China Moly ups stake in giant Tenke copper mine to 80%

Aerial view of the processing plant at China Molybdenum’s Tenke Fungurume mine in 2015. (Image courtesy of Freeport-McMoRan Copper & Gold)

China Molybdenum, which bought the giant Tenke Fungurume copper and cobalt mine from Freeport-McMoRan in 2016, is buying a holding company for $1.14 billion that will give it an 80%-stake in Democratic Republic of Congo’s operation.

The Chinese miner, which has spent almost $5 billion in the past two years on an acquisition rampage, said it had agreed to buy BHR Newwood DRC Holdings Ltd, a holding company set up by private equity firm BHR to buy a 24% stake in Tenke in 2017.

The company already has a controlling stake in the mine, after acquiring a 56% interest in 2016 that was held by Freeport, in a $2.65 billion-deal. Congo’s state miner Gecamines has a 20% interest in the operation.

Congo, which holds vast deposits of cobalt and copper, as well as gold, diamonds, tin and coltan, is one of the world’s most important but difficult mining jurisdictions.

One of the sector’s main concerns in the past year has been a new mining code introduced by outgoing President Joseph Kabila, which increased royalties, added taxes and cancelled a clause that would have protected them against fiscal changes for 10 years.

Despite fierce opposition from the mining industry, there hasn’t been any concessions so far.

Other companies present in the country include Glencore, Barrick Gold and privately-held Chemaf.