confidentially speaking
The Africa Confidential Blog
Cash calls
Blue Lines
African treasuries, cash-strapped after the commodity price crash, are
trying to recoup their losses by launching law suits against
multinational companies. The most sensational is a court ruling in Chad on 5 October that a consortium
led by Exxon Mobil should pay the government a fine of US$73.4 billion
for non-payment of royalties.
According to the court, the royalties amounted to 44 trillion CFA
francs ($808 million) but Exxon Mobil disputed the payments. Exxon
Mobil and Malaysia's Petronas,
also in the consortium, have appealed the judgement and are now
negotiating with President Idriss
Déby Itno's government.
The ambitions of Zambia's
state-owned ZCCM Investments are more modest: it is suing Canada's First Quantum for $1.4 bn.,
claiming the company took an unauthorised loan of $2.3 bn. at below
market rates from the Kansanshi copper mine and underpaid its tax
bills. First Quantum, which started negotiating with the government
after its share price started falling on the Toronto exchange, said the
claims were 'inflammatory, vexatious and untrue'.
Uncharacteristically, Nigeria's
legal claims are the most modest in the current round of law suits. It
is suing Total and Chevron for undeclared oil shipments amounting to
over $600 mn. in 2011-14. And it is seeking a further $400 mn. from
ENI, Petrobras and Shell for undeclared shipments in the same period.
