(Adds comments, some background.)
By Nicholas Bariyo
Special to DOW JONES NEWSWIRES
The Congolese government has given U.S.-based Freeport McMoRan
Copper & Gold Inc. (FCX) a maximum of two months to resolve
contract issues with the state mining company, Gecamines, over the
Tenke Fungurume copper project, government officials said
Thursday.
The Council of Ministers ruled Wednesday that the company should
reduce its shareholding in the $2 billion project, increase
Gecamines's stake and pay a contract signing fee of $30 million
within two months, or risk losing its license.
The government also wants Gecamines to be paid 2.5% of the total
annual turnover from the project.
Bill Collier, Freeport's Vice President in Charge of
Communications, told Dow Jones Newswires separately that the
company is cooperating with the Congolese government to review the
contract.
"The review process has not affected the development schedule or
current operations," he wrote in an email to Dow Jones Newswires
Thursday.
Tenke Fungurume is a joint venture between Freeport, Lundin
Mining Corp. (LUN.T) and the Congolese government.
In 2007, Congo started reviewing up to 61 mining contracts with
a number of foreign mining companies signed between 1996 and
2003.
"The position of the government is that the Tenke Fungurume
contract must be sorted in two months from now," said Justin Nyembo
Mutahile, the technical director of the state mining licensing
body, Cadatre Minier.
Nyembo said the government is toughening its stance on companies
with outstanding contract issues in a bid to speed up the recovery
of the sector. The government has also threatened to revoke the
contract of First Quantum Minerals Ltd. (FM.T), if its doesn't sort
out its contract soon.
-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256
75 262 4615; bariyonic@yahoo.co.uk