January 19, 1998
On January 19, 1998, Mr. Mbaka Kawaya Swana, the chairman and chief executive officer, La Générale des carrières et de mines, GECAMINES, faxed to NCN through its office in Belgium a letter asking NCN to broadcast the company's official statement in English on the matter of the Kolwezi Concentrator Tailings Project. NCN, on January 18, published the original French text as obtained from Agence Congolais Presse (ACP) and provided in addition a rough English translation. NCN appreciates receiving from GECAMINES a full English translation which reflects accurately what the company intended to say. The GECAMINES CEO's letter and statement are provided in full below, unedited.
Lubumbashi, Le 19-01-1998
To NEW CONGO NEWS (NCN)
|The Marek Enterprise, Inc.
11733 Bowman Green Drive
Reston, VA 20190-3501
Fax (703) 709-6328
U.S.A.
Dear Sirs,
We followed on Internet various comments which you have published in connection with the GECAMINES communiqué relating to the cancellation of the procedure for the tender on the KOLWEZI CONCENTRATOR TAILINGS PROJECT as appeared in the local press.
The information in your possession being erroneous, GECAMINES - in accordance with the Democratic Republic of CONGO Government - invites you to broadcast the clarification pertaining to our relationship with AMFI in various projects including the KOLWEZI CONCENTRATOR TAILINGS PROJECT, which will be also published in the other newspapers by which the first announcement read been published.
Relying on your sense of equity reinforced in this by the need of transparency, which should characterize any good information, we do hope that you won't fail to fulfill our request.
Sincerely yours,
Mbaka Kawaya Swana
Chairman and CEO
CLARIFICATION FROM GECAMINES RELATING
TO THE KOLWEZI CONCENTRATOR TAILINGS PROJECT
From January 3 to January 5, 1998, GECAMINES published an announcement in the Congolese local press (the newspapers Avenir and Forum) and also in the foreign press (notably the newspapers Echos de la Bourse and Financieel Economische TIJD) relating to cancellation of the procedure for the tender on the KOLWEZI CONCENTRATOR TAILINGS PROJECT.
Given certain reactions raised up by this announcement, throughout the world, GECAMINES wishes to reassure people both nationally and internationally that the above-mentioned decision was taken in accordance with international procedures relating to the granting of contracts applicable in the Democratic Republic of CONGO, and that the failure to conclude the project being considered - which was only at the negotiation stage - is due to the expectations of the Congolese State not being satisfied.
In the context of its development programme, GECAMINES envisaged carrying out the following projects with the company AMERICA MINERAL FIELDS INC. (AMFI):
1- Creation of a temporary association to rehabilitate the underground mine and concentrator at KIPUSHI.
2- Creation of a Joint-Venture with a view to constructing a treatment plant for old zinc tailings from the KIPUSHI concentrator and a new zinc refining plant.
3- Geological exploration of the southern part of the Exclusive Research Zone for copper ("Z.E.R. Sud Cuivre") and Exclusive Research Zone for tin ("Z.E.R. Etain") both belonging to GECAMINES.
4- Reprocessing of the copper and cobalt tailings at the KOLWEZI concentrator.
The progress of each of these projects is as follows:
1- Creation of a temporary association to rehabilitate the underground mine and concentrator at KIPUSHI.
The project was offered to AMFI in a private contract.
The specific framework agreement was signed between GECAMINES and AMFI on March 21, 1996, and approved by the then ZAIRE government on July 8, 1996.
AMFI subsequently began a pre-feasibility study, the results of which, when submitted to GECAMINES on June 4, 1997, were not adequate to meet GECAMINES expectations.
The observations made by GECAMINES with regard to this pre-feasibility study, and communicated to AMFI on October 20, 1997, have not yet received any response up to today.
When invited by GECAMINES to a meeting on this subject early in November 1997, AMFI did not reply and has still not yet replied up to now.
In view of this state of affairs, the project could not progress. GECAMINES is still waiting for a reply from AMFI.
2- Creation of a Joint-Venture with a view to constructing a treatment plant for old zinc tailings from the KIPUSHI concentrator and a new zinc refining plant.
This project was negotiated as a private contract with AMFI.
Although these plants were to be built much later, after rehabilitation of the KIPUSHI mine and the KIPUSHI concentrator, the negotiations should have taken place at the same time as those for the previous project. The pre-feasibility study forementioned concerned also this project which is then delayed by AMFI, which has taken no action since October 20, 1997.
3- Geological exploration of the southern part of the Exclusive Research Zone for copper ("Z.E.R. Sud Cuivre") and Exclusive Research Zone for tin ("Z.E.R. Etain") both belonging to GECAMINES.
This project was also offered to AMFI in a private contract.
In spite of concluding the general framework agreement between GECAMINES and AMFI subsequently approved by the ZAIRE Government, the project has not progressed for various reasons.
4- Reprocessing of the copper and cobalt tailings at the KOLWEZI concentrator.
In addition to the three projects described above, there is a fourth project, related to the creation of a Joint-Venture to reprocess the KOLWEZI CONCENTRATOR TAILINGS.
This Joint-Venture was aimed at exploiting a huge stock of old tailings, which contain 1,440,000 tonnes of copper and 275,000 tonnes of cobalt.
This project was initiated by GECAMINES in 1994 and had, at the beginning, been offered to a Chinese group in private contract.
In spite of the signature of preliminary agreements and a number of contacts between GECAMINES and this group, this project has not been achieved and was then cancelled.
Consequently, GECAMINES decided to submit this project to a widened call for tenders, sent to nearly 30 companies. Only eight responded, including AMFI.
When the provisional evaluation of these tenders was concluded, at a "pre-qualification step," six out of these eight submitting companies were chosen, including AMFI.
These "pre-qualified" companies were then invited by GECAMINES to visit the site in order to collect information which would enable them to make a final offer. They also received the technical dossier and terms of reference at that time, the latter stipulating among other things that GECAMINES would only choose the tender which seemed to it satisfactory, and would not have to justify its choice.
These companies had been required beforehand to sign a confidentiality agreement, covering all the information to be obtained from GECAMINES.
Each submitting company sent witnesses to the session when the final tenders were publicly opened, on 19 February 1997.
The six companies had been informed not only of the criteria for evaluating the tenders but also of GECAMINES' determination to select the best satisfactory offer. These companies had also been informed that any attempt to influence the result would lead to the exclusion of the applicant.
GECAMINES then began the second stage of selection on April 1, 1997.
Each company's final offer was submitted in two aspects: one technical, and the other one commercial.
Evaluation of these offers, - which started with the technical part and continued afterwards, with the commercial part - revealed that none of them satisfied GECAMINES' expectations for the commercial part.
As a result of this situation, GECAMINES did not grant the project to any of the companies and sent to all the submitting companies a letter, asking them to improve their commercial offers. While these improved commercial offers were being awaited, the town of LUBUMBASHI fell into the hands of the A.F.D.L. (Alliance of Democratic Forces for the Liberation of the CONGO) on 9 April 1997. Evaluation of the tenders, to make a final selection of the successful bidder, was then disturbed and therefore could not be concluded.
Taking advantage of the situation at that time, AMFI managed to get some of the leaders of the A.F.D.L. - who had not yet reached LUBUMBASHI to make contact with GECAMINES - sign a document in the town of GOMA, on 13 April 1997. The document granted AMFI all the projected developments for the KIPUSHI location and also, the KOLWEZI CONCENTRATOR TAILINGS treatment project. The document signed referred in some pages to GECAMINES and in the last page to MIBA (Societe Miniere de Bakwanga), which are yet different firms
Moreover, in an unjustifiable attempt to be granted the global GECAMINES Exclusive Research Zones, AMFI used GECAMINES document sent to the Government requesting an extension of the validity of these Exclusive Research Zones on which AMFI had erased the names "GECAMINES" and "SODIMICO," and replaced them with "AMFI," which is an objectionable action.
It was on the ground of such documents that AMFI made statements to the press relating to the conclusion of contracts valued at ONE BILLION $US with the Government of the Democratic Republic of CONGO, totalling the estimated investments in the various projects mentioned above.
Having noted the irregularities which have sullied AMFI's actions, the authorities after being contacted by GECAMINES have cancelled all the disputable documents and invited AMFI to carry out direct negotiations with GECAMINES.
This is how GECAMINES brought AMFI into the initial stages of negotiating private contracts for the projected developments at KIPUSHI and also drew up plans with this company for the KOLWEZI CONCENTRATOR TAILINGS PROJECT, which would be then submitted to the Government approval.
During contacts with the Government on the prior financial criteria for granting the contract for the KOLWEZI CONCENTRATOR TAILINGS reprocessing project, AMFI's difficulties in satisfying the project requirements led the competent authorities not to give the approval.
It should be remembered in this context that Article 41 in paragraph 3 of Law n° 81-013 of 2 April 1981, comprising general legislation on mines and hydrocarbons, provides that:
"The mining agreement, although duly signed by the parties, only comes into effect after being approved by a decree of the President of the Republic."
In a similar vein, the law of 6 January 1978 comprising general provisions applicable to public-sector firms, as amended and supplemented up to now, makes the granting of contracts conditional on authorisation from the Government.
To conclude, it must be remembered that:
1- The procedures for granting contracts in the context of projects with which we are concerned were scrupulously complied with by GECAMINES.
2- The private negotiations relating to the three projects described above had not been broken, AMFI being free to comply with the conditions formulated by GECAMINES with a view to reaching a conclusion.
3- As AMFI has not satisfied the financial conditions for granting the contract relating to treatment of the KOLWEZI CONCENTRATOR TAILINGS the Governmental authorities have not authorised the finalisation of the contract in question.
As this authorisation has not been granted, this agreement remains without any effect.
Signed Mbaka Kawaya Swana
Chairman and CEO