Lundin Mining to Sell Stake in African Mine for $1.14 Billion
November 15 2016 - 7:39AM
Dow Jones News
By Judy McKinnon
Lundin Mining Corp. said Tuesday it had agreed to sell its
minority stake in African copper mine Tenke Fungurume Mining S.A.
to a Chinese private-equity firm for $1.14 billion in cash.
The sale is a result of Toronto-based Lundin's review of
strategic options for its interest in TF Holdings Ltd., the Bermuda
holding company that indirectly owns an 80% interest in the Tenke
mine in the Democratic Republic of the Congo.
Lundin holds a 30% interest in TF Holdings, and an effective 24%
stake in the mining operation. Freeport-McMoRan Inc. currently owns
the remaining 70% stake in TF Holdings, but is in the process of
selling that to China Molybdenum Co.
"The sale will enable Lundin Mining to advance its strategy to
incrementally grow the company with projects and operations we
control, while maintaining a strong balance sheet," Lundin Chief
Executive Paul Conibear said in a release.
Lundin's sale, to an affiliate of China's BHR Partners, could
also include up to another $51.4 million, depending on future
average copper and cobalt prices.
As a result of the agreement, Lundin said it has waived its
right to acquire Freeport-McMoRan's 70% stake in the holding
company, and effective 56% stake in Tenke. In May, U.S. mining
company Freeport agreed to sell its stake in the holding company to
China Molybdenum for $2.65 billion. Lundin had the right to acquire
Freeport's stake at the same price and conditions offered by the
Chinese mining-and-processing firm.
Lundin's deal includes a termination fee of $100 million,
payable by the private-equity firm under certain circumstances. It
said it expects the sale to close in the first half of next
year.
The Tenke mine, whose remaining 20% is owned by state miner La
Générale des Carriéres et des Mines, is about 110 miles northwest
of Lubumbashi in the Katanga province.
Write to Judy McKinnon at judy.mckinnon@wsj.com
(END) Dow Jones Newswires
November 15, 2016 08:24 ET (13:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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