831259--3/15/2006--FREEPORT_MCMORAN_COPPER_&_GOLD

related topics

{debt, indebtedness, cash}

{operation, international, foreign}

{gas, price, oil}

{loss, insurance, financial}

{cost, contract, operation}

{cost, regulation, environmental}

{regulation, change, law}

{financial, litigation, operation}

{operation, natural, condition}

{stock, price, operating}

Because our primary operating assets are located in the Republic of Indonesia, our business may be adversely affected by Indonesian political, economic and social uncertainties, in addition to the usual risks associated with conducting business in a foreign country. In addition to the usual risks encountered in the mining industry, we face additional risks because our operations are located on difficult terrain in a very remote area. The terrorist attacks in the United States on September 11, 2001, subsequent attacks in Indonesia and the potential for additional future terrorist acts and other recent events have created economic and political uncertainties that could materially and adversely affect our business and the prices of our securities. Our profitability can vary significantly with fluctuations in the market prices of copper and gold. Our Contracts of Work are subject to termination if we do not comply with our contractual obligations, and if a dispute arises, we may have to submit to the jurisdiction of a foreign court or arbitration panel. Any suspension of required activities under our Contracts of Work requires the consent of the Indonesian government. Our mining operations create difficult and costly environmental challenges, and future changes in environmental laws, or unanticipated environmental impacts from our operations, could require us to incur increased costs. The volume and grade of the reserves we recover and our rates of production may be more or less than we anticipate. We do not expect to mine all of our reserves before the initial term of our Contract of Work expires. Servicing our debt will require a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control. Covenants in our bank credit facilities impose restrictions on us. Covenants in our 10 % senior notes due 2010 and 6 % senior notes due 2014 also impose restrictions on us. Movements in foreign currency exchange rates or interest rates could negatively affect our operating results. Because we are a holding company, our ability to pay our debts depends upon the ability of our subsidiaries to pay us dividends and to advance us funds. In addition, our ability to participate in any distribution of our subsidiaries assets is generally subject to the prior claims of the subsidiaries creditors.

Full 10-K form ▸

831259--3/15/2006--FREEPORT_MCMORAN_COPPER_&_GOLD_INC