First Quantum must pay Congo $6m damages -court

KINSHASA - First Quantum Minerals must pay Congo $6-million in damages over three failed lawsuits it filed against the government and state agencies after a mining project was cancelled, court documents showed on Friday.

Democratic Republic of Congo cancelled the Canadian miner's $500 million Kingamyambo Musonoi Tailings (KMT) copper and cobalt project in August as part of a government review of 61 mining deals.

On Aug. 26 and Sept. 3, KMT and Congo Minerals Development (CMD), a wholly owned subsidiary of First Quantum, filed three suits against Congo, state miner Gecamines and the mining regulatory agency, CAMI, in the country's highest civil court.

In the decision, which was seen by Reuters on Friday, the court in Congo's capital, Kinshasa, upheld the government's cancellation of the project and ordered KMT and CMD to pay damages for filing the cases.

"In consequence, (the court) orders each of the plaintiffs to pay the defendants the equivalant of $3 million in damages and interest," the decision, sent to Congo's President Joseph Kabila and Prime Minister Adolphe Muzito, read.

KMT and CMD must also pay court costs, the decision added.

Contacted by Reuters about the ruling, First Quantum's president Clive Newall declined to comment. But he said the company would release a statement on the matter.

Earlier this month, First Quantum attempted to withdraw the suits and many analysts expect the company to move the dispute to a court of international arbitration to defend its investment.

Under Congolese law, however, both the plaintiff and defendant must agree to drop a civil case and the government, CAMI, and Gecamines refused to withdraw from the legal action.

First Quantum's KMT operation is so far the only major mining project to be cancelled by the review, set up to boost state revenues from deals signed mostly during the chaos of a 1998-2003 war and the transitional government that followed.

Freeport-McMoRan's giant Tenke Fungurume (TFM) mine, believed to hold the world's largest undeveloped copper and cobalt reserves, has so far failed to clear the review. Officials from the U.S.-based firm have continued to negotiate with the government, and a spokesperson for TFM said on Friday that the company was now waiting for a decision on the contract.

Edited by: Reuters