Lundin Mining
Freeport McMoRan is the developer of the Tenke Fungurame minerals district in West Africa's Democratic Republic of Congo
Freeport-McMoRan has entered into a definitive agreement to sell its effective 56% interest in the Democratic Republic of Congo-based Tenke Fungurume copper mine.

Freeport-McMoRan announced on Monday that it would sell its interests in TF Holdings to China Molybdenum for $2.65 billion in cash and contingent consideration of up to $120 million.

Freeport-McMoRan has a 70% interest in TF Holdings, which in turn indirectly owns an 80% interest in Tenke Fungurume Mining.

The consideration consists of $60 million if the average copper price exceeds $3.50 per pound and $60 million if the average cobalt price exceeds $20 per pound, both during the 24-month period between 2018 and 2019.

In addition, Freeport-McMoRan has agreed to negotiate exclusively with China Molybdenum to enter into definitive agreements to sell its interests in Freeport Cobalt, including the Kokkola cobalt refinery in Finland, for $100 million and the Kisanfu exploration project in the DRC for $50 million.

Freeport Cobalt includes the large-scale cobalt refinery located in Kokkola, Finland, and related world-wide sales and marketing business, in which Freeport-McMoRan holds an effective 56% interest. Kisanfu is a copper and cobalt exploration project, located near Tenke, which Freeport-McMoRan fully owns.

“This transaction is another significant step to strengthen our balance sheet and enhance value for shareholders. Since the start of 2016, we have announced over $4 billion in asset sale transactions.

“We are committed to our immediate objective of reducing debt while retaining a large portfolio of high quality assets and resources and a leading position in the global copper industry,” says Freeport-McMoRan president and CEO Richard C. Adkerson.

Adkerson continued, “We congratulate our team on developing Tenke Fungurume to its premier status as a highly successful mining operation. We are confident that China Molybdenym will continue to build on Tenke Fungurume’s past success and future development potential, and will continue a commitment to provide a safe, productive work environment and a sustainable future with substantial benefits to the Congolese government and local community.”

Freeport-McMoRan does not expect the transaction to impact Tenke’s operations, employment, taxes and benefits provided to the DRC.

The TF Holdings transaction is expected to close in the fourth quarter of 2016, subject to regulatory approvals, China Molybdenym shareholder approval, which has undertaken to vote in favour of the transaction, and other customary closing conditions. The transaction is also subject to Lundin Mining Corporation’s right of first offer, which will be open for 90 days from receipt of the right of first offer notice.

Under the terms of the exclusivity agreement, Freeport-McMoRan has agreed to negotiate exclusively with China Molybdenym until 31 December 2016, with respect to the sale of the Freeport Cobalt and Kisanfu interests in separate transactions.

The sale of the Freeport Cobalt interests would be subject to a right of first offer from Lundin Mining Corporation.