Companies: CFM    NKR   

Central African Mining & Exploration Company (CAMEC) says it is contemplating legal proceedings over the removal of mining permits in the Congo.

The Congolese authorities have moved to revoke some of CAMEC’s key copper and cobalt licences. The AIM-listed company had acquired them from Zimbabwean entrepreneur Billy Rautenbach, who has been cited by critics as a key backer of Robert Mugabe’s Harare regime.

It is suggested that the concessions to CAMEC’s subsidiaries should be cancelled because of ‘administrative failings’ in the process. Headed by ex-cricketing entrepreneur and Zambian native Phil Edmonds, CAMEC, whose once high-flying shares have recently taken a pounding, says it is ‘actively considering... bringing international arbitration proceedings... against the government of the Democratic Republic of Congo’.

Significantly, the licence removal comes in the middle of a hostile all-share bid by CAMEC for fellow AIM counter Katanga Mining. Many suggest this is no coincidence.

CAMEC’s bid is opposed by Wall Street investment group RP Capital, which is thought to favour a tie-up between Katanga, with the potentially lucrative Kamoto copper project in the Congo, and another AIM counter Nikanor. Nikanor, whose own Congolese copper projects are said to have technical problems, is backed by the powerful Israeli Gertler clan, while the CAMEC camp claims George Forrest, Katanga shareholder and key local player, is at odds with the Gertlers.

Rautenbach holds some seven per cent of CAMEC, whose shares have plunged from last year’s 97p peak to 35p. That makes its paper bid for Katanga less and less valuable, while Nikanor’s shares at 474p have fallen more than £2 from this year’s high.