PHOENIX, Dec. 6 /PRNewswire-FirstCall/ -- Phelps Dodge Corp. announced today its board of directors has given conditional approval to develop the initial mining project at the Tenke Fungurume copper/cobalt concession in the Katanga Province of the Democratic Republic of the Congo (DRC). Final approval is contingent upon obtaining governmental approval of agreements recently reached with Societe Nationale d'Electricite (SNEL), a DRC electricity provider.
The initial Tenke Fungurume project will include development of a mine and associated copper and cobalt processing facilities. It will require a capital investment of approximately $650 million. Phelps Dodge is responsible for providing 70 percent of the funding. Tenke Mining Corp., a partner in the project, is responsible for providing the other 30 percent.
A Phelps Dodge subsidiary will be the operator of the project. Ownership in the project is: Phelps Dodge, 57.75 percent; Tenke Mining Corp., 24.75 percent; and Gecamines, DRC's state-owned mining company, 17.5 percent.
Tenke Fungurume is considered to be one of the largest, highest-grade, undeveloped copper/cobalt concessions in the world today. An ongoing, extensive exploration program is continuing to develop reserves to support future expansions.
The initial project will focus on 103 million metric tons of oxide ore reserves. It is expected to be in full production in late 2008 or early 2009. During the first 10 years of mining, total annual production is projected to be approximately 250 million pounds of copper and 18 million pounds of cobalt. The life of the initial project is anticipated to be approximately 40 years.
Estimates are the initial project will employ up to 2,500 construction workers at peak construction and will create approximately 1,100 full-time jobs. Projections estimate an additional 5,000 indirect jobs will be created in surrounding communities.
"We are pleased to advance the Tenke Fungurume project," said J. Steven Whisler, chairman and chief executive officer of Phelps Dodge. "The mine and related processing facilities represent a major building block for the future of our company. Like all properties we operate, it will be managed so it is both efficient and environmentally responsible. The project will be an engine for industrial growth in the DRC, a major contributor to infrastructure development, and a stimulus for creating small businesses and improving hospitals, clinics, schools and agriculture in the region. We are pleased to partner with Gecamines and Tenke Mining to bring this project to life."
Phelps Dodge is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs more than 15,000 people worldwide.
