VANCOUVER/TORONTO (Reuters) – The weak human rights record of one of Africa’s poorest countries is coming between Lundin Mining Corp and its pursuit of a prized European copper and gold asset. Cash-rich Lundin’s latest run at fellow Canadian miner Nevsun Resources Ltd is designed to bag the Timok project in Serbia, but it had to bring on a partner to pick up Nevsun’s Bisha mine in Eritrea.
That is because Lundin Mining’s board of directors, chaired by billionaire resources tycoon Lukas Lundin, refuses to invest in Eritrea, according to four people familiar with, but not able to speak publicly on, the matter.
They will not own the Eritrean mine “for even one second,” one of the people said. That stance is not necessarily a deal breaker, said an investor who declined to be named.
Lundin Mining’s biggest shareholder is a private investment company owned by a Lundin family trust, with a near 13-percent stake, Thomson Reuters data shows. Nevsun, Lundin and partner Euro Sun Mining Inc, a tiny mine developer whose stock several Nevsun shareholders are not keen to own, declined to comment.
Last week, Lundin Mining disclosed that it partnered with Euro Sun on a C$1.5 billion ($1.17 billion) cash and stock proposal to buy Nevsun. Under that plan, Lundin would own the European assets of Nevsun, including Timok, and Euro Sun would own the rest of Nevsun, including the Bisha mine in Eritrea.