Lundin Mining Corp. (LMC) was as surprised as anyone when it found out that the capital cost estimate on the mammoth Tenke Fungurume project has jumped more than 90% in just six months. The Democratic Republic of Congo-based mine is now expected to cost $1.75-billion.

Lundin, however, is fortunate in that it is largely protected from that increase. Analysts pointed out that according to the company's agreement with Freeport-McMoran Copper & Gold Inc. (FCX), Freeport has to finance Lundin's portion of any cost increase beyond 25% of the original forecast (about $815-million). Freeport would be repaid with interest from Lundin's share of Tenke's cash flow.

Costs at the Tenke copper-cobalt project under construction in the Democratic Republic of Congo have grown from $1 billion last October to $1.9 billion now.

Costs at the Tenke copper-cobalt project under construction in the Democratic Republic of Congo have grown from $1 billion last October to $1.9 billion now.

The estimated costs of constructing the mega Tenke Fungurume copper-cobalt mine in the DRC have nearly doubled to US$1.9-billion.