Two Years After Fatal Plane Crash, Aussie Miner Inks African Deal with Shearman Partner's Help

Brian Baxter

The Am Law Daily

12-10-2012

Shearman & Sterling and top Australian firm Gilbert + Tobin are advising Australian mining company Sundance Resources on its agreement with the government of Cameroon to move forward with the so-called Mbalam iron ore project that straddles the country's border with the Republic of the Congo.

Announced late last month, the agreement comes a little more than two years after six members of Sundance’s board of directors, including prominent mining lawyer John Carr-Gregg, were killed when the charter plane carrying them to the remote Mbalam region crashed in the Congo's dense jungle in June 2010.

Christophe Asselineau, the Paris-based project development and finance partner who heads Shearman's Africa practice and led the firm's team advising Sundance, was originally scheduled to be on the fatal flight. Though hesitant to discuss the tragedy, Asselineau tells The Am Law Daily that several former Sundance executives, including then-company secretary Carr-Gregg, were in his office just two days before the fatal crash.

Asselineau says the Sundance group, which was headed to the region to tour iron ore fields estimated to be worth up to $4.7 billion, suggested he forgo the flight and rendezvous with them a few days later instead. He remembers getting a phone call from a local lawyer working with the team, Marie Andre N’Gwe, that the plane carrying Carr-Gregg, eight other passengers, and two pilots had gone missing.

All told, according to an Am Law Daily story at the time, seven people affiliated with Sundance died in the crash, including mining tycoon Ken Talbot, whose nearly 17 percent stake made him the Perth-based company's largest shareholder, and a then 55-year-old Carr-Gregg, a former senior associate at leading Aussie firm Allens. 

About 200 people gathered in Sydney in early July 2010 for a memorial service for Carr-Gregg, who also served as general manager for corporate services at Sundance. Reflecting on Carr-Gregg's professional accomplishments, Asselineau notes that he began his legal career in the gaming industry. “There’s a lot of similarities in gaming and mining, they’re both about taking chances,” Asselineau says. “I only knew John for a few months, but he was quite a character.”

For Asselineau, who joined Shearman in April 2011 from London-based Simmons & Simmons, where he also headed the Africa group, flying to Cameroon to negotiate on behalf of Sundance in connection with the Mbalam project marked the latest chapter in a 25-year run handling African deals.

Asselineau cites the landmark $3.7 billion oil pipeline project between Chad and Cameroon a decade ago as among the highlights of his career on the continent. Since closing that deal, he says, he has made the six-hour flight from Paris to the West African country about once a month—a pace he does not expect will slow anytime soon.

“There’s no question that the level of African activity is growing,” Asselineau told The American Lawyer in September for a story about the increase in legal work emanating from Africa. “And this is really cross-practice—not just projects work but increasingly finance, M&A, and international arbitration."

Africa can be difficult for the uninitiated to navigate, with cultural quirks and government bureaucracies often creating obstacles to quick-and-easy dealmaking. Those complications notwithstanding, Asselineau says the lawyers on both sides of the Mbalam deal played key roles in achieving the agreement following years-long negotiations over the iron ore development project, which adjoins the border separating southern Cameroon from the $600 million Nabemba site in northern Congo.

For its part, the government of Cameroon relied on a legal team composed of attorneys from Patton Boggs and leading French firm Gide Loyrette Nouel for representation in the Sundance negotiations. Asselineau says the country’s decision to rely on outside advisers was a significant departure from the approach it—and many other African countries—have adopted when negotiating with foreign companies in the past. At the same time, he adds, the government's decision to employ outside counsel was helpful in moving the talks along.

“Cameroon was the most complex part of the project because that’s where you have most of the investment,” Asselineau says. “And since there wasn’t as much of a natural resources culture there, it’s a lot easier to negotiate with other lawyers [who] have experience in project development work.”

Leading the Patton Boggs team were corporate partner Douglas Boggs—the son of senior partner and so-called King of K Street Thomas Hale Boggs Jr.—and corporate, finance, and infrastructure partners Thomas Reems and Alan Noskow, all of whom are based in Washington, D.C. Also advising the government of Cameroon was Gide M&A partner Christophe Eck in Paris.

That the parties were able to reach an agreement suggests Sundance’s outside advisers followed the appropriate course by stepping in to help keep the company running in the wake of the fatal plane crash more than two years ago. 

Michael Blakiston, an energy and natural resources partner at Gilbert + Tobin, was one of those strategic advisers tapped to serve as an interim operational director to replace some of the Sundance executives who died in the crash. Now a nonexecutive member of the Sundance board, Blakiston was at the time a name partner at Perth-based Blakiston & Crabb who had already been tasked with advising the company on the agreements relating to the Mbalam-Nabemba project.

Asselineau says Blakiston devised the strategy whereby Sundance—most of whose assets are located in Africa—suspended trading of its shares on the Australian Securities Exchange in the immediate aftermath of the crash in order to stabilize the company as it dealt with the loss of most of its senior executives.

Blakiston also continued to advise Sundance on the negotiations necessary to obtain convention agreements with the governments of Cameroon and Congo related to the Mbalam project, even while overseeing a merger between his firm and Gilbert + Tobin in May 2011. (The two Aussie firms had established a formal alliance the year before.)

The convention agreements that have now been struck essentially spell out the financial, legal, and tax terms under which Sundance’s Cameroonian subsidiary, Cam Iron, will develop and operate the massive mine and related transportation infrastructure—such as a deep sea port and more than 300 miles of railway—needed to gain access to the Mbalam region's precious metal reserves. (Asselineau adds that a separate agreement the company worked out with the government of Congo was much simpler because it didn’t require the massive infrastructure investment slated for Cameroon.)

Blakiston, who was not immediately available for comment, did say in a statement released by Gilbert + Tobin that “the signing of the convention is the culmination of six years of hard work and collegial efforts between all parties involved, which will result in a world-class iron ore operation in Cameroon.”

The deal to develop the site, which is likely to be one of the most complex and integrated mining facilities on the continent, was signed on November 29 at a ceremony in the Cameroonian capital of Yaounde. Asselineau says that attendees took a moment to remember those who died doing their jobs for Sundance. 

Sundance itself is in the process of being acquired by Sichuan Hanlong Group, one of the largest private investment companies in China. Chengdu-based Hanlong first bought Talbot’s stake in Sundance early last year before launching a $1.5 billion bid the following July for the entire company, according to our previous reports. (Asselineau says Chinese companies have become increasingly active in the African mining sector, often by buying up Aussie investments in the region.)

Marc Montandon serves as Sundance’s general counsel and Brian Conrick is its company secretary. Both previously practiced at top Aussie firm Clayton Utz, which is advising Sundance on the Hanlong offer. That deal is delayed as Hanlong seeks to shore up its finances for the acquisition, according to The Australian. 

As for Sundance, the aftermath of the crash that claimed the lives of so many of its senior staff in June 2010 continues.

Almost two years to the day of the accident, 25 relatives of Carr-Gregg and other crash victims sued Sundance, Cam Iron, Garmin International, and several other companies this summer in federal court in Chicago for negligence over what the plaintiffs claim was a faulty GPS system that caused the plane to go down, according to Courthouse News.

Floyd Wisner, a name partner at the St. Charles, Illinois–based Wisner Law Firm who is representing the plaintiffs, was out of the country and unavailable for immediate comment. Outside counsel for the defendants have not yet entered appearances with the court.