Congo state miner Gecamines said on Wednesday it is “strongly opposed” to a decision by Lundin Mining Corp to sell a 24 percent stake in the Tenke copper mine to a Chinese private equity firm, arguing it has a preemptive right to buy the stake.
Canada’s Lundin announced on Tuesday it had agreed to sell its stake in the project in the Democratic Republic of Congo to BHR Partners for about US$1.14 billion in cash.
It comes after Tenke’s majority owner, U.S. copper miner Freeport-McMoRan Inc, agreed in May to sell its 56 percent stake to China Molybdenum Co Ltd for US$2.65 billion, a deal that Gecamines also objected to because it wanted to buy the stake itself.
“The concerted withdrawal of Lundin and Freeport, without taking into account Gecamines’ rights, would obviously result in forcing Gecamines into a new partnership with totally new and non-chosen companies,” Gecamines said in a statement.
Major miners are selling assets after a global commodities rout last year left them with high levels of debt. China, whose stimulus package spurred this year’s commodities rally, is the biggest potential buyer.
The closing of the Freeport sale has been held up for months while Lundin, which had a right of first offer on Freeport’s stake, weighed its options. With the sale of its stake, Lundin has now waived that right.
Lundin on Tuesday said the sale is expected to be completed in the first half of 2017. Its CEO Paul Conibear said he hoped it would not be challenged by Gecamines.
(Reporting by Edward McAllister; editing by Matthew Mpoke Bigg and Alexandra Hudson)
Photo courtesy of Lundin Mining Corp