5th September 2007
Camec said that it had been "obliged" to take this decision because of uncertainty relating to the mining licence regime in the Democratic Republic of the Congo (DRC).
The government of the DRC is reviewing certain mining leases, including those held by Camec and Katanga.
The company said that it had been informed that the attorney general of the DRC was taking also steps to revoke its licence on C19 and Mukondo - both very significant assets for Camec.
"Camec believes there is no legal valid basis for any revocation, and that the announcement of this potential action was clearly timed to impact Camec's offer for Katanga. Furthermore, Camec believes that this action is motivated by commercial forces in the DRC who oppose Camec's acquisition of Katanga," it explained in a statement.
However, the company remains confident that it will successfully refute any allegations or attempts made against its licences, (which were originally granted in 2004, under the new 2002 mining code) in settlement of international arbitration against the DRC government.
The company has already appealed to the Minister of Mines against any potential revocation.
"Should this appeal prove unsuccessful, Camec will initiate international arbitration proceedings against the government of the DRC, including its various agencies and all individuals personally involved, to recover any loss which it may suffer as a result of these actions," the company stated.
In addition, Camec will take action against all agencies and individuals responsible for unlawful interference with Camec's economic interests.
The company has been advised that it is entitled to continue working on the concession until the determination of the issue by a court.
In light of these developments in the DRC, Camec noted that it was concerned about the impact of the review by the DRC government on Katanga's licences. It added that Katanga had refused to share information with Camec, for due diligence purposes, and as a result it was unable to verify the status of such a review.
Camec has invested more than $150-million in the DRC, including the construction of a copper and cobalt SX/EW facility at Luita in the State of Katanga.
It expects that by the end of March 2008, Luita will have the capacity to produce 40 000 t/y of copper cathode and 6 000 t/y of cobalt cathode.
The plant has a targeted template capacity of 100 000 t/y of copper cathode and 12 000 t/y of cobalt cathode by the end of 2008.
"These anticipated production targets could be materially adversely affected by the actions of certain individuals in the DRC and particularly if Camec's licence on C19 in the DRC is revoked," the company concluded.
Edited by: Creamer Media Reporter