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China paints Africa red in debt

Aussie companies stripped of iron ore projects in Africa as China paints it RED

(Great story by AFR’s Brad Thompson) Dec 21, 2020 – 5.30pm

Perth-based Sundance Resources is seeking a multi-billion dollar payout from the Republic of Congo after being stripped of its iron ore mining licence in the central African nation where China is casting a big shadow.

Two other Australian-based companies have also had iron ore mining and exploration rights stripped by the RoC, which then awarded them to a mystery company with no history in the region.

The mystery company has been handed rights to about a billion tonnes of high grade iron ore by the RoC at a time Chinese steel mills are stuck paying high prices for Australian product.

It is understood the three Australian companies stripped of their permits will study any links between China, which wields increasing influence in the RoC, and the new permit and licence holder.

China is a dominant force in mining in the neighbouring Democratic Republic of Congo as well as a long-time supporter of the RoC.

Sundance said on Monday that the RoC had issued decrees purporting to strip its subsidiary Congo Iron of the mining permit for the Nabeba iron ore project and re-issued the permit to Sangha Mining Development Sasu.

Sangha Mining has also been awarded permits and licences for iron ore projects that were stripped from ASX-listed Equatorial Resources and privately-owned Core Mining Congo.

Equatorial Resources said it considered the sudden awarding of the Badondo (Equatorial), Nabeba (Sundance) and Avima (Core) permits to Sangha Mining a “flagrant breach of the RoC (Congo) government’s obligations under the mining code, the relevant mining conventions which exist between the permit holders and the RoC government, and international law”.

Both Sundance and Equatorial said they had no knowledge of Sangha Mining and were not aware of any previous mining activity by the group in RoC.

Sundance said it would conduct a full investigation into the actions of the Congo and into Sangha Mining before an arbitration process Sundance has kicked off by issuing a notice of dispute and notice of expropriation to the Congo.

In the notice of expropriation, Sundance has claimed damages of $US8.76 billion based on the iron ore price of $US154 a tonne on the day the notice was lodged.

Sundance chief executive Giulio Casello said the expropriation of iron ore mining permits and exploration licences by the Congo was “breathtaking in its size and audacity and in contempt of Congo’s mining laws and the government’s oft-stated claims that it upholds its own laws”.

“The Nabeba deposit is the most advanced in the region because of the work done by Sundance over many years.

“When combined with the other two projects whose licences have been expropriated, we are talking about approximately one billion tonnes of high-grade, direct-shipping iron ore within a 100 kilometre radius that have been illegally seized by the Congo government.

“Sundance will take all steps required to pursue the legal rights of the company and its subsidiaries and protect the interests of Sundance shareholders.

“We do not see how our dispute with the Congo government, as a result of its actions, can be resolved in the 54 remaining days of the negotiation period, absent an agreement by the Congo government to pay substantial damages.”

Mr Casello’s comments coincided with notice Sundance would be removed from the ASX boards from December 21 after being suspended from trading for a continuous period of two years.

Equatorial, led by former Wallaby and Resolute Mining managing director John Welborn, said it was shocked by the “unlawful and arbitrary actions” of the Congo.

“The actions of the RoC government in granting multiple mining licences to Sangha Mining are unprecedented, unlawful and unfair,” Equatorial said.

“Sangha Mining has never held any research permit or exploration permit over Badondo and, as far as Equatorial is aware, has conducted no work at Badondo nor made any investment whatsoever in the exploration or development of Badondo.

“Under the applicable RoC legislation, Sangha Mining is therefore ineligible for the grant of exploitation rights over the Badondo tenement.”

Equatorial said that through its subsidiary EEPL Holdings Mauritius, it would serve a notice of dispute and request for negotiations on the Congo under an agreement between the Congo and Mauritius for the reciprocal promotion and protection of investments.

Dash Editor

Self-confessed confused news junkie, with lifelong additions to coffee, great conversations, perfection in all its forms, cold wine, hot music and puppy dogs.

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