Congo Wants Tenke Fungurume Issues Resolved in 2 Months

By Nicholas Bariyo
Special to DOW JONES NEWSWIRES
The Congolese government has given U.S.-based Freeport McMoRan Copper & Gold Inc. (FCX) a maximum of two months to resolve contract issues with the state mining company, Gecamines, over the Tenke Fungurume copper project, government officials said Thursday.
The Council of Ministers ruled Wednesday that the company should reduce its shareholding in the $2 billion project, increase Gecamines's stake and pay a contract signing fee of $30 million within two months, or risk losing its license.
The government also wants Gecamines to be paid 2.5% of the total annual turnover from the project.
Bill Collier, Freeport's Vice President in Charge of Communications, told Dow Jones Newswires separately that the company is cooperating with the Congolese government to review the contract.
"The review process has not affected the development schedule or current operations," he wrote in an email to Dow Jones Newswires Thursday.
Tenke Fungurume is a joint venture between Freeport, Lundin Mining Corp. (LUN.T) and the Congolese government.
In 2007, Congo started reviewing up to 61 mining contracts with a number of foreign mining companies signed between 1996 and 2003.
"The position of the government is that the Tenke Fungurume contract must be sorted in two months from now," said Justin Nyembo Mutahile, the technical director of the state mining licensing body, Cadatre Minier.
Nyembo said the government is toughening its stance on companies with outstanding contract issues in a bid to speed up the recovery of the sector. The government has also threatened to revoke the contract of First Quantum Minerals Ltd. (FM.T), if its doesn't sort out its contract soon.
-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256 75 262 4615; bariyonic@yahoo.co.uk