Grasberg’s return to high-grade ore,  performance by DOZ above design  capacity and mill achievements led  the  way in 2004. 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. Making  It Happen OPERATIONS OVERVIEW Background photo:  Truck and shovel operations in the high-volume Grasberg open pit. 4 |  FREEPORT-McMoRan COPPER & GOLD INC. Success ful actions completed in 2004 in the Grasberg open-pit mine  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 gold.