Freeport’s $2 billion Chile sale hits snag

Freeport McMoRan’s (NYSE:FCX) sale of a large Chilean mine to Canada’s Lundin Mining (TSE:LUN) is being held up because of big changes to the South American country’s tax regime.

The WSJ reports Phoenix-based Freeport has been in negotiations with Lundin to sell its Candelaria copper mine for more than $2 billion, but the sale is being delayed because of uncertainty about planned new capital gains taxes.

Broad tax reforms were agreed to by Chile’s senate in July, but the legislation still has to be approved by the lower house.

Freeport owns 80% of the open pit and underground gold-copper mine, one of four it operates on the continent. Candelaria in northern Chile’s Atacama province last year produced 168,000 tonnes of copper.

The company’s South America operations produced 1.33 billion pounds of copper in 2013 and an expansion is under way at its massive Cerro Verde mine in Peru.

Freeport and Lundin have joint ownership of the Tenke Fungurume copper mine in the Democratic Republic of the Congo, but Freeport has been looking to sell that stake too.

Freeport, owner of the massive copper-gold Grasberg mine in Indonesia, has been selling off assets at it struggles with debts of nearly $21 billion.