Canada's Lundin Mining (TSX:LUN) shares were trading moderately higher Thursday after the company announced it had been granted a two week extension to bid on Freeport-McMoRan's (NYSE:FCX) stake in the Tenke Fungurume copper and cobalt mine, in Congo.
The Toronto-based miner originally had until today to decide whether to allow Freeport-McMoRan to proceed with the agreed sale of it stake in Tenke to China Molybdenum (CMOC), a $2.65 billion deal inked in May.
Lundin Mining controls 24% of Tenke Fungurume, which includes a first right of refusal to pick up Freeport's stake.Last week, Reuters reported that the Democratic Republic of Congo's state-owned Gecamines has submitted its own bid for Freeport's 56% stake in the high-grade Tenke Fungurume mine.
Lundin, which did not reveal why it needs more time, is entitled by a "right of first offer" to supplant any bids for the copper mine by matching them. It can also decide to sell its stake or do nothing and allow the China Molybdenum deal to proceed.
As most of its peers, Freeport has been struggling to get its debt load under control which ballooned to $20 billion following the ill-timed acquisition of oil and gas assets three years ago. In February the Phoenix-based company sold a 13% stake in its US Morenci mine, the world's fifth largest, for $1 billion to Japan's Sumitomo, but so far has not been able to offload the energy operations despite putting them on the block a year ago.
Shares in Lundin were up 1.2% at noon in Toronto, changing hands at Cdn$5.04. The stock has gained almost 33% so far this year.