11:29:54 EDT Wed 20 Jun 2018
Enter Symbol
or Name

Lundin Mining Corp
Symbol C : LUN
Shares Issued 584,005,006
Close 2013-01-21 C$ 5.19
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Lundin Mining JV to acquire cobalt refinery in Finland

2013-01-21 18:28 ET - News Release

Mr. Paul Conibear reports


Lundin Mining Corp. has, through a newly formed joint venture entity, entered into a definitive agreement with OM Group Inc. to acquire a large-scale cobalt chemical refinery located in Kokkola, Finland, and the related sales and marketing business. The acquisition will provide direct end-market access for the cobalt hydroxide production from the Tenke Fungurume copper/cobalt mine. Lundin Mining will hold an effective 24-per-cent ownership interest in the joint venture, with Freeport-McMoran Copper & Gold Inc. holding an effective 56-per-cent ownership interest and acting as operator of the joint venture, and La Generale des Carrieres et des Mines (Gecamines), the Congolese state mining company, holding a 20-per-cent interest. Under the terms of the agreement, initial consideration of $325-million (U.S.), on a 100-per-cent basis (subject to customary working capital adjustments), will be paid at closing, with the potential for additional consideration of up to $110-million (U.S.) payable over a period of three years, contingent upon the achievement of revenue-based performance targets. The acquisition is subject to customary closing conditions, including required regulatory approvals, and is expected to close in the second quarter of 2013.

Lundin Mining and Freeport will together finance the initial acquisition costs on a 30:70 basis, which amounts will be repaid in full prior to any distributions. Accordingly, the company will pay $97.5-million (U.S.) (subject to customary working capital adjustments) toward the initial purchase consideration and up to $33-million (U.S.) over a three-year period in contingent payments to satisfy its 30-per-cent share of the total purchase consideration.

Commenting on the transaction, Paul Conibear, president and chief executive officer of Lundin Mining, said: "The acquisition of Kokkola will enable immediate entry and vertical value-added integration to the refined cobalt market, and will ensure that all of the cobalt product from Tenke can be processed and sold in a competitive market. We are fortunate to be acquiring a market leader in the cobalt chemical business with a fully operating and staffed refining operation in Finland and significant global sales presence. We are pleased to be extending our partnership with Freeport and Gecamines further into the cobalt market."

About Kokkola

Kokkola, located on the Baltic Sea in Kokkola, Finland, processes unrefined cobalt and related metals, and manufactures advanced inorganic products for use in a variety of applications in fast-growing end-use markets. Kokkola is the world's largest supplier of cobalt chemicals and powders for use in:

Batteries:  Cobalt raw materials and precursors for rechargeable batteries

Chemicals and ceramics:  Cobalt inorganic materials for a variety of chemical, catalyst, blue pigment and other applications

Powder metallurgy:  Cobalt fine powders for the hard-metal and diamond-tooling industries

Kokkola has been in operation since 1968, and comes with an experienced management team, over 400 employees, and a global sales and marketing footprint that services approximately 500 customers in over 50 countries in Asia, Europe and the Americas. Kokkola has strong growth prospects, and a record of strong revenue and cash flow generation despite commodity price volatility.

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