Cairo, Egypt — 01 November 2012 – North African focused mineral exploration, development and mining company Centamin is to appeal against an Egyptian court ruling that has declared invalid its rights to operate the Sukari mine, its main asset in the North African country.
Centamin said after Tuesday’s ruling that operations were continuing at Sukari, its only production asset, and that the administrative court which had issued the decision did not have jurisdiction over its mining rights. But Reuters reports that shares in the firm fell 35% to 64 pence before trading was suspended.
“Of course we are appealing this ruling,” Youssef El-Raghy, general manager of Centamin’s Egyptian operations, told the Arabic satellite channel Al-Arabiya when asked whether the company would appeal.
Investment bank Beltone Financial said it believed Centamin could win an appeal but, failing that, the company could seek international arbitration in the dispute.
“We believe that, due to the firm’s foreign ownership structure and, given the right to appeal the ruling, Centamin would ultimately be able to successfully appeal and retain its mining rights,” the bank said in a research note, adding that international arbitration was an option if the ruling was upheld by a higher court.
The Egyptian government has previously said it wants to resolve legal disputes with other foreign investors over state land and other deals to avoid international arbitration.
In a brief statement on Tuesday Centamin said that to date the administrative court had only made “comments” and had said there was no final decision or written judgment available.
Courts in Egypt have challenged a number of commercial deals reached during the rule of Hosni Mubarak, who was ousted last year, adding to investor worries at a time when the government is trying to revive confidence in the economy.
Source: Reuters Africa. For more information, click here.