China's CMOC could take legal action against Congo mining company

JOHANNESBURG: China's CMOC Group could take legal action against Congo's state mining company Gecamines, a spokesman said, after having exports blocked from Tenke Fungurume, the world's second biggest cobalt mine, for a fifth month.

In July, Tenke Fungurume Mining TFM suspended copper and cobalt exports after a dispute between Congo and CMOC escalated, and a temporary administrator appointed by a Congolese court ordered CMOC to stop marketing and exporting its production.

Congo's government believes that CMOC understated TFM's reserve levels to reduce the amount of royalties it pays to Gecamines. CMOC, which was previously known as China Molybdenum, denies doing so.

Vincent Zhou, CMOC spokesman, acknowledged for the first time that exports had been disrupted because of the error of export code at customs.

The government has already filed with the authority to request corrections of errors and will resort to legal actions to protect the rights of the company, said Zhou.

On October 12, CMOC said TFM's production and operations were normal. The mine has not been exported since July, according to logistics and industry sources.

Sage Ngoie Mbayo, the state-appointed temporary administrator of TFM, said exports are still suspended. We need to get the two shareholders around a table. CMOC holds 80 per cent of TFM, while Gecamines owns the remaining 20 per cent stake.

Zhou said CMOC has maintained communications with Gecamines and believes that the TFM royalty payment issue will be dealt with in an impartial and just manner. If they want to take this to court internationally, they are ready, said Leon Mwine Kabiena, deputy director general of Gecamines.

He said that a legal process for us is an opportunity to expose reality, and that Gecamines are very confident in the evidence we have.