First Quantum Minerals Suspends Construction at Kolwezi Project
VANCOUVER, BRITISH COLUMBIA - (September 16, 2009) - First Quantum Minerals
Ltd. ("First Quantum" or the "Company") (TSX: FM)
(LSE: FQM) announces that
as of September 16, 2009, it has suspended construction at its Kolwezi
Project in the Democratic Republic of Congo ("DRC").
Kolwezi Project exploitation permit is held under the terms of a Contract
of Association, by Kingamyambo Musonoi Tailings SARL ("KMT"), which is
owned by the Company: 65%; La Generale Des Carrieres et Des Mines ("Gecamines"):
12.5%; Industrial Development Corporation of South Africa
("IDC"): 10%; the International Finance Corporation
("IFC"): 7.5%; and the Government of the DRC: 5%.
suspension follows the issuance of an order by the General Prosecutor of Katanga
to seal KMT's facilities. The Company has been
advised, by its lawyers, that such an order is illegal, for the following
General Prosecutor is not allowed to order such measures, especially without
a court order;
order is referring to the "spirit" of the letter of the General
Attorney of August 21, 2009 as its basis, which is not a proper legal
basis especially as the Attorney General's letter does not provide for
- sealing is usually associated with financial matters,
like non-payment of taxes, which is not the case with KMT.
Company has filed notices of force majeure, effective immediately, under
both the DRC Mining Code and Contract of Association, which were
necessary in response to actions taken by the DRC government to cancel or
revoke the exploitation permit and interfere with the Company's
activities. The government's actions followed a letter sent to the
Company with respect to the KMT Project and the DRC mining contract revisitation, which purported to try to establish the
basis on which the Kolwezi Project may be cancelled.
of the Project is at an advanced stage (approximately 65% complete) and
was on schedule to start commissioning in May 2010. Initial production
rates are expected to be 35,000 tonnes copper and 7,000 tonnes cobalt per
year, rising to 70,000 tonnes copper and 14,000 tonnes cobalt within 2
Company regrets that the suspension will result in the immediate loss of
approximately 700 jobs in the Kolwezi
area, loss of tax revenues to the DRC government, and an indefinite delay
in commissioning of the Kolwezi Project, which was targeted for May 2010.
Company and the Kolwezi Project's other contributing partners, the IFC
and the IDC, remain firmly of the view that the DRC government's actions
have no legal basis. While the Company is preparing to file for
International Arbitration pursuant to the Contract of Association, it
will continue to seek an alternative solution to the claims, which have
resulted from the mining contract revisitation
process, and will provide further updates as warranted.
of the Board of Directors of First Quantum Minerals Ltd.
G. Clive Newall, President
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