Congo Miner Said to Get $100 Million to Clear China Moly Buy – by Tom Wilson (Bloomberg News – February 22, 2017)

https://www.bloomberg.com/

The Democratic Republic of Congo’s state mining company received $100 million as part of a settlement to drop its objections to the sale of the country’s biggest copper mine to Chinese buyers, according to people with knowledge of the agreement.

The cash payment was made last month after state-owned Gecamines agreed to abandon legal cases to block the sale of Freeport McMoRan Inc. and Lundin Mining Corp.’s interests in the Tenke Fungurume mine, the people said, asking not be identified as terms of the arrangement aren’t public. China Molybdenum Co. and Chinese private-equity firm BHR Partners bought the stakes for a combined $3.8 billion.

The settlement marks the end of a nine-month dispute between Freeport, Lundin, the Chinese buyers and Gecamines over whether the sales, which were a transfer of ownership in an offshore holding company, should have been subject to preemption or approval by the state-owned miner. Gecamines owns 20 percent of local operating unit Tenke Fungurume Mining.

Gecamines has received other one-off payments in the past to approve similar deals and from the sale of its own assets, but has rarely published details of the transactions. Freeport said last month it paid Gecamines $33 million as its share in the settlement. The contributions of the other parties and the total sum paid have not been made public.

‘Closed Book’

“Gecamines is a closed book, we have very little idea where its money goes,” Pete Jones, a campaigner at London-based advocacy group Global Witness, said in an e-mailed response to questions. “Payments to Gecamines must be done with complete transparency, especially at this time where Congo says it is desperately short of cash to organize overdue elections.”

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