Banro seeks $1 billion for seized land — Suit aims to protect shareholders’ interests

In the midst of an insurgency aimed at ousting President Laurent Kabila of the Democratic Republic of Congo, Banro Resources (BNRS-C) has launched a $1-billion lawsuit against the government following its expropriation of 47 mining concession controlled by the company.

For unknown reasons, the government dissolved Banro’s Congolese subsidiary, Societe Aurifere du Kivu et du Maniema (Sakima), and cancelled an agreement for a 25-year mining lease. As a result, Banro stands to lose its 93% interest in four known gold deposits that contain a measured and inferred resource of 13 million oz. gold. The company says it has invested $15 million in the concessions.

Banro’s vice-president, Arnold Kondrat, says the legal action is necessary to protect shareholders’ interests. “We feel the billion-dollar figure is appropriate under the circumstances,” he tells The Northern Miner.

The company maintains it has fulfilled its commitments to keep the mining convention in good standing, and alleges the seizure violates DRC’s own laws.

Kondrat says he is confident the matter will be resolved before the action, filed through the International Center for the Settlement of Disputes in Washington, D.C., ever lands in court.

He adds that representatives of the president’s office “inferred that someone may have been ill-advised” to issue the expropriation order, and that the confusion resulting from the current uprising may be somehow responsible. Kondrat is attempting to arrange a meeting with Kabila to resolve the issue, though he concedes such a meeting may be impossible given the current unrest.

The rebel coalition of ethnic Tutsis and former Congolese soldiers won a string of stunning successes early in the 6-week-old uprising against Kabila, whom the rebels accuse of corruption and tribalism.

With the help of allied Angolan, Zimbabwean and Namibian forces, Kabila’s loyalist troops have regained ground nearly as quickly as it was lost. The rebels are widely believed to be backed by neighboring Rwanda and Uganada, though both countries have denied involvement.

Kondrat believes an agreement between the government and rebels is imminent, and he says the company intends to resume work on its projects following a resolution of its differences with the government — which he hopes will be soon.

However, recent cease-fire negotiations between the warring factions broke down after Kabila refused to meet with the rebels. It was the third time negotiations collapsed.