TORONTO (miningweekly.com) – Vancouver-based First Quantum Minerals and its partners are preparing a formal response, after receiving a letter from the Prime Minister of the Democratic of Congo (DRC), effectively proposing that the company return the permit for the Kolwezi project in the country.

The Kolwezi project is owned by First Quantum (65%), DRC State mining company Gécamines (12,5%), the Industrial Development Corporation of South Africa (10%), the International Finance Corporation (7,5%) and the government of the DRC (5%).

Earlier this month, media reports cited Deputy Mines Minister Victor Kasongo as saying that the DRC had cancelled the copper and cobalt mining contract for Kolwezi.

The letter received from Prime Minister Adolphe Muzito “purports to try to establish the basis on which the Kolwezi contract can be revoked or cancelled,” First Quantum said in a statement on Friday.

“It is the company's understanding that the Prime Minister's letter essentially proposes that KMT [Kingamyambo Musonoi Tailings] returns the exploitation permit, pertaining to the Kolwezi project, to Gécamines.”

The company said it has already “discussed and refuted” each of the claims made in the letter.

“The company and the Kolwezi project's other contributing partners, the IFC and the IDC, are firmly of the view that these claims have no legal basis,” the firm said.

The partners will seek further meetings with DRC government officials.

The Kolwezi tailings, or KMT project is scheduled for commissioning in the second quarter of 2010.

The plant will initially produce 35 000 t/y of copper cathode and 7 000 t/y of cobalt hydroxide and is designed to double capacity during the first year for a budgeted capital cost of approximately $40- million.

The mine life is expected to be 22 years at the expanded annual production rate of 70 000 t/y of copper cathode.