 TORONTO (miningweekly.com) – South Africa's State-owned Industrial Development Corporation (IDC) has asked the government to step in to protect the Democratic Republic of Congo (DRC) mine that was "expropriated" from copper-miner First Quantum last year - the IDC owned a 10% stake in the mine.
IDC resources executive Ufikile Khumalo tells Mining Weekly Online that South Africa and the DRC have a trade and investment agreement that could be employed to facilitate the return of the $765-million Kolwezi tailings project.
"We have engaged our government to assist. There is a bilateral agreement related to the protection of investment between the two countries," Khumalo said.
"We have requested our government to engage. They are our shareholder and we expect them to get involved - it is my view that in the end, a solution will be found."
TSX-listed First Quantum and its partners in the project, which also included the International Finance Corporation, took the DRC government to international arbitration in February over the cancellation of the Kolwezi mining licence, which occurred in September.
In May, the DRC government withdrew two more of First Quantum's mining rights in the country.
The Canadian government had since raised objections to the cancelling of billions of dollars worth of DRC debt with the Paris Club - a collection of First World countries that meets to give debt relief to poorer countries - and with the World Bank.
DRC President Jospeh Kabila had been hoping to receive some $8-billion in debt relief prior to his country's fiftieth independence anniversary, but complaints from Canadian officials meant the debt write-offs only occurred the day after.
Canadian Prime Minister Stephen Harper also raised First Quantam's plight at the Group of Eight summit in Muskoka, Ontario, last month. The summit issued a statement afterwards, urging the DRC to "extend urgently the rule of law" and "to enhance governance and accountability in the extractive sector".
The DRC government earlier this year awarded the Kolwezi licence to a joint venture (JV) between a British Virgin Island-registered group of companies called Highwind Properties.
The IDC's Khumalo said that the company had not been informed of the new ownership. "We are not aware that the licence has been awarded to another party. At the moment, this is not relevant as we believe that we have a strong case and are following all legal avenues as prescribed in the current agreement between our investee company (First Quantum) and the DRC government."
In May, First Quantum chairperson and CEO Philip Pascal said that "the activities on the legal side come from a small and very influential group of individuals in the Congo and don't necessarily mirror the sentiments of a number of other authorities".
He said that the company had "deliberately conducted our business in a transparent manner", adding there was a "concerted campaign" against it in the DRC.
First Quantum was trading at C$55 a share on Tuesday, up 4,5%, but well off its 52-week high of C$100,32 a share reached in January.
*The original version of this article incorrectly stated that former DRC Deputy Mines Minister Victor Kasongo had signed a contract between Highwind Properties and the DRC government. Mining Weekly Online apologises for the error.
|
|
