Kazakh miner Eurasian Natural Resources Corp (ENRC) yesterday agreed to a $1.25-billion settlement with Canada's First Quantum Minerals to end a long-running dispute over ownership of mining titles in the Kolwezi project in the copper-rich country of Democratic Republic of Congo (DRC).
The settlement will end one of Africa's most acrimonious investment disputes and First Quantum agreed to stop all legal action against both ENRC and the government of DRC.
First Quantum held the rights to the Kolwezi copper mining project, but the DRC government seized the project in 2009 citing contract violations and then sold it for $20 million to Fortune Ahead, a Hong Kong shell company whose owners are unknown, but many reports suggest that Fortune belongs to an associate of President, Joseph Kabila.
London Stock Exchange-listed ENRC bought a majority stake in the project in 2010 from the government of DRC for $175 million, which led First Quantum to file suits in international courts and tribunals, claiming they were stolen assets and sought $2 billion in damages.
The dispute had been expected to go to trial after a court in September 2010 upheld First Quantum's claim on the asset.
The acquisition of the Kolwezi copper mining project by ENRC was rebuked by the company's shareholders and several big investors, including Standard Life, sold their holdings in protest. Many directors of the company also quit after internal disagreements on the acquisition.