FCX Freeport McMoRan Inc

Freeport McMoRan Copper & Gold (FCX) has finally been given the thumbs up by the government of Congo following a review of its mining operation license that has lasted several years and resulted in a number of concessions to the state.

The U.S. copper producer, the second largest in the world after Chile's Codelco, can breathe easy, now its investments in Congo are in good standing.

"This important milestone provides the basis for future cooperation and enables Tenke to pursue additional investments to develop this massive project to its full potential," said Freeport's Chief Executive Richard Adkerson.

Just 10 days ago, Adkerson told Dow Jones Newswires in an interview in London that he was optimistic a resolution was very close.

The situation is very different for Canada-listed First Quantum Minerals (FM.T). As part of the same review process, its licenses have been removed and the company is now taking Congo's government to international arbitration for breach of international law.

The government has raised its stake in the mineral-rich Tenke Fungurume copper and cobalt mine to 20% from 17.5% previously, leaving Freeport with a 56% stake from 57.75% beforehand and Lundin Mining Corp (LUN.T) with 24%, from 24.75% previously, the company told Dow Jones Newswires.

Freeport will pay an additional royalty of $1.2 million for each 100,000 metric tons of proven and probable copper reserves above 2.5 million tons, and will make additional payments totaling $30 million in six installments upon reaching certain production milestones.

Freeport has also agreed to convert $50 million in intercompany loans to equity and pay $5 million for surface area fees.

Tenke's key fiscal terms, including a 30% income tax rate, 2% mining royalty rate and 1% export fee, will continue to apply and are consistent with the rates in Congo's current mining code.

The mine, in Katanga Province, has been fraught with problems since early 2009, when the Congo government said Freeport had failed to meet the requirements of its mining license review.

The African country suffered immensely in the 1980s and 1990s when copper prices tanked and miners downed tools. The license review, which started in June 2007, was designed to make sure the same won't happen again, should copper prices fall from their current elevated levels.

Neither side shed any light on why the situation has dragged on for so long, although Bene M'Poko, Congo's spokesman and ambassador for South Africa, said that the needs of the local economy must to be respected.

"Every international mining company has successfully gone through the revisitation process in a way that demonstrates concern for the local economy and rule of law," he said. "It is as simple as this--'perform or lose' according to the law when it comes to operating in the mining industry in Congo."

Congo is Africa's largest cobalt producer and the continent's second-largest copper producer after neighboring Zambia.

Gecamines' participation in the mine's management will be expanded, Freeport said, reiterating the company's commitment to use local services and Congolese workers.

Copper production at Tenke started last year, with the current annual capacity of 250 million pounds of copper and 18 million pounds of cobalt being expanded to around 290 million pounds of copper starting in 2011.

About $370 million in tax and related payments have been made to government institutions or in the form of transfer bonuses and social spending since the project's inception to June 30.

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com

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