Phelps Dodge Corp. today has reaffirmed its commitment to the returning of substantial cash to its shareholders and rejected a reckless demand, according to the Company from Atticus Capital towards adding a substantial debt burden to the company to fund an additional share repurchase program.

Atticus Capital LP is a foremost investment management firm, with in excess of US$9 billion of assets under management. From its commencement in 1995 by Timothy Barakett, the firm is headquartered in New York with an office in London. Atticus as an investment management firm usually invests in global securities markets on behalf of its clients. Timothy Barakett, Chairman and CEO, and David Slager, Senior Managing Director, are in the topmost hierarchy of the firm's portfolio management team. Nathaniel Rothschild is the Co-Chairman of the firm.

While talking the Chairman and Chief Executive Officer J. Steven Whisler said: “I have spoken with representatives of Atticus Capital on several occasions in recent months to try to gain a clear understanding of their proposals for Phelps Dodge. We believe their demand to add a substantial debt burden to Phelps Dodge at this point in the metal-pricing cycle to fund an additional stock buyback program represents a reckless bet that could threaten our company’s future.

“There should be no doubt, however, about our board’s commitment to return cash to our shareholders. Last October, the board authorized a shareholder capital return program of $1.5 billion, and we already have authorized the return of more than $900 million to Phelps Dodge shareholders through special dividends. We are committed to returning another $600 million by the end of 2006 – and possibly more – but we will do so only as our actual results justify it. We will not compromise our financial discipline based merely on a hope about future prices in an extremely volatile market.”

“We find it regrettable that Atticus Capital has chosen to mischaracterize our discussions, as well as our commitment to shareholder interests. We regularly meet with our shareholders, including Atticus Capital, and listen carefully to their views. In our most recent conversation with Atticus Capital last week, Atticus asked whether Mr. Barakett, the Atticus chairman, or an independent individual they would suggest to us could be added to our board of directors. I told Mr. Barakett that if he would identify specific potential director candidates, I would forward that information to our board’s Committee on Directors and Corporate Governance for consideration. Mr. Barakett assured me that he would call me back promptly with specific suggestions. Unfortunately, our next communication from Atticus was today’s public letter,” he added.