Junior explorer Pacific Bauxite is taking the Solomon Islands government to court over the cancellation of its Nendo bauxite project.

The company (ASX:PBX) was notified by the government in early June that the prospecting licence for its 50 per cent-owned Nendo project had been cancelled.

A prospecting licence allows a company to undertake exploration in the Solomon Islands.

Pacific Bauxite has now filed a legal claim in the High Court of Solomon Islands.

The joint venture company, Eight South Investments, had restarted work at the Nendo project in April and was gearing up for a more extensive phase of prospecting and drilling.

Bauxite is the key ingredient in aluminium and alumina production. Exploration for the type of bauxite deposit found in the Solomon Islands has increased in recent years, largely due to growing alumina demand in China and the Asia Pacific region.

Pacific Bauxite said the government’s decision to cancel its prospecting licence was completely unexpected.

The reasons outlined by the government in its letter to Pacific Bauxite included “unsatisfactory level of prospecting at Nendo and failure to establish amicable relations with the local communities”, Pacific Bauxite noted.

The company said the reasons were “factually incorrect and therefore unjustified”.

The appeal process is estimated to take six to 12 months.

Pacific Bauxite will travel to the Solomon Islands next week in the hopes of settling the matter out of court.

Stockhead is seeking comment.

Featured Companies

You might be interested in