HomeBase MetalsDRC may review First Quantum contract

DRC may review First Quantum contract

Aerial view of First
Quantum’s Tenke
Fungurume project
Kinshasa, DRC — MININGREVIEW.COM — 18 August 2009 – The government of the Democratic Republic of Congo (DRC ) may review its decision to cancel a copper and cobalt project in which Toronto-listed First Quantum Minerals is the majority stakeholder.

Earlier this month, the government cancelled a contract with First Quantum’s Kingamyambo Musonoi Tailings (KMT) unit, following its review of 61 foreign and local mining contracts.

A government official told Reuters here that the government remained open to discussions. “There is still a possibility of renegotiation,” said Emile Bongeli, head of the government’s contract review panel.

First Quantum’s wholly owned subsidiary Congo Minerals Development wrote to Congolese Prime Minister Adolphe Muzito soon after the contract’s cancellation, lobbying the government to re-examine its decision.

At the time of cancelling the contract, the government cited five points “’ including non-payment of royalties and failure to adhere to an agreed timetable “’ as reasons for the contract’s termination.

The contract review “’ launched in early 2007 following elections the year before “’ was intended to boost revenues from the country’s once-lucrative mining sector, and to bring contracts up to international minimum standards.

Four of the remaining contracts were approved on 6 August, but the flagship Tenke Fungurume copper and cobalt project was not given the final green light.