Plans to develop one of the world’s largest copper deposits in the Democratic Republic of Congo (DRC) have won the support of the Overseas Private Investment Corporation (Opic), via a US$400mn financing and political risk insurance package.
A total of US$250mn will be granted in financing to Phelps Dodge, an affiliate of the US company Freeport-McMoRan Copper & Gold, for the construction of a mining operation at the Tenke Fungurume ore deposit in the south-east of DRC. To avoid Opic’s exposure to the project exceeding US$400mn, OPIC insurance coverage will initially be limited to US$150mn. Then, as repayments are made, insurance coverage will be increased to a maximum of US$250mn.
During the first 10 years of operations, the Tenke Fungurume project is expected to produce an average annual amount of 250mn pounds of grade A copper cathode and 18mn pounds of cobalt, a copper mining by-product. Ore reserves for the first phase of the project are expected to last for 41 years.
The project is also aiming to have a positive impact on the local communities and overall development of the region, with a target of creating more than 800 permanent local jobs and generating over US$100mn annually in taxes and other payments to the government.
Healthcare will also be provided to all the project employees and families, water wells will be installed and micro-credit will be provided for start-up SMEs under the terms of the project.
Phelps Dodge is the managing shareholder of the Tenke Fungurume project, with Tenke Mining Corporation holding just under 25% share and Gecamines holding a 17.5% share. Construction on the project began in late 2006, and production is due to start late 2008 or early 2009.