First Quantum Mining Titles Returned To Sodimico-DRC Official
20 August 2010 - 10:31PM
Dow Jones News
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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