First Quantum Minerals has begun arbitration proceedings against Zambian state miner ZCCM-IH to try to resolve a dispute. The dispute is over a money transfer to the parent company of Kansanshi Mining. The parent company is majority-owned by First Quantum Minerals, a Toronto-listed group.
The arbitration proceedings follow a criminal complaint made by state-owned ZCCM-IH against the alleged unauthorized transfer of money by Kansanshi Mining to First Quantum’s local subsidiary.
The state miner had launched 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 Mining Plc without informing ZCCM-IH, a minority shareholder.
The transfer in the latest case was made between Kansanshi Mining and Kansanshi Holdings. The Holding company is the Zambian registered vehicle through which First Quantum Minerals owns its majority stake. Kansanshi Mining is 80% owned by First Quantum and 20% owned by ZCCM-IH.
Arbitration is expected to take place in London.
The Canadian miner has been embroiled in a dispute with the Zambian government after being handed a $5.8 billion bill for unpaid import duties last year.
