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First Quantum (LON:FQM.L) report:Suspension of operations at the Frontier Mine in the DRC

Contributed by Daniel Stewart & Company

By Daniel Stewart & Co

- First Quantum has been forced to suspend operations at its Frontier copper mine in the DR Congo following the withdrawal of its exploitation permit.

- This is the culmination of a series of sequestrations of First Quantum’s mining assets in the DRC, allegedly because of licence violations. First Quantum is already challenging the legality of these actions in the international courts as it has been unable to get legal satisfaction within the DRC.

- Frontier is a substantial operation – it is the largest single tax payer in the entire country. In any rational regime, the loss of this tax revenue would be of substantial importance, but this is apparently not an issue in the DRC.

- The legal ramifications of this will take years to resolve, but in the meantime it effectively means that the country is off-limits in terms of new investment, unless investors are prepared to pay the required additional costs – effectively protection money.