DRC approves terms for Tenke Fungurume

Vancouver — The transitional government of the Democratic Republic of Congo (DRC) has approved the terms of amended agreements that will govern future development of the renowned Tenke Fungurume copper-cobalt project in Katanga province.

Once the amended agreements are ratified, the project will advance according to a staged development program led by copper giant Phelps Dodge (PD-N). Under the amended terms, the project will be held by a Congolese company owned 82.5% by Tenke Mining (TNK-T), through its subsidiary Lundin Holdings, and 17.5% by Gcamines, a state-owned Congolese mining company.

Once the amended agreement is executed, Phelps Dodge will own enough shares of Lundin Holdings to effectively hold a 57.75% stake in Tenke Fungurume, leaving Tenke Mining with a 24.75% indirect interest.

The amended terms will also reduce a series of asset transfer payments and incorporate tax provisions of the DRC’s new mining code.

Tenke Mining had secured rights to the project in 1996, however prolonged civil and political unrest derailed efforts to advance the project to production.

The company spent US$38 million on exploration, engineering, environmental, and metallurgical studies, pilot-plant work, and on new and existing infrastructure. A bankable feasibility was nearing completion before force majeure was declared in 1999.

During the past several years, with the support of the international community, the transitional government led by Joseph Kabila has secured peace in most parts of the nation. The transitional government now includes representatives from all main parties across the country.

A new constitution and free elections are the next steps in the peace process. Tenke notes that more than 2.5 million people have been registered to vote in the capital city of Kinshasa alone.

Development of Tenke Fungurume will help re-establish the DRC as one of the leading copper producers in the world, and provide important benefits that will aid the nation’s rebuilding efforts.

The project hosts measured and indicated resources estimated at 223 million tonnes grading 2.9% copper and 0.3% cobalt, plus 314.3 million tonnes of 4% copper and 0.25% cobalt in the inferred category.

An open-pit mining operation is envisaged that could produce an estimated 100,000 tonnes per year of copper cathode and 8,000 tonnes per year of cobalt cathode, with potential for expansion.