Sundance Resources Limited (ASX: SDL) announced on Thursday that it has referred its dispute with the Republic of Congo over the Nabeba iron ore project to arbitration in London under the rules of the International Chamber of Commerce. The company, through its subsidiary Congo Iron SA, is seeking $8.76 billion in damages.
Revocation of Sundance’s Nabeba permit
In December 2020, the local government had revoked its mining permit for the Nabeba iron ore project from Sundance’s subsidiary Congo Iron. The Nabeba permit was part of Sundance’s Mbalam-Nabeba project, which straddles the border of Congo and Cameroon.
The decree to withdraw the mining permit was published in Official Journal and was announced to be prompted by ‘prolonged insufficiency of exploitation manifestly contrary to the potential of the deposit’ and failing to pay royalties. This was denied by Sundance.
The local government had then awarded the mining permit to China’s Sangha Mining Development, a company that was only incorporated in October.
Unsuccessful negotiation prompts arbitration
Sundance said that it had agreed to extend the period of negotiations with Congo by 30 days (that was until 18 March 2021) to allow discussions to progress with Congo. However, the company said that there was no meaningful engagement with the Congo Government.
Consequently, the Australian miner announced its decision that the dispute against the Congo Government’s unlawful expropriation of Congo Iron’s mining permit in the Sangha region of Congo and related rights and interests would be referred to arbitration in London.
Sundance is also in a dispute over its permit in Cameroon, noting that the government there had failed to issue a permit it needs to extract from the site.
Management comments
Sundance Resources CEO Giulio Casello said: “Sundance will continue to work with the Government of Cameroon to have our Mbalam-Nabeba Iron Ore Project ready to go when it becomes apparent to Congo and any financier that the Sangha Mining Project is an illegal farce.
We remain highly confident in the strength of our legal case against Congo and will pursue it with all our vigour to achieve the best results for our shareholders and stakeholders. Sundance will further update shareholders as and when appropriate.”
*Image Source: Sundance Resources Limited