Freeport-McMoRan to sell its stake in Tenke Funugurme for $2.7 billion
Freeport-McMoRan will sell its stake in the Tenke Fungurume Mine in the Democratic Republic of Congo for a reported $2.65 billion to a Chinese mining-and-processing company.
The Wall Street Journal reported that deal involves Freeport-McMoRan selling its interests in TH Holdings Limited, a Bermuda holding company that indirectly owns an 80 percent interest in the Tenke Fungurume Mine, to China Molybdenum Co. Freeport has a 70 percent stake in TF Holdings, and an effective 56 percent interest in Tenke Fungurume.
Freeport, the U.S.’s biggest mining company by market value, made a big bet on oil and gas in 2013 when it bought McMoRan Exploration Co. and Plains Exploration & Production Co. for a total of $9 billion. The purchase loaded the company with debt just before a steep decline in energy prices.
In April, Freeport announced it would cut 25 percent of the oil-and-gas workforce, or 325 jobs, as part of an overall restructuring in that business. The company said it is evaluating options for the oil-and-gas business, including possible asset sales or joint-venture arrangements. Since the beginning of this year, the company has announced more than $4 billion in asset-sale transactions.
The TF Holdings transaction, subject to regulatory approvals and other closing conditions, is expected to close in the fourth quarter of this year.
Freeport said it doesn’t expect the transaction to affect Tenke’s operations, which employs about 3,400 full-time workers and 4,200 contractors.
In addition to the TF Holdings transaction, Freeport said it would negotiate exclusively with China Molybdenum to enter into agreements to sell its interests in joint venture Freeport Cobalt, which includes the Kokkola Cobalt Refinery in Finland, for $100 million. The company also seeks to sell the Kisanfu Exploration project in the Democratic Republic of Congo for $50 million.
Last month, Freeport said revenue fell 15 percent to $3.5 billion in the latest quarter as it posted a $4.2 billion quarterly loss mostly on the declining book value of its oil and gas assets. The company said it would continue to ramp up copper production despite stagnating prices.