 International pressure is mounting on the Democratic Republic of Congo (DRC) government in the wake of its controversial decision to cancel a mining licence previously held by First Quantum, of Canada.
On Tuesday, Reuters reported the World Bank had postponed a decision to write off the DRC debt, at the request of the Canadian government. The move was taken the day before the former Belgian colony celebrated its fiftieth year of independence.
Canada's Prime Minister Stephen Harper also took up the issue at last week's Group of 8 G8 and Group of 20 meetings, in Toronto, which culminated in the G8 urging the DRC to "extend urgently the rule of law" and "to enhance governance and accountability in the extractive sector".
In August, First Quantum was told by the DRC government that its licence for the Kolwezi copper tailings project, where the company had invested $700-million, had been cancelled.
The government subsequently shut the mine, but had since awarded the licence to a joint venture involving a British Virgin Island-registered group of companies called Highwind Properties.
Mining Weekly Online has a copy of this joint venture agreement dated January 2010. Sydney Attius is named as the manager of Highwind, and Canadian paper the Financial Post linked the company to politically connected diamond magnate Dan Gertler, citing unnamed sources.
TSX-listed First Quantum has taken its case to international arbitration. The DRC government subsequently revoked two other licences for First Quantum's copper projects in the DRC.
In May, chairperson and CEO Philip Pascal noted 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".
An International Monetary Fund official told Mining Weekly Online on Wednesday a meeting would go ahead to discuss the debt relief.
Bloomberg said external DRC debt stood at $10,9-billion in March.
"The board will go ahead today," the Washington-based official said.
International Finance Corporation, which is a World Bank unit, is a 7,5% shareholder in the Kolwezi project, with South Africa's State-owned Industrial Development Corporation owning 10%.
First Quantum in a May conference call decried the actions of the DRC government, saying the company had "deliberately conducted our business in a transparent manner", adding there was a "concerted campaign" against it in the country.
*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.
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