Maravi

(MININGWEEKLY) Canadian paper links Gertler to DRC's new Kolwezi acquirer

Canadian paper links Gertler to DRC's new Kolwezi acquirer
By: Matthew Hill
18th June 2010

TORONTO (miningweekly.com) – Dan Gertler, the Israeli diamond magnate, has turned up in a new Democratic Republic of Congo (DRC) mining-related report.

Canada's Financial Post reported this week that the Kolwezi copper tailings project, which the government took away from TSX-listed First Quantum Minerals in September, is now in the hands of a British Virgin Islands company called Highwinds Properties. The report then cited unnamed sources linking Highwinds to Gertler, who was a major shareholder in DRC copper-miner Nikanor, which merged with Katanga Mining in 2007.

First Quantum watched last year as the DRC government withdrew the mining licence for the Kolwezi tailings project, saying the company violated an agreement. Then, earlier this year, the DRC Surpreme Court withdrew two more of First Quantum's licences in the country, Frontier and Lonshi.

Gertler is reportedly close to DRC President Joseph Kabila, having been invited to his wedding.

But First Quantum is not backing down without a fight. It has used strong language against the DRC government and has taken the dispute to international arbitration.

In May, chairperson and CEO Philip Pascall made the company's intentions clear: "We are extremely concerned with the orchestrated attack on the company's Frontier and Lonshi operations in the DRC in obvious retaliation for our commencement of international arbitration with respect to the illegal cancellation of our Kolwezi project and our refusal to resolve this dispute by agreeing to submit to arrangements with unspecified third parties.

"We will also take all necessary legal measures to protect our mining rights and property and pursue damages against any third-party interfering with our legal rights."

Pascall did not offer any explanation as to what he meant by "third party interferences".

There are also worries over whether Freeport-McMoran's $2-billion Tenke Fungurume copper project in the DRC might suffer the same fate as First Quantum's. This is the last contract to be reviewed by the government.

The mining licence review process that the DRC government embarked on in 2007 sent jitters through the industry, and for good reason it seems.

Adding further uncertainty, Reuters reported this week that the country's government would consider new legislation giving the State a 35% shareholding in all future mining projects in the DRC.

The Financial Times said in May that First Quantum's plight is a "much-watched barometer of investment risk" in the DRC. So far, the events that have unfolded cannot have evoked much confidence amongst potential investors.

All this, while copper prices trade at around $6 500/t, more than double their 2008 lows.

Labels: DAN GERTLER, DIAMONDS, HIGHWINDS PROPERTIES, JOSEPH KABILA, NIKANOR

posted by MrK @ 4:49 PM