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DRC to audit First Quantum

First Quantum’s
Frontier copper mine
in the DRC
Kinshasa, DRC — MININGREVIEW.COM — 01 September 2010 – The government of the Democratic Republic of Congo (DRC) plans to begin an audit into the operations of Canadian-based exploration, development and mining company First Quantum Minerals Limited in the country, to examine suspected wide-scale misconduct.

“The investigation will be carried out by a body engaged in financial auditing,” said mines minister Martin Kabwelulu in a statement e-mailed by public-relations company Bell-Pottinger.

The audit will investigate allegations that First Quantum illegally exported copper ore without fully declaring it, said DRC spokesman on the dispute Bene M’Poko,.

“This wouldn’t be accepted anywhere else,” M’Poko said by phone from Pretoria, where he is the DRC ambassador to South Africa. “We have observed it,” he said. “Before we didn’t have the capacity to deal with it, but now we have a democratically elected and functioning government.”

First Quantum said last week that it had suspended operations at its Frontier mine in the DRC after a government agency had withdrawn its permit. The company was also seeking international arbitration to resolve a yearlong dispute over its Kolwezi mining project in the country.

First Quantum president Clive Newall declined to comment when called by Bloomberg News. The company, which produces copper in Africa, said the loss of income from Frontier would not affect projects elsewhere.

“It doesn’t impact our cash resources and flow sufficiently to affect our projects,” CEO Philip Pascall told analysts on a conference call. “The company is reviewing legal options outside the country as the permit withdrawal has no legal basis,” he said.