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Making It Happen 

Grasberg’s return to high-grade ore, performance by DOZ above design capacity and mill achievements led the way in 2004. 

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## OPERATIONS OVERVIEW 

Mining and Milling  As we entered 2004, the operations of our mining affiliate, PT Freeport Indonesia, focused on recovery from the fourth-quarter 2003 Grasberg open-pit slippage and debris flow events. By the end of 2004, operations not only returned to full capacity — with mining resuming in the higher-grade portion s of the Grasberg mine — but our production team achieve d dozens of new operating records in the process while also improving our safety performance. As the Grasber g pit recovery progressed during the year, our undergro und division achieved record results, performing above operating capacity without increasing manpower or equipment. Our mill division accelerated maintenance programs for our concentrating operations during low er production from Grasberg early in the year, enabling u s to ramp up production during the second half of 2004. 

Sales for 2004 totaled 1.0 billion pounds of coppe r and 1.44 million ounces of gold, which, as anticipated , were lower than 2003 totals of 1.3 billion pounds of copper and 2.5 million ounces of gold, as pit recovery efforts deferred some mining of higher-grade ore unti l 2005. After achieving safe access to higher-grade area s of the Grasberg mine, fourth quarter production incre ased significantly. For the final quarter of 2004, PT Freepor t Indonesia’s share of sales totaled 419 million pounds of copper and 618,000 ounces of gold. The successful actions completed in 2004 provide us with access to higher-grade ores in 2005 with projected sales of 1.5 billion pounds of copper and 2.9 million ounces of gol d, representing estimated increases of 50 percent for co pper and 100 percent for gold from 2004 levels. 

