First Quantum Says Tribunal Bars Kolwezi Copper, Cobalt Project Transfer

First Quantum Minerals Ltd. said an arbitration tribunal hearing in Paris relating to its Kolwezi project in the Democratic Republic of Congo prohibited any transfer of the permit covering the copper and cobalt project.

Eurasian Natural Resources Corp. said yesterday it bought 50.5 percent of Camrose Resources Ltd. for $175 million, giving it a license to the Kolwezi venture. First Quantum and its partners still hold the “exclusive rights” to the project, the Vancouver-based company said in a statement.

“ENRC has not contacted First Quantum with respect to the status of the arbitration or its legal and contractual rights to the Kolwezi tailings exploitation permit,” the company said. “Any purported transfer of the tailings exploitation permit covering the Kolwezi Project is ineffective and contrary to the orders issued by the tribunal.”

First Quantum and Congo’s government have been involved in a yearlong dispute over the Kolwezi project, part-owned by the World Bank’s International Finance Corp. and the Industrial Development Corp. of South Africa. Congo’s government also withdrew permits for its Frontier mine in the country on Aug. 5, First Quantum said.

Frontier was Congo’s largest source of tax revenue last year, providing the government with more than $55 million in taxes. Congo’s courts have said the permits for the mine have now reverted to the country’s mines registry, according to First Quantum.

Frontier’s Operations

Frontier’s operations continue unaffected, the company said. A message left after hours with First Quantum spokeswoman Sharon Loung wasn’t immediately returned. First Quantum President Clive Newall didn’t immediately respond to a message left after hours. A message left after hours with Eurasian Natural Resources media adviser Julia Kalcheva wasn’t immediately returned.

The dispute is the subject of arbitration before the International Chamber of Commerce in Paris and First Quantum. Messages left with the organization after hours weren’t immediately returned.

Congo will abide by the arbitration decision no matter what it is, Ambassador to South Africa, Bene M’Poko, said by phone from Paris yesterday on behalf of Congo’s government, but the needs of Congo’s cash-strapped government could not wait for a resolution, he said.

“We as a government couldn’t afford to let those assets rot and we knew also that arbitration takes two to three years,” he said.

A Congo court on Aug. 4 appointed a liquidator for the Kolwezi project, which was closed last September by the government on claims of breach of contract.

A Congolese court ruled that First Quantum no longer owns the rights to the Kolwezi concession and was ordered to pay $12 billion in damages to Congo, M’Poko said. The domestic court decisions should be respected, he said.