Freeport transaction

Freeport McMoRan has struck a deal to sell its stake in a vast Congo copper mine to China Molybdenum (CMOC) for $2.65bn in cash as the US miner and oil producer steps up efforts to reduce its debt load.
Plunging oil and copper prices have affected Freeport’s ability to pay down its large debt burden. Net debt stood at more than $20bn at the end of March, compared to the company’s market capitalisation of $15.4bn.
In response, the company has cut its oil and gas workforce and embarked on an asset disposal programme.
Under the terms of the deal announced on Monday, Freeport will be selling its 70 per cent stake in TF Holdings, a Bermuda holding company that indirectly owns an 80 per cent interest in Tenke Fungurume Mining – a vast copper mining project in the south-eastern Katanga province of the Democratic Republic of Congo.
Freeport could receive an additional $120m if prices for copper and cobalt reaches a certain level between 2018 and 2019.
This is unlikely to be Freeport’s last deal with CMOC. The company said in a statement that it is in exclusive talks to see its interests in Freeport Cobalt, its Finnish mine to market solution business for cobalt products, and the Kisanfu Exploration project in Congo to CMOC for $100m and $50m respectively.