First Quantum Minerals chairman Philip Pascall looks on during the company's annual general meeting in Toronto on May 9, 2012.MARK BLINCH/Reuters
First Quantum Minerals has begun arbitration proceedings against Zambian state miner ZCCM-IH to try to resolve a dispute about a money transfer to the parent company of Kansanshi Mining, which is majority-owned by the Toronto-listed group.
The arbitration proceedings follow a criminal complaint made by ZCCM-IH with allegations of an unauthorized transfer of money by Kansanshi Mining to First Quantum’s local subsidiary.
First Quantum’s shares fell nearly 3% on Friday.
In a separate case ZCCM-IH began action in October 2016 to sue First Quantum for $1.4 billion over claims that the Canadian company borrowed $2.3 billion from its Zambian copper mining subsidiary Kansanshi without informing ZCCM-IH, a minority shareholder.
The transfer in the latest case was made between Kansanshi Mining, which is 80% owned by First Quantum and 20% owned by ZCCM-IH, to Kansanshi Holdings – the Zambian-registered vehicle through which First Quantum owns its majority stake.
A ZCCM-IH official, who declined to be identified, said the company had received information on Friday that Kansanshi Holdings intended to appeal for arbitration over the dispute.
The source declined further comment.
First Quantum was involved in a dispute with the Zambian government after being handed a $5.8 billion bill for unpaid import duties last year.
First Quantum’s second quarter results issued in July state its subsidiary Kalumbila Minerals had reached a settlement with the Zambia Revenue Authority “with respect to the assessment claim on duties.”
It does not name the figure, although a separate document seen by Reuters shows the figure to be 304 million Zambian kwacha ($21 million).
Tensions have been running high between western mining companies and several African governments this year as they have sought to increase their share of revenues from national resources.
Mumbai-listed Vedanta has been locked in a dispute with the Zambian government since May, when Lusaka appointed a liquidator to run Konkola Copper Mines (KCM), which is 20% owned by Zambian state mining company ZCCM and the rest by Vedanta.
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