Gecamines Offers to Buy Freeport Stake in Tenke Copper Project

Gecamines, the Democratic Republic of Congo’s state mining company, has submitted an offer on Wednesday (September 7) to buy Freeport McMoRan‘s (NYSE:FCX) stake in the Tenke copper project. The copper mine is one of the largest in the world.
Gecamines already owns 20 percent of the operation, but Canadian-based Lundin Mining (TSX:LUN), which controls another 24 percent, has the first right of refusal to buy Freeport’s stake. According to Reuters, Lundin Mining has until September 15 to make its offer known.
According to Mining.com, the sale is  an effort to get Freeport’s debt under control – the company owes $20 billion due to an ill-timed acquisition of oil and gas assets. Freeport is also in talks with China Moly to sell its interests in cobalt, including the Kokkola Cobalt Refinery in Finland.
Back in May, Freeport announced in a press release that it would sell its 56 percent stake in Tenke to China Molybdenum (HKG:3993) for up to $2.65 billion. However, Lundin has the first right of refusal before any deal can be made.
Freeport’s President and CEO, Richard C. Adkerson, said in the press release that although the company is committed to reducing their debt, they will continue to have “a leading position in the global copper industry.”
Gecamines’ interim director-general told Reuters that they have also received “serious proposals” for shares in the Tenke project. He said China Moly’s participation was not ruled out as a possible buyer.
Mining.com reported that the Tenke sales in 2015 included 467 million pounds of copper (215,000 tonnes) and 35 million pounds of cobalt (16,000 tonnes) at a net unit cash cost of $1.21 per pound of copper.
According to Reuters, the Congo mined 995,805 tonnes of copper in 2015, but output has dropped nearly 14 percent in 2016 due to low prices.