February 9, 2010 / 6:06 PM / 9 years ago

INTERVIEW-Congo says to accept legal ruling on First Quantum

* Case being closely watched abroad by investors

* DR Congo anxious to attract potential investors

By Thomas Hubert and Mark John

KINSHASA, Feb 9 (Reuters) - Democratic Republic of Congo pledged on Tuesday to accept the outcome of international arbitration in a dispute with Canada’s First Quantum Minerals (FM.TO) over the Kolwezi copper and cobalt tailings project.

First Quantum, which holds a 65 percent stake in the $550 million project, announced this month it would seek arbitration after Congo last August cancelled its permit and then ordered it to close the project down.

“First Quantum has every right to seek arbitration,” Planning Minister Olivier Kamitatu said in an interview on the margins of a business conference in Kinshasa.

“The Democratic Republic of Congo respects the law. You can’t on the one hand say you will improve transparency on natural resources ... the other say you don’t respect a legal ruling, so we will behave coherently,” he told Reuters.

The case has unnerved potential investors in Congo and is being closely watched abroad.

President Joseph Kabila is anxious to boost weak economic growth by attracting private sector investment and Kamitatu, leader of a minority coalition party, is in charge of the drive to improve business conditions in Congo.

Production at Kolwezi was due to have started this May, with annual output ultimately put at around 70,000 tonnes of copper and 14,000 tonnes of cobalt. First Quantum said the closure would mean the loss of 700 local jobs.

First Quantum launched arbitration in the Paris-based International Chamber of Commerce International Court of Arbitration against Congo and local partner Gecamines.

The Kolwezi contract was one victim of a review of more than 60 DRC mining contracts the government launched in 2007, arguing they were struck on unfair terms.

First Quantum said last August it was still interested in seeking a negotiated settlement with Congo on the asset, and analysts have doubted whether it will be forced to withdraw altogether.

Kamitatu questioned whether it would be possible for First Quantum and Congo to collaborate on other projects while the dispute was unsettled.

“Can one go into arbitration and before justice on the one hand, and want to promote partnership on the other?” he said, without elaborating. (Editing by James Jukwey)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below