PERTH (miningweekly.com) – Junior Sundance Resources has serviced notices of dispute on the Republic of Congo (RoC) and Cameroon over its Mbalam and Nabeba iron-ore projects.
The company this week told shareholders that it became aware on December 7 that the RoC had in late November issued a decree to withdraw the mining permit from Sundance’s subsidiary Congo Iron.
The company said that while the withdrawal decree had not yet been published in the Official Journal of Congo or formally provided to Congo Iron, the decree appeared to bear the signatures of the President, the Minister of Mines and Geology, the Minister of Tourism and Environment, and the Minister of Finance and Budget.
As a result of the withdrawal of the mining permit, Sundance considers that the RoC had breached numerous provisions of the 2014 Mining Convention between the government and Congo Iron.
The Convention was passed into law in 2016.
Sundance told shareholders that in particular, the withdrawal was not conducted in a manner and on grounds that complied with the Convention, and that RoC did not give Congo Iron the opportunity to remedy any alleged non-performance.
“Given the circumstances, not only do the actions of Congo constitute a serious breach of the Convention, they also constitute a grave violation of due process.
Further, the withdrawal breaches the RoC's undertaking not to expropriate all or part of the assets of Congo Iron” the company said in a statement.
Congo Iron is now starting the formal dispute resolution process provided for in the Convention.
In the event the dispute resolution process does not achieve a settlement within 60 days, Congo Iron intends to commence international arbitration proceedings.
Meanwhile, Sundance's subsidiary Cam Iron has also started a formal dispute resolution process with the government of Cameroon, after the President failed to issue an implementing degree for the company’s exploitation permit.
Sundance applied for an exploitation permit in 2009, and the Minister did not reject or otherwise process Cam Iron's exploitation permit application within the 90-day time limit prescribed, meaning that the exploitation permit is deemed to have been granted.
The company said this week that by failing to issue the implementing decree, Sundance considers that Cameroon has breached certain obligations owed to Sundance and Cam Iron under the 2015 Transition Agreement, including Cameroon's obligation to do all things reasonably required of it to effect, perfect or complete the transactions contemplated by the Transition Agreement.
The transition agreement provides for disputes to be resolved by a 60-day process of negotiation and, failing that, arbitration under the ICC Rules before a three-member tribunal seated in Paris.
If the dispute cannot be resolved by negotiation, Sundance and Cam Iron intends to commence international arbitration against Cameroon for breach of the Transition Agreement and the applicable law.
Sundance CEO Giulio Casello said this week that the company had been working for the last decade to develop the Mbalam-Nabeba iron-ore project, and had been impacted by a number of setbacks, including the 2010 plane crash which claimed the lives of the company’s entire board and senior management team.
“But the latest breaches of the legal agreements we hold with our host countries leave Sundance with the need to enforce the Company’s legal rights, and those of its subsidiaries, and protect the interests of Sundance shareholders.
“Sundance has invested near A$400-million in Mbalam and Nabeba, underpinned by our reliance on agreements with the governments of Congo and Cameroon and our adherence to the laws of those countries,” said Casello.
“Sundance has always acted in good faith and with the sole intent to deliver value for both our shareholders and the people of Congo and Cameroon. However, Sundance is now left with no choice but to issue the notices of dispute and prepare for international arbitration. If arbitration is necessary the Company has secured first-class representation in Magic Circle firm Clifford Chance and the company is confident it will be able to secure the funding needed to meet the costs of the proceedings via international litigation funders.
“Unfortunately, the forced action by Sundance means we need to reconsider our ASX re-listing plans. Following consultation with the ASX, the company had no choice but to seek a de-listing from the ASX and this will occur at close of trading on December 21.
“The company appreciates the continued and loyal support of our shareholders and the ASX during what has been a frustrating and disruptive past two years for all involved.”