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Cameroon-Mbalam mining project: Sundance, MINMIDT, and the 94 billion
By Bougna.net - May 11, 2022

For several weeks now, the Mbalam iron file has resurfaced in public opinion. Not because of the progress of the construction of the railway line for which Cameroon and the Bestway/AutSino consortium signed a public-private partnership contract last February. But because on the Cameroonian side, Sundance Resources Ltd has relaunched the file for the Mbalam iron deposit , on which it had lost its operating permit.

In a press release made public on April 5, and relayed by the Cameroonian press (in particular), Sundance Resources announces that it has resumed the international arbitration procedure against the State of Cameroon. A procedure opened in June 2021 at the International Chamber of Commerce (ICC) in Paris, but which had been suspended at the request of the Australian mining junior, who said that he had started settlement talks with Cameroon.T

Behind this last exit, it is not mainly a question for Sundance ResourcesLtd of announcing the reopening of the legal dispute which opposes it to Cameroon. Above all, as can be read in the press release, it is a question of passing on information relating to a provisional order (issued by the ICC)Exploitation of an iron deposit.prohibiting the Republic of Cameroon from granting exploitation rights on the deposit of iron ore from Mbalam to any party except the Cameroonian subsidiary of Sundance called Cam Iron.

Facts

In fact, Sundance, through its local subsidiary, Cam Iron , secured amining agreement in 2010 to mine the Mbalam iron deposit . By this, thecompany has two years to prove its financial and technical capabilities. In2014, at the end of the time limit, Sundance requested additional time fromthe State. Request validated by the State, through a transition agreementin 2015, after which Sundance must demonstrate its financial and technicalcapacities.

In 2018, at the end of the exceptional grace period granted to Sundance,the said agreement automatically expires. Having never been able to proveits financial and technical capacities, Sundance therefore remained unableto obtain an industrial exploitation permit. Thus, in December 2020,Sundance decided to attack Cameroon at the International Chamber ofCommerce for non-attribution of the Mbalam operating permit. In itsapplication, the company claims payment of the

"The acts of exploitation, in particular the exploitation permit for theMbalam iron ore deposit, therefore expired in 2018 and have never beenextended or renewed because, after unfulfilled promises , Sundance hadapplied for a renewal of the mining license that year, which expiredbecause, it had reached the maximum number of extensions possible underCameroon's Mining Code. Which, in fact, leads to an admission ofincompetence on the part of Sundance and its partner, following theforfeiture of rights noted by the Cameroonian mining authorities”,

declareda source generally well introduced.

Internal crisis

But this de facto expiration of Sundance's acts was not good for the healthof the company. Between 2018 and 2020, the financial health of theAustralian mining junior gradually deteriorated, with repercussions right upto the top of its pyramid: its shareholders.

In August 2021, in the midst of the crisis, Sundance enters into anagreement with Senrigan Master Fund, Noble Resources International PteLtd, DE Shaw Composite Holdings International Ltd, Wafin Limited andBSOF Master Fund LP (all noteholders or shareholders) to restructure theCompany's existing debt and security arrangements.

More simply, it is an agreement in which the shareholders agree to giveSundance a reprieve while the proceedings are ongoing against thegovernments of the Republic of Congo and the Republic of Cameroon.

In a press release made public for this purpose, the company will confirmthis option. "If Sundance is successful in any of these proceedings andawarded damages, noteholders will be entitled to receive an agreed portionof any recovered damages, as compensation for forbearing their convertiblenotes. and in reimbursement of the amounts due in respect of theconvertible securities” , she will declare.

The ICC

The internal calm regained, the company sets out again to attackCameroon, by relaunching its complaint to the International Chamber ofCommerce. In Cameroon, the defense is in place. But not everyone seemsto champion the same cause.

In the second quarter of 2021, the Minister of Mines, Industry andTechnological Development (Minmidt) receives several written legalopinions from international law firms, in particular those who havesuccessfully defended the Republic of Congo against the same company,clearly showing him that Cameroon, being in his right, has nothing to fearlegally and enjoining him not to give in to threats and sirens trying to leadhim into a logic of amicable negotiation, at the risk of weakening theposition of the State.

Despite these multiple warnings, in the same second quarter of 2021, theMinister of Mines, **riel Dodo Ndoke, decided to enter intonegotiations with Sundance. The expert assessment initially carried out onthe amount of expenditure made by Sundance estimates the amount due,and therefore potentially claimed by Sundance, at $17 million. Forclarification, these expenses within the meaning of the regulatory and legaltexts in force in the Republic of Cameroon, in particular the Mining Code of2001 and its implementing decree of 2002, or the Mining Code of 2016, arenot reimbursable.

DVEous comment: the par above explains the previous article (above) suggesting why the Minister might be in "trouble"

But, against all expectations, following meetings with the Minister of Mines,the amount of Sundance's claims is suddenly and brutally revised upwards,thus multiplying from 17 million dollars to substantially 170 million dollars(94 billion FCFA at average dollar rate in effect in the summer of 2021).

94 billion

Where does the 94 billion FCFA alluded to by the Minister of Mines comefrom? In fact, a few weeks earlier, in order to give a legal basis to thiscompany, the Minister of Mines will send a letter of comfort at the end ofFebruary 2022 to Sundance, reassuring it as to its rights vis-à-vis Mbalam,this then even that he is aware of the sovereign right of the Republic ofCameroon to dispose of its mineral resources.

With the door thus open to all sorts of haggling and claims, Sundancetriggered emergency arbitration proceedings in March 2022, leading to theissuance of an emergency order against Cameroon, aimed at preventing itfrom attribute Mbalam to a structure other than Cam Iron.

This strategy aims to force the hand of the State so that the 94 billion FCFAclaimed are paid. Remember that 90% of this amount will go to thecompany promoted by the Minister of Mines, Buns Mining, through theagreements made between the latter and Sundance regarding Cam Iron'sshareholding.

The State of Cameroon will decide to constitute a council for the follow-upof the procedure before the international jurisdictions concerning thisprocedure. Thus, on April 18, 2022, the Minister of State, Secretary Generalof the Presidency of the Republic, Ferdinand Ngoh Ngoh, sent a letter to theMinister of Mines, Industry and Technological Development, **riel DodoNdoké, to let him know, on the very high instructions of the Head of State,that Me Thierry Lauriol, lawyer at the Paris bar, partner in Cabinet Jeantet,already chosen to defend the interests of Congo within the framework ofthe arbitration proceedings with Sundance Resources LTD, will also have todefend those of the State of Cameroon.

The case of Me Njel Gwet

But, “the Minister of Mines will approach the Minister of State, Minister ofJustice, Keeper of the Seals in order to convince him of the choice ofanother lawyer to ensure the defense of the interests of Cameroon in theperson of Me Njel Gwet Amos”, confides a source who specifies that thelatter worked as a trainee lawyer on behalf of Sundance and its subsidiaryCam Iron. Something that Me Njel disputes. But, continues our source, “Thechoice of this lawyer is therefore not insignificant because it will only serveto defend the selfish and personal interests of the Minister of Mines and hissidekick Sundance in this procedure” . A position contested by the lawyerwho says he defends the interests of Cameroon.

Concluding on this subject, another source believes that "by associating theSundance lawyer in the Cameroon defense team made up, among others,of Me Njel Gwet Amos , officials from the Ministries of Justice, Mines,External Relations , Finance, Sonamines , etc., the Minister of Mines wantsto promote the payment of 94 billion FCFA to Sundance by the State,question of puncturing these sums from the coffers of the State and sharethe fruit with his acolyte Sundance Resources » .


Translated source:
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