Summary
Freeport-McMoRan Inc. (FCX) has announced a significant divestiture through a Stock Purchase Agreement with CMOC Limited. The company is selling its 56 percent ownership interest in Tenke Fungurume Mining S.A. (Tenke) for $2.65 billion in cash, with potential for up to $120 million in contingent payments based on future copper and cobalt prices in 2018 and 2019. This strategic move, expected to close in the fourth quarter of 2016, signals a considerable shift in FCX's asset portfolio and its approach to managing its mining operations in the Democratic Republic of Congo.
Key Highlights
- 1FCX is selling its 56% stake in Tenke Fungurume Mining S.A. for $2.65 billion cash.
- 2The agreement includes potential contingent payments of up to $120 million based on future copper and cobalt prices.
- 3The transaction is expected to close in the fourth quarter of 2016.
- 4Closing is subject to regulatory approvals, including from the PRC, and other customary conditions.
- 5FCX is also in exclusive negotiations to sell its interests in Freeport Cobalt and Kisanfu Exploration Project for $150 million, as announced via press release.
- 6The sale of Tenke is a material divestiture and represents a strategic portfolio adjustment for Freeport-McMoRan.
Frequently Asked Questions
This 8-K filing announces that Freeport-McMoRan Inc. (FCX) has entered into a material definitive agreement to sell its 56 percent ownership interest in Tenke Fungurume Mining S.A. (Tenke) to CMOC Limited.
The sale includes $2.65 billion in cash payable at closing, plus up to $120 million in contingent payments. These contingent payments are tied to average copper prices exceeding $3.50 per pound and average cobalt prices exceeding $20.00 per pound during calendar years 2018 and 2019.
The transaction is subject to several closing conditions, including receipt of regulatory approvals from the People's Republic of China, other antitrust approvals, waiver of a right of first offer by an affiliate of Lundin Mining Corporation, and approval by the shareholders of the Buyer Guarantor, among others.
The transaction is expected to close in the fourth quarter of 2016, provided all specified closing conditions are met or waived.
Yes, the filing also mentions that FCX issued a press release announcing agreements to sell its interests in Freeport Cobalt and Kisanfu Exploration Project for $150 million. This secondary sale is separate from the Tenke transaction.