Letter from the Chairman of the Board and the President and Chief Executive Officer

The theme of our 2008 Working Toward Sustainable Development Report, “Core Values,” reflects our company’s pledge to improve continuously in meeting our commitment to work in the most safe, inclusive, environmentally and socially responsible manner practicable. Freeport-McMoRan Copper & Gold Inc. has a long-standing history of addressing complex social, economic and environmental challenges proactively, yet past accomplishments will not determine future success. Beginning with our sustainable development team, and through programs integrated throughout our operations under Board of Directors oversight, we manage safety, social, environmental and economic development programs in partnership with our stakeholders and neighbors, set performance targets to gauge their effectiveness and seek external assurance to align our programs with international best practices.

These are challenging times, given the sudden downturn our industry experienced beginning in late 2008, as weakening global economic conditions resulted in a dramatic decline in commodity prices. We began the year focused on internal expansion projects as the world was demanding more copper, gold and molybdenum. By year end, we were responding to significant reductions in demand by deferring most of our expansion projects, reducing costs and curtailing production in some operations.

Freeport-McMoRan Copper & Gold Inc. is well positioned to supply copper and molybdenum to a world that continues to seek quality-of-life improvements. Our company has geographically diverse, significant proven and probable reserves of copper, gold and molybdenum. Despite our abundant resources and opportunities for growth, we will be ineffective unless we meet our commitments to our shareholders, employees, customers and the communities in which we operate.

As an international mining company, we face considerable challenges in mitigating environmental impacts, managing health and safety risks, and addressing difficult social and economic issues across our operations. We have set company-wide performance targets to address material sustainability issues identified by internal and external stakeholders. These performance targets will be available in our 2008 Global Reporting Initiative G3 report.

Freeport-McMoRan Copper & Gold Inc. is transitioning to a risk-based approach for the identification and management of key sustainability challenges and opportunities across its operating portfolio. As we implement the International Council on Mining and Metals (ICMM) Sustainable Development Framework, applying risk-based processes will provide improved consistency in our progress in working toward sustainable development. Through this approach, we expect to identify opportunities for more focused management of key issues, including setting relevant performance targets and ensuring appropriate systems for monitoring progress.

The necessary responses to weak market conditions in late 2008 required a reduction of workforce at certain of our operations, along with the implementation of cost reduction initiatives across our organization. We received high participation in voluntary retirement and resignation programs; however, we recognize that job losses can have adverse impacts on employees, their families and the communities near our operations. We are taking steps to mitigate the adverse impacts including reassigning affected workforce to other areas of our operations when practicable.

We regret to report five fatalities at our operations during 2008. The occurrence of any workplace fatality is unacceptable. The company has worked to identify and understand the root causes of these fatalities and has executed action plans to prevent recurrence.

Our current and future operations span complicated and challenging natural and social environments. Our stakeholders are essential partners in our quest toward sustainable development. When we provide transparent information about our business, communities and host governments can better understand and anticipate the effects of our operating plans. In 2008, we spent approximately $190 million on community investments and more than $460 million on environmental protection, reclamation and remediation. We are continuing our efforts to make lasting contributions to society, long after our operations have ceased. We will maintain the highest standards of integrity and transparency in our social and economic development programs.

We appreciate the response and engagement by our employees and stakeholders as we have executed significantly revised operating plans without compromising our environmental, economic and social performance. It is this spirit of dedication and cooperation that will support our sustainable development efforts now and long into the future.

Respectfully yours,

James R. Moffett
Chairman of the Board

Richard C. Adkerson
President and Chief Executive Officer

Freeport-McMoRan Copper & Gold Inc. President and Chief Executive Officer Richard C. Adkerson, with students at the Mkombozi School in Fungurume, one of the host communities for the Tenke Fungurume copper and cobalt mine development project in the Democratic Republic of Congo. As part of our commitment to education in the region, we have constructed two new schools and renovated another.

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