Avima Iron Ore has started arbitration proceedings against the Congo Republic, seeking $27bn in compensation for the government’s cancellation of its mining licence in November 2020.

The arbitration has been filed by the company’s subsidiary Avima Fer Congo and its affiliates before the International Court of Arbitration of the International Chamber of Commerce (ICC).

Avima Iron Ore wants Congo to either pay the said amount or return its mining licence to implement its planned production programme.

The company alleged that the Congolese government had wrongly expropriated its shovel-ready iron ore deposit, which was slated to begin production and ship high-grade iron ore to customers in January this year.

It claimed that the expropriation of the Avima license appeared to have been undertaken to personally benefit certain Congolese officials and complicit third parties.

Avima Iron Ore official Socrates Vasiliades said: “We have invested heavily into the Avima project and in the Republic of the Congo. We have invested hundreds of millions of US dollars over an extended period under the encouragement of the Congolese Government and its leadership.

“The steps taken by the Congolese Government are not just illegal, but they are damaging the country and its people. The Republic of the Congo actions disregards the rights of the investors and the economic and social development of a country in which millions of people live in extreme poverty.”

Avima Iron Ore had begun the project 14 years back and is said to have converted it into a high quality iron ore deposit from an obscure grass roots area.

The company said that it was scheduled to begin mining and transportation of five million tonnes per annum (mtpa) of the iron ore deposit. After the completion of a new railway and the Kribi port expansion, the exports would have increased to more than 50mtpa, claimed the miner.

Representing the company’s arbitration is UK-based law firm Clifford Chance, which has nominated Laurent Jaeger of King & Spalding International as arbitrator.

Lead counsel Simon Greenberg said: “It is hard to imagine a clearer case of expropriation. Our client invested hundreds of millions of dollars and more than ten years of work into the project.

“The mine was almost ready to start selling ultra-high-grade iron ore to the world market.”