Lundin Mining to sell its stake in Tunke Fungurume Mine for $1.14 billion

November 16, 2016

Lunding Mining Corp. announced that it will sell its minority stake in 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-percent interest in the Tenke copper mine in the Democratic Republic of the Congo.

Lundin holds a 30-percent interest in TF Holdings, and an effective 24-percent stake in the mining operation. Freeport-McMoRan Inc. currently owns the remaining 70 percent stake in TF Holdings, but is in the process of selling that to China Molybdenum Co. The Wall Street Journal reported.

“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 percent stake in the holding company, and effective 56 percent 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 percent is owned by state miner La Générale des Carriéres et des Mines, is about 110 miles northwest of Lubumbashi in the Katanga province.



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