Sundance Resources Ltd. said Dec. 21 that it is seeking $8.76 billion in damages after the Republic of Congo's decision to withdraw a mining permit issued to the company's Congo Iron SA subsidiary for the Nabeba iron ore project.
The amount is based on the iron ore price of $154 per tonne the day the notice was lodged. The decree, issued Nov. 30, was published in the Official Journal of the Republic of Congo.
A second decree, also in the journal, declared that the Nabeba mining permit would be issued to Sangha Mining Development Sasu.
Sundance said it does not know who the beneficial owners of Sangha Mining are, nor is the company aware of any previous mining activity by the group in the country. Sangha Mining has Chinese backing, according to a Bloomberg News report.
The company said a full investigation into the activities of the government and Sangha Mining will be completed the arbitration process is launched, which the company initiated by issuing a notice of dispute and a notice of expropriation to Republic of Congo on Dec. 15.
The journal also issued Sangha Mining the mining permit for the Avima iron ore project, originally held by Core Mining Ltd., and the exploration license for the Badondo iron ore project, originally held by Equatorial Resources Ltd.
"The Nabeba deposit is the most advanced in the region because of the work done by Sundance over many years. When combined with the other two projects whose licenses have been expropriated, we are talking about approximately 1 billion tonnes of high-grade, direct-shipping iron ore within a 100-kilometer radius that have been illegally seized by the Congo government," Sundance CEO Giulio Casello said in a statement.
Equatorial Resources, through subsidiary EEPL Holdings Mauritius, will serve a notice of dispute and request for negotiations between the Republic of Congo and the Republic of Mauritius on the reciprocal promotion and protection of investments agreement.
Equatorial Resources said Sangha Mining has never held any research permit or exploration permit over Badondo. Equatorial Resources is not aware of any mining activities of Sangha Mining in the country.
If the investment dispute is not satisfactorily resolved within six months, Equatorial Resources will consider starting international arbitration proceedings to pursue full compensation from the Republic of Congo government, the company said in a statement.