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Zijin agrees to buy Freeport McMoran's copper-gold assets in Serbia

Author Radomir Ralev
Zijin agrees to buy Freeport McMoran's copper-gold assets in Serbia Zijin Mining headquarters in Xiamen; Source: Zijin Mining

BELGRADE (Serbia), November 4 (SeeNews) - China's Zijin Mining Group has signed an agreement to acquire Freeport McMoran's copper and gold assets in Serbia for up to $390 million (350 million euro), it said on Monday.

The Chinese company will pay $240 million for 72% class B shares of CuAu International Holdings, a unit of Freeport McMoran, plus 0.4% of the net proceeds from the sales of all products annually, up to an aggregate maximum amount of $150 million, Zijin said in a filing with the Hong Kong Stock Exchange. 

After completion of the transaction, the company will own 100% interests in the resources of both the Upper Zone and the Lower Zone of the Timok copper-gold mine, Zijin said in the filing.

The transaction would lift the total controlled copper resources of Zijin by 7.72 million tonnes, or 15.6%, to 57.24 million tonnes on an equity basis, while its gold resources would rise by 161 tonnes, or 9.3%, to 1,889 tonnes, the Chinese company said.

Zijin will also acquire the interests of Freeport McMoran in five exploration licenses in the area surrounding the Timok copper-gold mine, which are currently held by Zijin-Freeport joint venture Rakita Exploration.

The Timok copper and gold project located in eastern Serbia consists of the Cukaru Peki Upper Zone and Lower Zone. Zijin owns 100% of the Cukaru Peki Upper Zone plus a 60.4% stake in the Cukaru Peki Lower Zone, while Freeport McMoran owns the remainder. 

The Chinese group injected $350 million in the capital of Serbian copper mining and smelting company RTB Bor in December 2018, acquiring majority ownership, and renamed it to Zijin Bor Copper. The majority owner intends to invest $1.26 billion to improve the production operations of RTB Bor, open new mines and increase efficiency, Serbia's energy minister Aleksandar Antic said in December.

($ = 0.895922 euro)