FAST NEWS

Lundin Mining says DRC approves Tenke contract changes

Lundin Mining confirmed on Monday that the DRC has approved changes made to the mining contracts for the huge Tenke Fungurume copper-cobalt mine

Posted: Tuesday , 19 Apr 2011

TORONTO (Reuters) - 

Lundin Mining Corp confirmed on Monday that the Democratic Republic of Congo has approved changes in the mining contracts for Tenke Fungurume, a massive copper-cobalt mine in the Katanga province of the DRC.

The final approval could have major ramifications for Lundin, which is currently attempting to attract a white knight and fend off a $4.8 billion hostile bid from rival base metal miner Equinox Minerals .

The lingering uncertainty around the final approval of the Tenke contracts was likely to be a possible impediment for Lundin in its attempts to attract a competing offer, analysts have said.

Lundin said the government of the DRC has now issued a Presidential Decree approving the amendments to the Tenke Fungurume mining contracts, confirming that the contracts are in good standing.

The Tenke Fungurume mine is controlled by Freeport McMoRan , which owns a 56 percent stake in the asset. Lundin owns a 24 percent stake and the DRC's state mining company Gecamines owns the remaining 20 percent.

The 24 percent stake in Tenke by itself accounts for a large chunk of Lundin's net asset value, with some analysts pegging the value of the minority stake at over $1.7 billion.

Tenke is currently designed to produce about 250 million pounds of copper and 18 million pounds of cobalt per year.

It is being expanded to produce about 290 million pounds of copper per annum, with further expansions expected over the next few years. (Reporting by Euan Rocha; Editing by Vinu Pilakkott)

© Thomson Reuters 2011 All rights reserved