Congolese mining licenses previously owned by First Quantum Minerals Ltd.'s (FM.T) Frontier and Comisa divisions have been returned to state-owned Sodimico, said a senior government mining official from the Democratic Republic of Congo on Friday.

Those assets have been "given back to the rightful owner," said Bene M'Poko, the coordinator for the DRC Government on Investment Issues and Natural Resources, in an interview.

He said that "First Quantum obtained those assets illegally. The then minister of mines expropriated Sodimico of its mining rights and gave it to First Quantum for reasons not known to us. Sodimico went to court" to claim those rights back.

M'Poko said the Congolese Supreme Court ruled in favor of restoring those rights to Sodimico, also known as the Societe de Developpement Industriel et minier du Congo.

First Quantum wasn't immediately available to comment, but on Aug. 11, the company confirmed that it received notice of the Supreme Court's ruling. First Quantum, however, noted that the ruling hasn't impeded its rights to produce copper from those assets.

"The conclusions of the Supreme Court are impossible to reconcile with the known history of the mineral rights in question," the company said.

"No steps have been taken to date to terminate either of Frontier's or Comisa's titles and they continue to operate without interference. The final outcome of the judgment remains uncertain and may result in an impairment of the Company's carrying value of Frontier which could be material."

The Supreme Court ruling was issued May 21, and since then the company has cut back on capital investment in the Frontier mine.

First Quantum has also been stripped of its mining rights over the Kolwezi project in the Congo. The company owned a 65% stake in the project and has taken the matter to an international arbitration court for review after the Congolese court system ruled in favor of revoking those rights.

Company Website: http://www.first-quantum.com

-By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; alex.macdonald@dowjones.com
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