First Quantum Loses Mine Rights to Hong Kong Company, Congo Minister Says
Congo’s Mines Minister Martin Kabwelulu said his government gave the rights to two mines previously operated by First Quantum Minerals Ltd. to a Hong Kong-based company called Fortune.
Fortune is in a joint venture with Sodimico, a state-owned Congolese mining company, Kabwelulu said in a mobile-phone text message today.
First Quantum is considering taking further legal action against the Congolese government and Fortune over losing the rights to the Frontier and Lonshi mines, Clive Newall, the company’s president, said in a mobile-phone interview today.
Kabwelulu declined to give further details of Fortune. Newall said First Quantum isn’t familiar with the company. Bloomberg News couldn’t immediately find Fortune’s contact details.
First Quantum, a Vancouver-based copper producer, has lost control of its biggest assets in Congo in the past year. It has a case before a Paris arbitration court over the $750 million Kolwezi project. Congo shuttered Kolwezi in 2009 and agreed last month to sell it to London-based Eurasian Natural Resources Corp.
First Quantum said Aug. 27 it suspended operations at the $249 million Frontier mine after the government withdrew its permit.
“Frontier has been taken away from us on wholly baseless grounds and we will take every available legal option to protect our rights including international arbitration,” Newall said.
Congo’s Ambassador to South Africa, Bene M’Poko, who serves as government spokesman in the First Quantum case, didn’t respond to requests by Bloomberg News for comment.
The impact of losing more than $1 billion of investment in Congo won’t keep the company from doubling in size in the next three years, Newall said. Losing Frontier and the exhausted Lonshi mine won’t affect First Quantum’s cash flow, he said.
“Revenues are lower but Frontier was our highest-cost operation,” he said. Without further investments in Congo, “our stock rating will be upgraded because the risk of the company will be diminished,” Newall said.
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at firstname.lastname@example.org