ENRC tells First Quantum to back off
09 Sep 2010
The spat between Kazakh mining giant Eurasian Natural Resources (ENRC) and Canadian miner First Quantum Minerals (FQM) over ENRC's acquisition of a majority interest in Camrose Resources is getting tetchier.
ENRC has sent a letter to FQM complaining about recent statements made by the Canadian company which ENRC believes are an attempt to interfere with the Kazakh company's rights to develop the Camrose joint venture and the Kolwezi tailings project.
It is the second letter ENRC has sent to FQM; the first suggested that the two companies meet to discuss their disagreements, but FQM chose not to respond to this offer.
Instead FQM opted to make public statements relating to the issue to Metalkol, a joint venture company indirectly controlled by Camrose, of PER652, the permit to exploit the Kolwezi Tailings site. The permit was issued by La Générale des Carrières et des Mines and Societe Immobiliere du Congo (Gécamines).
Before acquiring its majority stake in Camrose, ENRC had been aware of the dispute between FQM, Gécamines and the government of the DRC. That dispute arises from the contract revisitation process which was commenced by the DRC government in 2007.
Following that review, the relevant rights were withdrawn from Kingamyambo Musonoi Tailings Sarl (KMT) by the government of the DRC in August 2009.
FQM subsidiary Congo Mineral Developments (CMD), a shareholder in, KMT, challenged the withdrawal of those rights in the courts of the DRC. Those courts ruled in October 2009 that the withdrawal of the rights was lawful.
ENRC carefully considered the written judgments of the DRC courts and relevant DRC laws and, having done so, was satisfied that Gecamines had the right to transfer to Metalkol the permit to exploit the Kolwezi tailings.
"ENRC is not a party to arbitration or legal proceedings with First Quantum; any dispute that First Quantum has is with the relevant DRC authorities," said Felix Vulis, chief executive officer of ENRC.
PER652 was issued to Metalkol prior to FQM's public announcement on 21 August 2010 of the procedural order of the International Chamber of Commerce (ICC) arbitration tribunal. In light of this, ENRC maintains there is no basis for FQM alleging any breach by ENRC of the procedural order of the ICC arbitration tribunal and ENRC responded on Thursday to FQM pointing this out.
No proceedings have been issued against ENRC. If proceedings are issued, ENRC will defend its legal position vigorously.
