Legal Action in Brazil Over Mining Assets
A state-owned Brazilian company is launching a legal effort to stop Equinox Gold Corporation from transferring its precious metal assets to a major Chinese mining firm.
Companjia Bahia de Produção Mineral (CBPM) aims to secure an emergency injunction for the immediate confiscation of leased land in Bahia, a northeastern state in Brazil. Documents procured by authorities indicate the company contends that Equinox, based in Canada, claimed to merely be a leaseholder, thus lacking the authority to sell the concession.
Equinox has arranged to sell its Brazilian operations to CMOC Group, one of China’s largest mining entities, in a deal worth around $1 billion, which is anticipated to finalize this quarter. This agreement, revealed in December, encompasses several mines and deposits under Equinox South America.
The allegations from CBPM pertain exclusively to one property, referred to as the Bahia Complex. No other properties have been mentioned in the court documents. The company has previously voiced its disapproval of the transaction.
Ryan King, Equinox’s executive vice president of capital markets, mentioned they have not been informed of any legal proceedings related to this matter. He expressed confidence that the sale aligns with Brazilian law and all contractual commitments.
“Equinox Gold is willing to defend its position in court if needed, while remaining open to constructive discussions with the state for a mutually beneficial resolution,” King remarked.
There has been no response from CMOC Group regarding this situation. Several Chinese firms are on break for the Spring Festival holiday this week.
CBPM claims the deal was reached without their explicit approval, which they argue is a breach of the governing agreement for the concession. They are requesting the Bahia State Court of Justice to annul the lease and are also seeking damages.
“Canadian companies have been selling mineral rights that they do not actually own,” said CBPM President Enrique Carbaral in a phone interview.
