VANCOUVER, BRITISH COLUMBIA - February 1, 2010 - First Quantum Minerals Ltd. ("First Quantum" or the "Company") (TSX:FM)(LSE:FQM) today announced that it has, along with its partners the IFC ( International Finance Corporation ) and IDC ( Industrial Development Corporation of South Africa ), commenced international arbitration under the facilities of the International Chamber of Commerce International Court of Arbitration in Paris, France against La Generale des carrieres et des mines ("Gecamines") and the Democratic Republic of Congo ("DRC").
The Kolwezi Project Tailings Exploitation Permit is held under the terms of a Contract of Association, by Kingamyambo Musonoi Tailings SARL ("KMT"), which is owned by the Company's subsidiary Congo Mineral Developments Limited ("CMD") and its partners IFC and IDC, who collectively own 82.5% of KMT, and Gecamines and the DRC who own the balance of 17.5%.
On August 21, 2009, the DRC Prime Minister wrote to Gecamines and to CMD to advise that "... the Council of Ministers had noted and taken act of the impossibility of continuing this partnership and the requirement for the subsequent retrocession without condition, to Gecamines, of the title bearing on Tailings Exploitation Permit no652" (translation). On August 25, 2009 the DRC mining registry issued a notice to KMT cancelling Tailings Exploitation Permit no652 and on September 15 and 16, the DRC ordered closed and sealed the offices and work sites of KMT, thus preventing any further pursuit of KMT's activities. Despite numerous efforts by the Company, the IFC and IDC, attempting to resolve the dispute amicably and advising the DRC and Gecamines of the illegality of their action s and of the validity of the Contract of Association, the DRC and Gecamines have purported to unilaterally and illegally put an end to the Contract of Association and have stopped the KMT operations, thus placing out of work almost 1,000 employees, of which 700 are Congolese employees working on the construction of KMT's plant.
The Company, the IFC and IDC are firmly of the view that the DRC and Gecamines have breached the terms of the Contract of Association, which provides for recourse to resolve disputes through international arbitration. Notwithstanding, on January 11, 2010 CMD recieved a letter from Gecamines advising they were cancelling the Contract of Association. The Company believes international arbitration is now necessary to protect the investment of CMD, IFC and IDC, including seeking interim orders to protect and preserve the KMT site.
While the Company, IFC and IDC have commenced international arbitration pursuant to the Contract of Association, the Company will continue to seek a negotiated solution to the foregoing dispute and will provide further updates as warranted.
