African mining and exploration company Camec has accused the government of the Democratic Republic of the Congo (DRC) of making “misleading” and “erroneous” statements about the current dispute over its mining licences. Last month the DRC authorities attempted to revoke the company’s licences, reverting rights over certain mines to Gecamines, the state-owned mining firm. The attorney general claimed there were “serious irregularities” in the original issuing of the licences.
However, last week a court Le Tribunal de Grande Instance ruled in favour of Camec, finding that original transfers of licences to various subsidiaries of Camec were made in accordance with the law therefore were entirely valid.
Yet, the DRC government speaking via London firm Bell Pottinger was quick to retaliate and issued a statement declaring that the original licences remained entirely invalid.
“The DRC government notes Camec’s announcement that it has obtained a judgment endorsing the transfer of the apparent licences from one commercial body to another in 2004. The question apparently put to the court avoids the issue which concerns the DRC government, and which forms the basis of the action by the public prosecutor. The “licences” were improperly obtained originally and are still invalid,” says Jean Felix Mupande, director general of the Cadastre Minier.
Camec issued its own response on the same day as the DRC authorities, in which it dismissed the government’s “erroneous” statements, upholding the court ruling and stating that the court’s decision clearly referred to the original licence transfers made in 2004.
The mining firm is now in the process of writing to Bell Pottinger to ask them to issue an amended press release. “Given the importance of this matter to Camec and its shareholders, we are reviewing all options open to us to prevent the further dissemination of erroneous information into the marketplace,” says Andrew Groves, chief executive of Camec.
The dispute refers to the transfer of licences known as C19 and C21 to Camec’s subsidiary Boss Mining, as well as the transfer of licences C17 and C18 to Kababankola Mining Company (KMC), a joint venture company between KMC and Boss Mining. The transfer of the licences was concluded in 2004, following an international arbitration through the World Bank’s International Centre for the Settlement of Investment Disputes.
When the allegations were first made Camec immediately stood by the legality of its licences, stating it would potentially bring international arbitration proceedings against the DRC government.
Camec also believes the attempted licence repudiation was an attempt to sabotage its attempt to acquire Katanga Mining. By the beginning of September Camec announced it would withdraw its offer for Katanga, citing “the uncertainty relating to the mining licence region in the Democratic Republic of the Congo” as the reason it ceased bidding.
In light of its withdrawal, Katanga Mining issued the following statement made by Arthur Ditto, chairman, president and CEO of Katanga: ““Given the significant uncertainty surrounding CAMEC and its operations, we are not surprised by this development. Katanga is ready to continue to develop its Kamoto project and to investigate strategic options to maximize value for Katanga shareholders.”
The Kamoto project involves the rehabilitation of mines and plants near Kolwezi in the DRC. In March, Katanga Mining mandated Fortis, Investec Bank and Standard Chartered to lead arrange and underwrite a US$260mn project financing. The original plan was to raise the funding partly through commercial banks, export credit agencies and development fund agencies.