China Moly Poised to Acquire All of Congolese Copper Project

CONGO (Capital Markets in Africa) – China Molybdenum Co. reached an agreement to increase its control of one of the Democratic Republic of Congo’s biggest copper and cobalt mines, giving the Chinese miner a powerful position in the market for the two metals.

China Moly agreed in May to acquire a 56 percent stake in Tenke Fungurume from Freeport-McMoRan Inc., before Toronto-based Lundin Mining Corp. in November said it was selling its 24 percent stake to Chinese private-equity firm BHR Partners for at least $1.14 billion.

The Chinese miner said yesterday it signed an agreement to help BHR complete the purchase, and that it will then have the right to acquire BHR’s minority stake in the project at a pre-agreed price. If the agreement is executed, CMOC will have an 80 percent stake in the project alongside Congolese state mining company, Gecamines.

“Should BHR decide to exit Tenke in future, CMOC acquires the right to purchase BHR’s indirect stake in TFM to ensure stability and continuity of ownership and operations at Tenke,” China Moly said in an e-mailed statement.

Gecamines, which had opposed the stake sales, dropped its objections earlier this month after the parties reached an agreement to provide the company with financial compensation and the right to more consultation and control should the future owners of the asset decide to sell it.

Gecamines didn’t immediately respond to a request for comment.

Before announcing the November deal with BHR, China Moly was also said to have held talks with Lundin about offloading its 24 percent stake. Gecamines chairman Albert Yuma said at the time that any “simultaneous withdrawal” by Lundin and Freeport in favor of China Moly or another buyer would “reinforce the suspicion of fraud to Gecamines’ and the state’s rights.”

Beijing-based BHR specializes in deals outside the country. It was set up in 2013 by Bohai Industrial Investment Fund Management Co., Harvest Fund Management Co. and U.S. funds RSB LLC and Thornton LLC. BHR also receives support from state-owned Bank of China and China Development Bank Capital, according to its website.