UPDATE 2-Freeport-Lundin costs nearly double at Tenke

(Adds details. In U.S. dollars)

TORONTO, April 23 (Reuters) - Lundin Mining Corp (LUN.TO: Quote, Profile, Research) said on Wednesday the projected cost of developing its Tenke copper-cobalt joint-venture with Freeport-McMoRan Copper & Gold (FCX.N: Quote, Profile, Research) has nearly doubled from last year's estimate to around $1.75 billion.

The cost estimate for the mine, in the Democratic Republic of Congo, is up from an October 2007 estimate of $900 million. The price jumps to $1.9 billion when loans related to power development are included. About $475 million in project costs have already been incurred.

"We have just been advised of this overrun situation and an increase of this magnitude was not expected," Phil Wright, Lundin's chief executive, said in a statement. Lundin said it had been advised of the increases by Freeport.

Vancouver, British Columbia-based Lundin holds about 25 percent of the project, while operator Freeport holds about 58 percent and is responsible for 70 percent of its funding. Freeport will also finance Lundin's share of certain project overruns, Lundin said.

DRC state mining company La Generale des Carrieres et des Mines owns the remainder of the project. The companies and the government are embroiled in a contract dispute that has raised fears the state could grab a larger share in the project.

The mine is expected to begin production in 2009-10, but that hinges on resolving the dispute.

Lundin now expects to contribute $180 million to $210 million, up from a previous forecast of $150 million to $180 million.

The cost increase is due to expanded power generation, as well as housing, roads, bridges and extended "social and training initiatives," Lundin said. It also noted the high costs of developing in a remote area of Africa.