HomeBase MetalsDRC seeks to double stake in Freeport- McMoRan

DRC seeks to double stake in Freeport- McMoRan

Downtown Kinshasa,
capital of the
Kinshasa, DRC — MININGREVIEW.COM — 28 August 2008 – The Government of the Democratic Republic of Congo (DRC) wants to more than double its stake in its joint venture with Freeport-McMoRan Copper and Gold Incorporated, which is developing one of the world’s largest unexploited copper and cobalt deposits in the central African country.
This was confirmed to Bloomberg News in an interview here yesterday by Mines Ministry deputy chief of staff Gaby Matshafu, who explained that the DRC government wanted to increase its share of the US$1.9 billion (R14.25 billion) Tenke Fungurume project from the current 17.5% to 45% . Lundin Mining Corporation owns a quarter of the venture.

“The original Tenke Fungurume contract was concluded after an international call for tender,” Matshafu said. “They have to live up to their commitments.” Bloomberg reports that Freeport and Lundin will also be asked to increase their signing bonus from US$100 (R750 million) to US $250 million (R1.9 billion).

The agency adds that in 1996, when Lundin signed the original contract on Tenke Fungurume, the company agreed to pay a US$250 million (R1.9 billion) signing bonus and to the DRC government owning a 45% stake. Those terms were amended in 2005, reducing the signing bonus to US$100 million (R750 million) and the DRC government share to 17.5%. Freeport acquired 57.75% of the project when it bought Phelps Dodge Corporation last year, and Lundin currently owns 24.75 % of the project.

Freeport-McMoRan – as well as Africa’s biggest gold miner AngloGold Ashanti – are among the 61 companies whose contracts are currently being reviewed by the DRC government in effort to boost its revenue from mining.