Mining Tycoon’s $1 Billion Manganese Project Nears Collapse

12 December 2016

A unit of Timis Mining Corp. that says it was forced to stop developing the world’s largest manganese deposit may seek as much as $4 billion in damages from Burkina Faso because the suspension of mining will endanger its other projects in West Africa.

Pan African Minerals’ $1 billion Tambao project has been “completely suspended” since June 2015 and the company has fired almost all its workers, managing director Souleymane Mihin said in an interview Thursday in Burkina Faso’s capital, Ouagadougou. The company on Dec. 2 petitioned the International Court of Arbitration in Paris to protect its permit from being withdrawn, he said.

“Since the new government was appointed, no one has ever come to speak with us,” Mihin said. “The court will have to resolve this.”

With estimated reserves of 100 million metric tons, Tambao is the largest manganese mine in the world, according to Timis Corp.

Tambao was meant to generate revenue that could be invested elsewhere in the region. Profits from the mine would be used to fund the construction of a quay in Ivory Coast’s Abidjan port to ship manganese, building a railway from the Mont Klahohyo iron-ore deposit in Ivory Coast to the port of San Pedro, and the development of a uranium mine in Niger, according to Pan African Minerals in a letter to the Burkina Faso government dated Sept. 9.

The company managed to ship 2,000 metric tons of the mineral before an interim government appointed after the ouster of longtime leader Blaise Compaore told management to halt exports amid a review of the West African nation’s mining contracts. Two months later, in March 2015, the company was ordered to stop production.

After a presidential vote last year brought an elected government to power, a parliamentary committee of inquiry in October recommended that the company’s permit be withdrawn and given to a different company.

The parliamentary committee’s findings prompted Pan African Burkina to seek arbitration from the court, part of the International Chamber of Commerce, Mihin said. The parliamentary report “constitutes a risk of serious irreparable prejudice,” he said. “We went to the court to protect our license.”

Source – Bloomberg