First Quantum, the IFC and IDC are seeking to protect their investments in the Kolwezi tailings project, or KMT project, in which First Quantum owns 65%, Gécamines holds 12,5%, the IDC owns 10%, the International Finance Corporation has 7,5% and the government of the DRC owns 5%.
Construction work at the project was suspended in September last year, in response to an order by the General Prosecutor of the Katanga province to seal the Kingamyambo Musonoi Tailings (KMT) facilities,
following a mining contract review in the country.
“Despite numerous efforts by the company, the IFC and IDC, attempting to resolve the dispute amicably and advising the DRC and Gécamines of the illegality of their actions and of the validity of the contract of
association, the DRC and Gécamines have purported to unilaterally and illegally put an end to the contract of association and have stopped the KMT operations, thus placing out of work almost 1 000 employees, of
which 700 are Congolese employees working on the construction of KMT's plant,” First Quantum said in a statement on Monday.
The company said that it received a letter from Gécamines on January 11, advising that the Kolwezi contract of association was being cancelled.
While the international arbitration process is under way, First Quantum said that it will also continue to seek a negotiated solution to the dispute.
The Kolwezi tailings project had been scheduled for commissioning in the second quarter of 2010, before construction was halted last year.
The plant was designed to initially produce 35 000 t/y of copper cathode and 7 000 t/y of cobalt hydroxide, but capacity would be doubled during the first year for a budgeted capital cost of approximately $40-million.
The mine life was expected to be 22 years at the expanded annual production rate of 70 000 t/y of copper cathode.
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