Australian Mining Companies launch claims for over US$35 billion against Republic of Congo

June 21, 2021: Avima Iron Ore Limited, an Australian-owned mining company, launched a US$27 billion claim against the Republic of Congo (RoC) in the International Chamber of Commerce on June 4, 2021.

Perth-based Sundance Resources is also seeking a US$8.76 billion from the RoC for exploration investments and expected lost profit from iron ore exports. These two claims amount to three times the Gross Domestic Product of the RoC.

And Perth-based Equatorial Resources Ltd, through its subsidiary, EEPL Holdings Mauritius, has served a Notice of Dispute and Request for Negotiations on the RoC under the Agreement between the Government of the Republic of Congo and the Government of the Republic of Mauritius for the Reciprocal Promotion and Protection of Investments (the “Mauritius-RoC Treaty”). At this stage, no dollar claim has been announced.

Avima, Sundance and Equatorial Resources claim their property was expropriated by the government when three mining licences were granted to a Chinese company, Sangha Mining Development, over the areas the Australian companies had been exploring for several years, but had not started mining. China is seeking to diversify its iron ore requirements away from Australia’s Pilbara.

Avima stated that it had invested “hundreds of millions of US dollars over an extended period”, but somehow managed to claim US$27 billion in damages.

The Avima and Sundance cases use an RoC law which allows for foreign investor disputes to be arbitrated through the International Chamber of Commerce. Australia does not have an investment treaty with the RoC which might enable an Investor-State Dispute Settlement (ISDS) claim. Equatorial’s case demonstrates ISDS forum shopping, since it has used a Mauritius subsidiary to make the claim, even though it is an Australian company.

In 2019, the Republic of Congo had a Gross Domestic Product of US$12.2 billion. It has a population of 5.4 million, and a Gross National Income per person of US$1,720.

These cases continue a pattern of massive claims by Australian mining companies against developing countries based on dubious calculations of future lost profits.