* Sodimico files challenge against First Quantum in DRC
* Gecamines/CAMI sue First Quantum subsidiaries for $12 bln
* First Quantum close down 7.1 pct at C$86 on TSX
By Euan Rocha
TORONTO, March 30 (Reuters) - Shares of Canadian miner First Quantum Minerals Ltd (FM.TO) fell more than 7 percent on Tuesday as legal problems tied to its operations in the Democratic Republic of Congo continued to mount.
In September, First Quantum stopped construction of its Kolwezi copper-cobalt project in the DRC after authorities in the African country withdrew the company's license for the project after the government initiated a review of more than 60 mining contracts. [ID:nN16127717]
Kolwezi, a tailings recovery operation, was expected to eventually produce 70,000 tonnes of copper and 14,000 tonnes of cobalt per year. At the time, construction of the project was about two-thirds complete.
The company and its subsidiaries have now been summoned by DRC's Supreme Court because state entity Societe de Developpement Industriel et Minier du Congo (Sodimico) has filed a case challenging First Quantum's right to operate the Lonshi and Frontier copper mines that are located on the border of Zambia and the DRC.
Sodimico alleges that the DRC's Ministry of Mines in 2000 wrongfully withdrew mining titles belonging to Sodimico and subsequently granted the titles to Comisa and Frontier -- two of First Quantum's subsidiaries.
In addition, a commercial court in the DRC has ruled that Comisa owes Sodimico $57 million for the improper use of certain proprietary information related to the Lonshi mine.
First Quantum argues that there is no legal basis to any of Sodimico's claims.
However, the announcement prompted TD Newcrest to cut its price target on First Quantum shares to C$95, from C$102.
"We suspect that investors are likely to treat any asset held by First Quantum in the Democratic Republic of Congo with a significantly increased level of risk," said TD analyst Greg Barnes, in a note to clients.
Last year, First Quantum sued the government of the DRC, state miner Gecamines and the mining regulatory agency CAMI, following the cancellation of the Kolwezi project.
However, the country's highest civil court upheld the government's cancellation of the project and ordered First Quantum subsidiaries Kingamyambo Musonoi Tailings (KMT) and Congo Minerals Development (CMD) to pay Gecamines and CAMI $6 million in damages for filing the cases.
First Quantum said its subsidiaries KMT and CMD on Feb. 22 received notification that Gecamines and CAMI had sued for an additional $12 billion, as compensation for the losses suffered by each of them.
The hearing was held two days later on Feb. 24.
First Quantum alleges that its subsidiaries were not given proper notice of the hearing, but appeared before the appeals court in the DRC to object to the proceedings.
The company said it believes that the appeals court has ruled in favor of the DRC, Gecamines and CAMI, although it has yet to receive official notification of the decision.
However, First Quantum said any judgment rendered against KMT and CMD will not legally affect First Quantum itself, or any of its other operations.
The company said it regrets the escalation of legal actions by DRC entities against First Quantum, but it remains open to seeking a negotiated solution to the Kolwezi project dispute.
First Quantum said it is considering all available means of recourse to tackle the issues it is facing in the DRC and it would provide updates, as required.
Shares of First Quantum closed down 7.1 percent at C$86 on the Toronto Stock Exchange on Tuesday. (Reporting by Euan Rocha; editing by Peter Galloway)