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Congo to Launch Independent Audit of First Quantum's Mining Operations

Industry News 01:04:31PM Sep 01, 2010 Source:SMM

Sep 1 (Bloomberg)--

The Democratic Republic of Congo plans to begin an audit into the operations of First Quantum Minerals Ltd. in the country to examine “suspected wide-scale misconduct,” Mines Minister Martin Kabwelulu said.

"The investigation will be carried out by a body engaged in financial auditing,” he said today 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 Bene M’Poko, Congo’s spokesman on the dispute.

"This wouldn’t be accepted anywhere else,” M’Poko said by phone today from Pretoria, where he is the Congolese 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, based in Vancouver, said on Aug. 27 that it suspended operations at its Frontier mine in Congo after a government agency withdrew its permit. The company is 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 today.
The company, which produces copper in Africa, said the loss of income from Frontier won’t affect projects elsewhere.

"It doesn’t impact our cash resources and flow sufficiently to affect our projects,” Chief Executive Officer Philip Pascall told analysts on a conference call yesterday.

The company is reviewing legal options outside the country as the permit withdrawal has “no legal basis,” he said.

Arbitration may take two-to-three years at Frontier, while a ruling on the Kolwezi project is expected next year, Pascall said. The gross value of Frontier’s fixed plant is $249 million, Chief Financial Officer Mark Bolton said on the call.

Eurasian Natural Resources Corp., which now controls the Kolwezi assets, will run the mine while the arbitration process continues, M’Poko said. He declined to say whether Congo would respect the court ruling if it went against the country.

"We have a very strong case in arbitration,” M’Poko said. “We don’t want to speak about hypothetical cases.”

First Quantum said this month that Congo’s action at Frontier is a response to the company’s decision to seek arbitration over the Kolwezi copper and cobalt project. M’Poko rejected the claim.

  
 
                
 

Congo to Launch Independent Audit of First Quantum's Mining Operations

Industry News 01:04:31PM Sep 01, 2010 Source:SMM

Sep 1 (Bloomberg)--

The Democratic Republic of Congo plans to begin an audit into the operations of First Quantum Minerals Ltd. in the country to examine “suspected wide-scale misconduct,” Mines Minister Martin Kabwelulu said.

"The investigation will be carried out by a body engaged in financial auditing,” he said today 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 Bene M’Poko, Congo’s spokesman on the dispute.

"This wouldn’t be accepted anywhere else,” M’Poko said by phone today from Pretoria, where he is the Congolese 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, based in Vancouver, said on Aug. 27 that it suspended operations at its Frontier mine in Congo after a government agency withdrew its permit. The company is 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 today.
The company, which produces copper in Africa, said the loss of income from Frontier won’t affect projects elsewhere.

"It doesn’t impact our cash resources and flow sufficiently to affect our projects,” Chief Executive Officer Philip Pascall told analysts on a conference call yesterday.

The company is reviewing legal options outside the country as the permit withdrawal has “no legal basis,” he said.

Arbitration may take two-to-three years at Frontier, while a ruling on the Kolwezi project is expected next year, Pascall said. The gross value of Frontier’s fixed plant is $249 million, Chief Financial Officer Mark Bolton said on the call.

Eurasian Natural Resources Corp., which now controls the Kolwezi assets, will run the mine while the arbitration process continues, M’Poko said. He declined to say whether Congo would respect the court ruling if it went against the country.

"We have a very strong case in arbitration,” M’Poko said. “We don’t want to speak about hypothetical cases.”

First Quantum said this month that Congo’s action at Frontier is a response to the company’s decision to seek arbitration over the Kolwezi copper and cobalt project. M’Poko rejected the claim.