(Adds comments from ENRC, Zamin)
By Silvia Antonioli and Stephen Eisenhammer
LONDON/RIO DE JANEIRO, Dec 15 (Reuters) - Kazakh mining firm ENRC on Monday sued Indian billionaire Pramod Agarwal’s mining firm Zamin for the repayment of a $65 million loan, the latest chapter in a legal battle between Indian and Kazakh tycoons over a Brazilian iron ore project.
The latest filing in a British court comes after a Zamin subsidiary in June sued ENRC, a company owned by a trio of Kazakh billionaires and the Kazakh government. The lawsuit said ENRC failed to pay a final $220 million tranche of a $670 million purchase of the Brazilian iron ore project.
ENRC denies it owes any money to Zamin’s subsidiary, Ardila Investments N.V.
In response, ENRC is now requesting repayment of $65 million plus interest it says was loaned to Ardila as part of the original sale of the Pedra de Ferro iron ore project in Brazil’s northeastern state of Bahia. In addition, it has asked the court to award costs related to the claim.
ENRC says the loan was due on June 30.
“We believe the claims brought against us are wholly without merit and we are confident in our legal position,” an ENRC spokesperson said. “We are of the opinion that financial pressure on Zamin’s investments has led to this action and are concerned that Ardila and Zamin may not be able to pay the sums owing to us. We therefore intend to ask the court to order that they provide security for our costs.”
Zamin denied it is under financial pressure.
“ENRC’s application for summary judgment against Zamin is opportunistic and disregards the literal text of their contract and commercial sense. Zamin is not obliged to pay ENRC the sum of $65 million whilst ENRC remains in breach of its obligations to pay Zamin the sum of $220m,” a spokesman for Zamin said.
The sale of Pedra de Ferro was agreed upon in 2010, when the iron ore price was more than double the current $68.60 per tonne.
ENRC was delisted from the London Stock Exchange by its original founders last year after being hit by boardroom troubles, corruption investigations and weaker commodity prices. (Editing by Lisa Von Ahn and William Hardy)