AMF sues Anglo over Kolwezi tailings project

America Mineral Fields (AMZ-T) has filed suit against giant South African mining house Anglo American after the Democratic Republic of Congo’s state mining agency, Generale des Carrieres et des Mines, was reported to have terminated AMF’s tender to develop the Kolwezi copper-cobalt tailings project in Katanga province.

AMF’s suit claims damages ofUS$3 billion, alleging that Anglo “tortiously interfered with the company’s agreements in the Democratic Republic of Congo,” and the company insists that Gecamines has not formally notified it of any changes to the contracts.

In a release dated Dec. 31, America Mineral Fields (AMF) stated that Gecamines gave written confirmation of AMF’s selection, as well as written confirmation that the initial tender process had been terminated.

Several days later, Gecamines said it had cancelled the tender because it and the national government had expected the bidders to make a “substantial up-front payment for the undertaking of the project in compensation for the partial cession of Gecamines’ right on these tailings, besides the creation of new jobs.”

Gecamines stated that it had expected the payment to be proportional to the value of the tailings, which it estimated at more than $10 billion.

Gecamines stated further that new arrangements would be made “so that the project contributes more effectively to the country’s development goals.” Arkansas-based AMF had won the tender last April, signing a US$1-billion agreement with the Zairian rebels led by Laurent Kabila (Kabila took control of the country over the months that followed).

The tender had been launched in November 1995, with the participation of such bidders as South Africa’s Anglo American, Gencor and Iscor.

Resources at Kolwezi have been pegged at 107 million tonnes grading 1.34% copper and 0.26% cobalt from three locations: Kingamwambo (60.5 million tonnes), Kasobantu (32.2 million tonnes) and Musomoi Valley (11.8 million tonnes).