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               SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C. 20549



                            FORM 10-K

(Mark One) 

[x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

               THE SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 1998

                               OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

             OF THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from .......... to ..........

                  Commission file number 1-9916



               Freeport-McMoRan Copper & Gold Inc.

     (Exact name of registrant as specified in its charter)



          Delaware                                74-2480931

 (State or other jurisdiction of   (I.R.S. Employer Identification No.) 

  incorporation or organization)





                 1615 Poydras Street

              New Orleans, Louisiana              70112

      (Address of principal executive offices)  (Zip Code)



Registrant's  telephone  number,  including  area  code: (504)582-4000



   Securities registered pursuant to Section 12(b) of the Act:



     Title of each class          Name of each exchange on  which registered

     -------------------          ------------------------------------------

Class A Common Stock                     New York Stock Exchange

 par value $0.10 per share              

Class B Common Stock                     New York Stock Exchange

 par value $0.10 per share               

Depositary Shares representing           New York Stock Exchange

 0.05 shares of Step-Up Convertible      

 Preferred Stock,

 par value $0.10 per share

Depositary Shares representing           New York Stock Exchange

 0.05 shares of Gold-Denominated         

 Preferred Stock,

 par value $0.10 per share

Depositary Shares, Series II,            New York Stock Exchange

 representing 0.05 shares of Gold-       

 Denominated Preferred Stock, 

 Series II, par value $0.10 per share

Depositary Shares representing           New York Stock Exchange

 0.025 shares of Silver-                   

 Denominated Preferred Stock,

 par value $0.10 per share

9-3/4% Senior Notes due 2001 of          New York Stock Exchange

 P.T. ALatieF Freeport Finance

 Company B.V., guaranteed by

 the registrant



Securities registered pursuant to Section 12(g) of the Act:  None



     Indicate by check mark whether the registrant (1) has filed

all reports required to be filed by Section 13 or 15(d) of the

Securities Exchange Act of 1934 during the preceding 12 months (or

for such shorter period that the registrant was required to file

such reports), and (2) has been subject to such filing

requirements for the past 90 days.  Yes X  No   

                                        --    --

     Indicate by check mark if disclosure of delinquent filers

pursuant to Item 405 of Regulation S-K is not contained herein,

and will not be contained, to the best of the registrant's

knowledge, in definitive proxy or information statements

incorporated by reference in Part III of this Form 10-K or any

amendment to this Form 10-K. [ ] 

                              

     The aggregate market value of classes of common stock held

by non-affiliates of the registrant on March 8, 1999 was

approximately $1,211,000,000.



     On March 8, 1999, there were issued and outstanding

64,809,423 shares of Class A Common Stock and 98,759,277 shares

of Class B Common Stock.



               DOCUMENTS INCORPORATED BY REFERENCE



     Portions of the registrant's Annual Report to stockholders

for the year ended December 31, 1998 are incorporated by reference

into Parts II and IV of this report and portions of the Proxy

Statement submitted to the registrant's stockholders in connection

with its 1999 Annual Meeting to be held on May 6, 1999 are

incorporated by reference into Part III of this report.















                        TABLE OF CONTENTS

                                                              Page

Part I



Items 1. and 2. Business and Properties..........................1

Item 3. Legal Proceedings.......................................13

Item 4. Submission of Matters to a Vote of Security Holders.....13

        Executive Officers of the Registrant ...................14



Part II



Item 5. Market for Registrant's Common Equity

         and Related Stockholder Matters........................15

Item 6. Selected Financial Data.................................15

Items 7. and 7A. Management's Discussion and Analysis of

         Financial Condition and Results of Operations

         and Quantitative and Qualitative Disclosures

         About Market Risk......................................16

Item 8. Financial Statements and Supplementary Data.............16

Item 9. Changes in and Disagreements with Accountants on

         Accounting and Financial Disclosure....................16



Part III



Item 10. Directors and Executive Officers of the Registrant.....16

Item 11. Executive Compensation.................................16

Item 12. Security Ownership of Certain Beneficial

          Owners and Management.................................16

Item 13. Certain Relationships and Related Transactions.........16



Part IV



Item 14. Exhibits, Financial Statement Schedules 

          and Reports on Form 8-K...............................17



Signatures.....................................................S-1



Index to Financial Statements..................................F-1



Report of Independent Public Accountants.......................F-1



Exhibit Index..................................................E-1





   i



                              PART I



Items 1. and 2.  Business and Properties.



General



Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (FCX

or the Company), is one of the world's largest copper and gold

companies in terms of reserves and production, and believes that

it has the lowest cost copper producing operations in the world,

taking into account customary credits for related gold and silver

production.



FCX's principal operating subsidiary is P.T. Freeport Indonesia

Company (PT-FI), a limited liability company organized under the

laws of the Republic of Indonesia and domesticated in Delaware. 

PT-FI's operations involve the exploration for and development,

mining and processing of ore containing copper, gold and silver

in Irian Jaya, Indonesia pursuant to an agreement (a Contract of

Work or COW) with the government of the Republic of Indonesia

(the Indonesian Government) and in the worldwide marketing of

concentrates containing those metals. FCX owns directly an 81.28

percent interest in PT-FI.  Of the remaining 18.72 percent, 9.36

percent is owned by each of the Indonesian Government and P.T.

Indocopper Investama Corporation, an Indonesian limited liability

company (PT-II). FCX owns a 49 percent interest in PT-II, giving

FCX an aggregate 85.87 percent ownership interest in PT-FI. PT-

FI's operations are located in the remote rugged highlands of the

Sudirman Mountain Range in the province of Irian Jaya, Indonesia,

located on the western half of the island of New Guinea.  The PT-

FI COW permits extensive exploration, mining and production

activities in a 24,700-acre area, referred to as "Block A," and

an exploration area currently consisting of approximately 1.6

million acres referred to as "Block B."  PT-FI's largest mine,

Grasberg, was discovered in Block A in 1988 and contains the

largest single gold reserve and one of the three largest open-pit

copper reserves of any mine in the world.



Through P.T. IRJA Eastern Minerals Corporation (Eastern Mining),

FCX holds an additional COW in Irian Jaya covering an approximate

1.25 million-acre exploration area. Eastern Mining was formed in

1994 to explore for copper, gold and silver in the Eastern Mining

COW area. FCX owns 90 percent of the outstanding common stock of

Eastern Mining through a wholly owned subsidiary, and PT-II owns

the remaining 10 percent, giving FCX an aggregate 94.9 percent

ownership interest in Eastern Mining.



In 1996, FCX and Rio Tinto plc (Rio Tinto) established

exploration and expansion joint ventures.  Pursuant to the

exploration joint ventures, Rio Tinto has a 40 percent interest

in future development projects under the PT-FI COW and the

Eastern Mining COW.  Rio Tinto also has a 40 percent interest in

certain assets and production exceeding specified annual amounts

of copper, gold and silver through 2021 and 40 percent of all

production thereafter through a joint venture covering expanded

operations in Block A.



FCX  has an option through June 1999 to acquire a 90 percent

ownership interest in an entity that holds a COW covering an area

of approximately 1.2 million acres in central Irian Jaya. 

Additionally, in June 1998 FCX entered into an exploration joint

venture agreement through which it can earn an indirect interest

in a COW area covering a total of approximately 1.0 million acres

in several blocks contiguous to PT-FI's Block B and Eastern

Mining's Block I areas.  See "Exploration."



FCX's operations also involve the smelting and refining of copper

concentrates in Spain and marketing refined copper products

through its indirect, wholly owned subsidiary, Atlantic Copper,

S.A. (Atlantic).  PT-FI has a 25 percent interest in P.T.

Smelting Co. (PT-SC), an Indonesian company that completed

construction of a copper smelter/refinery in Gresik, East Java,

Indonesia during the third quarter of 1998. See "Atlantic Copper,

S.A." and "P.T. Smelting Co."



Republic of Indonesia



The Republic of Indonesia consists of more than 17,000 islands

stretching 3,000 miles along the equator from Malaysia to

Australia and is the fourth most populous nation in the world

with over 200 million people.  Following many years of Dutch

colonial rule, Indonesia gained independence in 1945 and now has

a presidential republic system of government.



   1



Maintaining a good working relationship with the Indonesian

Government is of particular importance to the Company because all

of its mining operations are located in Indonesia. PT-FI's mining

complex was Indonesia's first copper mining project and was the

first major foreign investment in Indonesia following the

economic development program instituted by the Indonesian

Government in 1967. PT-FI works closely with the central,

provincial and local governments in development efforts in the

vicinity of its operations. The Company's current exploration and

mining operations in Indonesia are conducted through PT-FI by

virtue of the PT-FI COW and through Eastern Mining by virtue of

the Eastern Mining COW, both of which have 30-year terms, provide

for two 10-year extensions under certain conditions, and govern

PT-FI's and Eastern Mining's rights and obligations relating to

taxes, exchange controls, royalties, repatriation and other

matters. Both COWs were concluded pursuant to the 1967 Foreign

Capital Investment Law, which expresses Indonesia's foreign

investment policy and provides basic guarantees of remittance

rights and protection against nationalization, a framework for

economic incentives and basic rules regarding other rights and

obligations of foreign investors.  Any disputes regarding the

provisions of the COWs are subject to international arbitration.



The area surrounding PT-FI's mining development is sparsely

populated by local tribes and former residents of more populous

areas of Indonesia, some of whom have resettled in Irian Jaya

under the Indonesian Government's transmigration program. A small

segment of the local population has in the past opposed

Indonesian rule over Irian Jaya, and several small separatist

groups have sought political independence for the province.

Public discussion of the degree of political and economic

autonomy that may be allowed individual provinces, including

Irian Jaya, have been held and likely will continue throughout

the 1999 parliamentary and presidential elections.  Sporadic

attacks on civilians by the separatists and sporadic but highly

publicized conflicts between separatists and the Indonesian

military have led to previous allegations of human rights

violations. PT-FI personnel have not been involved in those

conflicts.  The Indonesian military occasionally has exercised

its right to appropriate transportation and other equipment of

PT-FI to use in its security operations.



Unfavorable economic conditions continue to affect Southeast

Asia, including Indonesia.  Since early 1997, Indonesia's economy

has contracted, inflation increased dramatically, and the

Indonesia rupiah severely weakened initially and then partly

recovered and continues to be unpredictable.  Financial

assistance to Indonesia is being provided by the International

Monetary Fund, and various political, financial and regulatory

changes are being implemented, including national parliamentary

elections scheduled for June 1999 followed by a presidential

election currently scheduled for September 1999.  International

copper and gold markets have been adversely affected by the

developments in Southeast Asia.



Contracts of Work



The PT-FI COW covers both Block A, which was originally the

subject of a 1967 COW between PT-FI's predecessor and the

Indonesian Government, and Block B, to which PT-FI gained rights

in 1991. The initial term of the PT-FI COW expires in December

2021 with provisions for two 10-year extensions under certain

conditions.  Pursuant to the PT-FI COW, PT-FI  to date has

relinquished its rights to 4.9 million acres in Block B,

including 1.6 million acres in December 1998.  PT-FI retains the

rights to 1.6 million acres in Block B, which it believes contain

the most promising exploration opportunities following extensive

geological assessment.



In August 1994, the Indonesian Government granted Eastern Mining

a COW originally covering approximately 2.5 million acres in

three separate blocks.  The Eastern Mining COW provides for a

four-to-seven year exploratory term and a 30-year term for mining

operations, with provisions for two 10-year extensions under

certain conditions.   Like the PT-FI COW, the Eastern Mining COW

requires Eastern Mining to relinquish its right to portions of

the COW area determined by Eastern Mining in amounts equal to 25

percent of the original approximately 2.5 million acres at the

end of each of three specified periods. Eastern Mining to date

has relinquished approximately 1.25 million acres and must

relinquish approximately 0.6 million additional acres by August

2001.



Ore Reserves



All of PT-FI's proved and probable reserves, including the

Grasberg deposit, lie within Block A.  In 1998, PT-FI increased

its aggregate proved and probable reserves by approximately 381

million metric tons of ore representing 6.0 billion recoverable

pounds of copper, 4.3 million recoverable ounces of gold and 18.7

million recoverable ounces of silver. December 31, 1998 aggregate

proved and probable recoverable reserves, net of 1998 production,

totaled 2.48 



   2



billion metric tons of ore averaging 1.13 percent

copper, 1.05 grams of gold per metric ton and 3.83 grams of

silver per metric ton, representing 51.3 billion pounds of

copper, 64.2 million ounces of gold and 153.1 million ounces of

silver.  Pursuant to joint venture arrangements, Rio Tinto has a

40 percent interest in production exceeding specified annual

amounts of copper, gold and silver through 2021, calculated by

reference to PT-FI's proved and probable reserves as of December

31, 1994, and 40 percent of all production thereafter. Net of Rio

Tinto's share, PT-FI's share of proved and probable recoverable

copper, gold and silver reserves was 40.0 billion pounds of

copper, 51.6 million ounces of gold and 119.1 million ounces of

silver as of December 31, 1998. Net of Rio Tinto's share, 1998

additions and revisions to PT-FI's proved and probable copper,

gold and silver reserves replaced approximately 250 percent of

PT-FI's 1998 copper production, 120 percent of gold production

and 330 percent of silver production. Estimated recoverable

reserves were assessed using a copper price of $0.90 per pound

and a gold price of $325 per ounce.  Using prices of $0.75 per

pound of copper and $280 per ounce of gold would reduce estimated

recoverable reserves by approximately 9 percent for copper, 7

percent for gold and 9 percent for silver.



The Grasberg deposit contains the largest single gold reserve and

is one of the three largest open-pit copper reserves of any mine

in the world. The Grasberg deposit contained combined open pit

and underground proved and probable ore reserves as of December

31, 1998 of 1.88 billion metric tons at an average grade of 1.04

percent copper, 1.03 grams of gold per metric ton and 3.05 grams

of silver per metric ton.  As of December 31, 1998, Kucing Liar

contained proved and probable ore reserves of 320.5 million

metric tons at an average grade of 1.41 percent copper, 1.41

grams of gold per metric ton and 5.30 grams of silver per metric

ton.



The Company's reserves as of December 31, 1997 and 1998 included

in this report have been verified by Independent Mining

Consultants, Inc., and this reserve information has been included

in this report in reliance upon the authority of Independent

Mining Consultants, Inc. as experts in mining, geology and

reserve determination.  See "Cautionary Statements."



Mining Operations



Mines in Production. PT-FI currently has two mines in operation:

the Grasberg and the Intermediate Ore Zone (IOZ), both within

Block A. Open pit mining of the Grasberg ore body commenced in

January 1990, and in 1998 the Grasberg mine output totaled

approximately 67.0 million metric tons of ore, providing 93

percent of PT-FI's total ore production in 1998. The IOZ is an

underground block cave operation that was placed in production in

the first half of 1994. Production is at the 3,550 meter

elevation level, approximately 300 meters below the Ertsberg East

deposit, which was depleted in the second half of 1994.  In 1998,

output from the IOZ mine totaled 4.9 million metric tons of ore.



Mines in Development. Four other significant ore bodies, referred

to as the Deep Ore Zone (DOZ), the DOM, the Big Gossan and Kucing

Liar are located in Block A.  These ore bodies are currently at

various stages of development, and are carried as proved and

probable reserves.  See "Cautionary Statements."



The DOZ ore body lies vertically below the IOZ. Initial

production from the DOZ ore body commenced in 1989 but was

suspended in favor of production from the Grasberg deposit. DOZ

production is anticipated to recommence in approximately 2000 as

the overlying IOZ reserve nears depletion.



The DOM ore body lies approximately 1,200 meters southeast of the

depleted Ertsberg East deposit. Pre-production development was

completed as the Grasberg ore body began open pit production in

1990, and all maintenance, warehouse and service facilities are

in place. Production at the DOM ore body was deferred until after

completion of open pit mining as a result of the increasing

reserves and production capabilities of the Grasberg ore body.



The Big Gossan ore body is located approximately 1,000 meters

southwest of the original Ertsberg East deposit. Initial

underground development of the ore body began in 1993 when

tunnels were driven from the mill area into the ore zone at the

2,900 meter elevation level. A variety of stoping methods will be

used to mine the deposit, with production expected to commence

within the next ten years as other underground mines are

depleted.



The Kucing Liar ore body lies on the southern flank of and

underneath the southern portion of the Grasberg open pit at the

2,500-2,900 meter elevation level. Two rigs are now drilling in

the Kucing Liar ore body.  Recent drilling to the west indicates

a possible thinning or fault offsets to the mineralization, but

continuity of mineralization extends beyond the 



   3



1998 reserve additions and along  favorable horizons toward the Grasberg

deposit.  Further delineation of this ore body is scheduled for

1999, upon completion of which potential development plans will

be assessed.



For a detail of PT-FI's proved and probable reserves as of

December 31, 1998, see FCX's Annual Report incorporated herein by

reference as part of  "Item 8. Financial Statements and

Supplementary Data."



Exploration



Block A delineation drilling continues at Kucing Liar (as

discussed above), Grasberg Underground and the DOZ underground

ore bodies. Drilling at Grasberg Underground is ongoing with two

drills working from the Amole drift to delineate the Grasberg

Underground deposit below the 1998 reserve additions.  Copper-

gold mineralization is decreasing with depth where additional

drilling is planned for 1999 to fully define the ultimate

geometry of the mineralized zone, which extends for over 1,500

meters vertically from the original ore intercepts at the 4,200

meter elevation.  Drilling at DOZ continues to return positive

results, indicating the potential for additional reserve

increases.  Other targets in Block A yet to be evaluated include

the DOM Deep, fault systems parallel to the Kucing Liar/Idenberg

#1 fault system and other intrusive centers and fault

intersections.



Exploration activities continue in Block B, which includes the

Wabu Ridge gold prospect as well as in other COW areas.

Activities are primarily focused on prospects that potentially

could lead to the discovery of significant porphyry and/or skarn-

type copper-gold deposits.  Presently, exploration drilling is

ongoing with three rigs on several identified geological

anomalies.  Rio Tinto has elected to participate in 40 percent of

FCX's interest and costs in exploration drilling activities now

in progress.



Pursuant to the exploration joint ventures, Rio Tinto has a 40

percent interest in development projects under the PT-FI COW and

the Eastern Mining COW.  Under these arrangements, Rio Tinto

funded $100 million in 1996 for approved exploration costs in the

areas covered by the PT-FI COW and the Eastern Mining COW.  As of

December 31, 1998, $1.2 million in PT-FI's Block A remained to be

applied to the $100 million Rio Tinto exploration funding. 

Mutually agreed upon exploration costs in PT-FI's Block B and

Eastern Mining's COW areas are now being shared 60 percent by FCX

and 40 percent by Rio Tinto.



In December 1997, FCX signed a letter of intent to acquire an

ownership interest in P.T. Iriana Mutiara Mining (PT-IMM).  PT-

IMM holds a COW covering an area of approximately 1.2 million

acres in central Irian Jaya, in part contiguous to Eastern

Mining's COW area. Pursuant to the Rio Tinto joint venture

arrangements, Rio Tinto has elected not to participate with

respect to 40 percent of FCX's interest in this COW area.  If FCX

elects to continue participation beyond June 30, 1999, it would

acquire for $7.0 million a 90 percent ownership interest and

would fund all exploration costs up to and including a

feasibility study.  FCX would also be responsible for arranging

construction financing for PT-IMM for any economically feasible

projects in the PT-IMM COW area.



In June 1998, FCX entered into an exploration joint venture

agreement through which it can earn an indirect interest in a COW

area covering a total of approximately 1.0 million acres in

several blocks contiguous to PT-FI's Block B and one of Eastern

Mining's blocks in Irian Jaya.  Rio Tinto has elected to

participate in 40 percent of FCX's interest and costs in this

exploration joint venture.  To earn up to a 54 percent interest,

FCX and Rio Tinto must spend a total of up to $21 million on

exploration and other activities in the joint venture areas ($3.0

million of which was incurred through December 31, 1998). 

Exploration drilling is ongoing on several identified geological

anomalies.



Milling and Production



The ore from PT-FI's mines moves by a conveyor system to a series

of ore passes through which it drops to the mill complex located

approximately 2,900 meters above sea level. At the mill, the ore

is crushed and ground and mixed in tanks with water and small

amounts of chemical reagents where it is continuously agitated

with air. During this physical separation process, copper-, gold-

and silver-bearing particles rise to the top of the tanks and are

collected and thickened. The concentrate leaves the mill complex

as a thickened concentrate slurry, consisting of approximately 65

percent solids by weight, and is pumped through three 115

kilometer pipelines to the port site facility at Amamapare where

it is filtered, dried and stored for shipping. Ships are loaded

at dock facilities at the port until they draw their maximum

water, then move to deeper water, where loading is completed from

shuttling barges.



   4



In early 1998, PT-FI and Rio Tinto completed construction on the

"fourth concentrator mill expansion" of PT-FI's facilities.

Pursuant to the expansion joint venture agreement, Rio Tinto

provided a $450 million nonrecourse loan to PT-FI for PT-FI's

share of the cost of the expansion.  PT-FI and Rio Tinto began

sharing incremental cash flow attributable to the expansion

effective January 1, 1998 on the basis of 60 percent to PT-FI and

40 percent to Rio Tinto.  PT-FI has assigned its share of

incremental cash flow to Rio Tinto until Rio Tinto receives an

amount equal to the funds loaned to PT-FI plus interest based on

Rio Tinto's cost of borrowing.  Through December 31, 1998, PT-

FI's share of incremental cash flow totaled $236.4 million of

which $188.6 million was paid to Rio Tinto in 1998 and $47.8

million was paid in 1999.  The incremental production from the

expansion, as well as production from PT-FI's existing

operations, share proportionately in operating, nonexpansion

capital and administrative costs. PT-FI will continue to receive

100 percent of the cash flow from specified annual amounts of

copper, gold and silver through 2021 calculated by reference to

its proved and probable reserves as of December 31, 1994 and 60

percent of all cash flow thereafter.



PT-FI's copper royalty rate under the COW varies from 1.5

percent, at a copper price of $0.90 or less, to 3.5 percent, at a

copper price of $1.10 or more, of copper net revenue.  The

related rate for gold and silver sales is 1.0 percent.  In light

of its substantially expanded production capabilities, PT-FI is

discussing with the Indonesian Government the payment of

voluntary additional royalties on metal from production above

200,000 metric tons of ore per day (MTPD) in amounts for copper

equal to the COW royalty and for gold and silver equal to twice

the COW royalties.  Therefore, including the payment of COW

royalties, the total of royalties paid on copper net revenues

from production above 200,000 MTPD would be double the amount of

the COW royalty; and the total of royalties paid on gold and

silver sales from production above 200,000 MTPD would be triple

the amount of the COW royalties.  The additional royalties would

be effective January 1, 1999.  Because in large part mineral

royalties under Indonesian Government regulations are remitted to

the provinces from which the minerals are extracted, PT-FI

offered the voluntary additional royalties to provide additional

support to the local governments and the people of Irian Jaya.



In 1998, PT-FI's production, net of RioTinto's interest, totaled

1.43 billion pounds of copper, approximately 22 percent more than

in 1997, and 2,227,700 ounces of gold, approximately 24 percent

more than in 1997, resulting from record average ore throughput

of 196,400 MTPD, as compared to an average of 128,600 MTPD for

1997.  Average cash production costs in 1998,  net of customary

gold and silver credits, were  $0.12 per pound of copper, which

were 47 percent lower than the comparable 1997 average primarily

because of  lower labor costs reflecting the devaluation of the

Indonesian rupiah, lower diesel fuel and power costs, economies

of scale from the fourth concentrator mill expansion and cost

reduction efforts.  For more information regarding FCX's

operating and financial results, see "Item 6. Selected Financial

Data" and "Items 7. and  7A. Management's Discussion and Analysis

of Financial Condition and Results of Operations and Quantitative

and Qualitative Disclosures About Market Risk."



Infrastructure Improvements



The location of PT-FI's current operations in a remote area

requires that its operations be virtually self-sufficient. In

addition to the mining facilities described above, the facilities

originally constructed by or with the participation of PT-FI

include an airport, a port, a 119 kilometer road, an aerial

tramway, a hospital and related medical facilities, two town

sites with housing, schools and other facilities sufficient to

support more than 17,000 persons.



In 1996, PT-FI completed the first phase of the Enhanced

Infrastructure Program (EIP), which includes various residential,

community and commercial facilities.  The EIP is designed to

provide the infrastructure needed for PT-FI's operations, to

enhance the living conditions of PT-FI's employees, and to

develop and promote the growth of local and other third party

activities and enterprises in Irian Jaya.  The full EIP includes

plans for various commercial, residential, educational, retail,

medical, recreational, environmental and other infrastructure

facilities to be constructed over a ten-to-twenty year period. 

The facilities constructed through the EIP have been and are

expected to continue to be developed by PT-FI through joint

ventures or direct ownership involving local Indonesian interests

and other investors.



In March 1997,  PT-FI completed the final $75.0 million sale of

infrastructure assets to joint ventures then owned one-third by

PT-FI and two-thirds by P.T. AlatieF Nusakarya Corporation

(AlatieF), an Indonesian investor.  The sales to the AlatieF

joint ventures totaled $270.0 million during the period from

December 1993 to March 1997.  PT-FI subsequently sold its one-

third interest in the joint ventures to AlatieF in March 1997. 

In September 1998, PT-FI reacquired for $30.0 



   5



million an aggregate one-third interest in the joint ventures and continues

to lease the infrastructure assets under infrastructure asset

financing arrangements.  PT-FI guarantees the AlatieF loan

associated with the purchases and is consolidating the joint

ventures for financial reporting purposes because the financing

arrangements provide the joint venture partners with a guaranteed

15 percent after-tax minimum annual return on their investment.



In December 1997, PT-FI completed a $366.4 million sale of the

new power plant facilities to the joint venture that owns the

assets that already provide electricity to PT-FI.  The purchase

price included $123.2 million for Rio Tinto's share of the new

power plant facilities. Asset sales to the power joint venture

totaled $581.4 million through 1997 including $458.2 million of

PT-FI owned assets.  PT-FI subsequently sold its 30 percent

interest in the joint venture to the other partners and is

purchasing power under infrastructure asset financing

arrangements pursuant to a power sales agreement.



Marketing



PT-FI's copper concentrates, which contain significant quantities

of gold and silver,  are sold under United States dollar-

denominated sales agreements, mostly to companies in Asia and

Europe and international trading companies.  Substantially all of

PT-FI's budgeted production of copper concentrates is sold under

long-term contracts, pursuant to which the selling price is based

on world metals prices (generally the London Metal Exchange (LME)

settlement prices for Grade A copper) less certain allowances.

Under these contracts, initial billing occurs at the time of

shipment and final settlement on the copper portion generally

occurs three months after arrival based on average LME prices for

that month. Gold generally is sold at the London Bullion Market

Association average price for the month of shipment. Revenues

from concentrate sales are recorded net of royalties, treatment

and refining costs and the impact of derivative financial

instruments, if any, used to hedge against risks from copper and

gold price fluctuations. Treatment and refining costs represent

payments to smelters and refiners and are either fixed or in

certain cases vary with the price of copper. A small portion of

PT-FI's forecasted production of copper concentrates, and any

production in excess of these amounts, is sold in the spot

market. See "Cautionary Statements."



PT-FI has obtained commitments, including commitments from

Atlantic and PT-SC, for essentially all of its estimated 1999

production at market prices. PT-FI's share of sales for 1999 is

expected to approximate 1.4 billion pounds of copper and 2.1

million ounces of gold. PT-FI's estimated 1999 copper and gold

sales reflect management's expectation of producing at higher

mill throughput rates than in 1998 because of the fourth

concentrator mill expansion, offset by expected lower average ore

grades and recoveries compared to 1998.  See "Cautionary

Statements." The lower projected ore grades for 1999 reflect the

capability of the expanded mill facilities to process large

volumes of lower grade ore material.  PT-FI has a long-term

contract to provide Atlantic with approximately 60 percent of its

copper concentrate requirements at market prices.  PT-FI is

providing 100 percent of PT-SC's copper concentrate requirements

at market prices; however,  for the first 15 years of operations

the treatment and refining charges will not fall below a

specified minimum rate.  After PT-SC's operations reach design

capacity, FCX anticipates that PT-FI will sell at least 50

percent of its annual concentrate production to Atlantic and PT-

SC.



Atlantic Copper, S.A.



Atlantic's smelter has a design capacity of 290,000 metric tons

of metal per year.  Atlantic purchased approximately 70 percent

of its 1998 concentrate requirements from PT-FI at market prices.

 Atlantic has a long-term contract through December 2004 to

purchase approximately 60 percent of its concentrate requirements

from PT-FI at market prices.  During 1998, Atlantic treated

973,900 metric tons of concentrate, 5 percent more than the

929,700 metric tons treated in 1997.



P.T. Smelting Co.



During the third quarter of 1998, PT-SC completed construction of

its smelter/refinery in Gresik, East Java, Indonesia, which is

designed to produce 200,000 metric tons of metal per year. The

smelter furnace was ignited on October 12, 1998 with first

production of copper cathode in December 1998.  Production is

expected to gradually increase to design capacity over an

approximate two-year period.  PT-SC is a joint venture between

PT-FI, Mitsubishi Materials Corporation (Mitsubishi Materials),

Mitsubishi Corporation (Mitsubishi) and Nippon Mining & Metals

Co., Ltd. (Nippon), which own 25 percent, 60.5 percent, 9.5

percent and 5 percent, respectively, of the outstanding PT-SC

stock.  PT-FI is providing 100 percent of PT-SC's copper

concentrate requirements at market rates; however, for the



   6

 

first 15 years of operations the treatment and refining charges will

not fall below a specified minimum rate.  PT-FI has also agreed

to assign, if necessary, its earnings in PT-SC to support a 13

percent cumulative annual return to Mitsubishi Materials,

Mitsubishi and Nippon for the first 20 years of commercial

operations.



Competition



FCX competes with other mining companies in the sale of its

mineral concentrates and the recruitment and retention of

qualified personnel. Some competing companies possess financial

resources equal to or greater than those of FCX. Management

believes, however, that FCX is the lowest cost copper producer in

the world, taking into account customary credits for related gold

and silver production, which serves as a significant competitive

advantage.



Social Development



FCX has a social and human rights policy to ensure it operates in

Irian Jaya in compliance with Indonesian laws, in a manner that

respects basic human rights and the culture of the people who are

indigenous to the area.  PT-FI continues to incur significant

costs associated with its social and cultural activities.  These

activities include comprehensive job training programs, basic

education programs, extensive malaria control and several public

health programs, agricultural assistance programs, a business

incubator program to encourage the local people to establish

their own small scale businesses, cultural preservation programs,

and charitable donations.   In April 1996,  PT-FI agreed to

commit at least one percent of its revenues for the following 10

years to support village-based, bottom-up health, education,

economic and social development programs in its area of

operations through the Freeport Fund for Irian Jaya Development

(FFIJD).  This commitment replaced community development programs

undertaken by the company that spent a similar amount of money

each year.  In 1998, PT-FI contributed $13.5 million to the

FFIJD.



In early 1996, the international consulting firm of LABAT-

Anderson undertook a comprehensive independent audit of social

programs at PT-FI's operations in Irian Jaya.  In July 1997, the

LABAT-Anderson team submitted its final report to the Indonesian

Government and PT-FI, which noted that PT-FI had gone beyond the

usual role and responsibilities of a private company in providing

assistance for the development of the local people.  The report

also made a number of recommendations designed to make PT-FI's

programs more effective, including restructuring PT-FI's

participation in the Indonesian Government's development plan for

the area to provide for more direct input by local people through

their leaders.  At the end of 1998, discussions with local and

church leaders, government representatives and members of

interested non-governmental organizations successfully culminated

with the restructuring of the FFIJD.  The new umbrella structure

is called the Lembaga Pengembangan Masyarakat-Irian Jaya (LPM-

IRJA), or the People's Development Foundation-Irian Jaya.  The

LPM-IRJA Board of Directors is made up of the head of the local

government, currently a Kamoro, a leader of the Amungme people, a

leader of the Kamoro people, leaders of the three local churches

and a representative of PT-FI.  The Board of Directors makes

grants from the FFIJD and has oversight for implementation of

local developmental programs, through the implementation Board,

which is headed by an Amungme leader and is composed of

representatives of all local indigenous groups.



The LPM-IRJA Board of Directors has approved a 1999/2000

operational plan and has selected a number of yayasans, or

foundations, to implement funded projects.  The operational plan

provides some type of assistance for all 71 villages in the

Mimika district, with the greatest support going to the 29

villages defined by the Amungme and Kamoro as most critically

impacted by PT-FI's operations.  Another important project will

be a  new primary care hospital in Timika.  Ground has been

broken for the 75-bed facility.  The team which accomplished the

restructuring took care to socialize and communicate the results

in all Mimika villages before the implementation of any new

programs or projects. 



While management believes that its efforts to be responsive to

the issues relating to the impact of its operations on the local

villages and tribes should serve to avoid disruptions of mining

operations, social and political instability in the area may, in

the future, have an adverse impact on PT-FI's mining operations.



Environmental Matters



FCX has an environmental policy committing it not only to

compliance with federal, state and local environmental statutes

and regulations, but also to continuous improvement of its

environmental performance at every operational site.  Management

believes that PT-FI's operations are being conducted pursuant to

applicable permits and are in 



   7



compliance in all material respects

with applicable Indonesian environmental laws, rules and

regulations. Mining operations on the scale of PT-FI's operations

in Irian Jaya involve significant environmental challenges,

primarily related to the disposition of tailings, which are the

crushed and ground rock material resulting from the physical

separation of commercially valuable minerals from the ore. The

Company has an extensive, ongoing management system for the

disposal of tailings resulting from its milling operations. In

January 1997, PT-FI completed an engineered levee system, as part

of its Indonesian Government-approved Tailings Management Plan,

to minimize the impact of the tailings on the environment through

a controlled deposition area that ultimately will be reclaimed

and revegetated.



In 1995, PT-FI participated in a voluntary independent

environmental audit of its Irian Jaya operations under a program

monitored by the Indonesian Government.  The environmental audit

report was completed and released in 1996 and included a total of

33 principal recommendations, all of which have been implemented.

The audit team identified the disposal of tailings as the most

critical environmental issue facing PT-FI, requiring significant

study, engineering and monitoring over the life of the mine.  The

audit concluded PT-FI's Tailings Management Plan represented the

most suitable option for tailings disposal considering the

engineering and environmental challenges in Irian Jaya.  The

audit also confirmed that: the tailings from PT-FI's mining

operations are non-toxic; the mining operations do not pose any

significant risk to Irian Jaya's biodiversity; and, PT-FI's

operations are being conducted in compliance in all material

respects with applicable Indonesian environmental laws, rules and

regulations.  PT-FI has committed to independent external

environmental audits by qualified experts every three years, with

the results to be made public.  The second such audit will be

conducted and made public in the second half of 1999.  PT-FI is

also continuing its annual internal audits, through the life of

its mining operations, so that PT-FI's environmental management

and monitoring programs will remain sound and the operations will

remain in material compliance.



In December 1997, PT-FI received environmental approval from the

Minister of Environment for its Regional AMDAL (comprehensive

Environmental Assessment, Monitoring Plan and Management Plan)

study, which was necessary to allow PT-FI to expand its milling

rate up to a maximum of 300,000 MTPD.  PT-FI's environmental

programs were developed, expanded and/or enhanced in accordance

with the approved 300,000 MTPD Regional AMDAL study.



The ultimate amount of PT-FI's reclamation and closure costs to

be incurred cannot currently be projected with precision.

Estimates involving environmental matters, such as closure some

thirty or more years in the future, are by their nature imprecise

and can be expected to be revised over time because of changes in

government regulations, operations, technology and inflation. 

Ultimate reclamation and closure costs may require as much as

$100 million but are not expected to exceed $150 million.  These

estimates are subject to revision over time as more complete

studies are performed and more definitive plans are formulated. 

Some reclamation costs will be incurred throughout the remaining

life of the mine while most closure costs and the remaining

reclamation costs will be incurred at the end of the mine's life,

which is currently estimated to exceed 30 years. PT-FI had $9.2

million accrued on a unit-of-production basis as of December 31,

1998 for mine closure and reclamation costs. In 1996, PT-FI began

contributing to a cash fund ($0.9 million balance at December 31,

1998) designed to accumulate at least $100 million by the end of

its Indonesian mine's life.  Proceeds from this fund, including

accrued interest, will be used to fund costs incurred for mine

closure and reclamation.  An increasing emphasis on environmental

issues and future changes in regulations could require FCX to

incur additional costs that would be charged against future

operations.



Management believes that Atlantic's facilities and operations are

in compliance in all material respects with all applicable

Spanish environmental laws, rules and regulations. In 1996 and

1997, Atlantic successfully completed the environmental

improvement project started in 1994 in conjunction with expansion

activities at its copper smelter in Huelva.  New technology

substantially reduced atmospheric emissions from its operations

even with an approximate doubling of production capacity.  In

addition, dust emissions have decreased as a result of the

installation of new facilities for handling ore concentrates and

the addition of new bag filters in the concentrate drying and

furnace tapping areas.  New gas scrubbers have significantly

reduced acid mist and particulate emissions.



The Indonesian and Spanish governments may periodically revise

their environmental laws and regulations or adopt new ones, and

the effects on the Company's operations of new or revised

regulations cannot be predicted.  The Company has expended

significant resources, both financial and managerial, to comply

with environmental regulations and permitting and approval

requirements, and anticipates that it will continue to do so in

the future.  There can be no assurance that additional

significant costs and liabilities will not be incurred to comply

with such current and future regulations or that such regulations

will not have a material effect on the Company's operations.  See

"Cautionary Statements."



   8



Guarantee of Loan for Purchase of PT-II Stock



In March 1997, P.T. Nusamba Mineral Industri (NMI), a subsidiary

of P.T. Nusantara Ampera Bakti, acquired from a third party

approximately 51 percent of the capital stock of PT-II.  NMI

financed $254 million of the $315 million purchase price with a

variable-rate commercial loan maturing in March 2002.   FCX has

agreed that if NMI defaults on the loan, FCX will purchase the

PT-II stock or the lenders' interest in the commercial loan for

the amount then due by NMI under the loan.  FCX also agreed to

lend to NMI any amounts to cover any shortfalls between the

interest payments due on the commercial loan and the dividends

received by NMI from PT-II.  At December 31, 1998, $25.4 million

was due in March 2002 from NMI because of interest payment

shortfalls.  The amount of any future shortfalls will depend

primarily on the level of PT-FI's dividends to PT-II.



Employees and Relationship with FM Services Company



As of December 31, 1998, PT-FI had 6,349 employees (approximately

97 percent Indonesian).  In addition, as of December 31, 1998,

PT-FI had approximately 2,252 contract workers, the vast majority

of whom were Indonesian.  Approximately 57 percent of PT-FI's

Indonesian employees are members of the All Indonesia Workers'

Union, which operates under Indonesian Government supervision and

is party to a labor agreement covering PT-FI's hourly-paid

Indonesian employees that expires on September 30, 1999. PT-FI's

relations with the workers' union have generally been positive.



On August 11, 1998, PT-FI's mining and milling operations at its

Grasberg mine were suspended as a result of a wildcat work

stoppage by a group of workers, a majority of whom were employees

of contractors of PT-FI.  On August 14, 1998, the workers

voluntarily returned to work and PT-FI began resuming operations.

The workers cited economic and other employment issues as the

reasons for their work stoppage.  The employees of certain

contractors expressed a desire to become PT-FI employees, who

generally have higher wages and more attractive benefits.  PT-FI

indicated that it would continue its practice of reviewing its

package of wages and benefits to ensure that PT-FI remains

competitive with other companies.  The workers' union did not

authorize the work stoppage.  The actions of the workers were

peaceful, there were no injuries or property damage and the

suspension and resumption of operations were conducted in an

orderly fashion.  Shipments of concentrates were made from

inventory and were not disrupted by the work stoppage. 



As of December 31, 1998, Atlantic had 773 employees, of which

approximately 31 percent are covered by union contracts. 

Atlantic experienced no work stoppages in 1998 and relations with

these unions have also generally been good.



Since January 1, 1996, FM Services Company, a Delaware

corporation 45 percent owned by FCX (FMS), has furnished

executive, administrative, financial, accounting, legal, tax,

sales and similar services to FCX, PT-FI, Eastern Mining and

Atlantic.  FCX reimburses FMS, at its cost, including allocated

overhead, for these services on a monthly basis.  As of December

31, 1998, FCX had 42 employees and FMS had 207 employees.  FMS

employees also provide services to two other publicly traded

companies.



Cautionary Statements



This report includes "forward-looking statements" within the

meaning of Section 27A of the Securities Act of 1933 and Section

21E of the Securities Exchange Act of 1934.  Forward-looking

statements are all statements other than statements of historical

fact included in this report, including, without limitation,

statements under the headings "Business and Properties," "Market

for Registrant's Common Equity and Related Stockholder Matters,"

and "Management's Discussion and Analysis of Financial Condition

and Results of Operations and Quantitative and Qualitative

Disclosures About Market Risk" regarding the Company's financial

position and liquidity, payment of dividends, strategic growth

initiatives, future capital needs, development and capital

expenditures (including the amount and nature thereof),

reclamation and closure costs, exploration efforts, reserve

estimates and additions, production levels, ore grades, commodity

prices, revenues, business strategies, and other plans and

objectives of the Company's management for future operations and

activities.



   9



Forward-looking statements are based on certain assumptions and

analyses made by the Company in light of its experience and its

perception of historical trends, current conditions, expected

future developments and other factors it believes are appropriate

under the circumstances.  These statements are subject to a

number of assumptions, risks and uncertainties, including the

risk factors discussed below and in the Company's other filings

with the Securities and Exchange Commission, general economic and

business conditions, the business opportunities that may be

presented to and pursued by the Company, changes in laws or

regulations and other factors, many of which are beyond the

Company's control.  Readers are cautioned that these statements

are not guarantees of future performance, and the actual results

or developments may differ materially from those projected,

predicted or assumed in the forward-looking statements.  All

subsequent written and oral forward-looking statements

attributable to the Company or persons acting on its behalf are

expressly qualified in their entirety by these cautionary

statements.   Important factors that could cause actual results

to differ materially from those projected in the forward-looking

statements  include, among others:



Commodity Price Risk.  FCX's revenues are derived primarily from

PT-FI's sale of copper concentrates, which also contain

significant amounts of gold, and from Atlantic's sale of copper

cathodes and wire rod. FCX's net income can vary significantly

with fluctuations in the market prices of copper and gold. 

Prices for copper and gold historically have fluctuated widely

and are affected by numerous factors beyond FCX's control.  In

addition, PT-FI's concentrate sales agreements, with regard to

copper, provide for provisional billings when shipped with final

settlement generally based on the average LME price for a

specified future month.  Copper revenues on provisionally priced

open pounds are adjusted monthly based on then current prices. 

Movement in the average price used for these open pounds will

have an impact on FCX's net income.



Indonesian Political, Economic and Social Risks.  President

Suharto, who assumed power in 1966, was re-elected in March 1998

to a seventh consecutive five-year term.  In May 1998, President

Suharto resigned his presidency in the wake of an economic

collapse in Indonesia and in the face of growing social unrest

and demonstrations. Vice-President B.J. Habibie succeeded Suharto

and has since announced new parliamentary elections will be held

in June 1999, followed by a presidential election currently

scheduled for September 1999.



Unfavorable economic conditions continue to affect Southeast

Asia, including Indonesia.  Since early 1997, Indonesia's economy

has contracted, inflation increased dramatically, and the

Indonesian rupiah severely weakened initially and then partly

recovered and continues to be unpredictable.  Financial

assistance to Indonesia is being provided by the International

Monetary Fund, and various political, financial and regulatory

changes are being implemented, including the scheduled June 1999

national parliamentary elections discussed above.  International

copper and gold markets have been adversely affected by the

developments in Southeast Asia.



PT-FI's current mining operations are located in the Indonesian

province of Irian Jaya, which occupies the western half of the

island of New Guinea and became part of Indonesia during the

early 1960s. The area surrounding PT-FI's mining development is

sparsely populated by primitive local tribes and former residents

of more populous areas of Indonesia, some of whom have resettled

in Irian Jaya under the Indonesian Government's transmigration

program. A small segment of the local population has in the past

opposed Indonesian rule over Irian Jaya, and several small

separatist groups have sought political independence for the

province. Public discussion of the degree of political and

economic autonomy that may be allowed individual provinces,

including Irian Jaya, have been held and likely will continue

throughout the 1999 parliamentary and presidential elections. 

Sporadic attacks on civilians by the separatists and sporadic but

highly publicized conflicts between separatists and the

Indonesian military have led to previous allegations of human

rights violations.  PT-FI personnel have not been involved in

those conflicts.  The Indonesian military occasionally has

exercised its right to appropriate transportation and other

equipment of PT-FI.



PT-FI's policy is to operate in Irian Jaya in compliance with

Indonesian laws, in a manner that respects basic human rights and

the culture of the people who are indigenous to the area.  PT-FI

continues to incur significant costs associated with its social

and cultural activities. While management believes that its

efforts to be responsive to the issues relating to the impact of

its operations on the local tribes should serve to avoid

disruptions of mining operations, social and political

instability in the area may, in the future, have a material

adverse impact on PT-FI's mining operations.



   10



Location and Industry Risks.  PT-FI's mining operations are

located in steeply mountainous terrain in a very remote area of

Indonesia, which makes the conduct of its operations difficult

and has required PT-FI to overcome special engineering

difficulties and develop extensive infrastructure facilities. 

The area is subject to considerable rainfall, which has led to

periodic floods and mud slides.  The mine site is also in an

active seismic area, and earth tremors have been experienced from

time to time.  PT-FI also is subject to the usual risks

encountered in the mining industry, including unexpected

geological conditions resulting in cave-ins, floodings and rock-

bursts and unexpected changes in rock stability conditions. PT-FI

has substantial insurance involving the amounts and types of

coverage as it believes are appropriate for its exploration,

development, mining and processing activities in Indonesia. 



Environmental and Government Regulation.  The Company's

exploration and mining activities in Irian Jaya involve

significant engineering and environmental challenges that relate

primarily to the location of the mine in remote, rugged highlands

and the disposition of tailings in an engineered, controlled and

managed deposition area near the sea.  The Company has expended

significant resources, both financial and managerial, to comply

with environmental regulations and permitting and approval

requirements and anticipates that it will continue to do so in

the future.  There can be no assurance that additional

significant costs and liabilities will not be incurred in order

to comply with current and future regulations.



Foreign Currency Exchange Risk.  FCX conducts the majority of its

operations in Indonesia and Spain where its functional currency

is the U.S. dollar.  All of FCX's revenues are denominated in

U.S. dollars; however, some costs and certain asset and liability

accounts are denominated in Indonesian rupiah, Australian dollars

or Spanish pesetas.  Generally, FCX's results are adversely

affected when the U.S. dollar weakens against these foreign

currencies and positively affected when the U.S. dollar

strengthens against these foreign currencies. 



Since early 1997, the Indonesian rupiah exchange rate has been

extremely volatile, severely weakening initially and partly

recovering later against the U.S. dollar and continuing to be

unpredictable. Operationally PT-FI has benefited from a weakened

Indonesian rupiah currency, primarily through lower labor costs.

During the first quarter of 1998, PT-FI began a currency hedging

program to reduce its exposure to changes in the Indonesian

rupiah and Australian dollar by entering into foreign currency

forward contracts to hedge a portion of its anticipated payments

in these currencies.  At December 31, 1998, these contracts

hedged 120.0 billion of rupiah payments at an average exchange

rate of 19,478 rupiah to one U.S. dollar through August 1999,

approximately 40 percent of projected rupiah payments, and 79.2

million of Australian dollar payments at an average exchange rate

of 1.59 Australian dollars to one U.S. dollar through September

1999, approximately 80 percent of projected Australian dollar

payments.



A portion of Atlantic's operating costs and certain Atlantic

asset and liability accounts are denominated in Spanish pesetas.  

Atlantic has a currency hedging program to reduce its exposure

to changes in the U.S. dollar and Spanish peseta exchange rate

that involves foreign currency forward contracts.  At December 

31, 1998, Atlantic had contracts, with a fair value of $2.0 

million, to purchase 10.8 billion Spanish pesetas at an average 

exchange rate of 144.7 pesetas to one U.S. dollar through 

January 2000.  These contracts currently hedge approximately 70 

percent of Atlantic's projected net peseta cash outflows through 

January 2000.



On January 1, 1999, a new common currency (the Euro) was

introduced to member states of the European Union, including

Spain.  A transition period will extend until January 1, 2002.

Only a few of Atlantic's customers and none of its suppliers have

notified Atlantic of their intent to use the Euro as the currency

for commercial transactions beginning January 1, 1999.  Atlantic

has not yet decided when it will adopt the Euro as its currency

for commercial transactions.  Atlantic does not expect conversion

to the Euro currency to have a material impact on revenues or

expenses.  A single European currency is expected to improve

Atlantic's competitiveness with other European copper smelters

and refiners by eliminating exchange rate differences. 

Atlantic's current management information systems are designed to

accommodate multiple currencies and would not require major

modifications to process transactions involving the Euro. 

Atlantic's peseta hedging contracts will be set at a fixed

exchange rate to the Euro and would continue to achieve their

objectives.



There can be no assurance that future movements in foreign

currency exchange rates will not have a negative effect on

operating results.



   11



Risks Associated with the Year 2000 Issue.  The Year 2000 (Y2K)

issue is the result of computerized systems being written to

store and process the year portion of dates using two digits

rather than four.  Date-aware systems (i.e., any system or

component that performs calculations, comparisons, sequencing or

other operations involving dates) may fail or produce erroneous

results on or before January 1, 2000 because the year 2000 will

be interpreted as the year 1900.



FCX  has been pursuing a strategy to ensure all its significant

computer systems will be able to process dates from and after

January 1, 2000, including leap years, without critical systems

failure (Y2K Compliant or Y2K Compliance).  Computerized systems

are integral to the operations of FCX, particularly for plant and

equipment process control at its mining, milling and smelting

production facilities.  Certain services are provided to FCX and

its subsidiaries by FMS, which is responsible for ensuring Y2K

Compliance for the systems it manages. FMS has separately

prepared a plan for its Y2K Compliance.  Certain PT-FI

infrastructure assets within PT-FI's area of operations are

operated by third parties.  Each respective third party is

responsible for its own Y2K Compliance, although PT-FI is

coordinating their activities and providing oversight.  Progress

of the Y2K plan is being monitored by FCX executive management

and reported to the Audit Committee of the FCX Board of

Directors.  In addition, the independent accounting firm

functioning as FCX's internal auditors is assisting management in

monitoring the progress of the Y2K plan.  FCX believes all

critical components of the plan are on schedule for completion by

the end of the second quarter of 1999.



Expenditures for the necessary Y2K-related modifications will

largely be funded by routine software and hardware maintenance

fees paid by FCX or FMS.  Based on current information, FCX 

believes that the estimated incremental cost of Y2K Compliance

not covered by routine software and hardware maintenance fees

will total approximately $3 million, most of which is expected to

be incurred in 1999.  If  the necessary software modifications

and conversions are not made, or are delayed, the Y2K issue could

have a material impact on FCX operations.  Additionally, cost

estimates are based on management's best estimates, which are

derived using numerous assumptions of future events including the

continued availability of certain resources, third party

modification plans and other factors.  There also can be no

assurance that the systems of other companies will be converted

on a timely basis or that their failure to convert will not have

a material adverse effect on FCX.



Based on its Y2K risk assessment work, FCX believes the most

likely Y2K-related failures would probably be temporary

disruption in certain materials and services provided by third

parties, which would not be expected to have a material adverse

effect on FCX's financial condition or results of operations. 

FCX believes that these third-party risks will be mitigated

through its contingency plans for critical purchased commodities

and close monitoring of compliance for other third parties that

are important to its operations.



Companies, including FCX, cannot make Y2K Compliance

certifications because the ability of any organization's systems

to operate reliably after midnight on December 31, 1999 is

dependent upon factors that may be outside the control of, or

unknown to, the organization.  Although FCX believes the

likelihood of any or all of the above risks occurring is low,

specific contingency plans to address certain risk areas will be

developed, if needed, beginning in the first quarter of 1999. 

While there can be no assurance that FCX will not be materially

adversely affected by Y2K problems, it is committed to ensuring

that it is fully Y2K ready and believes its plans adequately

address the above-mentioned risks.



Reserves and Exploration Risks.  FCX reserve amounts, which are

determined in accordance with established mining industry

practices and standards, are estimates only.  PT-FI's mines,

whether in the production or development stages, may not conform

to geological concepts or other expectations, so that the volume

and grade of reserves recovered and the rates of production may

be more or less than anticipated.  Because ore bodies do not

contain uniform grades of minerals, ore recovery rates will vary

from time to time, resulting in variations in volumes of minerals

sold from period to period.  Further, market price fluctuations

in copper, gold and, to a lesser extent, silver, and changes in

operating and capital costs may render certain existing ore

reserves uneconomic to develop.  Further, no assurance can be

given that FCX's exploration programs will result in the

discovery of additional commercially exploitable mineral

deposits.



   12



Holding Company Structure.  Because FCX is primarily a holding

company, conducting business through its subsidiaries, its

ability to meet its financial obligations and to pay dividends on

its preferred and common stock will depend on the earnings and

cash flow of its subsidiaries and the ability of its subsidiaries

to pay dividends and to advance funds to the Company.  Under

certain circumstances, contractual and legal restrictions, as

well as the financial condition and operating requirements of

PT-FI and the Company's other subsidiaries, could limit the

Company's ability to obtain cash from its subsidiaries for the

purpose of meeting its debt service obligations and to pay

dividends.  Any right of the Company to participate in any

distribution of the assets of PT-FI , Atlantic and its other

subsidiaries upon the liquidation, reorganization or insolvency

thereof would, with certain exceptions, be subject to the claims

of creditors (including trade creditors) and preferred

stockholders (if any) of such subsidiaries.



Item 3.  Legal Proceedings. 

                                

Tom Beanal v. Freeport-McMoRan Inc. and Freeport-McMoRan Copper &

Gold Inc., Civ. No. 96-1474 (E.D. La. filed Apr. 29, 1996).  In

March 1998, the U. S. District Court for the Eastern District of

Louisiana dismissed with prejudice the plaintiff's third amended

complaint.  The court held that the plaintiff failed to plead

facts underlying his claims against FCX.  The plaintiff has

appealed the court's decision.  The plaintiff alleges

environmental, human rights and social/cultural violations in

Indonesia and seeks $6 billion in monetary damages and other

equitable relief.  FCX will continue to defend this action

vigorously.



Yosefa Alomang v. Freeport-McMoRan Inc. and Freeport-McMoRan                 

Copper & Gold Inc., Civ. No. 96-9962 (Orleans Civ. Dist. Ct. La.

filed June 19, 1996).  The plaintiff alleges substantially

similar violations as those alleged in the Beanal suit and seeks

unspecified monetary damages and other equitable relief.  In

February 1997, the Civil District Court of the Parish of Orleans,

State of Louisiana dismissed this purported class action for lack

of subject matter jurisdiction because the alleged conduct and

damages occurred in Indonesia.  In March 1998, the Louisiana

Fourth Circuit Court of Appeal reversed the trial court's

dismissal and found that subject matter jurisdiction existed over

some claims.  In July 1998, the Louisiana Supreme Court denied

without comment FCX's writ application in which FCX sought a

review of the Fourth Circuit's earlier ruling.  The plaintiff has

amended its complaint.  FCX  has additional legal defenses to the

action it is pursuing.  FCX will continue to defend this action

vigorously.



In addition to the foregoing proceedings, FCX may be from time to

time involved in various legal proceedings of a character

normally incident to the ordinary course of its business. 

Management believes that potential liability in any proceedings

would not have a material adverse effect on the financial

condition or results of operations of FCX.  FCX maintains

liability insurance to cover some, but not all, potential

liabilities normally incident to the ordinary course of its

business as well as other insurance coverage customary in its

business, with coverage limits as management deems prudent.



Item 4.  Submission of Matters to a Vote of Security Holders.



Not applicable.



   13



Executive Officers of the Registrant.



Certain information as of March 1, 1999 about the executive

officers of FCX, including their position or office with FCX, PT-

FI and Atlantic, is set forth in the following table and

accompanying text:



Name                   Age    Position or Office

- ----                   ---    ------------------



Richard C. Adkerson    52     President and Chief Operating

                              Officer of FCX.  Director and

                              Executive Vice President of PT-FI.



Michael J. Arnold      46     Senior Vice President of FCX.

                              Director and Executive Vice

                              President of PT-FI.



Stephen M. Jones       40     Senior Vice President and

                              Chief Financial Officer of FCX. 

                              Director and Executive Vice

                              President of PT-FI.



W. Russell King        49     Senior Vice President of FCX.



Adrianto Machribie     57     President Director of PT-FI.



John A. Macken         47     Senior Vice President of FCX.

                              Executive Vice President of PT-FI.



James R. Moffett       60     Director, Chairman of the

                              Board and Chief Executive Officer

                              of FCX.  President Commissioner of

                              PT-FI.



Paul S. Murphy         55     Senior Vice President of FCX. 

                              Commissioner of PT-FI.



Craig E. Saporito      47     Senior Vice President and

                              Treasurer of FCX.  Treasurer of PT-FI.



Steven D. Van Nort     58     Senior Vice President of FCX.

                              Executive Vice President of PT-FI.



Robert M. Wohleber     48     Senior Vice President of FCX. 

                              Senior Vice President of PT-FI.

                              Chairman of Atlantic.



Richard C. Adkerson has served as FCX's President and Chief

Operating Officer since April 1997.  Mr. Adkerson is also

Executive Vice President and a director of PT-FI,  and Co-

Chairman of the Board, President and Chief Executive Officer of

McMoRan Exploration Co. (MMR). From April 1994 to November 1998

he was Co-Chairman of the Board and Chief Executive Officer of

McMoRan Oil & Gas Co. (MOXY), and from November 1997 to November

1998 he was Vice Chairman of the Board of Freeport-McMoRan

Sulphur Inc. (FSC).  Mr. Adkerson served as Executive Vice

President of FCX from July 1995 to April 1997, as Senior Vice

President from February 1994 to July 1995 and as Chief Financial

Officer from July 1995 to November 1998.  He also served as

Chairman of the Board of Stratus Properties Inc., a real estate

development company, from May 1993 to August 1998, as President

from August 1995 to May 1996 and as Chief Executive Officer from

May 1996 to May 1998.  Mr. Adkerson served as Vice Chairman of

the Board of Freeport-McMoRan Inc. (FTX) from August 1995 to

December 1997 and as Senior Vice President and Chief Financial

Officer of FTX from May 1992 to August 1995.



Michael J. Arnold has served as Senior Vice President of FCX

since November 1996.  Mr. Arnold is also Executive Vice President

and a director of PT-FI, and Senior Vice President of MMR.  From

July 1994  to November 1996, Mr. Arnold was Vice President and

Controller - Operations of FCX.  Mr. Arnold also served as a

Senior Vice President of FTX from November 1996 until December

1997.  From October 1991 to November 1996, he was Vice President

of FTX, serving as Controller - Operations from May 1993 to

November 1996.



Stephen M. Jones has served as Senior Vice President and Chief

Financial Officer of FCX since November 1998. Mr. Jones is also

Executive Vice President and a director of PT-FI. Mr. Jones

served as Vice President of FCX from July 1992 to December 1994.

He served as Senior Vice President of PT-FI from June 1992 to

December 1994.



   14



W. Russell King has served as Senior Vice President of FCX since

July 1994.  Mr. King served as  Senior Vice President of FTX from

November 1993 to December 1997.



Adrianto Machribie has served as President Director of PT-FI

since March 1996.  From September 1992 to March 1996, Mr.

Machribie was a director and Executive Vice President of PT-FI.



John A. Macken has served as Senior Vice President of FCX since

December 1997.  He is also Executive Vice President of PT-FI. 

From April 1996 to December 1997, Mr. Macken was a Vice President

of FCX.  From April 1995 to March 1996, Mr. Macken served as a

director of PT-FI and from April 1993 to April 1995, he served as

a Vice President of PT-FI.



James R. Moffett has served as Chairman of the Board and Chief

Executive Officer of FCX since July 1995 and has served as a

director of FCX since May 1992.  He is also President

Commissioner of PT-FI and Co-Chairman of the Board of MMR.  From

November 1994 to November 1998 he was Co-Chairman of the Board of

MOXY and from November 1997 to November 1998 he was Co-Chairman

of the Board of FSC.  Mr. Moffett served as Chairman of the Board

of FTX from May 1992 to December 1997.



Paul S. Murphy has served as Senior Vice President of FCX since

March 1998.  Mr. Murphy is also a Commissioner of PT-FI.  Mr.

Murphy served as Executive Vice President of PT-FI from September

1992 to May 1998.



Craig E. Saporito has served as Senior Vice President and

Treasurer of FCX since November 1997.  Mr. Saporito is also

Treasurer of PT-FI and Senior Vice President and Treasurer of

MMR.  From July 1994 to November 1997, Mr. Saporito was a Vice

President of FCX and from May 1988 to December 1997, he was a

Vice President of FTX.



Steven D. Van Nort has served as Senior Vice President of FCX

since December 1997.  Mr. Van Nort also serves as Executive Vice

President of PT-FI.  From March 1995 to December 1997, Mr. Van

Nort was a Vice President of FCX and from June 1992 to June 1997,

he served as a Senior Vice President of PT-FI.



Robert M. Wohleber has served as Senior Vice President of the

Company since November 1997.  He is also Senior Vice President of

PT-FI, Chairman of Atlantic, and Executive Vice President, Chief

Financial Officer and a director of MMR. He served as a Vice

President of FCX from July 1994 to November 1997, as Vice

President and Treasurer of FCX  from July 1993 to July 1994.  Mr.

Wohleber served as President and Chief Executive Officer of FSC

from November 1997 to November 1998 and as a director of FSC from

August 1997 to November 1998.  Mr. Wohleber served as Senior Vice

President and Chief Financial Officer of FTX from November 1996

to December 1997.  He was Vice President of FTX from June 1994 to

November 1996 and Vice President and Treasurer of FTX from May

1992 to June 1994.





PART II





Item 5.  Market for Registrant's Common Equity and Related

Stockholder Matters.



The information set forth under the captions "FCX Class A Common

Shares," "FCX Class B Common Shares" and "Common Share

Dividends," on the inside back cover of the Annual Report is

incorporated herein by reference.  As of March 8, 1999, there

were 8,120 and 12,936 holders of record of FCX's Class A and

Class B common stock, respectively.



Item 6.  Selected Financial Data.



The information set forth under the caption "Selected Financial

and Operating Data," on page 18 of the Annual Report is

incorporated herein by reference.



FCX's ratio of earnings to fixed charges for each of the years

1994 through 1998, inclusive, was 7.5x, 5.9x, 4.5x,  3.8x, and

2.5x,  respectively.  For this calculation, earnings consist of

income from continuing operations before income taxes, minority

interests and fixed charges.  Fixed charges include interest and

that portion of rent deemed representative of 



   15



interest.  FCX's ratio of earnings to fixed charges and preferred stock 

dividends for each of the years 1994 through 1998, inclusive, was 2.1x,

3.0x, 2.6x,  2.8x and 1.9x, respectively.  For this calculation,

the preferred stock dividend requirements were assumed to be

equal to the pre-tax earnings which would be required to cover

such dividend requirements.  The amount of such pre-tax earnings

required to cover preferred stock dividends was computed using

tax rates for the applicable years.



Items 7.  and 7A.  Management's Discussion and Analysis of

Financial Condition and Results of Operations and Quantitative

and Qualitative Disclosures About Market Risk.



The information set forth under the caption "Management's

Discussion and Analysis" on pages 19 through 27, inclusive, 29,

31 and 33, as well as the "Working Toward Sustainable

Development"  report on pages 6 through 17 of the Annual Report

are incorporated herein by reference.



Item 8.  Financial Statements and Supplementary Data.



The financial statements of FCX appearing on pages 28, 30, 32 and

34,  the notes thereto appearing on pages 35 through 50, 

inclusive, the report thereon of Arthur Andersen LLP appearing on

page 51, and the report of management on page 51 of the Annual

Report are incorporated herein by reference.





Item 9.  Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure.



Not applicable.





PART III





Items 10.  Directors and Executive Officers of the Registrant.



The information set forth under the caption "Information About

Nominees and Directors" of the Proxy Statement submitted to the

stockholders of the registrant in connection with its 1999 Annual

Meeting to be held on May 6, 1999 is incorporated herein by

reference.



Items 11.  Executive Compensation.



The information set forth under the captions "Director

Compensation" and "Executive Officer Compensation" of the Proxy

Statement submitted to the stockholders of the registrant in

connection with its 1999 Annual Meeting to be held on May 6, 1999

is incorporated herein by reference.



Items 12.  Security Ownership of Certain Beneficial Owners and

Management.



The information set forth under the captions "Stock Ownership of

Directors and Executive Officers" and "Stock Ownership of Certain

Beneficial Owners" of the Proxy Statement submitted to the

stockholders of the registrant in connection with its 1999 Annual

Meeting to be held on May 6, 1999 is incorporated herein by

reference.



Items 13.  Certain Relationships and Related Transactions.



The information set forth under the caption "Certain

Transactions" of the Proxy Statement submitted to the

stockholders of the registrant in connection with its 1999 Annual

Meeting to be held on May 6, 1999 is incorporated herein by

reference.



   16





PART IV





Item 14.  Exhibits, Financial Statement Schedules and Reports on

Form 8-K.



(a)(1).   Financial Statements.           



Reference is made to the Index to Financial Statements appearing

on page F-1 hereof.



(a)(2).   Financial Statement Schedules.

                                       

Reference is made to the Index to Financial Statements appearing

on page F-1 hereof.



(a)(3).   Exhibits.

                 

Reference is made to the Exhibit Index beginning on page E-1

hereof.



(b).      Reports on Form 8-K.

                             

During the last quarter of the period covered by this report, FCX

filed one Current Report on Form 8-K dated December 9, 1998

reporting information under Item 5.



  17







                              SIGNATURES



     Pursuant to the requirements of Section 13 of the Securities

Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly

authorized, on March 19, 1999.



                                   Freeport-McMoRan Copper & Gold Inc.







                                   By:     /s/ James R. Moffett     

                                        -------------------------

                                        James R. Moffett

                                        Chairman of the Board and

                                        Chief Executive Officer



     Pursuant to the requirements of the Securities Exchange Act

of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities

indicated on March 19, 1999.





         

Signatures

- ----------



                                   Chairman of the Board, Chief

                                   Executive Officer and

/s/ James R. Moffett               Director (Principal Executive Officer)

- --------------------

    James R. Moffett



                             

           *                       President and Chief Operating Officer

- ----------------------

  Richard C. Adkerson



                                   Senior Vice President and

                                   Chief Financial Officer

           *                       (Principal Financial Officer)

- ---------------------

    Stephen M. Jones



                                   Vice President and Controller

                                   - Financial Reporting

           *                      (Principal Accounting Officer)

- ----------------------

  C. Donald Whitmire



               

           *                       Director

- ----------------------

  Robert W. Bruce III





           *                       Director

- ---------------------

     Leon A. Davis



               

           *                       Director

- --------------------

   Robert A. Day





           *                      Director

- ------------------------

William B. Harrison, Jr.





   S-1





           *                      Director

- ------------------------

  J. Bennett Johnston





           *                      Director

- ------------------------

  Henry A. Kissinger



               

           *                      Director

- -----------------------

   Bobby Lee Lackey



               

           *                      Director

- -----------------------

  Rene L. Latiolais



             

           *                      Director

- -----------------------

 Jonathan C. A. Leslie



               

           *                      Director

- -----------------------

 Gabrielle K. McDonald

               

             

           *                      Director

- ----------------------

  George A. Mealey





           *                      Director

- ----------------------

   George Putnam



               

           *                      Director

- ----------------------

    B. M. Rankin





           *                      Director

- ----------------------

 J. Taylor Wharton







*By: /s/ James R. Moffett

    ---------------------                                   

     James R. Moffett

     Attorney-in-Fact





   S-2





               FREEPORT-McMoRan COPPER & GOLD INC.

                  INDEX TO FINANCIAL STATEMENTS



     The financial statements of FCX appearing on pages 28, 30,

32, and 34,  the notes thereto appearing on pages 35 through 50,

inclusive, and the report thereon of Arthur Andersen LLP

appearing on page 51 of FCX's 1998 Annual Report to stockholders

are incorporated herein by reference.



     The financial statements in schedule I listed below should

be read in conjunction with such financial statements contained

in FCX's 1998 Annual Report to stockholders.





                                                           Page

Report of Independent Public Accountants                    F-1

Schedule I-Condensed Financial Information of Registrant    F-2

Schedule II-Valuation and Qualifying Accounts               F-4

  

     Schedules other than the ones listed above have been omitted

since they are either not required, not applicable or the

required information is included in the financial statements or

notes thereto.







            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



     We have audited, in accordance with generally accepted

auditing standards, the financial statements as of December 31,

1998 and 1997 and for each of the three years in the period ended

December 31, 1998 included in Freeport-McMoRan Copper & Gold

Inc.'s Annual Report to stockholders incorporated by reference in

this Form 10-K, and have issued our report thereon dated January

19, 1999.  Our audits were made for the purpose of forming an

opinion on those statements taken as a whole.  The schedules

listed in the index above are the responsibility of the Company's

management and are presented for purposes of complying with the

Securities and Exchange Commission's rules and are not part of

the basic financial statements.  These schedules have been

subjected to the auditing procedures applied in the audits of the

basic financial statements and, in our opinion, fairly state in

all material respects the financial data required to be set forth

therein in relation to the basic financial statements taken as a

whole.







                                       Arthur Andersen LLP

New Orleans, Louisiana,

  January 19, 1999







   F-1





               FREEPORT-McMoRan COPPER & GOLD INC.

   SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                         BALANCE SHEETS





                                                        

                                               December 31,       

                                          ----------------------  

                                             1998        1997  

                                          ----------  ----------    

                                              (In Thousands)

                                                

Assets:

Cash and cash equivalents                 $      802  $    1,501

Interest receivable                            7,996      12,597

Due from affiliates                           41,766      88,098

Notes receivable from PT-FI                  832,492     982,492

Note receivable from NMI                      25,438       7,614

Investment in PT-FI and PT-II                610,234     455,610

Investment in Atlantic Copper                 51,418      46,744

Other assets                                  43,118      40,497

                                          ----------  ----------    

Total assets                              $1,613,264  $1,635,153

                                          ==========  ==========  



Liabilities and Stockholders' Equity:

Accounts payable and accrued liabilities  $   17,300  $   18,999

Long-term debt                               967,251     825,250

Other liabilities and deferred credits         2,457       5,785

Deferred income taxes                         22,833       6,220

Redeemable preferred stock                   500,007     500,007

Stockholders' equity                         103,416     278,892

                                          ----------  ---------- 

Total liabilities and

 stockholders' equity                     $1,613,264  $1,635,153

                                          ==========  ==========







                      STATEMENTS OF INCOME





                                         

                                                            

                                          Years Ended December 31,    

                                       ----------------------------

                                         1998      1997      1996

                                       --------  --------  --------

                                                (In Thousands)

                                                  

Income from investment in PT-FI

 and PT-II, net of

 PT-FI tax provision                   $211,232  $218,752  $253,895

Net income (loss) from

 investment in Atlantic Copper            4,674     3,391   (24,258)

Intercompany charges and eliminations    (7,700)   53,117a    7,244

Exploration expenses                     (8,958)  (11,198)     -    

General and administrative expenses      (7,082)   (8,855)   (9,141)

Depreciation and amortization            (4,384)   (3,873)   (3,590)

Interest expense, net                   (66,141)  (59,626)  (21,191)

Interest income on PT-FI notes receivable:

  Promissory notes                       29,273    47,219    29,150

  8.235% debenture                        8,101    11,723    12,353

  Step-up debenture                        -        3,083     6,327

  Gold and silver production

   payment loans                         19,212    20,451    23,696

Other income (expense), net               1,326       878    (1,698) 

Provision for income taxes              (25,705)  (29,954)  (46,538)

                                       --------  --------  --------

Net income                              153,848   245,108   226,249

Preferred dividends                     (35,531)  (36,567)  (51,569)

                                       --------  --------  --------

                                       $118,317  $208,541  $174,680

                                       ========  ========  ========



                                                                 



(a)Includes amounts for elimination of intercompany profit

   totaling $(7.7) million in 1998, $9.3 million in 1997 and

   $7.2 million in 1996 as well as intercompany charges for

   stock-based incentive compensation totaling $43.8 million in

   1997.



The footnotes to the consolidated financial statements of FCX

  contained in FCX's 1998 Annual Report to stockholders are an

  integral part of these statements.



   F-2





               FREEPORT-McMoRan COPPER & GOLD INC.

   SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                     STATEMENTS OF CASH FLOW







                                           Years Ended December 31,  

                                        ----------------------------

                                          1998      1997      1996

                                        --------  --------  --------

                                            (In Thousands)

                                                   

Cash flow from operating activities:

Net income                              $153,848  $245,108  $226,249

Adjustments to reconcile net income

 to net cash provided by

 operating activities:

  Income from investment

   in PT-FI and PT-II                   (211,232) (218,293) (253,895)

  Deferred income taxes                   16,613     1,400     4,820

  Net (income) loss from

   investment in Atlantic Copper          (4,674)   (3,391)   24,258

  Elimination of intercompany profit       7,700    (9,271)   (7,244)

  Dividends received from PT-FI and PT-II 48,832   205,092   220,916

  Depreciation and amortization            4,384     3,873     3,590

Decrease (increase) in interest

 receivable and due from affiliates       50,933   (44,358)   (5,214)

Increase (decrease) in accounts

 payable and accrued liabilities          (1,699)   (1,898)    4,501

Other                                      3,208     7,536    (1,087)

                                        --------  --------  --------

Net cash provided by

 operating activities                     67,913   185,798   216,894

                                        --------  --------  --------

                                              

Cash flow from investing activities:

Other                                     (9,583)  (11,895)  (11,138)

                                        --------  --------  --------

Net cash used in investing activities     (9,583)  (11,895)  (11,138)

                                        --------  --------  --------



Cash flow from financing activities:

Cash dividends paid:

  Class A common stock                   (14,157)  (73,309)  (69,425)

  Class B common stock                   (21,225) (105,032) (106,341)

  Convertible exchangeable

   preferred stock                          -         -      (15,498)

  Step-up convertible preferred stock    (24,500)  (24,642)  (19,250)

  Mandatory redeemable preferred stock   (14,657)  (15,901)  (17,689)

Proceeds from sale of Senior notes          -         -      445,570

Proceeds from debt                       161,506   180,000    31,561

Repayment of debt                        (19,504)  (17,310) (137,000)

Loans to PT-FI                              -         -     (244,682)

Repayment from PT-FI                     150,000   325,320   147,315

Loans to NMI                             (17,824)   (7,614)     -    

Purchase of FCX common shares           (259,213) (438,388) (220,997)

Other                                        545     4,232       829

                                        --------  --------  --------

Net cash used in financing activities    (59,029) (172,644) (205,607)

                                        --------  --------  --------

Net increase (decrease) in cash

 and cash equivalents                       (699)    1,259       149

Cash and cash equivalents

 at beginning of year                      1,501       242        93

                                        --------  --------  --------

Cash and cash equivalents

 at end of year                         $    802  $  1,501  $    242 

                                        ========  ========  ======== 

               

Interest paid                           $ 68,950  $ 59,798  $ 28,249

                                        ========  ========  ========

                                                              

Taxes paid                              $  8,629  $ 28,286  $ 41,586

                                        ========  ========  ========





The footnotes to the consolidated financial statements of FCX

  contained in FCX's 1998 Annual Report to stockholders are an

  integral part of these statements.



   F-3





               FREEPORT-McMoRan COPPER & GOLD INC.

         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS







              

    Col. A             Col. B            Col. C         Col. D    Col. E 

- -----------------    ----------  ---------------------- ------- ---------

                                       Additions 

                                 ----------------------

                     Balance at  Charged to  Charged to  Other  Balance at

                     Beginning   Costs and     Other      Add     End of

                     of Period    Expense     Accounts  (Deduct)  Period

                     ---------   ----------  ---------- -------- ---------

                                       (In Thousands)

                                                   

Reserves and allowances

  deducted from asset

  accounts: 

1998   

Materials and supplies

  reserves            $29,513     $ 3,000       $  -    $(7,880)  $24,633

Allowance for uncollectible

  value-added taxes     3,825         833         833       -       5,491



1997 

Materials and supplies

  reserves             19,340      12,000          -     (1,827)   29,513

Allowance for uncollectible

  value-added taxes     5,337       1,809         289    (3,610)    3,825



1996  

Materials and supplies

  reserves             26,040       3,000          -     (9,700)   19,340

Allowance for uncollectible

  value-added taxes     3,438       1,813         201      (115)    5,337



Reclamation and mine

    shutdown reserves:

1998

PT-FI                 $ 5,466      $3,763       $  -       $ -     $9,229



1997  

PT-FI                     500       4,966          -         -      5,466

  

1996 

PT-FI                      -          500          -         -        500 







   F-4



               Freeport-McMoRan Copper & Gold Inc.

                            EXHIBIT INDEX



Exhibit

Number

     

                                               

                                     Description

                                               



2.1  Agreement, dated as of May 2, 1995 by and between  Freeport-

     McMoRan Inc. (FTX) and FCX and The RTZ Corporation PLC,  RTZ

     Indonesia Limited,  and RTZ  America,  Inc. (the  Rio  Tinto

     Agreement).  Incorporated by reference to Exhibit 2.1 to the

     Current Report on Form 8-K of FTX dated as of May 26, 1995.



2.2  Amendment dated May 31,  1995 to the  Rio Tinto Agreement.  

     Incorporated by reference  to Exhibit 2.1  to the  Quarterly

     Report on Form 10-Q  of FTX for the  quarter ended June  30,

     1995.



2.3  Distribution Agreement dated as of July 5, 1995 between  FTX

     and FCX.  Incorporated  by reference to  Exhibit 2.1 to  the

     Quarterly Report on Form 10-Q  of FTX for the quarter  ended

     September  30, 1995 (the FTX 1995 Third Quarter Form 10-Q).



3.1  Composite copy of the Certificate of Incorporation of FCX.  

     Incorporated by reference  to Exhibit 3.1  to the  Quarterly

     Report on Form 10-Q  of FCX for the  quarter ended June  30,

     1995 (the FCX 1995 Second Quarter Form 10-Q).



3.2  Amended By-Laws of FCX dated as of March 12, 1999.



4.1  Certificate  of  Designations  of  the  Step-Up  Convertible

     Preferred Stock  of  FCX.    Incorporated  by  reference  to

     Exhibit 4.2 to the FCX 1995 Second Quarter Form 10-Q.



4.2  Deposit Agreement  dated  as  of July  1,  1993  among  FCX,

     ChaseMellon Shareholder Services,  L.L.C. (ChaseMellon),  as

     Depositary, and  holders  of  depositary  receipts  (Step-Up

     Depositary Receipts) evidencing  certain Depositary  Shares,

     each of which,  in turn, represents  0.05 shares of  Step-Up

     Convertible Preferred Stock.   Incorporated by reference  to

     Exhibit 4.5 to the Annual Report on Form 10-K of FCX for the

     fiscal year ended December 31, 1993  (the FCX 1993 Form  10-

     K).



4.3  Form  of  Step-Up  Depositary  Receipt.    Incorporated   by

     reference to Exhibit 4.6 to the FCX 1993 Form 10-K.



4.4  Certificate  of   Designations   of   the   Gold-Denominated

     Preferred Stock  of  FCX.    Incorporated  by  reference  to

     Exhibit 4.3 to the FCX 1995 Second Quarter Form 10-Q.



4.5  Deposit Agreement dated  as of  August 12,  1993 among  FCX,

     ChaseMellon,  as  Depositary,  and  holders  of   depositary

     receipts (Gold-Denominated  Depositary Receipts)  evidencing

     certain  Depositary  Shares,   each  of   which,  in   turn,

     represents 0.05 shares of Gold-Denominated Preferred  Stock.

      Incorporated by reference  to Exhibit 4.8  to the FCX  1993

     Form 10-K.



4.6  Form of Gold-Denominated  Depositary Receipt.   Incorporated

     by reference to Exhibit 4.9 to the FCX 1993 Form 10-K.



4.7  Certificate  of   Designations   of   the   Gold-Denominated

     Preferred Stock, Series  II (the Gold-Denominated  Preferred

     Stock II) of FCX.  Incorporated by reference to Exhibit  4.4

     to the FCX 1995 Second Quarter Form 10-Q.



4.8  Deposit Agreement dated as of  January 15, 1994, among  FCX,

     ChaseMellon,  as  Depositary,  and  holders  of   depositary

     receipts   (Gold-Denominated    II   Depositary    Receipts)

     evidencing certain  Depositary  Shares, each  of  which,  in

     turn, represents 0.05  shares of Gold-Denominated  Preferred

     Stock II.  Incorporated by reference  to Exhibit 4.2 to  the

     Quarterly Report on Form 10-Q of  FCX for the quarter  ended

     March 31, 1994 (the FCX 1994 First Quarter Form 10-Q).



   E-1



4.9  Form   of   Gold-Denominated   II   Depositary   Receipt.   

     Incorporated by reference  to Exhibit  4.3 to  the FCX  1994

     First Quarter Form 10-Q.



4.10 Certificate  of  Designations   of  the   Silver-Denominated

     Preferred Stock  of  FCX.     Incorporated by  reference  to

     Exhibit 4.5 to the FCX 1995 Second Quarter Form 10-Q.



4.11 Deposit Agreement  dated  as of  July  25, 1994  among  FCX,

     ChaseMellon,  as  Depositary,  and  holders  of   depositary

     receipts (Silver-Denominated Depositary Receipts) evidencing

     certain Depositary Shares, each of which, in turn, initially

     represents  0.025  shares  of  Silver-Denominated  Preferred

     Stock.  Incorporated by reference to Exhibit 4.2 to the July

     15, 1994 Form 8-A.



4.12 Form of Silver-Denominated Depositary Receipt.  Incorporated

     by reference to Exhibit 4.1 to the July 15, 1994, Form 8-A.



4.13 $550 million Composite Restated Credit Agreement dated as of

     July 17, 1995 (the PT-FI Credit Agreement) among PT-FI, FCX,

     the several financial institutions that are parties thereto,

     First Trust  of New  York,  National Association,  as  PT-FI

     Trustee, Chemical  Bank,  as administrative  agent  and  FCX

     collateral agent,  and The  Chase Manhattan  Bank  (National

     Association),  as  documentary   agent.    Incorporated   by

     reference to Exhibit  4.16 to the  Annual Report  of FCX  on

     Form 10-K for the year ended December 31, 1995 (the FCX 1995

     Form 10-K).



4.14 Amendment dated  as of  July 15,  1996 to  the PT-FI  Credit

     Agreement  among   PT-FI,   FCX,   the   several   financial

     institutions that are  parties thereto, First  Trust of  New

     York, National Association, as PT-FI Trustee, Chemical Bank,

     as administrative agent  and FCX collateral  agent, and  The

     Chase Manhattan Bank (National Association), as  documentary

     agent.   Incorporated by  reference to  Exhibit 4.2  to  the

     Quarterly Report of FCX on Form  10-Q for the quarter  ended

     September 30, 1996 (the FCX 1996 Third Quarter Form 10-Q).



4.15 Amendment dated as of  October 9, 1996  to the PT-FI  Credit

     Agreement  among   PT-FI,   FCX,   the   several   financial

     institutions that are  parties thereto, First  Trust of  New

     York, National  Association,  as PT-FI  Trustee,  The  Chase

     Manhattan Bank (formerly  Chemical Bank), as  administrative

     agent, security agent and JAA security agent, and The  Chase

     Manhattan Bank  (as successor  to The  Chase Manhattan  Bank

     (National Association)), as documentary agent.  Incorporated

     by reference to Exhibit 10.2 to  the Current Report on  Form

     8-K of  FCX  dated and  filed  November 13,  1996  (the  FCX

     November 13, 1996 Form 8-K).



4.16 Amendment dated  as of  March 7,  1997 to  the PT-FI  Credit

     Agreement  among   PT-FI,   FCX,   the   several   financial

     institutions that are  parties thereto, First  Trust of  New

     York, National  Association,  as PT-FI  Trustee,  The  Chase

     Manhattan Bank, as administrative agent, security agent  and

     JAA  security  agent,  and  The  Chase  Manhattan  Bank,  as

     documentary agent.   Incorporated  by reference  to  Exhibit

     4.16 to the Annual Report of  FCX on Form 10-K for the  year

     ended December 31, 1997 (the FCX 1997 Form 10-K).



4.17 Amendment dated  as of  July 24,  1997 to  the PT-FI  Credit

     Agreement  among   PT-FI,   FCX,   the   several   financial

     institutions that are  parties thereto, First  Trust of  New

     York, National   Association,  as PT-FI  Trustee, The  Chase

     Manhattan Bank, as administrative agent, security agent  and

     JAA  security  agent,  and  The  Chase  Manhattan  Bank,  as

     documentary agent.   Incorporated  by reference  to  Exhibit

     4.17 to the FCX 1997 Form 10-K.



4.18 $200 million Credit Agreement dated as of June 30, 1995 (the

     CDF) among PT-FI,  FCX, the  several financial  institutions

     that are parties thereto, First Trust of New York,  National

     Association,   as   PT-FI   Trustee,   Chemical   Bank,   as

     administrative agent  and FCX  collateral agent,  The  Chase

     Manhattan Bank (National Association), as documentary agent.

     Incorporated by reference  to Exhibit 4.2  to the FCX  1995

     Third Quarter Form 10-Q.



4.19 Amendment dated as of July 15, 1996 to the CDF among  PT-FI,

     FCX, the  several financial  institutions that  are  parties

     thereto, First Trust of  New York, National Association,  as

     PT-FI Trustee, Chemical  Bank, as  administrative agent  and

     FCX collateral agent, and The Chase Manhattan Bank (National

     Association),  as  documentary   agent.    Incorporated   by

     reference to Exhibit 4.1 to the FCX 1996 Third Quarter  Form

     10-Q.



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4.20 Amendment dated as of October 9,  1996 to the CDF among  PT-

     FI, FCX, the several financial institutions that are parties

     thereto, First Trust of  New York, National Association,  as

     PT-FI Trustee, The Chase  Manhattan Bank (formerly  Chemical

     Bank), as  administrative  agent,  security  agent  and  JAA

     security agent, and The  Chase Manhattan Bank (as  successor

     to The  Chase  Manhattan Bank  (National  Association)),  as

     documentary agent.   Incorporated  by reference  to  Exhibit

     10.1 to the FCX November 13, 1996 Form 8-K.

  

4.21 Amendment dated as of March 7, 1997 to the CDF among  PT-FI,

     FCX, the  several financial  institutions that  are  parties

     thereto, First Trust of  New York, National Association,  as

     PT-FI Trustee, The Chase  Manhattan Bank, as  administrative

     agent, security agent and JAA security agent, and The  Chase

     Manhattan Bank,  as  documentary  agent.    Incorporated  by

     reference to Exhibit 4.21 to the FCX 1997 Form 10-K.



4.22 Amendment dated as of July 24, 1997 to the CDF among  PT-FI,

     FCX, the  several financial  institutions that  are  parties

     thereto, First Trust of  New York, National Association,  as

     PT-FI Trustee, The Chase  Manhattan Bank, as  administrative

     agent, security agent and JAA security agent, and The  Chase

     Manhattan Bank,  as  documentary  agent.    Incorporated  by

     reference to Exhibit 4.22 to the FCX 1997 Form 10-K.



4.23 Senior Indenture dated as of November  15, 1996 from FCX  to

     The Chase  Manhattan  Bank,  as Trustee.    Incorporated  by

     reference to Exhibit 4.1 to the  Current Report on Form  8-K

     of FCX dated November 13, 1996 and filed November 15, 1996.



4.24 First Supplemental Indenture dated  as of November 18,  1996

     from FCX to The Chase Manhattan Bank, as Trustee,  providing

     for the issuance of the  Senior Notes and supplementing  the

     Senior Indenture dated  November 15, 1996  from FCX to  such

     Trustee, providing  for  the issuance  of  Debt  Securities.

     Incorporated by reference  to Exhibit 4.20  to the FCX  1996

     Form 10-K.



10.1 Contract  of  Work  dated  December  30,  1991  between  The

     Government  of  the  Republic  of  Indonesia  and  PT-FI.   

     Incorporated by reference  to Exhibit 10.2  to the FCX  1995

     Form 10-K.



10.2 Contract  of  Work  dated   August  15,  1994  between   The

     Government of  the  Republic  of  Indonesia  and  P.T.  Irja

     Eastern Minerals Corporation.  Incorporated by reference  to

     Exhibit 10.2 to the FCX 1995 Form 10-K.



10.3 Agreement dated as of October 11, 1996 to Amend and  Restate

     Trust Agreement among PT-FI,  FCX, the RTZ Corporation  PLC,

     P.T. RTZ-CRA Indonesia, RTZ  Indonesian Finance Limited  and

     First Trust of New York, National Association, and The Chase

     Manhattan Bank, as Administrative Agent, JAA Security  Agent

     and Security Agent.   Incorporated by  reference to  Exhibit

     10.3 to the FCX November 13, 1996 Form 8-K.



10.4 Credit Agreement dated  October 11, 1996  between PT-FI  and

     RTZ Indonesian Finance Limited.   Incorporated by  reference

     to Exhibit 10.4 to the FCX November 13, 1996 Form 8-K.



10.5 Participation Agreement dated as of October 11, 1996 between

     PT-FI and P.T. RTZ-CRA Indonesia  with respect to a  certain

     contract of work.  Incorporated by reference to Exhibit 10.5

     to the FCX November 13, 1996 Form 8-K.



10.6 Second Amended and Restated Joint Venture and  Shareholders'

     Agreement dated  as of  December 11,  1996 among  Mitsubishi

     Materials Corporation,  Nippon  Mining and  Metals  Company,

     Limited and  PT-FI.   Incorporated by  reference to  Exhibit

     10.3 of the FCX 1996 Form 10-K.



10.7 Put and  Guaranty  Agreement  dated as  of  March  21,  1997

     between FCX and The Chase  Manhattan Bank.  Incorporated  by

     reference to Exhibit 10.7 to the FCX 1997 Form 10-K.



10.8 Subordinated Loan  Agreement  dated  as of  March  21,  1997

     between FCX and PT  Nusamba Mineral Industri.   Incorporated

     by reference to Exhibit 10.8 to the FCX 1997 Form 10-K.



10.9 Amended and  Restated  Power  Sales Agreement  dated  as  of

     December 18, 1997 between  PT-FI and P.T. Puncakjaya  Power.

     Incorporated by reference  to Exhibit 10.9  to the FCX  1997

     Form 10-K.



   E-3



10.10     Option, Mandatory Purchase and  Right of First  Refusal

     Agreement dated as  of December 19,  1997 among PT-FI,  P.T.

     Puncakjaya Power, Duke  Irian Jaya,  Inc., Westcoast  Power,

     Inc. and  P.T.  Prasarana Nusantara  Jaya.  Incorporated  by

     reference to Exhibit 10.10 to the FCX 1997 Form 10-K.



     Executive  Compensation  Plans  and  Arrangements  (Exhibits

          10.11 through 10.30)



10.11     Annual Incentive  Plan  of  FCX  as  amended  effective

     February 2, 1999.



10.12     1995 Long-Term  Performance  Incentive Plan  of  FCX.  

     Incorporated by reference  to Exhibit 10.9  to the FCX  1996

     Form 10-K.



10.13     FCX Performance  Incentive  Awards Program  as  amended

     effective February 2, 1999. 



10.14     FCX  President's  Award   Program.    Incorporated   by

     reference to Exhibit 10.8 to the FCX 1995 Form 10-K.



10.15     FCX  Adjusted   Stock   Award  Plan,   as   amended.   

     Incorporated by reference to Exhibit 10.15 to the           

     1997 FCX Form 10-K.



10.16     FCX 1995 Stock Option Plan.  Incorporated by  reference

     to Exhibit 10.13 to the FCX 1996 Form 10-K.



10.17     FCX 1995 Stock Option Plan for Non-Employee  Directors,

     as amended.  Incorporated by  reference to Exhibit 10.17  to

     the FCX 1997 Form 10-K.



10.18     Financial Counseling  and  Tax Return  Preparation  and

     Certification Program of FCX.  Incorporated by reference  to

     Exhibit 10.12 to the FCX 1995 Form 10-K.



10.19     FM  Services  Company   Performance  Incentive   Awards

     Program as amended effective February 2, 1999.

 

10.20     FM Services Company Financial Counseling and Tax Return

     Preparation and  Certification  Program.    Incorporated  by

     reference to Exhibit 10.14 to the FCX 1995 Form 10-K.



10.21     Consulting Agreement  dated  as of  December  22,  1988

     between  FTX  and  Kissinger  Associates,  Inc.   (Kissinger

     Associates). Incorporated by reference  to Exhibit 10.21  to

     the FCX 1997 Form 10-K.



10.22     Letter Agreement dated May 1, 1989 between FTX and Kent

     Associates, Inc. (Kent  Associates, predecessor in  interest

     to  Kissinger  Associates).  Incorporated  by  reference  to

     Exhibit 10.22 to the FCX 1997 Form 10-K.



10.23     Letter Agreement dated January 27, 1997 among Kissinger

     Associates, Kent Associates, FTX, FCX and FMS.  Incorporated

     by reference to Exhibit 10.20 to the FCX 1996 Form 10-K.



10.24     Agreement for Consulting Services between FTX and B. M.

     Rankin, Jr. effective as of January 1, 1991 (assigned to FMS

     as of January 1, 1996). Incorporated by reference to Exhibit

     10.24 to the FCX 1997 Form 10-K.



10.25     Supplemental Agreement between FMS and B. M. Rankin Jr.

     dated December  15,  1997.   Incorporated  by  reference  to

     Exhibit 10.25 to the FCX 1997 Form 10-K.



10.26     Supplemental Agreement between FMS and B.M. Rankin  Jr.

     dated December 7, 1998.



10.27     Letter Agreement dated March 8, 1996 between George  A.

     Mealey and FCX.  Incorporated by reference to Exhibit  10.22

     of the FCX 1996 Form 10-K.



10.28     Letter  Agreement  effective  as  of  January  4,  1997

     between  Senator  J.  Bennett   Johnston,  Jr.  and  FCX.   

     Incorporated by reference to Exhibit  10.25 of the FCX  1996

     Form 10-K.



10.29     Letter Agreement dated  December 22,  1997 between  FMS

     and Rene L. Latiolais. Incorporated by reference to  Exhibit

     10.28 to the FCX 1997 Form 10-K.



   E-4



10.30     Letter Agreement dated January 25, 1999 between FMS and

     Rene L. Latiolais.



12.1 FCX Computation of Ratio of Earnings to Fixed Charges.



13.1 Those portions of the 1998 Annual Report to stockholders  of

     FCX that are incorporated herein by reference.



21.1 Subsidiaries of FCX.



23.1 Consent of Arthur Andersen LLP.



23.2 Consent of Independent Mining Consultants, Inc.



24.1 Certified resolution  of  the  Board  of  Directors  of  FCX

     authorizing this  report  to  be signed  on  behalf  of  any

     officer or director pursuant to a Power of Attorney.



24.2 Powers of Attorney  pursuant to which  this report has  been

     signed on behalf of certain officers and directors of FCX.



27.1 FCX Financial Data Schedule.



   E-5