First Quantum Minerals, the Vancouver-based copper miner embroiled in a dispute with the Congolese government over expropriation of one of its key assets, has sold its mines in the Central African country.
First Quantum (TSE:FM) said Thursday that Eurasian Natural Resources Corporation PLC has agreed to pay US$1.25 billion for its Kolwezi tailings project, along with the Frontier and Lonshi mines and related exploration interests.
Two years ago First Quantum had its largest copper mine, Frontier, nationalized by the DRC government, which accused the company of contract violations. First Quantum was subsequently ordered to shut down the mine after a Congolese Supreme Court ruling that granted prospecting rights, but not mining rights, to state-owned miner Sodimico.
First Quantum then took the Congolese government to international arbitration over the expropriation.
The $1.25 billion sale price announced today also includes settlement of legal matters.
“I am satisfied that we have reached this agreement. It brings to a close First Quantum’s current involvement in the DRC and secures substantial compensation for our shareholders for the loss they have suffered,” First Quantum Chairman and CEO Philip Pascall said in a statement.
The deal is expected to close on Feb. 29.
First Quantum shares were up about 5% in mid-day trading on Thursday.
3 Comments
Eugene
Its a pitty since there is so much potential in the DRC.
Bob
The devil is in the details.It took so many years for the government to come to this ‘expropriation thing’.Big mining companies should learn to respect contracts and tax systems instead of employing their ‘sophisticated methods’ to out do monitoring systems in the name of making profit for the share holders.Call it whatever name but in my opinion it all stinks of china Vs the West.Yet your wonder who is willing to contribute more to development in exchange with mineral rights.
Abe
What is the treatment plan for Lonshi and Frontier? I am informed that ore was treated at First Quantum’s facilities across the border in Zambia?