A surprise change of government in Peru has not discouraged Freeport-McMoRan Copper & Gold Inc. (FCX), Chief Executive Richard Adkerson said on the company's conference call.

Freeport is poised for a major expansion at its Cerro Verde copper and molybdenum mine in Peru, with capital costs of $3.5 billion and completion set for 2016.

Peru's President-Elect Ollanta Humala ran on a platform of higher mining taxes, and has been considered a threat to the country's booming resource sector.

"The election was a surprise. Humala wasn't expected to win," Adkerson said. "We're going forward with our expansion plans...it's a question of time-will-tell, but we're not discouraged with where we stand."

The plan is to expand Cerro Verde's mining rate to 850,000 metric tons a day, from current levels of 320,000 tons, and boost milling capacity to 360,000 tons per day from current rates of around 120,000 tons.

The expansion would increase Cerro Verde's copper output to 600 million pounds of copper and 15 million pounds of molybdenum per year.

Freeport has a tax stability agreement in place for Cerro Verde, which exempts the mine from royalty payments until it expires in 2013. Freeport has expressed interest in renewing this agreement, and Adkerson said he looks forward to negotiations with the newly named mining minister.

"There's been a few very encouraging public comments that Humala has made," Adkerson said. "This is unfolding and we have to monitor what goes on."

Freeport-McMoRan is the world's largest listed copper mining company.

-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com

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