After weeks of deliberation, Canada’s Lundin Mining (TSX:LUN) said Tuesday it will sell its minority stake in the African copper mine Tenke Fungurume to a Chinese private-equity firm for $1.14 billion in cash.
The deal is a result of the Toronto-based miner’s review of strategic options for its interest in TF Holdings Ltd., the Bermuda holding company that indirectly owns an 80% interest in the massive mine, located in the Democratic Republic of the Congo.
Lundin has an indirect 30% interest in TF Holdings, which translate into the miner owning 24% of Tenke. Congo’s state miner Gecamines owns 20%. The remaining 56% belongs to Freeport-McMoRan (NYSE:FCX), which back in May signed a deal to sell that stake to China Molybdenum (CMOC) for up to $2.65 billion, a crucial part in the Phoenix-based company’s debt reduction plan.
Originally, Lundin had until mid-September to decide whether to allow Freeport to go ahead with the sale of Tenke to China Moly, but the Canadian miner was granted four extensions since then.
The company had no option but to either allow the deal to proceed, supplant the offer, or sell its stake, as it has chosen to do.
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