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Tuesday, 26th May 2020
2:26:47pm

Mining Company Katanga sues China MMG's Kinsevere mine in Congo

China’s MMG Ltd on Monday said Mining Company Katanga (MCK) has obtained a freezing court order over some assets of its Kinsevere copper mine in Democratic Republic of Congo and is seeking damages of $258 million over a mining services contract.

MCK has commenced legal proceedings as it claims MMG Kinsevere is liable to compensate it for losses as a result of the company’s decision not to renew or extend a mining services contract with MCK Trucks in 2018, an MMG statement to the Hong Kong Stock Exchange read.

“MMG Kinsevere and the Company regard the claim as unfounded and opportunistic, and the amount of the claim completely disproportionate to the losses that could reasonably have been suffered,” the statement from MMG Ltd CEO Gao Xiaoyu read.

MMG rejected MCK claims it was entitled to a “life of mine” agreement saying that such an agreement depended on the business being owned by MCK founder Moise Katumbi or his son, and the contract remaining internationally competitive.

MMG Kinsevere said it understands that at the time the contract ceased, Katumbi had sold his and his family’s interest in the business. 

Hong Kong-listed shares in MMG finished down 8.7%.

MCK officials could not be immediately reached for comment. 

MMG cast doubt on the legality of the proceedings in Lubumbashi Courts which led MCK to obtain a freezing order over “certain” assets. It did not specify which assets were frozen.

“MCK has obtained a freezing order over certain assets of MMG Kinsevere via proceedings that have, in MMG’s view, not followed usual legal processes in the DRC,” the MMG statement read, adding that the company was appealing against the order.

MCK was co-founded by Katumbi in 1997. The Congolese businessman and politician went on to become governor of Katanga province from 2007 to 2015.

-Reuters

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