Republic of Congo cancelled three iron ore projects awarded to Australian miners and passed them on to a little-known Chinese firm Sangha Mining Development Sasu, according to media reports. Sundance Resources, which was earlier granted a permit for the mines, is seeking $8.76bn in damages from the Congolese government.

 

Congo cancelled the mining projects granted to the Australian miners through a notification in an official journal. Permits for three areas Avima, Nabeba and Bandodo passed on to Sangha Mining citing insufficient development and non-payment of mining rights. The three projects hold reserves of approximately 1bn mt high-grade iron ore, according to Sundance.  

 

Sundance has issued a notice of dispute to the Congolese authorities over the withdrawal of contracts on Dec 15 and has claimed damages of $8.76bn based on $154/mt iron ore prices on that day.  

 

High iron ore prices due to Chinese restriction on import of ores from Australia is hurting steelmakers margins in China. Last week, Chinese authorities had questioned leading miners like BHP and Rio Tinto on ‘unreasonable’ iron ore prices, which hit a seven-year high of $160/mt cfr China. The China Iron and Steel Association (CISA) is also mulling to establish a new pricing mechanism to regulate iron ore prices in China. 

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