JOHANNESBURG – First Quantum Minerals has asked Zambia’s attorney general to block criminal proceedings that may be brought against its directors of a State-controlled mining-investment company.

The copper producer, based in Vancouver, said it’s been “reliably informed” that  ZCCM Investments Holdings is considering charging its directors, Matt Pascall, operations director at First Quantum, said in a letter to the attorney general, a copy of which was sent to Bloomberg and confirmed by Pascall. That’s resulted in executives at its Kansanshi unit not attending board meetings in Zambia, and has prevented the company from accepting meeting requests from government representatives, he said.

First Quantum wants the attorney general to ask ZCCM-IH to halt a case in the Lusaka High Court, where it accuses the company of fraud and is seeking as much as $1.4-billion, according to the letter, dated April 21. The fraud claims are “vexatious and extraordinary,” Pascall said in the letter. Zambian Attorney General Likando Kalaluka, and ZCCM-IH, of which the government owns 77.5%, didn’t immediately respond to requests for comment.

First Quantum has had a rocky relationship with the government in Zambia, Africa’s second-biggest copper producer. The company said it suspended $1-billion worth of investment in 2015 because of uncertainty about tax rates. In 2008, it started arbitration proceedings because of tax changes at Kansanshi.

CRIMINAL PROCEEDINGS
“We respectfully seek your undertaking that any criminal proceedings arising from ZCCM-IH’s complaints against FQM individuals will not be authorized and actively discontinued by your office,” Pascall said in the letter. “We also seek that your office requests ZCCM-IH to suspend its proceedings in the Lusaka High Court to allow the commercial matter to proceed in commercial arbitration.”

The company plans to spend $350-million to upgrade its flagship Kansanshi mine and at least $700-million to build a second smelter, having already invested almost $4-billion in the country, Pascall said. ZCCM-IH has a 20% stake in Kansanshi.

First Quantum also said that recent unilateral power-tariff changes broadened the scope of its arbitration claim over the Kansanshi development agreement. What previously amounted to more than $2-billion in damages now was an “overall threat of expropriation of the entire value of our investments in Zambia,” Pascall said in the letter.