Freeport sells billion dollar mine to Chinese miner

Freeport McMoRan has sold its largest holdings in Africa to China Molybdenum for more than US$2 billion.

Freeport has entered into a definitive agreement with China Molybdenum Co,. Ltd (CMOC) to sell its 70 per cent stake in TF Holdings – which indirectly owns 80 per cent of the Tenke Fungurume mine(which operates one of the world’s largest copper and cobalt resources) – and its 56 per cent stake in the Tenke Fungurume mine.

CMOC will pay US$2.65 billion in cash for the purchase, with a contingent consideration of up to US$120 million, consisting of US$60 million if the average copper price exceeds US$3.50 per pound and US$60 million if the cobalt price exceeds US$20 per pound between 2018 and 2019.

“This transaction is another significant step to strengthen our balance sheet and enhance value for shareholders,” Freeport McMoRan CEO Richard Adkerson said.

“Since the start of 2016, we have announced over US$4 billion in asset sale transactions. We are committed to our immediate objective of reducing debt while retaining a large portfolio of high quality assets and resources and a leading position in the global copper industry.”

On top of this, Freeport is also working to sell its interests in Freeport Cobalt, which includes the Kokkola Cobalt Refinery in Finland – for approximately US$100 million – and the Kisanfu exploration project in the Democratic Republic of Congo (DRC) for around US$50 million.

Freeport will use the proceeds to pay down debt.

CMOC has been on a buying spree in the last few months, acquiring distressed assets, having purchased Anglo American’s Brazilian phosphates and niobium business for US$1.5 billion in cash late last month.


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