Very important news!
News and comments from NCN:
"International Business News
The Dow Jones Newswires reported on March 17 that America Mineral Fields Inc. (T.AMZ) announced it has dropped its $3 billion lawsuit against Anglo American Corp. of South Africa (ANGLY) and others in an attempt to settle the dispute out of court. AMZ had alleged that Anglo American "interfered with the company's agreements in the Democratic Republic of Congo." AMZ had also alleged that Anglo American "has for some time orchestrated a well-financed campaign to interfere with the company's projects" in the Congo. It is not clear what is going on here, but on the surface it appears that the law suit against Anglo was either not winnable, or it was winnable but at too great an expense, or it was not worth the battle. What is clear is that AMZ was getting nowhere with the Government of the Congo and its state-owned mining company, Gecamines, so long as this law suit and the publicity that surrounded it remained active. Another factor that is also clear is that AMZ has gone through a turbulent series of management changes at the top, the most recent of which was the short-lived chairmanship of Robert Stewart who was recently replaced by Bernard Valvala following a failure by Mr. Stewart to revive the canceled Kolwezi Tailings Project after weeks of negotiations and meetings in the DRC. In addition, AMZ has gone through a set of presidents and CEOs in a very short period of time, with the latest company press release signed by Steven Malouf as the president and CEO. It would appear that the company is struggling to find its footing. However, NCN believes that there were four gut issues that drove AMZ to cancel the $3 billion law suit against Anglo:
First, AMZ management wants to mine in the DRC, becauase AMZ realizes the country's minerals potential. But AMZ mining in the DRC appeared impossible given the law suit and the bitter words that have been exchanged publicly in the past between AMZ and Gecamines management.
Second, Anglo American wants to do business in the United States, and that was being made more difficult with this law suit on the active books. As NCN has reported earlier, Anglo, and its subsidiary De Beers, are on the hot-seat with the American Department of Justice alleged violations of international anti-trust rules. Anglo and De Beers executives have avoided visiting the United States, fearing they would be arrested. Cancelation of this law suit might make the ground a bit more fertile in the U.S. for Anglo to come to terms with the American Justice Department.
Third, both AMZ and Anglo probably saw that they could achieve their financial objectives if they decided to get together and approach the Congolese marketplace together instead of standing opposed. Standing opposed only made raising the required international financing more difficult. It is NCN's belief that the two will now come together and join in mining projects in the DRC.
Finally, the Congolese government, and Gecamines in particular, need to get on with the Congo's economic development and get the flow of hard currency turned on. That was being seriously impeded by this conflict between AMZ and Anglo. Investors around the world were scared away, stock prices on several mining companies active in the DRC were plummeting, and serious questions were being raised about the Congo's stability vis-…-vis minerals investments. A "Pax Romana" between Anglo and AMZ followed by an agreement between the two to hotly pursue the Congolese minerals market supported by a Gecamines agreement to let them both join in and develop the minerals resources of key mines in the Congo could change the entire investment environment in the Congo for the better. "
Regards Marten |
