New hopes for peace in the Democratic Republic of Congo (DRC) have Phelps Dodge (PD-N) inking a deal with BHP (BHP-N) to earn up to half of BHP’s interest in the huge Tenke Fungurume copper-cobalt project in that country’s copper belt.
BHP has an option to acquire a majority portion of Tenke Mining‘s (TNK-T) stake in the project in exchange for providing certain development funding. BHP also has the option to act as project operator.
Tenke has a 55% stake in the project. The remainder is held by DRC state-owned Gnrale des carrires et des mines (Gcamines).
The project is located in Katanga Province in the southernmost part of the country. It boasts total resources of 547 million tonnes of 3.5% copper and 0.29% cobalt (acid-soluble grade).
A preliminary study for a solvent-extraction electrowinning operation was completed, based on 85 million tonnes with an average acid-soluble grade of 3.19% copper and 0.29% cobalt. The study calls for a 15-year mine life.
The project already has a considerable amount of infrastructure in place. Tenke has completed mine planning, process design and test work, environmental baseline studies and tailings management studies. A bankable feasibility study was nearing completion when force majeure was invoked, in February 1999, as a result of political unrest in the country.
Since then, Tenke’s financial and work obligations have been suspended and the project has gathered dust.
Hopes for peace got a shot in the arm earlier this year, when the assassinated President Laurent Kabila was succeeded by his son Joseph. Recently, hundreds of U.N. troops have been deployed in several towns to protect an observer force overseeing the foreign troop withdrawal.
“Our strategy is to advance the project as quickly as possible, and having Phelps Dodge join with BHP significantly strengthens our ability to do this,” says Adolf Lundin, Tenke’s president. “This agreement will bring the resources of two of the world’s largest copper producers to bear on the development of this world-class deposit.”
Discussions with Gcamines about how to develop the project are expected to continue over the next few months.
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