Gecamines Says Lundin Withdrawal From Congo Would Be Problematic – by Thomas Wilson (Bloomberg News – September 23, 2016)

Gecamines, the Democratic Republic of Congo’s state-owned miner, warned that any decision by Lundin Mining Corp. to withdraw from the Tenke Fungurume copper mine could scupper Freeport McMoRan Inc.’s proposed sale of its stake in the project.

By exiting at the same time as Freeport and transferring full ownership of the project to new parties without securing Gecamines’ approval, Lundin and Freeport would further violate the state-owned miner’s rights, Chairman Albert Yuma said by e-mail Friday. Gecamines must be permitted to match any offers for Lundin’s stake, or it could block the deal, he said.

Freeport announced in May it sold its indirect 56 percent stake in Tenke Fungurume to China Molybdenum Co. for $2.65 billion. Gecamines, which owns 20 percent of the mine, said it hadn’t been informed about the transaction and would investigate the deal in order to “assert its rights.”

As Freeport’s partner in the project, Lundin has an option that expires Sept. 29 to match China Molybdenum’s offer. Lundin plans to exit the venture and has held talks with China Molybdenum and other companies about offloading its 24 percent stake, people familiar with the matter said Friday.

“Any simultaneous withdrawal by Lundin and Freeport in favor of CMOC or other buyers will be problematic and would in fact actually reinforce the suspicion of fraud to Gecamines’ and the state’s rights,” Yuma said. The transaction “will remain in a deadlock, unless Lundin and Freeport respect Gecamines’ and the state’s rights,” he said.

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