tfkThe DRC state-owned mining company (GECAMINES) said on 07 September 2016 it has submitted an offer to buy Freeport McMoran Inc.’s majority stake in the Tenke-Fungurume Mining (TFM) copper project. Freeport agreed in May to sell its 56% stake in TFM, one of the world’s largest copper mines, to China Molybdenum Co Ltd (CMOC) for $2.65 billion.

Toronto-based Lundin Mining, which holds a 24 % stake, has until 15 September 2016 to exercise its right of first offer before any deal goes through.

GECAMINES, which holds the remaining 20%, and Congolese authorities have objected to the sale, which they were not informed of beforehand. The mining legislation of the country prescribes that the government must be informed of any sale of shares

DRC Minister of Mining said in May that he suspected Freeport was hiding its true value.

Freeport did not immediately respond to a request for comment on 07 September 2016.

The company has previously said the transaction was conducted transparently and in accordance with all applicable laws.

« For us, it’s a matter of setting up a new joint venture with new partners to facilitate the exit of Freeport and reassure the state and the workers, » GECAMINES’ interim director-general Jacques Kamenga told Reuters.

He added that GECAMINES had received « serious proposals from potential industrial and financial partners ». He did not specify who but said CMOC’s participation was not ruled out.

Freeport has not acknowledged that GECAMINES has a right of first offer for TFM.

DRC, Africa’s top copper exporter, mined 995,805 tonnes of the metal in 2015, but output dropped nearly 14 percent in the first half of this year as producers cut back due to low prices.

A lot of uncertainties surround GECAMINES’ offer, more specifically in terms of the company’s ability to raise the necessary capital for the contemplated acquisition. The state-owned company is said to rely on industrial and financial partners whose identities have not be disclosed.

Its offer to acquire TFM’s shares is made against a backdrop of difficult economic context for Congolese mining companies adversely affected by the slump in copper prices. Besides, GECAMINES is involved in an ambitions modernisation programme which would cost up to $717 million of investments in its facilities.

With Reuters