First Quantum in Congo Talks After Report of Canceled Contract

By Thomas Biesheuvel

Aug. 7 (Bloomberg) -- First Quantum Minerals Ltd., the producer of copper in Africa, said it’s talking to the government of the Democratic Republic of Congo after Reuters reported a mining contract was canceled.

First Quantum’s contract for the Kolwezi cobalt and copper project was ended after the Vancouver-based company failed to begin commercial operations within an agreed timeframe, Reuters reported yesterday.

First Quantum hasn’t missed any schedule or received any notification from the government about a cancellation, the company’s President Clive Newall said today in a phone interview.

“We are in the process of talking with the government,” Newall added. He declined to disclose details of the talks.

Congolese state-owned mining companies are renegotiating contracts with investors as the government seeks to increase its share of revenue from the industry.

Development of Kolwezi in Congo’s Katanga province is 65 percent complete and has so far cost about $300 million, Newall said. It will start commercial production in the first quarter of 2010, according to the company’s Web site.

First Quantum owns 65 percent of Kolwezi, South Africa’s Industrial Development Corp. has 10 percent and the World Bank’s International Finance Corp. unit 7.5 percent. Congo and state- owned miner Gecamines together own 17.5 percent.

Gecamines Chief Executive Officer Paul Fortin didn’t immediately answer his mobile phone when Bloomberg News called seeking comment.

To contact the reporter on this story: Thomas Biesheuvel in London tbiesheuvel@bloomberg.net

Last Updated: August 7, 2009 06:57 EDT