Congo liquidator takes over First Quantum's Kolwezi Africa

By Katrina Manson

KINSHASA (Reuters) - A court-appointed liquidator said on Friday it has taken over the running of Toronto-listed First Quantum Minerals' Kingamyambo Musonoi Tailings (KMT) copper and cobalt project at Kolwezi in the Democratic Republic of Congo.

On Wednesday, the firm said a Congolese court had initiated proceedings to liquidate the $750 million project, the latest step in a row between the company and the government.

"It's now down to me to organise all the administration (at Kolwezi)," court-appointed liquidator Eric Monga of Trade Service told Reuters on Friday following a visit to the site in Congo's southern copperbelt.

"They went on site today with court sheriffs," a source based in Kolwezi and familiar with the site, which was sealed last September, told Reuters.

Monga, heading the liquidation team, said he has been asked to evaluate the value of the assets and report back to the tribunal as quickly as possible, but did not specify a deadline.

"We want to determine the exact value of the assets in an objective way with the eyes of experts," Monga added.

Congo's appeals court ruled that liquidation proceedings be initiated with a view to selling all the assets in documents seen by Reuters and dated July 29.

Congo's mines minister Martin Kabwelulu confirmed this week he had signed a contract, yet to be given a presidential decree, that hands the site to a company registered in the British Virgin Islands named Highwinds Properties.

First Quantum has initiated international arbitration proceedings at the International Court of Arbitration in Paris.

The dispute began when authorities shut KMT last September after a protracted review flagged contract irregularities and production delays at the site, which has never produced metal on a commercial scale.

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Congolese Businesses Complain Over Taxes, Regulations (Update1)

The Democratic Republic of Congo’s main business federation submitted a formal complaint to Prime Minister Adolphe Muzito about the burden that new taxes, regulation and corruption are placing on companies.

In a 20-page document handed to Muzito at a meeting yesterday in Kinshasa, the Federation des Entreprises du Congo said Congo’s fiscal policy imposes a “disproportionate burden” on the mining, transport, manufacturing and banking industries.

Muzito told FEC members that his government wanted a “constructive dialogue” on improving the business climate in the country, according to an e-mailed statement sent by his office after the meeting.

Congo, which holds 4 percent of the world’s copper and 30 percent of all cobalt, is rebuilding its economy after two civil wars between 1996 and 2003 destroyed the country’s infrastructure and claimed the lives of millions. Companies including AngloGold Ashanti Ltd., the world’s third-largest gold producer, and Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper miner, have operations in the Central African country.

In March, Muzito called on the government to double its revenue, something the FEC says is being carried out through taxes, some of them illegal, and fees.

“In a context where the informal sector is dominant and corrupt, informal and mafia-like practices are important, a fiscal policy based on increasing fiscal pressure puts a disproportionate burden on the few businesses that operate in the formal sector,” FEC President Albert Yuma said in the document.

Congo’s courts have become a “graveyard for the law,” where corruption and susceptibility to external pressure are undermining confidence in the judiciary, Yuma said.

Congo was ranked second to last among countries in the World Bank’s 2010 guide for ease of doing business.

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9[at]bloomberg.net.

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