenson-Tilghman Syndicate. He pooled capital of $700,000 to finance the project and purchased Bryanmound and the surrounding area.

Frasch’s Union Sulphur Company sued to bar the syndicate from using the Frasch engineering method at Bryanmound on the grounds that supplementary unexpired patents were crucial to the process. After lengthy litigation, a U.S. circuit court of appeals ruled that the remaining unexpired patents did not provide needed insight to the invention. As a consequence, the syndicate founded Freeport Sulphur Company in 1912, as well as the Freeport Townsite Company to develop a city on the west bank of the Brazos River and the Freeport Terminal Company to maintain train facilities to the port. In 1913 Freeport Texas Company was chartered as a holding company for Freeport Sulphur Company; Freeport Townsite Company; Freeport Asphalt Company; Freeport Sulphur Transportation Company; Freeport Terminal Company; South Texas Stevedore Company; and La Espuela Oil Company, Ltd. Headquarters for the holding company were located in New York City and Eric Swenson served as the company’s first president, remaining in that office until 1930.

New mining methods were introduced at Bryanmound during its early years of operation. Elevated pipes carrying the molten sulfur from the well to the storage vats were replaced with three-inch-wide sulfur lines encased in six-inch-thick pipes through which steam could circulate to protect the lines from inclement weather and reduce clogging. During World War I demand for sulfur rose sharply. Approximately 1,500 tons were generated daily at Bryanmound to cover shipments sent to U.S. factories producing combat weapons. Before its closure in 1935, the find yielded more than five million long tons of sulfur.

The company began exploration on a second mine in 1922 when it acquired sulfur rights to Hoskins Mound, 15 miles from Bryanmound. Unfavorable geological formations in the mound prompted innovative drilling methods that later were used at other sites. Company engineers checked the escape of hot water into sedimentary deposits of sand by pumping large quantities of mud into the formation, thus making the find a successful venture. They also developed a process to heat water with water boiler gases. The plant at Hoskins Mound closed in 1955 after producing more than ten million long tons of sulfur.

A growing opposition to Eric Swenson’s attitude as president of FMC led to his déposai by stockholders, who felt Swenson was insensitive to their concerns. In 1930 Eugene Norton was named president and under his leadership the company became the first sulfur-producing firm in the United States to diversify its interests. In 1931 Freeport purchased controlling interest in Cuban-American Manganese Corporation and, through its Cuban subsidiary in Oriente Province, gained access to rich deposits of low-grade manganese oxide ores. Freeport’s research department developed a process to refine manganese from low-grade ore for use in the manufacture of steel. As a result, between 1932 and 1946, when the find was exhausted, the company produced more than one million tons of manganese oxide. In 1936 the corporate name was changed from Freeport Texas Company to Freeport Sulphur Company.

Langbourne M. Williams was associated with Freeport Sulphur for many years. He was elected president of the company in 1933 and chairman in 1957, and served on the board of directors until 1977. When he became president in 1933, company operations began at Grand Ecaille, a sulfur dome in the Mississippi delta region, 45 miles south of New Orleans, Louisiana. Because the dome was located beneath marshlands, engineers drove thousands of wooden pilings into the land and built reinforced concrete mats over them to provide transportation to and from the mine. Company workers also dug a ten-mile canal between the plant and a site near the Mississippi River where they shipped the product to market. The site was later named Port Sulphur. Grand Ecaille served as a model in developing engineering solutions that would be applied in the future. When the plant at Grand Ecaille closed in 1978, more than 40 million tons of sulfur had been produced. During World War II company plants at Hoskins Mound and Grand Ecaille received army and navy “E” awards from the U.S. government for outstanding wartime production. Another Freeport subsidiary, Nicaro Nickel Co., chartered in 1942, was under contract to the U.S. government and contributed more than 63 million pounds of nickel to the war effort. The plant closed in 1947 when it became unworkable to cover production costs and sell the ore at competitive peacetime prices.

Expansion After World War

Charles Wight became a director of Freeport in 1948 and president in 1958. During the 1950s new mining discoveries allowed for continued product diversification. Discoveries of substantial finds of potash in New Mexico and Canada prompted Freeport to establish the National Potash Company in 1955, in partnership with Consolidated Coal Company. Production began in 1957, and in 1966 Freeport acquired full ownership of the successful operation.

At the same time, Freeport’s research center developed several technological advances, some resulting in lower mining production costs. In 1952 the company pioneered a process substituting seawater for fresh water in sulfur mining. This process eliminated the need to transport fresh water to sites located near sources of seawater. Another process developed at Freeport’s research center produced pure nickel and cobalt from nickel ore and rekindled company interest in mining Cuban ores. In 1955 Freeport chartered the Cuban American Nickel Company and a subsidiary, the Moa Bay Mining Company. The company invested $119 million in constructing plant facilities and a town at Moa Bay, Cuba, as well as a refinery at Port Nickel, Louisiana.

In 1960, however, the government of Fidel Castro confiscated the Cuban facility. In all, Freeport produced more than three million pounds of nickel, 310,000 pounds of cobalt, and more than 7,000 tons of the byproduct ammonium sulfur before the plant closed. Freeport eventually listed the Cuban facility as a tax loss.

Key Dates

1912:: Freeport Sulphur Company is founded.
1931:: Freeport purchases a controlling interest in Cuban-American Manganese Corp.
1955:: Freeport establishes the National Potash Company.
1956:: Freeport Oil Company is formed.
1966:: Freeport Indonesia is founded.
1969:: McMoRan Exploration Co. is founded.
1971:: The Freeport parent company name is changed to Freeport Minerals Co.
1981:: McMoRan Oil & Gas merges with Freeport Minerals to form Freeport-McMoRan Inc. (FMI).
1986:: FMI forms Freeport-McMoRan Resource Partners to handle its fertilizer business.
1990:: FMI spins off 27 percent of Freeport-McMoRan Copper & Gold Inc., retaining the remainder until a complete spinoff in 1994.
1997:: FMI is acquired by IMC Global.
2000:: Indonesian dictator Suharto leaves power; Freeport-McMoRan Copper & Gold remains principally focused on Indonesia, despite public relations battles and political uncertainty there.

Although Freeport began oil exploration in 1913 when it chartered La Espuela Oil Company, Ltd. to handle fuel requirements for its operation at Bryanmound, it was not until 1948 that the company began a sustained program of oil and gas exploration. In 1956 it formed Freeport Oil Company to handle ventures in Louisiana, Kansas, Texas, and New Mexico. In association with two other interests, it discovered oil and gas reserves at Lake Washington, Louisiana, and set a record, at the time, by producing oil from the world’s deepest well, which extended 22,570 feet below the ground. In 1958 Freeport Oil Company sold its interest at Lake Washington for approximately $100 million to Magnolia Petroleum Company. Throughout the 1960s and 1970s the company participated in various joint oil and gas discoveries throughout the United States.

Robert C. Hills became president of Freeport in 1961 and remained in office for six years. During his administration the company produced a record two million tons of sulfur and became the world’s largest sulfur producer for 1963. At the same time, Freeport launched several new subsidiaries to meet company needs. It formed Freeport Kaolin Company in 1963 after purchasing the main assets of Southern Clays Inc. Included in the sale were white clay reserves used as filler and coating materials in the manufacture of paper. From 1964 through 1981 Freeport Kaolin Company underwent a major expansion program designed to increase mining and processing capacity and to upgrade its products.

In addition, Freeport organized Freeport of Australia in 1964 to oversee its mineral exploration, development, and production activities in Australia as well as in the surrounding Pacific Ocean region. In 1967 Freeport of Australia, in a joint venture with Metals Exploration, located large Australian nickel deposits near Greenvale, Queensland.

In 1966 Freeport established Freeport Chemical Company to embark on a phosphate chemical project, for which it constructed a plant in Uncle Sam, Louisiana. The plant produced its first shipments of phosphoric acid and sulfur acid in 1968. In the 1970s plant facilities were expanded at Uncle Sam and a plant to produce sulfuric acid was added in Port Sulphur, Louisiana. A research project undertaken at Freeport led to the recovery in 1988 of uranium oxide, commonly referred to as yellowcake, from phosphoric acid. Subsequently two uranium-recovery plants were opened: one at Uncle Sam and the second one at Agrico Chemical Company’s phosphoric acid facility in Don-aldsonville, Louisiana.

In 1966 Freeport founded Freeport Indonesia, Inc., to mine copper in the province of Irian Jaya. Because the find, known as Grasberg Prospect, was located in a remote, mountainous region, open-pit mining operations did not begin until late 1972. The first copper shipment was made the following year, however, and was valued at $2 million. Gold and silver also were mined at the find.

During the 1970s through 1982, significant changes occurred in the company. In 1971 the company name changed from Freeport Sulphur Company to Freeport Minerals Company (FMC) to reflect its role as a diversified mineral producer. Paul W. Douglas became president in 1975. FMC continued a policy of diversification in 1981 when it formed Freeport Gold Company to operate a gold find located in Jerrit Canyon, Nevada.

In 1980 FMC reported a record of $147.4 million in company earnings. Over the years FMC had worked in joint mining ventures with McMoRan Oil & Gas Company and acquired three million shares of its convertible preferred stock. In 1981, when the companies merged, it became one of the leading natural resources companies in the country.

McMoRan Company Background

W.K. McWilliams, Jr., and James R. (Jim Bob) Moffett, both geologists, started a private company, McMoCo, during the mid-1960s. McMoCo was the forerunner of McMoRan Oil & Gas Company. It began as a consultant for oil and gas exploration programs, but soon added personnel to enable it to handle entire projects, from locating finds to drilling and producing the product. Because the company had limited funds, outside sources provided risk capital. In return for its work, McMoCo received 25 percent interest in each find. B.M. Rankin, Jr., a specialist in land-leasing and sales operations, joined as an associate in about 1967. With his arrival, McMoCo was liquidated and the three owners formed McMoRan, the company name combining portions of their surnames. In order to secure necessary funding for its many drilling programs, the company decided to become a public company. In 1969 it merged with Horn Silver Mines Company, a public firm incorporated in 1932 and controlled by television personality Art Linkletter and several associates, that was listed on the Salt Lake City Stock Exchange. As a consequence, a new public firm, named McMoRan Exploration Company, emerged, with Linkletter as a board member. One of the firm’s earliest oil explorations was on the gulf coast of Louisiana in LaFourche Parish; McMoRan owned 50 percent of the successful find.

During the 1970s, the company acquired a reputation as an aggressive petroleum explorer with cost-efficient drilling programs. It formed drilling partnerships with several organizations. In 1972 it signed an agreement with Geodynamics Oil & Gas Inc. and Comprehensive Resources Corporation and bought working interests in several oil- and gas-producing properties in Texas and Louisiana. In 1973 it formed a joint petroleum exploration program with Dow Chemical Company. In this venture, Dow Chemical Company received 50 percent interest in all exploration finds, while McMoRan Exploration Company’s interest varied from 25 percent to 38 percent per find. In 1975 the company began a $36 million onshore oil and gas exploration and development program with Transco Exploration Company. During its first year of operation, McMoRan Exploration Company successfully completed five of the 17 wells drilled. As a result, budgets for the second and third year of operation were expanded from $8 million to $14 million.

While many exploration programs were in progress, administrative and operational changes took place within the organization. In 1970 stockholders voted to delist the company from the Salt Lake City Stock Exchange. In 1977 a four-member operating committee headed by Moffett was named to assume the duties of McWilliams and Rankin, who stepped down as cochairmen. Moffett became president and chief executive officer, while McWilliams and Rankin remained as consultants, directors, and stockholders. In 1978 the company was reincorporated in Delaware and was listed on the New York Stock Exchange. In 1979 the name was changed from McMoRan Exploration Company to McMoRan Oil & Gas Company.

Other operational changes included the creation of subsidiaries to separate distinct operations within the organization and provide the company with additional exploration exposure. In 1977 McMoRan Offshore Exploration Company (MOXY) began operation to manage and expand oil and gas explorations in federal waters off the Gulf of Mexico. Interests in federal offshore lease blocks were acquired through sublease arrangements. In 1980 MOXY entered a three-year program with several organizations, including Transco Exploration Company and Freeport Minerals Company. Under the agreement, MOXY provided 25 percent of exploratory expenses in exchange for 35 percent working interest in the finds.

Another subsidiary, McMoRan Exploration Company (MEC), was formed in 1979 to handle exploration and production of oil and gas properties located primarily along the gulf area of Texas and Louisiana, both onshore and in waters owned by these states. In 1980 MEC began an exploration and development program for oil and gas operations in the gulf region with several organizations. MEC provided 25 percent of total exploration funds in return for a 37.5 percent working interest in the finds.

Merged Company in the 1980s

In 1981 McMoRan Oil & Gas Company merged with Freeport Minerals Company. The new company, Freeport-McMoRan Inc. (FMI), elected Paul Douglas as president and Benno C. Schmidt as chairman of the board. James R. Moffett became vice-chairman but remained president of McMoRan Oil & Gas Company, directing all combined oil and gas activities. Freeport-McMoRan’s policy put greater emphasis on domestic oil and gas exploration programs yet sustained interest in growth programs in minerals and chemical products.

In 1982 Freeport Gold Company completed its first full year of operation. It held the record as the largest gold producer for the year, reporting an output of 196,000 ounces of gold. In 1983 FMI created Freeport-McMoRan Oil and Gas Royalty Trust to afford shareholders direct participation in the income from selected U.S. offshore oil and gas properties held by McMoRan Oil & Gas Company. Although the company was unable to put a value on these properties, its annual report for 1982 listed entire oil and gas assets at $1.06 billion.

Freeport-McMoRan in 1983 purchased Stone Exploration Corporation, a company engaged in gas exploration, development, and production, primarily in south Louisiana. At the time, Stone Exploration had estimated proven reserves of 57 billion cubic feet of gas and gas equivalents.

In 1983 Paul W. Douglas resigned as president and chief executive officer. Schmidt, chairman of the company, assumed the additional position of chief executive officer but the position of president remained vacant. In 1984 Moffett succeeded Schmidt as chairman and chief executive officer. Schmidt became executive committee chairman and a director. Richard B. Stephens replaced Moffett as president of McMoRan Oil & Gas Company. Milton H. Ward assumed the duties of president and chief operating officer of Freeport-McMoRan. At the time, the company’s asset base was valued at $1.4 billion.

In 1984 Freeport-McMoRan enjoyed a 133 percent increase in its oil and gas reserves when it purchased a 50 percent working interest in Voyager Petroleum Ltd. of Canada and Midlands Energy Company, operating in the midwestern and western United States. Freeport-McMoRan Oil & Gas Company, a fully owned subsidiary of Freeport-McMoRan Inc., also became managing general partner of Freeport McMoRan Energy Partners, Ltd., which it incorporated in 1984.

In 1985 Freeport-McMoRan sold certain assets to reduce its long-term debt. It sold Freeport Kaolin Company for more than $95 million to Engelhard Corporation, a manufacturer of specialty chemical and metallurgical products and a trader in precious metals. In June 1985 it sold a 25 percent interest in Midlands Energy Company to Bristol PLC, a British energy company, for $73 million. The 25 percent interest included natural gas and oil reserves, exploration land, and a stake in three processing plants. It sold 14 percent of its domestic oil and gas business for more than $125 million on the New York Stock Exchange in the form of depository receipts representing limited partnership units in its Freeport-McMoRan Energy Partners, Ltd. In addition, it sold approximately 11 percent of its common shares in Freeport-McMoRan Gold Company, formerly known as Freeport Gold Company, to the public for more than $39 million.

Also in 1985, Freeport-McMoRan acquired two new companies and announced a program to repurchase up to ten million common shares of its stock depending on market conditions. Over the next five years, Freeport-McMoRan spent more than $1 billion to buy back common stock. Also in the mid-1980s it bought Geysers Geothermal Company (GGC), a producer of steam for electric power generation, for $216.7 million. The purchase allowed Freeport-McMoRan to extend the use of the hot-water technology it had developed while operating its sulfur reserves. It also bought most of the assets of Pel-Tex Oil Company for $74 million, thereby acquiring its oil and gas properties located in the gulf area of Louisiana and Texas.

Operational costs of the organization were significantly reduced beginning in 1985 when corporate headquarters in New York City were moved to New Orleans, Louisiana, and combined with the company’s office there. Oil and gas and certain mineral functions also were moved to the new Freeport-McMoRan Building built to serve as headquarters for the organization.

In 1986 the parent company formed Freeport-McMoRan Resource Partners (FRP), whose operations included the production of phosphate, nitrogen fertilizer products, sulfur, and geothermal resources, and the recovery of uranium oxide from phosphoric acid. FRP stock was placed on the New York Stock Exchange. The same year, in partnership with Kidder, Peabody & Company, FMI reached an agreement to buy Petro-Lewis Corporation and an affiliate, American Royalty Trust Company, for $440 million. The acquisition increased Freeport-McMoRan’s domestic oil and gas production.

In 1987 FRP acquired a chemical fertilizer plant located in Taft, Louisiana, from Beker Industries for $22.5 million. It also bought Agrico Chemical Company from The Williams Companies for more than $250 million. Agrico assets included phosphate rock mines, production facilities for phosphate and nitrogen fertilizers, and a large sales and distribution network.

During the year, Freeport-McMoRan changed its interests in Australia. It sold most of its holdings in the Greenvale Nickel project in Queensland in two transactions for a total of $26 million in cash and a deferred payment of $11 million. It set up Freeport McMoRan Australia Ltd. in 1987 to handle its gold and diamond projects in that country. Late in 1988 the new subsidiary merged with Poseidon Ltd., an Australian mining concern, and a new company emerged called Poseidon Exploration Ltd.

In November 1989 Moffett outlined a plan to sell between $1.2 billion to $1.5 billion in assets to reduce longstanding debts. Future company focus would be concentrated on developing two mammoth mining discoveries: the sulfur find in the Gulf of Mexico off Louisiana (Main Pass project), and the copper and gold finds in Indonesia (the Grasberg and Ertsberg projects). Moffett felt that the asset sales also would free up capital for the development of the fields, which had emerged as extremely valuable resources. The extension of the Grasberg ore body in Indonesia had transformed that operation into the largest single gold reserve in the world, and propelled it to a ranking as one of the top five copper reserves worldwide. In 1991 Freeport set up new subsidiaries to control operations in both Indonesia and the Gulf of Mexico.

The Main Pass Line was revealed as the first significant Frasch sulphur discovery on the North American continent since the 1960s, and one of the most productive oil fields in the Gulf of Mexico. Developers estimated that 67 million long tons of sulfur, 39 million barrels of oil, and seven billion cubic feet of natural gas lay beneath the Gulf near the Mississippi Delta. Extraction of these natural resources was expected to cause settling on the Gulf floor, precluding super-strong framing inside the underwater mine. Moffett liquidated $2 billion of Freeport-McMoRan’s assets to finance the projects. The 1989 sales included Freeport-McMoRan Gold Company and about $85 million of its oil and gas properties; Voyager Energy; geothermal energy assets; and an interest in an Australian mining company.

Concentrating on Mining in the 1990s

In 1990 the company sold its nitrogen fertilizer business to Agricultural Minerals Corporation for $275 million. It divested itself of Freeport-McMoRan Gold Company, sold to Minorco South Africa for about $705 million, and spun off to the public Freeport-McMoRan Copper & Gold, Inc., which remained 73 percent in the parent company’s hands. At the end of 1990, Freeport-McMoRan stated that it planned to auction an additional $750 million of its assets, again as part of its debt-reduction goal.

The parent company, Freeport-McMoRan Inc., was now basically a holding company for its two principal assets, Free-port-McMoRan Copper & Gold and Freeport-McMoRan Resource Partners, which ran the sulphur and fertilizer business. The main thing was to have enough cash to finance the development of the huge finds at Irian Jaya and Main Pass. Both of these assets got better the more they were studied. Main Pass was the second largest recoverable sulphur reserve known, surpassed only by a Texas deposit that was nearing the end of its usefulness. The ore reserves in Irian Jaya were huge, and by 1993 Freeport announced that after a $550 million expansion, it needed to expand again to accept the increased capacity. The company built a huge ore pass that funneled chunks of ore down the mountainside. The long drop itself crushed the ore, reducing the need for further mechanical pulverizing. This process helped make the Grasberg mine one of the world’s lowest-cost producers of copper. Although world prices for Freeport’s minerals were quite low in the early 1990s, the company was nevertheless in a prime position for when prices rose again. The copper and gold affiliate’s sales stood at more than $925 million in 1993, up almost 30 percent from the year previous.

But fertilizer prices remained frustratingly low, and Free-port-McMoRan entered on a series of complex deals designed to concentrate the company on its best business. With fertilizer prices hitting bottom in 1993, Freeport-McMoRan Resource Partners formed a joint venture with one of its largest competitors, IMC Global Inc. Freeport-McMoRan Inc. spent $1.06 billion in a stock swap in 1996 to acquire another fertilizer competitor, Arcadian Corp. This made a combined company with annual revenue near $2.2 billion. Yet the next year, Free-port-McMoRan Inc. agreed to be bought by joint venture partner IMC Global.

Meanwhile, in 1994 the holding company, Freeport-McMoRan Inc., spun off its majority interest in Freeport-McMoRan Copper & Gold. This company continued to be run by Jim Bob Moffett and headquartered in the Freeport-McMoRan Building in New Orleans. The subsidiary company seemed to have outlasted its parent. This company was now fully focused on its Indonesian mine. Yet the mine became a source of violent trouble and terrible publicity. In the 1960s, the company had promised the native Papuans “community development” in exchange for use of their land—as the tribes had no real concept of property rights, this was about all that could be done at first. But by the mid-1990s, many of the islanders had come to keenly resent the company. Not only were they poorly compensated, but the mine discharged tons of tailings into the forest and rivers, causing evident environmental damage. Violent incidents at the mine in 1995 and 1996 led to several deaths and scores of injuries. The company’s relationship with the indigenous people was reputedly abysmal as tribal leaders sought to close the mine. The trouble at Grasberg was widely reported, and Freeport-McMoRan fought gory public relations battles. CEO Moffett stormed into the offices of the New Orleans Times-Picayune after one unfavorable story, and the company hired none other than Henry Kissinger to plead its case to the Clinton administration when it lost some government-backed insurance.

These troubles did not go away. When Indonesian dictator Suharto left power in 2000, the soundness of Freeport-McMoRan’s long-term contracts was questioned. Political instability threatened all foreign investment in Indonesia, and Freeport-McMoRan Copper & Gold was probably the most visible and clearly resented foreign company in the nation. Despite the political uncertainty clouding the Indonesian mine, the company was able to make money out of it. Its costs were very low, allowing it to do well even when world metal prices were low, as they were in the early 2000s. When copper and gold prices ticked up, the company stood to make handsome profits.