JOHANNESBURG () -- South Africa's biggest zinc and iron-ore producer, Kumba Resources [JSE:KMB], and Canadian miner First Quantum [TSX:FM] had been granted a court order against Congolese state mining group Gecamines in a dispute over the Kipushi mine project in Congo, Kumba said on Friday.
Partners Kumba and First Quantum threatened to take legal action last month to protect their rights after Gecamines launched an appeal in August for new partners to develop the Kipushi zinc and copper mine.
Kipushi was one of the world's major zinc and copper producers, but halted production in 1993 due to a lack of foreign exchange and supplies in the Democratic Republic of Congo.
A Belgian court prohibited Gecamines from disclosing confidential information about Kipushi, subject to a penalty of EUR3m, Kumba said.
The court also authorised First Quantum unit Zincongo to take further legal steps against Gecamines.
The court order was issued two-and-a-half weeks ago, but Kumba and First Quantum did not initially publicise it because they were still in talks with Congolese officials, said Doug Taylor, Kumba's GM of strategy and business development.
"We'd given it time, but we decided to put it out at this time," he said.
"We're still endeavouring to engage with the (mining) minister. We hope to resolve the issues around Kipushi amicably."
Kumba, which also has interests in heavy minerals and coal, is majority owned by Anglo American [Nasdaq:AAUK].
Kumba's share price closed 0.93% higher on Friday at R135 (US$18) , and Anglo closed 8 cents stronger at R332.05 (US$44.26).
"We've been extremely proud of the track record that we've got in Kumba, and we believe if you look at those figures as you've said that there's been huge value unlocked for Kumba," Kumba CE, Dr. Con Faucconier said, "When we started it was round about an R8 billion (US$1B) company and today that's R42 billion (US$5.5B) - that in the period of five years I think is a job well done."
Kumba and First Quantum had taken the issue to a court in Belgium because the original agreement with Gecamines specified that was the way to handle any disputes about the project, Taylor said.
The mine, located in southeast Congo 30km from Lubumbashi, has a total resource of 2.8M tonnes of zinc and 392,755 tonnes of copper.
Congolese Zinc Investments, now owned by First Quantum, first signed a deal with Gecamines in 1996 to rehabilitate the mine, and last year renewed a joint venture with Kumba, according to the website of Adastra Minerals.
First Quantum Minerals acquired copper and cobalt miner Adastra in May in a cash and stock deal valued at C$275M.
The joint venture granted Kumba the right to earn an interest of up to 50% in the Kipushi project by spending up to $3.5M.
Kumba is the biggest zinc producer in Africa with a mine in Namibia, a 115,000-ton-a-year zinc plant near Johannesburg and a refinery in China. With Classic Business Day.