First Quantum says ENRC Congo deal violates ruling

* Tribunal froze transfer of assets before ENRC deal -FQ

* First Quantum’s Frontier copper mine’s permit revoked

By Katrina Manson

KINSHASA, Aug 21 (BestGrowthStock) – Canada’s First Quantum (FM.TO: )
said on Saturday that Kazakh mining group ENRC’s (ENRC.L: )
acquisition of mining rights in Congo violated a tribunal order
freezing the sale of a contested mining project.

ENRC announced on Friday that it agreed to buy a majority
stake in Camrose Resources Ltd, which through an off-shore
company has secured a new permit to take over the Kolwezi
project after First Quantum put $750 million into developing it.

Camrose is controlled by Israeli investor Dan Gertler, who
has built up a wide portfolio of interests in resource firms
across Congo over the last 13 years.

First Quantum said that a tribunal at the International
Chamber of Commerce (ICC) in Paris had issued an order the day
before the ENRC announcement to prohibit Congo “from taking any
action to transfer or allow the transfer of the Kolwezi tailings
exploitation permit”.

“These announcements (by ENRC) appear to indicate a clear
contradiction of the Tribunal’s orders,” said the statement from
First Quantum, adding that the company believes it has exclusive
rights and a binding contract for the project.

“(A)ny purported transfer of the tailings exploitation
permit covering the Kolwezi Project is ineffective,” it added.

Officials from the ICC were not immediately available for
comment.

First Quantum sought international arbitration at the ICC in
February after its Kolwezi copper tailings project, KMT, was
closed by Congo’s government late last year following a
protracted mining contracts review.

The company said on Saturday a second order from the ICC
prohibits Congo enforcing a local court judgement that required
First Quantum to pay $12 billion in damages.

ENRC CEO Felix Vulis said on Friday his company was not
award of any legal action regarding the deal.

“We have done a very, very good legal due diligence … We
are in really good comfort,” he told Reuters by telephone.

“Everybody’s putting the emphasis on arbitration, but we
also have internal legal proceedings in Congo, and arbitration
does not overrule what the Congolese court, a sovereign court,
does,” Bene M’Poko, Congo’s spokesman on the deal with ENRC and
ambassador to South Africa, told Reuters by telephone on Friday.

First Quantum said its Frontier mining project, the biggest
copper producer in the country, had also been informed in a
letter dated Aug. 5 that its production permit had been
withdrawn, but said its operations at the site were unaffected.
(Editing by David Lewis and Jane Baird)

First Quantum says ENRC Congo deal violates ruling