CANBERRA (CU)_In September last year, Australian mining company Sundance Resources entered into an agreement with AustSino Resources Group, a former partner with links to major Chinese state-owned firms, over its Mbalam-Nabeba iron ore project on the border of Cameroon and the Democratic Republic of Congo. Accordingly, AustSino was expected to bring in Chinese state-owned port and rail companies in order to assist the building and funding on the project, which was expected to include a 510km rail line. In return, the firm was given access to the engineering work on the proposed 40 million-tonne-a-year mine.
However, the expected $100 million investment never came and therefore Sundance cut ties with AustSino. Subsequently, Sundance, along with fellow Australian company Equatorial Resources and British firm Avima Iron Ore were stripped of control of several iron ore projects by the government of DRC and the combined deposits were handed over to a Congolese entity controlled by Hong Kong-registered Bestway Finance.
Several months later, Perth-based Sundance Resources was left in shock after its former partner swept in to take over the iron ore projects bordering the two Central African nations. On Saturday (26 June), AustSino revealed that it had entered into a memorandum of understanding with the government of Cameroon, as well as Bestway Finance, over the development of rail and port facilities with a capacity of transporting about 100 million tonnes of iron ore each year. Responding to the announcement, Sundance claimed that its stalled Mbalam-Nabeba iron ore project had been illegally taken away.
“We are shocked at these latest developments, not least because an Australian company – AustSino – that we introduced into the Mbalam-Nabeba iron ore project is attempting to benefit from the illegal expropriation of Sundance’s iron ore assets,” Sundance Chief Executive Giulio Casello said in a statement on Sunday. “AustSino had been our partner for a number of years. We worked in good faith to introduce AustSino to our project and arrange a role for AustSino in the negotiations with Cameroon and Congo on the basis of a clear understanding that AustSino would act in our mutual interests in accordance with their legal obligations.”
So far, both Sundance and Avima have launched proceedings against the DRC in the International Court of Arbitration of the International Chamber of Commerce over the loss of their mining license. The former is seeking US$8.8 billion in damages, while the latter is seeking US$27 billion.
Following the recent announcement, Casello revealed that his company is considering whether it should expand the scope of its legal action. “Sundance has always fulfilled all of its licence obligations and gone above and beyond in both Cameroon and Congo, which is why we are so determined to challenge this illegal expropriation through the international courts, a process that is underway,” he said. “We will now consider, with the assistance of our legal advisers at Magic Circle firm Clifford Chance, whether in light of these developments we need to expand the scope of our legal action to ensure we can protect the interests of Sundance and our investors.”
