Tussle Over Freeport Mine Sale Escalates in Congo Court Caseby
Court in Lubumbashi appoints administrator to run copper mine
Mine’s operator counters that court ruling has been suspended
A tussle over Freeport McMoRan Inc.’s sale of one of the biggest copper mines in the Democratic Republic of Congo, Africa’s largest producer of the metal, has escalated after a local court appointed an administrator to run project operator Tenke Fungurume Mining.
Freeport completed the sale of its 56 percent stake in TFM to China Molybdenum Co. last month for $2.65 billion despite efforts by state-owned miner Gecamines, which has a 20 percent stake in the copper producer, to block the deal.
The Commercial Court of Lubumbashi ruled in favor of a Gecamines petition, appointing an administrator for six months, extendable to a year, according to a Dec. 2 judgment sent to Bloomberg by a person who asked not to be identified as they’re not authorized to speak for the court. The administrator will audit TFM’s management, the court said.
Implementation of the ruling has been suspended by the General Inspectorate of Judicial and Prison Services and no administrator appointed, TFM said in an e-mailed statement Friday. “TFM is pursuing legal actions to enforce its rights and in the interests of its shareholders and all other stakeholders,” it said, adding that it’s appealed against the court’s decision.
Gecamines declined to comment on the ruling in an e-mailed response to questions. Freeport and China Molybdenum didn’t immediately respond to e-mails and phone calls seeking comment.
After completing its sale on Nov. 17, Freeport sought to convene the TFM board to approve the installation of new China Molybdenum directors, before Gecamines petitioned the court to block the meeting, according to the court documents.
Gecamines opened arbitration in Paris in October to block the sale, saying it should have been given the right to preempt China Molybdenum’s purchase of the controlling stake.
In completing the transaction while arbitration was continuing, Freeport and China Molybdenum handed Gecamines a “fait accompli,” the court said in last week’s judgement.
Outgoing Congolese Prime Minister Matata Ponyo Mapon has previously backed the deal.