Freeport-McMoRan Inc has announced that it has completed the indirect sale of its 70% interest in TF Holdings Ltd (TFHL) to China Molybdenum Co Ltd for $2.65 billion in cash. TFHL is a Bermuda holding company that indirectly owns an 80% interest in Tenke Fungurume Mining SA located in the Democratic Republic of Congo. FCX had a 70% interest in TFHL and an effective 56% interest in Tenke. FCX says it plans to use net proceeds from the transaction of approximately $2.65 billion to repay indebtedness, half of which will be used to repay borrowings under FCX’s unsecured bank term loan.
Under the terms of the agreement, FCX could also receive contingent consideration of up to $120 million in cash, consisting of $60 million if the average copper price exceeds $3.50 per pound and $60 million if the average cobalt price exceeds $20 per pound, both during calendar years 2018 and 2019.
FCX is a premier US-based natural resources company with an industry-leading global portfolio of mineral assets. FCX is the world’s largest publicly traded copper producer. FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits, and significant mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.
The China Molybdenum Board stated: “Tenke is a world-class, long-lived, unique copper-cobalt mine located in the DRC, which in 2015 produced approximately 204,000 t of copper and 16,000 t of cobalt (100% basis) at a net cash cost of approximately US$1.21 per pound of copper. The acquisition allows the company to grow its portfolio of high-quality base, specialty and precious metals assets and establishes an international platform for growth. The Board would like to thank the shareholders for their deliberate consideration and engagement, and all the parties involved for their sterling efforts in completing the acquisition just over six months from entering into the Stock Purchase Agreement. The Board would also like to thank the Government of the DRC for welcoming and supporting the company to invest in their country. The Board is looking forward to the
company growing its relationship with all the stakeholders and continuing to maintain the highest standards of environmental and social responsibility.”
In a separate transaction, Lundin Mining Corporation has announced that it has entered into a definitive agreement to sell its indirect 30% interest in TF Holdings Ltd (effective interest in Tenke mine 24%) to an affiliate of BHR Partners, a Chinese private equity firm, for $1.136 billion in cash and contingent consideration of up to $51.4 million, consisting of $25.7 million if the average copper price exceeds $3.50 per pound and $25.7 million if the average cobalt price exceeds $20 per pound, both during a 24-month period beginning on January 1, 2018.
