Lundin Mining closes US $1.136B sale of Tenke stake to BHR Partners

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By Ted Liu

Lundin Mining Corporation (TSX: LUN; OMX: LUMI) has closed the sale of its indirect interest in TF Holdings Limited to BHR Partners, a Shanghai, China based private equity firm, for US $1.136 billion in cash (all figure in US dollars).

TF Holdings is a Bermuda holding company that owns an 80% interest in Tenke Fungurume Mining S.A. located in the Democratic Republic of Congo. Lundin Mining held an indirect 30 percent interest in TF Holdings and therefore, an effective 24 percent interest in Tenke.

Under the terms of the agreement previously announced on November 15, 2016, Lundin Mining could also receive contingent consideration of up to $51.4 million, consisting of $25.7 million if the average copper price exceeds $3.50 per pound and $25.7 million if the average cobalt price exceeds $20.00 per pound, both during a 24-month period beginning on January 1, 2018.

Concurrently with the completion of the sale, Lundin Mining paid approximately $14.2 million to China Molybdenum Co Ltd. (CMOC) as reimbursement for payments made by CMOC in connection with a settlement agreement among La Générale des Carrières et des Mines (Gécamines), Tenke, TF Holdings, Freeport-McMoRan Inc.(NYSE: FCX), CMOC, Lundin Mining and BHR to resolve all claims brought by Gécamines against TF Holdings and several other parties (other than Lundin Mining) related to the sale of TF Holdings.

Following the closing of the sale, Tenke is owned by China Molybdenum Co., Ltd. (56%) as the operating partner, BHR Partners (24%), and Gécamines, the Congolese state mining company (20% free carried interest in the project).

Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the United States of America, Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, Lundin Mining holds an indirect 24 percent equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.

BHR Partners is the cross-border investment arm of Bohai Industrial Investment Fund Management Co., Ltd. Its sponsors include Harvest Fund Management Co., Ltd., Rosemont Seneca Partners, Thornton Group LLC. Its backer also include Bank of China, China Development Bank Capital, National Council of Social Security Fund, China Life, Postal Savings Bank of China. Bohai Capital manages the RMB20 billion Bohai Industrial Investment Fund, which was the first RMB-denominated private equity fund approved in China.

photo credit: Lundin Mining