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NEW YORK Jan 26 Construction at Freeport
McMoRan Copper & Gold's (FCX.N) mine project in war-tornDemocratic Congo is 80 percent complete and the company expects
to start commercial operations after June, executives said on
They also said Freeport was hopeful the Kinshasa
government's review of mining contracts will be favorable to
the company that has so far invested some $1.4 billion in the
Tenke Fungurume copper and cobalt project.
"We have made better progress there on physical
construction that I expected, given the challenges," President
and Chief Executive Officer Richard Adkerson told Reuters in a
"Congo faces a number of difficulties, including the
problems in the east," he said, referring to a guerrilla war
raging near the border with Rwanda and Uganda, some 1,000 km
(620 miles) from the mine in copper-rich Katanga province.
"The country is suffering the impact of low copper and
cobalt prices," Adkerson earlier told Wall Street analysts on a
conference call to discuss fourth-quarter results.
Asked if Freeport was in a good position now, he said: "The
government would like to see more benefits and they appreciate
how fast we are living up to our commitment on development.
"I would not characterize it as leverage, we are being
cooperative with the government."
He noted the contract to mine Tenke Fungurume dated from
1996 and had been renegotiated in 2005 before Kinshasa began a
review process last year, aiming to overhaul 61 deals most of
which were agreed during the chaos of a 1998-2003 war.
"There is no firm date for the complete review, but we
expect it 'in the near future,'" said Adkerson.
"The process is unfolding and discussions are going on
right now. The council of ministers is taking the lead. We'll
find a way forward that both sides are happy with."
John Marsden, president of Freeport-McMoRan Mining, updated
analysts about construction at the site, believed to be one of
the world's richest deposits of copper and cobalt.
"Construction has advanced well on the mine and processing
plant. Also the infrastructure, roads and access to the Katanga
region," said Marsden, who is in charge of construction,
exploration and research and development for Freeport.
"Construction is now about 80 percent complete," he said.
Commissioning of the plant, which will produce 250 million
pounds of copper per year and 18 million pounds of cobalt, is
expected in the second quarter, he said. "We expect commercial
production to start in the second half of the year."
Adkerson declined to comment on the status of Freeport's
junior partner in Tenke Fungurume, Canada's Lundin Mining,
(LUN.TO) which is being acquired by HudBay Minerals (HBM.TO).
On Monday, Lundin shareholders approved the takeover but
analysts believe the deal will collapse at the hands of
"We have a contract with Lundin," said Adkerson, "and their
corporate situation is independent from that."
Freeport holds a 57.75 percent stake in Tenke Fungurume,
Lundin has a 24.75 stake and Gecamines, the Congo government
agency owns the remaining 17.5 percent.
(Editing by Leslie Gevirtz)