The arbitration tribunal in Paris, France, has ordered the Australian group Sundance, via its Congolese subsidiary, Congo-Iron, to pay the sum of 5 million euros, or approximately 32 billion FCFA, to the Congolese state in a case opposing the government.
The dispute between the Republic of Congo and Sundance and its subsidiary Congo-Iron arose from the withdrawal of the mining permit for the Nabeba mine, in the Sangha department, from the company for non-compliance with its obligations. Indeed, after declaring itself competent, the Paris Arbitration Tribunal ruled the requests admissible before dismissing the plaintiffs’ substantive claims in their entirety.
The court recognized that the withdrawal of the Nabeba permit was in accordance with Article 15 of the Mining Convention, since the Applicants had not started construction of the mining facilities within the contractual period of 24 months from the entry into force of the Convention.
Odilon Obami, legal advisor to the Minister of State for Mining Industries and Geology, commented on this victory for the Congolese state. “After the signing of the relevant mining agreement in 2014, it was observed that there was a prolonged lack of activity on the ground. It was on this basis that the Republic of Congo deemed it necessary in 2020 to revoke Congo-Iron’s mining permit after issuing a formal notice, in accordance with the provisions of the mining code and the stipulations of the agreement signed with this company. It was a very long and costly procedure that lasted five years, but in the end, Congo won, and we are delighted ,” he stated.
Odilon Obami emphasized that following this victory, Congo intends to strengthen its stance against mining companies that operate outside the bounds of the Republic’s laws. “This decision, for us, sends a strong signal to other companies in roughly the same situation, who, after obtaining permits, lack the resources to develop their projects on the ground. The treatment meted out to Congo-Iron is the same treatment that will ultimately be meted out to these companies. The same causes will produce the same effects ,” he warned.
The Sundance/Congo-Iron group was claiming the astronomical sum of $5.5 billion. However, the outcome is all the more significant given that, with regard to costs and expenses, the Tribunal determined that the Congo prevailed by a considerable margin (75%/25%). Nevertheless, the Republic of Congo’s contribution to the arbitration costs, amounting to €2 million (approximately 1,311,914,000 FCFA), must be deducted from this €5 million.
The Nabeba mine hasn’t remained undeveloped all this time, as another company has taken over. “On the ground, Sangha Mining has been working for some time on the development of the Nabeba mine, located between Congo and Cameroon. Mining operations are carried out on both sides. On the Cameroonian side, it’s called the Mbalam mine, and on the Congolese side, it’s the Nabeba mine. The two countries have joined forces to develop it together; that’s why it’s called a mega-project ,” explained Odilon Obami, urging investors who want to enter this sector to comply with the laws of the Republic of Congo.
