Phelps Dodge Statement

Phelps Dodge Corp. today issued the following statement regarding the decision of the Falconbridge Ltd. board of directors to continue to recommend that Falconbridge shareholders tender their shares into the Inco Ltd. offer to purchase all outstanding common shares of Falconbridge.

J. Steven Whisler, chairman & C.E.O. of Phelps Dodge, said: "We appreciate the continued support of the Falconbridge board for the Inco offer, which is valued at C$64.40 per Falconbridge share as of the close of market today. Inco’s offer, supported by Phelps Dodge, is clearly superior both currently & in the long term to the Xstrata offer &, unlike Xstrata’s hostile offer, has received all necessary regulatory approvals. Upon closing of the Phelps Dodge offer for Inco, Falconbridge shareholders will own approximately 30% of the new Phelps Dodge Inco. This 3-way combination will create a North American mining powerhouse with a global nickel headquarters in Toronto, approx., $900 million in annual synergies, a rich portfolio of development projects, & market-leading positions in both copper & nickel, as well as strong positions in molybdenum & cobalt.”