Avima Iron Ore has initiated an arbitration process against the Congo Republic and is seeking $27bn in damages for cancelling its mining permit last year.
The arbitration has been filed by the company’s subsidiary Avima Fer Congo and its affiliates before the International Court of Arbitration of the International Chamber of Commerce (ICC).
Avima Iron Ore claims that the Congolese Government had wrongly expropriated its Avima iron ore deposit, which is situated in the North West Republic of Congo.
The Avima project, in which the Republic of Congo Government owns a 25% interest, was slated to begin production and ship high-grade iron ore to customers in January this year.
Avima Iron Ore said that it had invested hundreds of millions of dollars to convert the project into a high-quality iron ore deposit from an obscure grassroots area, over a 14-year period.
The company is now seeking either damages from the government or the return of its mining licence to undertake the planned production programme.
Avima Iron Ore official Socrates Vasiliades said: “The Republic of the Congo actions disregards the rights of the investors and the economic and social development of a country in which millions of people live in extreme poverty.
“We are taking all necessary action and pre-emptive measures to protect our investment against these unlawful attempts to expropriate our assets, to safeguard the future of the project and the thousands of jobs that depend on it.”
UK-based law firm Clifford Chance is representing the company’s arbitration. It has nominated Laurent Jaeger of King & Spalding International as arbitrator.
Clifford Chance lead counsel Simon Greenberg said: “The mine was almost ready to start selling ultra-high-grade iron ore to the world market.”
The Avima mining permit was among the three licences that were withdrawn by the government last year.