Copper-miner First Quantum Minerals last week defended its mining rights for the Lonshi and Frontier copper mines, in the Democratic Republic of Congo (DRC), describing the latest challenge to its licences as an “orchestrated attack” in retaliation to its decision to start international arbitration over the cancellation of its Kolwezi project.

Chairperson and CEO Phillip Pascall said in a webcast that the company was disappointed, adding that it believed a small group of influen- tial figures was driving the legal action and that did not necessarily reflect the views of the entire DRC government.

First Quantum confirmed that its subsi- diaries, Comisa, which operated the Lonshi mine, and Frontier, which operated the Frontier mine, had been notified that the DRC Supreme Court of Justice had annulled a letter from the former DRC Minister of Mines, dated February 5, 2000, to withdraw exploration rights held by Sodimico.

The State-owned mining company wanted these rights, which were now held by Frontier and Comisa, to be reinstated to Sodimico.

First Quantum highlighted that the Supreme Court did not set out the impact its decision would have on the valid and existing mining licences held by its two subsidiaries.

“To date, no direct action has been taken by the DRC authorities against either Frontier or Lonshi as a result of the Supreme Court decision and our operations continue,” it stated.

Pascall highlighted that, when the new Mining Code in the DRC was promulgated and when Comisa and Frontier converted their mining rights, Sodimico made no claims to these rights.

“It is simply inconceivable that the wellbeing of so many Congolese citizens and the largest source of revenue for the DRC, not to mention our valid mining rights, could be put at risk as a result of a dispute between the DRC and its own company almost a decade after the matter in dispute arose,” Pascall stated.

He noted that the company had previously received threats that, if it went ahead with the international arbitration process with regard to the Kingamyambo Musonoi Tailings (KMT) mining project, some of its other projects could also be targeted.

After an order had been issued by the government to ‘seal’ the facilities of KMT, which held the exploitation licence for the Kolwezi project, in September last year, First Quantum decided to suspend its Kolwezi project.

Pascall explained that there had been requests by some government entities that it should negotiate with a certain third party regarding the Kolwezi project.

However, he pointed out that it could not do so, as this would be in violation of its contracts with shareholders, the International Finance Corporation and South Africa’s Industrial Development Corporation.

First Quantum had since started the arbitration process, which it would continue to pursue despite the latest events, said Pascall, noting that there was currently no other way to resolve the dispute.

First Quantum highlighted that it had invested $750-million in the Kolwezi project, with a further $300-million having been invested at the Frontier operation.

While feasibility studies for underground mining at the Lonshi operation were near completion, the company was unlikely to make an investment decision in the current environment, said Pascall.

Nevertheless, it remained committed to its projects in the DRC and would “vigorously pursue” its rights to the Kolwezi project, as well as to its Frontier and Lonshi projects.

“We will also take all the necessary legal measures to protect our mining rights and property and pursue damages against any third party interfering with our legal rights,” the company stated.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.