The Nabeba permit is part of Sundance’s flagship Mbalam-Nabeba project, which straddles the border of Congo and Cameroon. It has yet to begin extracting iron ore.

A decree by President Sassou Nguesso published on Dec. 17 in Congo’s official gazette confirmed the permit had been withdrawn for “prolonged insufficiency of exploitation manifestly contrary to the potential of the deposit” and a failure to pay royalties.

Another presidential decree awarded the permit to Sangha Mining Development Sasu, headquartered in the Congolese city of Pointe Noire. It was not clear who owns Sangha Mining.

A Sundance spokesman was not immediately available to respond to the government’s charges, but the company said in a statement that it had formally initiated the arbitration process on Dec. 15.

The revocation of its permit was “breathtaking in its size and audacity and in contempt of Congo’s mining laws”, Sundance said.

Congo’s government spokesman was not immediately available for comment.

Under the arbitration process the two parties have 54 more days to first negotiate a settlement, but Sundance said that would only happen if the government agreed to pay substantial damages.

Sundance is also in a dispute over its permit in Cameroon, with the company saying the government there has failed to issue a permit the company needs to extract from the site.