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Gold/Mining/Energy : America Mineral Fields - AMZ -- Ignore unavailable to you. Want to Upgrade?

To: FRANK J who wrote (90)	9/1/1998 1:40:00 PM
From: Kevin G. O'Neill	Read Replies (1) \| Respond to of 120

Canadian miner files $1 bln claim as Congo burns Friday August 28, 6:25 am Eastern Time By Darren Schuettler JOHANNESBURG, Aug 28 (Reuters) - A tiny Canadian mining company's $1 billion claim against Laurent Kabila's Democratic Republic of the Congo is likely to fall on deaf ears in Kinshasa where a civil war rages on, analysts said on Friday. Canadian-listed Banro Resources Corp (BNRS.CD), through its U.S. unit Banro American, launched the massive claim in Washington on Thursday, nearly a month after Kabila's government expropriated its gold mining concessions. The dispute is being watched closely by foreign mining companies eyeing other projects in the mineral rich central African country. ''Banro's story has become widely known among foreign investors in the Congo and has had an immediate chilling impact, particularly in the critical mining sector,'' Banro American president William Wilson said in a statement. The company has filed for arbitration before the Washington-based International Center for the Settlement of Disputes (ICSID) and valued its claim at over $1 billion. If the Kabila government does not reverse its decision, Banro warned it will ''explore other legal remedies...including additional lawsuits in U.S. Federal Court.'' Banro discovered on July 31 that the DR Congo had unilaterally dissolved its Congolese subsidiary and terminated a 25-year mining convention. Banro, through its 93-percent-owned subsidiary Societe Aurifere du Kivu et Maniema Sarl (Sakima), held 47 mining concessions totalling 10,271 sq km in South Kivu and Maniema provinces in eastern Congo. These areas are currently embroiled in a war between government and rebel forces aiming to overthrow Kabila. ''I don't think (Banro's claim) is really going to help that much. They are filing against a government that has more important things to worry about,'' said Kelly Redman, a mining analyst with Societe Generale Frankel Pollak in Johannesburg. Rebel forces were on the outskirts of the capital Kinshasa on Friday where artillery fire echoed over the city after a second night of curfew. ''At the end of the day, the government is busy fighting a war and the outcome is still uncertain,'' another analyst said. Sakima, through its predecessor company Sominki, has owned the titles to the disputed concessions since the early 1900s. The Congo government said it dissolved Sakima and terminated Banro's mining convention due to ''irregularities'' in the liquidation of Sominki and the creation of Sakima. Banro said it was not informed of the irregularities and insists that all its activities complied with Congolese law. Banro has spent about $6.5 million in total on exploration activities in the Congo thus far. It is the second time the Kabila government has revoked a major mining agreement since taking power last year after a civil war ousted former dictator Mobutu Sese Seko. The Kolwezi tailings project was yanked from Texas-based America Mineral Fields (AMZ.TO - news) late last year in a move that raised concerns about the security of foreign mining contracts. America Mineral is now seeking government approval for a joint venture to develop the tailings site with South Africa's Anglo American Corp (AACJ.J). Reviving the Congo's mining sector is key to rebuilding the country's shattered economy, but most foreign companies have yet to make substantial capital commitments due to delays in receiving final project approvals. Analysts said the civil war has further delayed this process. The former Zaire was one of the world's leading copper-cobalt producers, with annual output as high as 475,000 tonnes of copper and 17,000 tonnes of cobalt in the 1980s. But mismanagement during the Mobutu era led to state-owned Gecamines' collapse in the early 1990s.