MAC: Mines and Communities

China-Australia dispute over Congo iron ore escalates

Published by MAC on 2021-04-01
Source: Reuters (2021-04-02)

Australia's Sundance switching to arbitration mode.

The government of Congo has stripped Australian mining firm Sundance Resources of its permit to develop the Mbalam-Nabeba iron ore project, which straddles the border of Cameroon and Congo in central Africa.

The government has cited a lack of development for its decision to revoke the permits and grant them to a firm called Sangha Mining Development, which is reported to have Chinese backing.

Diplomatic tensions between China and Australia have led Beijing to ban imports of Australian coal, while is still dependent on Australian iron ore. However, China appears to be in the process of shoring up enough supply of iron ore to be able to cut shipments from Australia.

Back on May 2012, China's Hanlong Mining was said to take over of Sundance for the iron ore project, which includes building a 510 km (320 mile) rail line and a deep water port.

See also:

2012-06-05 The Chinese resource supercycle slows down

Sundance refers iron-ore dispute with Congo Republic to arbitration

Reuters https://www.reuters.com/article/us-congorepublic-iron-sundance-idUSKBN2BH21T

25th March 2021

DAKAR - Australia's Sundance Resources said on Thursday it had referred its dispute with Congo Republic over the Nabeba iron ore project to arbitration in London, where it is seeking $8.76-billion in damages.

Congo's government revoked Sundance affiliate Congo Iron's permit in December and awarded it to a little known company backed by Chinese investment.

It accused Sundance of making insufficient progress developing the mine and failing to pay royalties, which the company denies.

Congo's mines ministry could not immediately be reached for comment on Thursday.

The Nabeba permit is part of Sundance's flagship Mbalam-Nabeba project, which straddles the border of Congo and Cameroon. It has yet to begin extracting iron ore.

Sundance said in a statement it extended a negotiation period with Congo for 30 days last month, but there was "no meaningful engagement". The referral was made under the rules of the International Chamber of Commerce.

"We remain highly confident in the strength of our legal case against Congo and will pursue it with all our vigour," said CEO Giulio Casello.

During the negotiation period, Congo signed a new deal to develop Nabeba with Sangha Mining Development, a company that was only incorporated in October.

Sundance is also in a dispute over its permit in Cameroon. The company says the government there has failed to issue a permit it needs to extract from the site.


Congo Republic signs deal on revoked iron ore licenses with Sangha Mining

Reuters https://www.reuters.com/article/uk-congorepublic-iron-idUSKBN2B6054

15th March 2021

BRAZZAVILLE –  Congo Republic on Saturday has signed two mining conventions with Congo's Sangha Mining to exploit iron-ore on licenses the government withdrew last year from Australian miners Sundance and Equatorial Resources, and Nevis-registered Avima.

The government of Congo revoked the licenses on Avima; Badondo, operated by Equatorial Resources, and Nabeba, owned by Sundance last year, saying the companies had failed to meet their obligations to develop their high-grade iron-ore concessions. The companies deny this.

The government handed the licenses to Sangha Mining Development Sasu which is registered in the Congolese city of Pointe Noire.

Sangha Mining said on Saturday that it will invest $10-billion to develop the projects.

"We plan to start work in the fourth quarter 2021, with a plan to start exporting in 2023 and eventually have an annual production of over 100-million tonnes of iron-ore," Manuel Andre, the chief executive of Sangha, said at the signing ceremony on Saturday.

Sangha is little-known company backed by Chinese investment which is embarking on its first mining project. Andre did not comment on how the investment would be financed.

Congo's mines minister Pierre Oba said during the ceremony that the previous operators had failed to bring the projects to stream a decade after conventions were signed that is why the licenses were withdrawn.

Avima iron-ore Limited said on Thursday it had written to Congo government demanding it either reinstate its licence or pay damages of $27-billion, while Sundance, which is seeking $8.76-billion in damages, is advancing plans to start international arbitration against Congo.

"The previous partners have decided to take the case to court," Oba said, adding that the government had obtained a one-month truce before the opening of discussions for possible compensation.

 

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