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                                                                     Exhibit 3.2



                                              Amended Effective November 1, 2000




                                  B Y - L A W S

                            PHELPS DODGE CORPORATION


         ARTICLE I.  NAME, LOCATION and CORPORATE SEAL

         Sec. 1.  The name of this Corporation is PHELPS DODGE CORPORATION.

         Sec. 2. The principal office of the Company shall be in the City of
Phoenix, County of Maricopa, State of Arizona. The Company shall also have such
other offices, either within or without the United States, and may transact its
business at such other places, as the Board of Directors may appoint.

         Sec. 3. The corporate seal of the Company shall have inscribed thereon
the name of the corporation, and the year of its creation. It shall be of the
form impressed upon the margin hereof. It shall be in charge of the Secretary. A
duplicate of the seal may be kept and used by the Treasurer or by any Assistant
Secretary or Assistant Treasurer, when so ordered by the Board of Directors.

                                                  (Imprint of corporate seal)



         ARTICLE II. SHAREHOLDERS

         Sec. 1. Annual Meeting. The annual meeting of shareholders shall be
held at 12:00 noon on the first Wednesday in May of each year, or at such other
time on that day or at such time on such other day as the Board of Directors
shall from time to time determine, at the principal office of the Company in the
City of Phoenix, County of Maricopa, State of Arizona, or at such other place
within or without the State of New York as the Board of Directors shall from
time to time determine, for the purpose of electing Directors and for the
transaction of such other business as may properly be brought before the
meeting.


         The Secretary shall cause to be sent by first class mail or
electronically not less than 10 nor more than 60 days before the date of such
meeting, a notice thereof addressed to each shareholder of record entitled to
vote at such meeting at his or her mailing or electronic address as it appears
on the books of the Company. Notice may also be sent by third class mail not
less than 24 nor more than 60 days before the date of such meeting. Any
previously scheduled annual meeting of shareholders may be postponed by
resolution of the Board of Directors upon public announcement of the
postponement on or prior to the date previously scheduled for such annual
meeting of shareholders.

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         Sec. 2. Special Meetings. Special meetings of the shareholders may be
held at the principal office of the Company in the City of Phoenix, County of
Maricopa, State of Arizona, or at such other place within or without the State
of New York as the Board of Directors or the Chairman of the Board shall from
time to time determine, and may be called by vote of a majority of the Board of
Directors, or by the Chairman of the Board. Special meetings of the
shareholders, or of the holders of a particular class or series of shares, shall
also be called when required by the Certificate of Incorporation at the times
and in the manner therein set forth.


         Notice of the time, place and purposes of any such special meeting
shall be served personally ,sent by first class mail or electronically to each
shareholder of record entitled to vote at such meeting, not less than 10 nor
more than 60 days before the date of such meeting, at his or her mailing or
electronic address as it appears on the books of the Company. Notice may also be
sent by third class mail not less than 24 nor more than 60 days before the date
of such meeting. A written waiver of notice of any meeting may be made by any
shareholder. Any previously scheduled special meeting of the shareholders may be
postponed by resolution of the Board of Directors upon public announcement of
the postponement on or prior to the date previously scheduled for such special
meeting of shareholders.


         Sec. 3. Quorum. At any meeting of shareholders, unless otherwise
provided by law or by the Certificate of Incorporation, the holders of shares
(of any class) aggregating a majority of the total number of shares of all
classes of the Company then issued and outstanding and entitled to vote at the
meeting, present in person or represented by proxy, shall constitute a quorum,
provided that, unless otherwise provided by law or by the Certificate of
Incorporation, when a specified item of business is required to be voted on by
any one or more of a particular class or series of shares, voting as a separate
class, the holders of a majority of the shares so eligible to vote as a separate
class shall constitute a quorum for the transaction of such specified item of
business.

         The shareholders present at any duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
sufficient shareholders to constitute the remaining shareholders less than a
quorum. Whether or not a quorum is present at a meeting, the person presiding at
the meeting or the holders of a majority of the shares of all classes of the
Company entitled to vote at the meeting so present or represented may adjourn
the meeting from time to time. At any such adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting as originally called.

         Sec. 4. Chairman and Secretary. Meetings of shareholders shall be
presided over by the Chairman of the Board or, if he is not present, by the
President or, if neither of them is present, by a Vice Chairman, or if none of
them is present, by a Vice President or, if neither the Chairman of the Board,
the President, a Vice Chairman nor a Vice President is present, by a person to
be chosen at the meeting. The Secretary of the Company shall act as Secretary at
all meetings of the shareholders, but in the absence of the Secretary the
presiding officer may appoint any person to act as Secretary of the meeting.


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         Sec. 5. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation, each shareholder entitled to vote at a meeting of
shareholders shall be entitled to one vote, in person or by proxy, for each
share having voting power held by him or her on the record date for such
meeting, as appears on the books of the Company.

         Only the person in whose name shares stand on the books of the Company
at the time of closing of the transfer books for such meeting shall be entitled
to vote, in person or by proxy, the shares so standing in his or her name.


         The Board of Directors shall have the power and authority to fix a day
not less than 10 nor more than 60 days prior to the day of holding any meeting
of shareholders, as the day as of which shareholders entitled to notice of and
to vote at such meeting shall be determined; and all persons who are holders of
record of shares with voting rights on such day, and no others, shall be
entitled to notice of and to vote at such meeting.


         Sec. 6. Inspectors of Election. The Board of Directors, in advance of
any shareholders' meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so appointed, the
person presiding at a shareholders' meeting may, and on the request of any
shareholder entitled to vote thereat shall, appoint one or more inspectors. In
case any person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, before entering upon
the discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his or her ability. Thereafter each inspector shall
have at such meeting all of the powers and duties provided by law.

         Sec. 7. Business Conducted at Meetings. At an annual meeting of
shareholders, only such business may be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting
business must be (a) specified in the notice of meeting (including any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
shareholder of the Company who was a shareholder of record at the time of giving
of notice provided for in this Section 7, who is entitled to vote at the meeting
and who complies with the notice procedures set forth in this Section 7. For
business to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Company. To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal office of the Company not less than 60 days nor
more than 90 days prior to the meeting; provided, however, that in the event
that the date of the annual meeting is scheduled for a day other than the first
Wednesday in May in such year and less than 70 days' notice or prior public
announcement of the new date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so received not later than the
close of business on the 10th day


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following the day on which such notice of the new date of the annual meeting was
mailed or such public announcement was made.(1)

         A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address of the shareholder proposing such business, as they appear on the
Company's books, and of the beneficial owner, if any, on whose behalf such
notice is being given, (c) the class and number of shares of the Company which
are owned beneficially and of record by such shareholder and by such beneficial
owner, and (d) any material interest in such business of such shareholder or of
such beneficial owner.

         At a special meeting of shareholders, only such business may be
conducted as shall have been properly brought before the meeting. To be properly
brought before a special meeting, business must be related to the purpose or
purposes set forth in the notice of the meeting (including any supplement
thereto) given by or at the direction of the Board of Directors or the Chairman
of the Board.

         Notwithstanding anything in the By-Laws to the contrary, no business
shall be conducted at a meeting of shareholders except in accordance with the
procedures set forth in this Section 7. The chairman of a meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 7,


------------------------
(1) Effective as of the close of business on the day of the May 2001 annual
meeting of shareholders of the Company, this sentence shall be amended to read
as follows:

               To be timely, a shareholder's notice must be delivered
               to or mailed and received at the principal office of
               the Company not later than the close of business on the
               90th day and not earlier than the close of business on
               the 120th day prior to the first anniversary of the
               preceding year's annual meeting; provided, however,
               that in the event that the date of the annual meeting
               is more than 30 days before or more than 60 days after
               such anniversary date, notice by the shareholder to be
               timely must be so received not earlier than the close
               of business on the 120th day prior to the date of such
               annual meeting and not later than the close of business
               on the later of the 90th day prior to the date of such
               annual meeting or the 10th day following the day on
               which public announcement of the date of such annual
               meeting is first made. In no event shall the public
               announcement of an adjournment of an annual meeting
               commence a new time period for the giving of a
               shareholder's notice as described above.


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and if the chairman should so determine, he or she shall declare to the meeting
that any such business not properly brought before the meeting shall not be
transacted. In addition to the provisions of this Section 7, a shareholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth herein. Nothing
in these By-Laws shall be deemed to affect any rights of shareholders to request
inclusion of proposals in the Company's proxy statement pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended from time to time (the
"Exchange Act") and to put before such meeting any proposals so included in the
Company's proxy statement at his or her request.

         Sec. 8. Nomination of Directors. Only persons who are nominated in
accordance with the procedures set forth in this Section 8 shall be eligible for
election as Directors at any meeting of shareholders held for the election of
Directors (an "Election Meeting"). Nominations of persons for election to the
Board of Directors of the Company may be made at an Election Meeting by or at
the direction of the Board of Directors or by a shareholder of the Company who
was a shareholder of record at the time of giving of notice provided for in this
Section 8, who is entitled to vote for the election of Directors at such
Election Meeting and who complies with the notice procedures set forth in this
Section 8. Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Company. To be timely, a shareholder's notice must be delivered
to or mailed and received at the principal office of the Company not less than
60 days nor more than 90 days prior to such Election Meeting; provided, however,
that in the event the date of the Election Meeting is scheduled for a day other
than the first Wednesday in May and less than 70 days' notice or prior public
announcement of the date of such Election Meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of such Election Meeting was mailed or such public
announcement was made. Notwithstanding anything in the foregoing sentence to the
contrary, in the event that the number of Directors to be elected to the Board
of Directors of the Company at such Election Meeting is increased or there is a
vacancy to be filled at such Election Meeting in a class of Directors whose
terms do not expire at such Election Meeting and there is no public announcement
at least 70 days prior to such Election Meeting naming all of the nominees for
Director or specifying the size of the increased Board of Directors or the
number of Directors to be elected, a shareholder's notice required by this
Section 8 shall also be considered timely, but only with respect to nominees for
any positions created by such increase or vacancy, if it shall be delivered to
or mailed and received at the principal office of the Company not later than the
close of business on the 10th day following the day on which such public
announcement is first made by the Company.

         Such shareholder's notice to the Secretary shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or
re-election as a Director, (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of the Company which are owned
beneficially by such person and (iv) any other information concerning such
person that is required to be disclosed in connection with the solicitation of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including without limitation
such person's written consent to being named in the proxy statement as a nominee
and to


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serving as a Director if elected); and (b) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination is made,
(i) the name and address of such shareholder, as they appear on the Company's
books, and of such beneficial owner and (ii) the class and number of shares of
the Company which are owned beneficially and of record by such shareholder and
by such beneficial owner. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a Director shall furnish to
the Secretary of the Company that information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee.

         No person shall be eligible for election as a Director of the Company
unless nominated in accordance with the procedures set forth in this Section 8.
In the event that a person is validly designated as a nominee in accordance with
the foregoing and shall thereafter become unable or unwilling to stand for
election to the Board of Directors, the Board of Directors or the shareholder
who proposed such nominee, as the case may be, may designate a substitute
nominee. The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
provisions of this Section 8, and if the chairman should so determine, he or she
shall declare to the meeting that the defective nomination shall be disregarded.
In addition to the provisions of this Section 8, a shareholder shall also comply
with all applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth herein.

         Sec. 9. Public Announcement. For purposes of this Article II, "public
announcement" shall mean disclosure in a communication sent by first class mail
to shareholders, in a press release reported by the Dow Jones News Service,
Reuters Information Services, Inc., Associated Press or comparable national news
service or in a document filed by the Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.


         ARTICLE III. DIRECTORS

         Sec. 1. Number; Classification of Board; Newly Created Directorships
and Vacancies. The business of the Company shall be managed under the direction
of its Board of Directors, which shall consist of not less than nine nor more
than twelve Directors, provided that whenever the holders of any one or more
series of Preferred Shares of the Company become entitled to elect one or more
Directors to the Board of Directors in accordance with any applicable provisions
of the Certificate of Incorporation, such maximum number of Directors shall be
increased automatically by the number of Directors such holders are so entitled
to elect. Such increase shall remain in effect until the right of such holders
to elect such Director or Directors shall cease and until the Director or
Directors elected by such holders shall no longer hold office. The exact number
of Directors within the foregoing minimum and maximum limitations shall be
determined from time to time by resolution adopted by the affirmative vote of a
majority of the entire Board.

         Except as otherwise provided in any applicable provisions of the
Certificate of Incorporation relating to Preferred Shares of the Company, the
Directors shall be divided into three


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classes, designated Class I, Class II and Class III. All classes shall be as
nearly equal in number as possible. The terms of office of the Directors
initially classified shall be as follows: at the 1988 annual meeting of
shareholders, Class I Directors shall be elected for a one-year term expiring at
the 1989 annual meeting of shareholders, Class II Directors for a two-year term
expiring at the 1990 annual meeting of shareholders, and Class III Directors for
a three-year term expiring at the 1991 annual meeting of shareholders. At each
annual meeting of shareholders after the 1988 annual meeting, Directors so
classified who are elected to replace those whose terms expire at such annual
meeting shall be elected to hold office until the third succeeding annual
meeting. Each Director so classified shall hold office until the expiration of
his term and until his successor has been elected and qualified.

         Except as otherwise provided in any applicable provisions of the
Certificate of Incorporation relating to Preferred Shares of the Company, (a)
newly created directorships resulting from an increase in the number of
Directors and vacancies occurring on the Board of Directors for any reason may
be filled by vote of the Directors (including a majority of Directors then in
office if less than a quorum exists), and (b) if the number of Directors is
changed, (i) any newly created directorships or any decrease in directorships
shall be apportioned by the Board among the classes so as to make all classes as
nearly equal as possible, and (ii) when the number of Directors is increased by
the Board and any newly created directorships are filled by the Board, there
shall be no classification of the additional Directors until the next annual
meeting of shareholders. Any Director elected by the Board to fill a newly
created directorship or a vacancy shall hold office until the next annual
meeting of shareholders and until his successor, classified in accordance with
these By-Laws, has been elected and qualified. No decrease in the number of
Directors constituting the Board shall shorten the term of any incumbent
Director.

         Sec. 2. Quorum. One-third, but in any event not fewer than five (5)
members of the Board of Directors, shall constitute a quorum for transacting
business at all meetings. In the event of a quorum not being present, a lesser
number may adjourn the meeting to a time not more than twenty (20) days later.

         Sec. 3. Place of Meetings. The Directors may hold their meetings either
within or without the State of New York.

         Sec. 4. Meetings. Regular and special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, any Vice
Chairman, the President, any Executive Vice President or Senior Vice President,
or any member of the Executive Committee of the Board and shall be held at such
time and place as the notice of the meeting shall specify. Notice of any such
meeting shall be given to each Director (a) personally (either orally or in
writing) not less than 12 hours in advance of such meeting, (b) by telex or
similar method of communication dispatched to his usual place of business not
less than 24 hours in advance of such meeting, or (c) by mail or telegram
dispatched to his address on file at the Company for such purpose not less than
two days in advance of such meeting. Such notice shall be given by the Secretary
or, if the Secretary is not available, by the individual calling the meeting
and, in the case of special meetings, shall also specify the object of the
meeting. At any such meeting held without notice at which every member


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of the Board shall be present or shall waive notice in writing before or after
the meeting, any business may be transacted which might have been transacted if
notice of the meeting had been duly given.

         Regular meetings may also be held at such times and places as the Board
may designate from time to time, and no notice shall be required for any such
regular meeting when held as so designated.

         Any one or more members of the Board may participate in a meeting of
the Board by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at the
meeting.

         Sec. 5. Removal. Any officer elected or appointed by the Board of
Directors, may be removed at any time by the affirmative vote of a majority of
the whole Board.

         Sec. 6. Compensation. Each Director of the Company who is neither an
officer or employee of the Company or of a subsidiary of the Company nor a
Chairman of a Committee of the Board of Directors of the Company shall receive
an annual retainer of Thirty Six Thousand Dollars ($36,000). Each Director of
the Company who is not an officer or employee of the Company or of a subsidiary
of the Company and who is a Chairman of a Committee of the Board of Directors of
the Company shall receive an annual retainer of Thirty Nine Thousand Dollars
($39,000). In addition, each Director of the Company who is not an officer or
employee of the Company or of a subsidiary of the Company shall receive: (i) a
fee of One Thousand Dollars ($1,000) per meeting for attendance at any regular
or special meeting of the Board or as a member or by invitation at any regular
or special meeting of any Committee of the Board and (ii) a fee of One Thousand
Dollars ($1,000) for each day (prorated for part of a day) that such Director
renders service to the Company in excess of that required by such Director's
usual responsibilities either as a member of the Board of Directors of the
Company or as a member of a Committee thereof.

         Sec. 7. Indemnification--Third Party and Derivative Actions.

                  (a) The Company shall indemnify any person made, or threatened
to be made, a party to an action or proceeding other than one by or in the right
of the Company to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any Director or officer of the Company
served in any capacity at the request of the Company, by reason of the fact that
he, his testator or intestate, is or was a Director or officer of the Company,
or is or was serving such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement and expenses (including attorneys' fees)
incurred in connection with such action or proceeding, or any appeal therein,
provided that no indemnification may be made to or on behalf of such person if
(i) his acts were committed in bad faith or were the result of his active and
deliberate dishonesty and were material to such action or proceeding or (ii)


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he personally gained in fact a financial profit or other advantage to which he
was not legally entitled.

                  (b) The Company shall indemnify any person made, or threatened
to be made, a party to an action by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he, his testator or intestate,
is or was a Director or officer of the Company, or is or was serving at the
request of the Company as a Director or officer of any other corporation of any
type or kind, domestic or foreign, or of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against judgments, amounts paid in
settlement and expenses (including attorneys' fees) incurred in connection with
such action, or any appeal therein, provided that no indemnification may be made
to or on behalf of such person if (i) his acts were committed in bad faith or
were the result of his active and deliberate dishonesty and were material to
such action or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.

                  (c) For the purpose of this Section 7, the Company shall be
deemed to have requested a person to serve an employee benefit plan where the
performance by such person of his duties to the Company also imposes duties on,
or otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be considered fines.

                  (d) The termination of any civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such Director or officer has not met the standard of conduct set forth in this
Section 7. However, no Director or officer shall be entitled to indemnification
under this Section 7 if a judgment or other final adjudication adverse to the
Director or officer establishes (i) that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or (ii) that he personally gained in fact a
financial profit or other advantage to which he was not legally entitled.

         Sec. 8. Payment of Indemnification; Repayment.

                  (a) A person who has been successful, on the merits or
otherwise, in the defense of a civil or criminal action or proceeding of the
character described in Section 7 of this Article shall be entitled to
indemnification as authorized in such Section.

                  (b) Except as provided in Section 8(a), any indemnification
under Section 7 of this Article, unless ordered by a court, shall be made by the
Company only if authorized in the specific case:

                           (1) by the Board of Directors acting by a quorum
consisting of Directors who are not parties to the action or proceeding giving
rise to the indemnity claim upon a finding that the Director or officer has met
the standard of conduct set forth in Section 7 of this Article; or


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                           (2) if a quorum under the foregoing clause (1) is not
obtainable or, even if obtainable, a quorum of disinterested Directors so
directs:

                                    (i) by the Board of Directors upon the
opinion in writing of independent legal counsel (i.e., a reputable lawyer or law
firm not under regular retainer from the Company or any subsidiary corporation)
that indemnification is proper in the circumstances because the standard of
conduct set forth in Section 7 of this Article has been met by such Director or
officer, or

                                    (ii) by the holders of the Common Shares of
the Company upon a finding that the Director or officer has met such standard of
conduct.

                  (c) Expenses incurred by a Director or officer in defending a
civil or criminal action or proceeding shall be paid by the Company in advance
of the final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such Director or officer to repay such amount in
case he is ultimately found, in accordance with this Article, not to be entitled
to indemnification or, where indemnity is granted, to the extent the expenses so
paid exceed the indemnification to which he is entitled.

                  (d) Any indemnification of a Director or officer of the
Company under Section 7 of this Article, or advance of expenses under Section
8(c) of this Article, shall be made promptly, and in any event within 60 days,
upon the written request of the Director or officer.

         Sec. 9. Enforcement; Defenses. The right to indemnification or advances
as granted by this Article shall be enforceable by the Director or officer in
any court of competent jurisdiction if the Company denies such request, in whole
or in part, or if no disposition thereof is made within 60 days. Such person's
expenses incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company. It shall be a defense to any such action (other than
an action brought to enforce a claim for the advance of expenses under Section
8(c) of this Article where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in Section 7 of this Article, but the burden of proving such defense shall be on
the Company. Neither the failure of the Company (including its Board of
Directors, its independent legal counsel, and the holders of its Common Shares),
to have made a determination that indemnification of the claimant is proper in
the circumstances nor the fact that there has been an actual determination by
the Company (including its Board of Directors, its independent legal counsel,
and the holders of its Common Shares) that indemnification of the claimant is
not proper in the circumstances, shall be a defense to the action or create a
presumption that the claimant is not entitled to indemnification.

         Sec. 10. Contract; Savings Clause; Preservation of Other Rights.

                  (a) The foregoing indemnification provisions shall be deemed
to be a contract between the Company and each Director and officer who serves in
such capacity at any time while these provisions as well as the relevant
provisions of the New York Business Corporation Law are


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in effect and any repeal or modification thereof shall not affect any right or
obligation then existing with respect to any state of facts then or previously
existing or any action or proceeding previously or thereafter brought or
threatened based in whole or in part upon any such state of facts. Such a
contract right may not be modified retroactively without the consent of such
Director or officer.

                  (b) If this Article or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify each Director or officer of the Company against
judgments, fines, amounts paid in settlement and expenses (including attorneys'
fees) incurred in connection with any actual or threatened action or proceeding,
whether civil or criminal, including an actual or threatened action by or in the
right of the Company, or any appeal therein, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the full extent permitted by applicable law.

                  (c) The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of shareholders or Directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a Director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. The Company is hereby authorized to provide
further indemnification if it deems it advisable by resolution of shareholders
or Directors or by agreement.

         Sec. 11. Indemnification of Persons Not Directors or Officers of the
Company. The Company may, by resolution adopted by the Board of Directors of the
Company, indemnify any person not a Director or officer of the Company, who is
made, or threatened to be made, a party to an action or proceeding, whether
civil or criminal, by reason of the fact that he, his testator or intestate, is
or was an employee or other agent of the Company, against judgments, fines,
amounts paid in settlement and expenses (including attorneys' fees) incurred in
connection with such action or proceeding, or any appeal therein, provided that
no indemnification may be made to or on behalf of such person if (i) his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to such action or proceeding, or (ii) he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.

         ARTICLE IV. EXECUTIVE AND OTHER COMMITTEES

         Sec. 1. The Board of Directors shall, by an affirmative vote of a
majority of the whole Board, appoint from the Directors an Executive Committee
not more than nine and not less than three, of which one-third (but not less
than two) shall constitute a quorum. Should it be impracticable at any time, due
to absence or illness of members or other cause, to obtain a quorum of the
members so appointed for any desired meeting, the Secretary, or, if the
Secretary is not available, the member calling the meeting, may call upon any
other Director or Directors, not members of such Executive Committee but who
have been designated by the Board as alternate members of the Executive
Committee, to make up a quorum for that particular meeting, which other Director
or Directors shall for the time being be members of said Executive Committee,
and the acts and proceedings of the Committee as so constituted for such meeting
shall have the same


                                      -11-
<PAGE>   12
force and effect as the acts and proceedings of meetings where a quorum of the
regular committee is in attendance.

         The Board of Directors may from among their number also, by a similar
vote, appoint any other committees.

         The Board of Directors shall fill vacancies in the Executive Committee
by election from Directors; and at all times it shall be the duty of the Board
of Directors to keep the membership of the Executive Committee up to the
required number.

         Any member of the Executive Committee who shall cease to be a Director
shall ipso facto cease to be a member of the Committee.

         All action by the Executive Committee, or by other committees appointed
by the Board of Directors, shall be reported to said Board at its meeting next
succeeding such action, and, except to the extent stated in the second sentence
of the first paragraph of Section 2 of this Article, shall be subject to
revision, alteration, or approval by the Board of Directors.

         The Executive and other committees shall each fix its own rules of
procedure and arrange its own place of meeting; but in every case (except in the
case of the Executive Committee) a majority of such committee shall be necessary
to constitute a quorum, and in every case (except in the case of the Executive
Committee) the affirmative vote of a majority of the members of each of such
committees shall be necessary for its adoption of any resolution. Any one or
more members of the Executive or any other committee may participate in a
meeting of such committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at the meeting.

         Meetings of the Executive Committee shall be held whenever called by
the Chairman of the Board, any Vice Chairman, the President, any Executive Vice
President or Senior Vice President or any member of that Committee, and shall be
held at such time and place as the notice of the meeting shall specify. Notice
of any such meeting shall be given to each member of the Committee (a)
personally (either orally or in writing) not less than 12 hours in advance of
such meeting, (b) by telex or similar method of communication dispatched to his
usual place of business not less than 24 hours in advance of such meeting, or
(c) by mail or telegram dispatched to his address on file at the Company for
such purpose not less than two days in advance of such meeting. Such notice
shall be given by the Secretary or, if the Secretary is not available, by the
individual calling the meeting and shall also specify the object of the meeting.

         The Executive Committee shall keep regular minutes and cause them to be
recorded in a book to be kept in the principal office of the Company for that
purpose.

         Sec. 2. Powers of Committees. The Executive Committee shall, whenever
the Board of Directors is not in session, direct the management of the affairs
of the Company in all cases in


                                      -12-
<PAGE>   13
which specific directions to the contrary shall not have been given, or specific
action of the Board of Directors is required by law. Notwithstanding anything to
the contrary stated in the fifth paragraph of Section 1 of this Article, the
rights of third persons acquired in reliance on an Executive Committee
resolution prior to receiving notice of action by the Board of Directors shall
not be prejudiced by action by the Board of Directors.

         Other committees appointed by the Board of Directors shall have such
powers as the Board may delegate by resolution.

         Sec. 3. Compensation. The members of the Executive Committee and the
members of any other committee appointed by the Board of Directors shall receive
such compensation for their services as from time to time shall be fixed by the
Board of Directors.


         ARTICLE V. OFFICERS AND THEIR DUTIES

         Sec. 1. Officers. The officers of the Company shall be: Chairman of the
Board of Directors, President, Treasurer, Secretary, and Controller, and such
Vice Chairmen, such Vice Presidents (one or more of whom may be designated
Executive Vice President or Senior Vice President), and such Assistant Vice
Presidents, Assistant Treasurers, Assistant Secretaries, and Assistant
Controllers as the Board of Directors in its discretion may elect or appoint. No
officer other than the Chairman of the Board need be a member of the Board of
Directors. Any number of offices may be held by the same person, except that the
same person shall not be (i) Treasurer and Controller or (ii) Chairman of the
Board or President and Secretary.

         Officers shall be elected annually at the first meeting of the Board of
Directors following the annual meeting of shareholders, subject to the power of
the Board of Directors to fill vacancies at any time. All officers shall serve
at the pleasure of the Board of Directors and may be removed as provided in
Article III, Section 5 of these By-Laws.

         Sec. 2. Chairman of the Board. The Chairman of the Board of Directors
shall be the chief executive officer of the Company and shall be responsible to
the Board of Directors for the administration and operations of the Company. He
shall preside at all meetings of the Board of Directors and at all meetings of
shareholders. By virtue of his office he shall be a member of the Executive
Committee of the Board of Directors and shall preside at meetings of the
Executive Committee. He shall have such other powers and perform such other
duties as from time to time may be assigned to him by, and shall be responsible
solely to, the Board of Directors. He may sign, with the Treasurer, all
promissory notes of the Company and any guarantees of the Company in respect of
borrowed money, and, with the Secretary when the corporate seal is to be
affixed, all share certificates, bonds, mortgages and other contracts of the
Company.

         Sec. 2-A. Vice Chairmen. Each Vice Chairman shall have such powers and
perform such duties as from time to time may be assigned to him by the Board of
Directors or the Chairman of the Board. Any Vice Chairman may sign, with the
Treasurer, all promissory notes of the Company


                                      -13-
<PAGE>   14
and any guarantees of the Company in respect of borrowed money, and, with the
Secretary when the corporate seal is to be affixed, all share certificates,
bonds, mortgages, and other contracts of the Company.

         Sec. 3. President. The President shall have such powers and perform
such duties as from time to time may be assigned to him by the Board of
Directors or by the Chairman of the Board. He may sign, with the Treasurer, all
promissory notes of the Company and any guarantees of the Company in respect of
borrowed money, and, with the Secretary when the corporate seal is to be
affixed, all share certificates, bonds, mortgages, and other contracts of the
Company.

         Sec. 3-A. Vice Presidents. Each Vice President shall have such powers
and perform such duties as from time to time may be assigned to him by the Board
of Directors, the Chairman of the Board, any Vice Chairman, or the President.
Any Vice President may sign, with the Treasurer, all promissory notes of the
Company and any guarantees of the Company in respect of borrowed money, and,
with the Secretary when the corporate seal is to be affixed, all share
certificates, bonds, mortgages, and other contracts of the Company.

         Sec. 4. Assistant Vice Presidents. The Board of Directors may elect or
appoint one or more Assistant Vice Presidents, each of whom shall have such
powers and perform such duties as from time to time may be assigned to him by
the Board of Directors, the Chairman of the Board, any Vice Chairman, the
President, or any Vice President.

         Sec. 5. Secretary. The Secretary shall keep a record of all proceedings
of the Board of Directors, and of all meetings of the shareholders, and of the
Executive Committee and of all other committees, in books provided for that
purpose, and he shall attend to giving and serving all notices of the Company.
The Secretary shall keep in safe custody the seal of the Company and he shall
affix such seal on all share certificates, bonds, mortgages, and other contracts
of the Company executed under such seal. He shall have charge of the records of
shareholders of the Company, including transfer books, and share ledgers, and
such other books and papers as the Board of Directors shall direct, and in
general shall perform all the duties incident to the office of Secretary.

         Sec. 6. Assistant Secretaries. The Board of Directors may appoint one
or more Assistant Secretaries, who shall have power to sign, with the Chairman
of the Board, any Vice Chairman, the President, or any Vice President, share
certificates of the Company. In the absence of the Secretary, the Assistant
Secretaries shall be vested with the powers of, and any one of them may perform
the duties of, the Secretary. Each Assistant Secretary shall perform such other
duties as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board, any Vice Chairman, the President, or any Vice
President.

         Sec. 7. Treasurer. The Treasurer shall have in his charge all the funds
and securities of the Company. When necessary or proper, he, or such other
officer or officers of the Company as may be so duly authorized by the Board of
Directors, shall endorse on behalf of the Company for collection checks, notes
or other obligations and shall deposit the same to the credit of the Company in
such bank or banks or depositories as the Board of Directors may designate or as
may be


                                      -14-
<PAGE>   15
designated by persons authorized by the Board of Directors to make such
designations. He, or such other officers or employees of the Company or any of
its subsidiaries, acting individually unless otherwise provided, as may from
time to time be designated by the Board of Directors or be designated in writing
by any officer or officers of the Company duly authorized by the Board of
Directors to make such designations, shall sign all receipts and vouchers for
payments made to the Company, and shall sign all checks, drafts or bills of
exchange, provided that the Board of Directors from time to time may designate
other persons as authorized signatories of the Company or authorize other
persons to make such designations on behalf of the Company. The Treasurer
jointly with the Chairman of the Board, any Vice Chairman, the President, or any
Vice President shall sign all promissory notes of the Company and any guarantees
of the Company in respect of borrowed money, and shall pay out and dispose of
the same under the direction of the Board; he shall keep a complete set of
books, showing the financial transactions of the Company, and shall exhibit his
books to any Director upon application at the office of the Company, during
business hours; he shall make such reports as the Board of Directors or the
Executive Committee may from time to time request; and he shall perform all acts
incidental to the office of Treasurer, subject, nevertheless, to the control of
the Board of Directors.

         He shall give such bonds for the faithful discharge of his duties as
Treasurer as the Board of Directors may require.

         Sec. 8. Assistant Treasurers. The Board of Directors may appoint one or
more Assistant Treasurers. In the absence of the Treasurer, the Assistant
Treasurers shall be vested with the powers of, and any one of them may perform
the duties of, the Treasurer. Each Assistant Treasurer shall perform such other
duties as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board, any Vice Chairman, the President, or any Vice
President.

         Sec. 9. Controller. The Controller shall have supervision and direction
of all accounts of the Company, and shall see that the system of accounts is
duly enforced and maintained.

         There shall be kept in his office a general set of books containing a
complete set of all the business transactions of the Company, and he shall, as
often as necessary, make an examination of the accounts of any officer, agent or
employee entrusted with the handling or care of money of the Company.

         It shall be the duty of the Controller to know that all money belonging
to the Company, collected from any source by any officer, agent or employee, is
properly accounted for and promptly paid into the treasury, and that all
accounts of the Company are properly and promptly settled.

         It shall be the duty of the Controller to know that all bonds required
of officers, agents and employees for the faithful performance of their duties
are given. Such bonds shall be transmitted to the Controller for safe custody
and shall be released only upon a complete and satisfactory settlement of the
accounts covered by them, unless otherwise ordered by the Board.


                                      -15-
<PAGE>   16
         Sec. 10. Additional Officers; Division Officers. In addition to the
above officers, the Board of Directors may also appoint one or more general
counsel and one or more auditors and such other officers as they may deem wise
and advisable for the best interests of the Company, who shall perform such
duties as from time to time may be assigned to them by the Board of Directors.
If the Board of Directors establishes divisions of the Corporation, the Board
may also establish such division offices and appoint such division officers as
the Board deems appropriate. Such division officers shall have such powers and
perform such duties as from time to time may be assigned to them by the Board of
Directors. The Board of Directors shall fix salaries for all officers of the
Company, or may delegate, to any committee of the Board or to the Chairman of
the Board, the power to fix salaries of officers of the Company in cases where
the Board deems it appropriate to so delegate.

         Sec. 11. Voting upon Stocks. Unless otherwise ordered by the Board of
Directors, the Chairman of the Board, any Vice Chairman, the President or any
Vice President shall have full power and authority on behalf of the Company to
attend, act and vote, or in the name of the Company to execute proxies
appointing any person or persons to attend, act and vote on behalf of the
Company, at any meeting of stockholders of any corporation in which the Company
may hold stock, and at any such meeting such officer or person or persons
appointed in any such proxy, as the case may be, shall possess and may exercise
on behalf of the Company any and all rights, powers and privileges incident to
the ownership of such stock. The Board of Directors may by resolution from time
to time confer like powers upon any other person or persons.

         Sec. 12. Sales of Stock. Neither the corporation of Phelps Dodge
Corporation nor any subsidiary company by it controlled, shall speculate in the
stock either of Phelps Dodge Corporation or of any subsidiary company, or shall
buy or sell same except in the regular course of legitimate business of such
company or for the purpose of retirement and this provision shall be unalterable
save by the vote of the holders of a majority of the stock of the company voting
thereon at a meeting called, as provided by these By-Laws.

         ARTICLE VI. SHARE CERTIFICATES AND TRANSFERS

         Sec. 1. Certificates for Shares. The Board of Directors shall prepare,
in form according to law, and approve, certificates evidencing shares of the
Company.

         No certificate shall be valid unless it is signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President; and also by
the Secretary or an Assistant Secretary. The signatures of the officers upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent or registered by a registrar other than the Company itself or its
employee.

         Sec. 2. Transfer of Shares. Shares of the Company shall be transferred
only on the books of the Company by the holder thereof in person or by his or
her attorney duly authorized thereto in writing, and by cancellation and
surrender of certificates for a like number of shares.


                                      -16-
<PAGE>   17
         ARTICLE VII. AMENDMENTS

         These By-Laws, with the exception of Section 12 of Article V, may be
amended or repealed by a vote of a majority of all the Directors at any regular
or special meeting of the Board.




                                      -17-
<PAGE>   18
         ARTICLE VIII.

         The Company expressly elects not to be governed by the provisions
currently designated as Article 2, Chapter 23, Title 10 of the Arizona Revised
Statutes.




                                      -18-