Congo Government Will Investigate, Tax Freeport Copper-Mine Sale

Kinshasa, DR. Congo, Capital Markets in Africa: The Democratic Republic of Congo’s government plans to investigate Freeport-McMoRan Inc.’s sale of a copper mine in the central African country for $2.65 billion and tax the transaction, Mines Minister Martin Kabwelulu said.

Freeport, based in Phoenix, Arizona, announced May 9 it sold its indirect 56 percent stake in the Tenke Fugurume mine, which also produces cobalt, to China Molybdenum Company Gecamines, the state-owned Congolese miner, said May 10 it wasn’t informed about the sale.

“Freeport has made a foreign sale of a Congolese asset of great value,” Kabwelulu said. “There must be a tax to pay here. We will push the tax authority to claim it.”

Gecamines owns 20 percent of Tenke Fungurume, alongside Freeport and Toronto-based Lundin Mining Corp. China Molybdenum will acquire Freeport’s ownership via a 70 percent interest in Bermuda-based TF Holdings Ltd. Lundin, which owns the other 30 percent of TF Holdings, has 90 days to match the offer for Freeport’s stake.

Gecamines has opposed similar transactions in the past. In 2012, it almost stopped the acquisition of Anvil Mining NL by China’s Minmetals Resources Ltd. The deal proceeded after they reached an agreement that included Anvil paying $55 million to Gecamines.