Political RiskThe two excerpts below vividly illustrate the extreme political risks that Investors face in some Third World locations.Below, company president Mike Surratt, in an August 19 Bloomberg feature, provided some emphasis about the political safety of the Mineral Park deposit, when he contrasted it to “the Congo, or one of those places…”
Well, as coincidence would have it, the Congo, and the extreme political risk that is associated with it, is in the news today…..Now that it is coming along so nicely, it seems that the Congo would like to increase their take on the Tenke mine, from 12.5%, to 45%.
At this point, one has to wonder, at what point does its operator, Freeport McMoran, decide to simply shut it down, instead?
Richer deposits in emerging-market countries attract greater discounts from investors wary of sovereign risk, BMO Capital's Melek said.
``At least you've got laws on the books that you can deal with,'' said Michael Surratt, the CEO of Kingman, Arizona-based Mercator, which plans a fivefold increase in annual copper production from an Arizona copper prospect it acquired for about $3.3 million in 2003. The mine is scheduled to begin operating in October and produce 10.3 million pounds of molybdenum and 56 million pounds of copper a year.
``Going to the Congo, or one of those places, you never can tell when someone starts shooting and it all goes away,'' he said.
Congo wants bigger stake in Tenke copper mine
Thu Aug 28, 2008 7:12am EDT
https://www.reuters.com/article/marketsNews/idCALS53536920080828?rpc=44&sp=true
KINSHASA, Aug 28 (Reuters) - The Democratic Republic of Congo wants a bigger stake in the Tenke Fungurume copper-cobalt project, owned by Freeport-McMoRan (FCX.N: Quote, Profile, Research, Stock Buzz) and Lundin Mining (LUN.TO: Quote, Profile, Research, Stock Buzz), government officials said on Thursday.
"We are looking to improve the deal," Deputy Mines Minister Victor Kasongo told Reuters.
State-owned mining firm Gecamines owns 12.5 percent of the project, and the state itself a smaller percentage, while Freeport owns 58 percent and Lundin 25 percent.
"We are asking to go back to the conditions of the original public offering," said Gaby Matshafu, Deputy Chief of Staff of the mines ministry, and part of the review commission.
"That was 45 percent for Gecamines and 55 percent for Lundin."
Lundin acquired its share in the project when it bought Tenke Mining last year, while majority owner Freeport is responsible for 70 percent of the project's funding.
"We haven't yet received a response from Freeport," Matshafu said.