Sundance Resources continues fight for African iron ore project
Mystery surrounds the Congo’s decision to withdraw the mining permit covering the project.
Former market darling Sundance Resources faces a fight to keep hold of its African iron ore project as the price of the steelmaking commodity peaks, with the company saying it would take the Republic of Congo to arbitration over a decision to strip it of one half of its Mbalam Nabeba iron ore project.
Sundance was once worth more than $1bn as it approached a development decision for the 40 million tonne a year project, which straddles the border of Cameroon and Congo.
But the iron ore crash put paid to any near-term development and Sundance has since had a torrid time finding financial backers for the multi-billion iron ore project, which needs a 510km railway line through Cameroon to reach a port.
Mystery surrounds the Congo’s decision to withdraw the mining permit covering the project. Sundance said it had seen a decree signed by the country’s president and dated November 30 – but the decree had not been published in official records, nor been served on the company’s local subsidiaries.
Equatorial Resources, which controls an iron ore project near to that of Sundance, and ASX-listed Kore Potash, also said this week they have received notices from the Congolese government “expressing disappointment” with the pace of work on their own projects, and threatening to remove the rights to mine the deposits.
Sundance said on Wednesday it would take arbitration action in the International Chamber of Commerce if Congo did not withdraw the decree, saying it had spent more than $400m on the deposit over the last 12 years.
Sundance said it would also initiate action against the government of Cameroon over its ongoing failure to issue mining permits over its portion of the project.
Sundance will delist from the Australian exchange on Monday.