Vancouver’s First Quantum Minerals (TSX:FM) is continuing its legal battle in the British Virgin Islands, two years after the government of the Democratic Republic of Congo seized control of a copper project in the African nation.
On Monday, First Quantum said the British Virgin Islands Commercial Court rejected an application by the Highwinds Group to dismiss the Vancouver company’s legal claim in relation to the Kolwezi tailings project.
The dismissal means First Quantum’s claim will now proceed to trial.
“At which Highwinds will need to explain its involvement in the unlawful cancellation of First Quantum’s interest in the Kolwezi project,” First Quantum said in a statement Monday.
The legal action targets Highwind Properties Ltd., Pareas Ltd., Interim Holdings Ltd. and Blue Narcissus Ltd., together known as the Highwinds Group, which are subsidiaries of London-based Eurasian Natural Resources Group (LSE:ENRC).
The dispute is centred on a highly prospective copper project that First Quantum had the rights to and invested more than $400 million in before the DRC government sealed it off in 2009, effectively throwing 700 Congolese miners out of work.
In February, the company commenced international arbitration against the DRC for the seizure.
But the fight heated up August 20, 2010, when London’s ENRC said it had bought 50.5% of Camrose Resources Ltd., which, through its ownership of the Highwinds Group, had a 70% stake in Kolwezi.
First Quantum argues the sale violates an order handed down the day before that prohibits the DRC from taking any action to transfer or allow the transfer of Kolwezi to another party.
First Quantum said Monday that Highwinds would need to explain at trial “how it came about that it signed a contract to acquire the Kolwezi permit the very same day First Quantum’s contract was cancelled.”
The legal action includes claims for inducement of breach of contract and interference with contractual relations, the company said, adding that its damages are estimated to exceed $2 billion.
At press time, First Quantum’s shares were down $1.83 to $19.35.
Joel McKay
Twitter:jmckaybiv