Risky Business. The Lundin Group's involvement in the Tenke Fungurume Mining project in the Democratic Republic of CongoRaf Custers & Sara Nordbrand, February 2008
A SwedWatch/Diakonia/IPIS report.
After a decade of war and political turmoil, the tide seems to be turning for the DR Congo. The country is now engaged in reconstructing a society that was destroyed by decades of dictatorship and a global power play. Activities are taking off in the mining sector as well.
The DR Congo belongs to the category of resource rich countries, with a number of important reserves such as diamond, gold, copper and cobalt. Mining projects that were once frozen for years, due to wars and turmoil, are starting up or planning to. Especially in the Copper Province of Katanga, certain frenzy exists among foreign mining companies rushing for copper and cobalt to profit from today's soaring mineral prices on the world market.
The Tenke Fungurume Mining project, run by Tenke Fungurume Mining s.a.r.l. (TFM), is one of the biggest projects in Katanga and plans to extract copper and cobalt in 2009. Particularly important is that its reserves contain an exceptionally high degree of copper and cobalt ore. TFM was created in December 1996, when a Joint Venture was formed between the Lundin group's Lundin Holdings (55%) and the Congolese parastatal mining company, Gécamines (45%). In 2005, a third owner, Phelps Dodge from the US, joined the capital structure. It took lengthy negotiations for these three to reach an agreement on their obligations and rights. Ultimately, Phelps Dodge's stake reached 57.75%, the Lundin Group's Tenke Mining Corporation received 24.75% whereas Gécamines got the remaining 17.5%. Last year, Freeport McMoRan from the United States (US) acquired Phelps Dodge, and together they formed the biggest publicly traded copper and gold company in the world.
Currently, Swedish-related capital has an important stake in this project, directly through the second largest shareholder of the project – Swedish/Canadian Lundin Mining - and indirectly via Swedish pension funds. Many of the Swedish public pension funds own shares in Lundin Mining and Freeport McMoRan Copper and Gold Inc. The latest figures show a common ownership valued around US $88 million (617 million Swedish crowns).