Mining Weekly | 17 November 2023
Abyssinian launches legal dispute against State JV partner in Ethiopia
By: Marleny Arnoldi
Abyssinian Metals, African Mining and Energy (AME), Abyssinian Investments and Kenticha Mining (KMP) have taken steps to issue a notice and dispute and request for negotiations to the Ethiopian government over concerns at measures taken against Abyssinian’s investments in the Kenticha lithium and tantalum project in the country.
The parties have also issued a force majeure notice to the Ethiopian Federal Ministry of Mines and Petroleum relating to the Abyssinian group’s ability to access the Kenticha project site and continue with an agreed work programme.
This notice was issued by the joint venture (JV) company KMP, in which members of the Abyssinian group hold a 51% interest, and State-owned Oromia Share Mining Company holds 49%.
The Abyssinian group’s rights over the Kenticha project are held by KMP, through an exploration licence agreement with the Ministry, an exploration licence issued by the Ministry, and a mining licence issued by the Ministry over the historical tailings area at the project site.
Through the efforts and investment of the Abyssinian group, an inferred resource of 88-million tonnes, grading 0.78% lithium oxide, and other exploration targets, have been identified.
The Abyssinian group has been working to establish a mining operation at Kenticha, which is scheduled to start production of spodumene concentrate in the first quarter of next year.
The Abyssinian group’s investments in the Kenticha project are protected by the Netherlands-Ethiopia Bilateral Investment Treaty (BIT).
The BIT includes standard protections for covered investments, including a guarantee of fair and equitable treatment, full protection, and non-impairment of investments by unreasonable and discriminatory measures.
The BIT also prohibits the unlawful expropriation of covered investments.
The BIT provides that, in the event of a dispute between a covered investor (in this case, the relevant members of the Abyssinian group) and the host State (in this case, Ethiopia), the investor and the host State are required to attempt to resolve the dispute through amicable negotiations for a period of six months.
If the dispute is not amicably resolved in this way, the BIT provides for the dispute to be resolved by international arbitration outside of the host State.
Abyssinian says it remains committed to the Kenticha project and aims to achieve an amicable resolution, such that the Abyssinian group may return to Kenticha and resume pre-production works.
The Abyssinian group was ordered to leave the Kenticha site on October 18.
