Congo Detains Freeport Employees for Questioning

By ANDREA HOTTER

LONDON -- Freeport-McMoRan Copper & Gold Inc.'s relations with the Congolese government took a turn for the worse Monday after the country detained three company employees in association with alleged misappropriation of public funds.

While the government hasn't yet provided any evidence of wrongdoing, the U.S. copper-mining company said it was cooperating with the Congolese inquiry as well as conducting its own internal investigation.

"We understand that three of our employees have been detained for questioning associated with an inquiry opened by the Kinshasa Prosecutor in connection with their potential involvement in alleged misappropriation of public funds related to work permits and visas for the Tenke Fungurume copper project," company spokesman William Collier told Dow Jones Newswires.

"The government has not presented Tenke Fungurume with any evidence of wrongdoing by Tenke Fungurume's employees. We will take appropriate action if it is determined that any of our personnel have acted improperly," Mr. Collier added.

The mine, located in the mineral-rich Katanga Province, is a joint venture between Freeport, Lundin Mining Corp. and the government of Congo, through state-owned miner Gecamines. Freeport has the majority stake and is the project operator.

Tenke has been fraught with problems since earlier this year when the Congo government said Freeport had failed to meet the requirements of its mining license review. Earlier this month, the government ruled that Freeport should reduce its stake in the project, increase Gecamines' stake, pay a $30 million contract signing fee and give Gecamines 2.5% of the project's total annual turnover.

The review for Tenke, which produced its first copper in March, began in 2007 and has dragged on ever since. Freeport has always maintained that its contract is fair and equitable, complies with Congolese law and is enforceable without modification.

A total of 61 mining companies that signed licenses between 1996 and 2003 have been reviewed in the renegotiation process. Most of them have now been cleared to proceed.

Write to Andrea Hotter at andrea.hotter@dowjones.com