Kolwezi arbitration

Production and Markets

Publishing Date: 02 Feb 2010 1:55pm GMT
Author: Mining Journal

First Quantum Minerals has started international arbitration over the cancellation of the Kolwezi copper-tailings project in the Democratic Republic of Congo.

With its partners, the International Finance Corp and Industrial Development Corp of South Africa, Vancouver-based First Quantum began proceedings at the International Chamber of Commerce International Court of Arbitration in Paris. The action is against La Generale des Carriers et des Mines and the DRC.

The Kolwezi project is held under the terms of a contract of association by Kingaamyambo Musonoi Tailings SARL (KMT), which is owned by First Quantum’s subsidiary, Congo Mineral Development Ltd and its partners IFC and IDC.

Collectively, they own 82.5% of KMT, and Gecamines and the DRC own the remaining 17.5%.

First Quantum said in a statement that, along with the IFC and IDC, it was of the view that the DRC and Gecamines had breached the contract terms, which provide for recourse to resolve disputes through international arbitration.

It said that despite attempts to resolve the dispute amicably, the DRC and Gecamines had purported illegally to put an end to the contract of association and stopped the KMT operation.

According to First Quantum, this had placed almost 1,000 employees out of work, of which 700 are Congolese employees working on the construction of KMT’s plant.