After a long period of negotiations with the Congolese government, Freeport-McMoRan Copper & Gold Inc (NYSE:FCX) and Lundin Mining (TSE:LUN) have come to an agreement with them on a Tenke contract.
While continuing to maintain majority interest in Tenke, Freeport did have to give up 1.75 of there 57.75 percent stake in Tenke, and drop it to 56 percent. Lundin Mining's stake dropped to $24.75 percent.
BMO Capital Markets said, "The impact from the lower equity in Tenke is estimated at less than 1 percent for Freeport-McMoRan and less than 2 percent for Lundin."
The value of the Tenke Fungurume copper and cobalt project is an estimated $2 billion.
Together the two companies had to pay over $70 million in fees to the Democratic Republic of Congo, who via their state-owned company Gecamines, raised their stake in Tenke to 20 percent.
While winning some important concessions, the process and resultant changes could backfire on Congo, as many watching the process are more concerned than ever about doing business in the country.
All the concessions don't even include the high income tax rate of 30 percent, a royalty rate of 2 percent, and an export fee of 1 percent.
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