First Quantum chairman and CEO Philip Pascall was diplomatic, as always, for the duration of a conference call on Monday to discuss the announcement that two (more) of the group’s interests in the Democratic Republic of the Congo (DRC) have again been the subjects of special mention. “We are extremely concerned with the orchestrated attack on the company’s Frontier and Lonshi operations”, said First Quantum.
More to the point, perhaps, First Quantum appears to be nearing the day when it will “name and shame” the individuals that, under increasingly fragile disguises, are waging a relentless campaign against it in the DRC.
First Quantum, one of the world’s top ten copper miners, has long been insistent that it is compliant with the DRC’s Mining Code, but in a September 2009 announcement, it confirmed suspension of work at the 75%-complete KMT project, after it was shuttered by government agents, cutting 700 jobs loose. Today First Quantum put its investment, so far, in KMT, at USD 750m.
Where will this go? Unlike KMT, no “direct action” has been taken by the DRC authorities (so far) against either Frontier or Lonshi as a result of a Supreme Court “decision”.
Questions put by investment analysts to Pascall on Monday pussyfooted around the background to the attacks on First Quantum in the DRC, which First Quantum solidly alluded to in its statement on Monday, when it referred to: “our refusal to resolve this dispute by agreeing to submit to arrangements with unspecified third parties”.
Proverbial napalm was further poured out, when First Quantum later added: “We will also take all necessary legal measures to protect our mining rights and property and pursue damages against any third party interfering with our legal rights”.
The names of the “third parties” are hardly secret, and could well become public within a month, when arbitration proceedings commence over the KMT debacle. On 1 February 2010 First Quantum announced an international arbitration by First Quantum and its partners in KMT, under the facilities of the International Chamber of Commerce, International Court of Arbitration, in Paris.
So far, courts of law, Congolese style, have been used as the main weapon against First Quantum. On 30 March, First Quantum announced that it “believes” that a DRC appeal court had upheld a USD 12bn “damages” claim against First Quantum, in respect of KMT.
The classic “third party” technique applied in the DRC is simple, starting with placing an entity such as First Quantum under extreme pressure. In the case of mining companies, the target s then approached to buy additional “valuable” mining properties. Whether paid by the victim in cash or shares, or both, the hustlers (diplomatically, “third parties”) cash in on millions and millions of dollars. First Quantum is unyielding, having apparently adopted a stance of “never give an inch, never yield an atom”.
“Orchestrated attack” intensifies on First Quantum, which seems closer to naming and shaming certain “unspecified third parties” as another court-supported potential asset confiscation looms.
Author: Barry Sergeant
[http://www.first-quantum.com/s/NewsReleases.asp]
What is this article doing here? 😮
Well done congolesse stand for what you want and what investors must respect
#2 If I were you I would rather wait for more information before I open my mouth. My experience with business delas in Congo DR is that even if government is involved, it never benefits the people on the street. It is usally a question of successive ministers sharing the loot. So I would rather wait and hear more on this one, maybe through the international arbitration.
#3 Katie Good it is nice to know that there are Zambians like you who are upto date with the murky world of the DRC mining industry. What #2 doesnt know is that this may have nothing to do with Congolese interests. Instead the Congolese are just been used as pawns in this property grab. I have some idea as to who these third parties are. They are a bunch of Diamond traders. One has a name that starts with a G. They claim to be mining magnets but they run no operating mines. They are rogue players buying and stripping off assets. Seems the’ve met their match in FQM.
#4 Princess, thanks, my knowledge did not go that far but I do know and agree with you that the mining industry there is rather murky. And the interests of the citizens is not always at the top of the list.