FIRST Quantum Minerals (FQM) has dropped a lawsuit against the Zambian Government filed in the United Kingdom (UK) over alleged abrogation of the Bwana Mkubwa Development Agreement (DA).
According to documents obtained by the Sunday Times, the mining company has also agreed to a deferral of the Kansanshi arbitration.
The matter had been set for arbitration in October last year and the Zambian Government had filed in a plea to the claim by FQM, who consequently submitted a counter claim based on the Government’s defence.
But documents accessed by the Sunday Times show that the company has agreed to set aside the Bwana Development Agreement arbitration, which was completed on December 19, 2013.
“The withdrawal of the Bwana arbitration was an important step for us, as it involved releasing our rights under the Bwana Development Agreements, which were arbitrarily breached by the previous government,” states the documents.
“We did this on the basis that during the many discussions we had with your Government, including President (Michael) Sata, we received a strong message that the GRZ did not want to negotiate under the threat of arbitration.”
“We were also assured that if we withdrew the Bwana arbitration, the GRZ would then negotiate with First Quantum in good faith to resolve the Kansanshi Development Agreement dispute, as well as to regularise our relations with the Zambia Revenue Authority (ZRA).”
Sources said during the week that the decision by the mining giant to drop the suit was aimed at promoting dialogue in order to negotiate in good faith for an amicable settlement.
“FQM had initiated a lawsuit in the United Kingdom against the Zambian Government for allegedly abrogating the Bwana Mkubwa DA,” the sources explained.
“The Government filed a plea to the claim by FQM, who filed a counter claim based on the Government’s defence on September 25, 2013.
However, FQM at the beginning of the year agreed to drop the case at the request of Government.”
It is believed that the previous government had arbitrarily breached the DAs that formed a set of unique incentives negotiated by individual mining companies as provided for under the Mines and Minerals Act of 1995.
The 1995 Act in place of uniform tax regime and code of conditions within which the private mining companies were to operate provided for the negotiation of unique DAs with each company.
The Development Agreements reached by mining companies formed part of favourable conditions for increased capital injection in a moribund industry in the post-privatisation era.
The company hoped that with the withdrawal, it would re-engage in the Kansanshi settlement discussions as well as explore ways to rebuild the previously cordial relationship with the ZRA.
Thanks to the PF for leading the negotiations & putting in corrective measures on damage by MDD.what is more important is Govt dictating & being in charge by refusing to engage unless lawsuit was withdrawn by the mining giant,am sure uncle Bob is in charge here,he was recently elected second at AU.
Which party or company is MDD? Im lost.
Wena Chinyama the issue seems to have gone over your head. To begin with the Development Agreements (DAs) were a child of the Chiluba Administration of which Sata and Chikwanda were inside players. It was the Mwanawasa administration that came to throw away these DAs at which point FQM sued. The PF is growing cold feet and it wants to “negotiate”! Question is what is there to negotiate when Zambians had established a decade ago that the DAs were nothing but a conduit for stealing Zambia’s wealth!
This is one tiny step in the right direction. If we all support our government in such matters, they will feel confident when negotiating with foreign investors and they will not surrender our resources for peanuts.
They come in your house get into your bedroom and start dictating which pants, trousers, shirt, shoes, tie, how to make your bed, haha, these guys! When will slavery really end? Ever in shackles, if you do not do this, this time we do slavery differently: through small prints that hide real conditions and these will be backed by law suits.
Slavery will end when you come back from diaspora where you went thinking u can lead a better life using their hard earned money.
With all due respect. Looking from outside the box and outside ones self provides a chance for reflection of what others have and why you don’t have it in the diaspora context. And if anything it makes for a more informed choice and opinion about goings on, whether you are within or without. The whole diaspora thing is boring and reeks of envy and jealousy. Hard work is definitive whether at home or abroad…and never underestimate the drive, pride and passion of people’s who realise how much they love their country.
And why does a market place exist for products dug out of Zambia in another country that does not produce the product or have any resources resembling the product. Why are we governed by a world price on copper set by “analysing” last years data to produce data that is scaremongering and effectively slowing the very economies that actually produce or have the raw product. In other words… Why have the middle man in some stock market, funding their own economy, in a country that has nothing to give back to Zambia. We did it with the Gem Auction, admittedly on a smaller scale. We have what everyone wants. Why succumb to manipulated and orchestrated market prices.
“…..with First Quantum in good faith to resolve the Kansanshi Development Agreement dispute, as well as to regularise our relations with the Zambia Revenue Authority (ZRA).”
These guys are just looking to sign more concessions and developmental agreements which favour them. In the end I see us losing out as usual.
Given the nature of recent environmental reports and various possible pilferings with monies, ignoring local law and general “jump” ” how high?” attitudes of investors ….and that fact that there are many investors I.e. the Japs, interested in mining etc, real unbiased, assertive and robust consideration is needed here. Unfortunately the company in question is one of the better ones but this should offer us a chance to learn and correct these issues for the better, for Zambia.
Its time we get in control of our resources, these guyz came wt swet words and promises in the end all they want is a part of our copper too bad for them its PF in the lead,