May 28, 2019 / 10:42 AM / 4 months ago

Uganda's tungsten mine sues International Tin Association for defamation

JOHANNESBURG (Reuters) - An owner of Uganda’s only tungsten mine is suing the International Tin Association for defamation, saying the certifier wrongly accused it of trading in conflict minerals, court documents seen by Reuters show.

The association’s International Tin Supply Chain Initiative (ITSCI) program, used by companies such as Apple, was introduced after the 2008 financial crisis to certify minerals in response to regulation which obliged U.S. companies to vet their supply chains.

The International Tin Association’s Kay Nimmo, who leads the ITSCI program, said in an email she had no immediate comment.

The ITSCI program, which dominates mineral certification in conflict-ridden central Africa, aims to create mineral supply chains that avoid contributing to conflict, human rights abuses, or other risks such as bribery, according to its website.

Kerilee Investments, the British-based majority shareholder in Uganda-based KI3R, which owns the Nyamuliro tungsten mine, says it was damaged by ITSCI’s malign abuse of its alerting system and negligence in investigation and reporting.

A filing to the High Court of Uganda, dated May 14, charges the defendant “falsely and maliciously wrote and published material alleging that it was dealing in conflict minerals”.

Kerilee says the allegations injured its credit and reputation and it is seeking damages of $998,060 plus interest and public retractions.

“The facts are as we have presented them. We look forward to clearing our name - though we shouldn’t have to,” Brian Beckett, chairman and CEO of Kerilee Investments, told Reuters.

The court filing concerns an alert issued by the ITSCI on Dec. 13, 2017 and updated on Jan. 29, 2018, which said two 18-tonne consignments of tungsten concentrate shipped from the Nyamuliro mine could pose supply chain risks.

KI3R says the consignments were legitimate and ITSCI’s alerts were based on a third-party report, whose veracity it said ITSCI had not independently checked.

It further said it was ignored after writing to ITSCI providing clarification.

A Kenyan court decision in July 2018 led to the release of the containers, which had been impounded in Mombasa, following a delay of around nine months as a result of “the defamatory actions,” the court documents said.

Tungsten is used to strengthen alloys and has applications in the electronics industry.

ITSCI is beginning to face competition from programs based on blockchain, the technology behind Bitcoin, which provides a way to track mineral movements.

In January, Societe Miniere de Bisunzu, Democratic Republic of Congo’s biggest miner of coltan — an ore in which battery mineral tantalum is contained — said it was leaving ITSCI and would use an alternative scheme because of cost.

Reporting by Barbara Lewis; additional reporting by Elias Biryabarema in Kampala; editing by Kirsten Donovan

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