Two subsidiaries of Brisbane-based explorer Axiom Mining (ASX: AVQ) have been fined a total $1.3 million by the Solomon Islands government for allegedly failing to have a provincial business licence for mining interests in Isabel Province.
Axiom Nickel (SI) Limited and Axiom KB Limited received a letter of demand last week from the country’s Ministry of Commerce, Industry, Labour & Immigration ordering them to pay fines of $620,000 each for the lack of a licence and for purportedly failing to provide annual survey reports for the past seven years.
The government has also demanded the subsidiaries’ directors, as well as parent company chief executive Ryan Mount, surrender their Australian and New Zealand passports.
Axiom maintains there is no legal basis for the demands, saying the claims in the letter of demand are not valid in law.
“[Our] subsidiaries in the Solomon Islands have faithfully met and completed all surveys that have been sent to them for completion by the government,” the company said.
“We also dispute the alleged requirement to hold a business license for Isabel Province.”
Axiom operates the Isabel nickel project in Isabel Province – widely considered one of the largest nickel laterite discoveries in the mineral-rich Pacific Rim, with the key deposits being San Jorge and Kolosori.
It is not the first time Axiom has attracted the wrong attention from Solomon Islands officials.
Last month, the company had its foreign investment licence cancelled and was told its expatriate workers could not stay in the country.
The cancellation meant Axiom was no longer permitted to conduct mining activities in the region and its production operations at the San Jorge deposit were suspended.
The company’s legal advisers believe the “grounds provided for this decision are not lawful”.
“We remain confident the licence will be re-stated and that an export permit will be issued,” Axiom said.
“Under this scenario, we would anticipate an 8 to 10 week period of re-mobilisation and re- commencement of mining at San Jorge prior to the first shipment of ore.”
There are concerns from some corners that the Solomon Islands government is making moves to push Axiom out of the country while favouring Chinese rival Bintan Mining.
Last month, the government switched diplomatic relations from Taiwan to China and assigned one of Axiom’s prospective tenements to Bintan.