UPDATE 2-Sundance Resources readies for arbitration over Congo Republic mine project

(Adds details on Congo Iron, and extension of negotiation process with Cameroon)

JOHANNESBURG, Feb 18 (Reuters) - Australia’s Sundance Resources Ltd said on Thursday it was advancing its plans to start international arbitration proceedings against Congo Republic after the African country cancelled its Nabeba iron ore project in December.

Sundance, which delisted from the Australian Stock Exchange on Dec. 21, said arbitration proceedings would be conducted under International Chamber of Commerce rules, before a tribunal of three arbitrators in London.

A presidential decree issued on Dec. 17 said the mining permit for Sundance’s local subsidiary Congo Iron had been withdrawn for “prolonged insufficiency of exploitation manifestly contrary to the potential of the deposit” and a failure to pay royalties.

Sundance issued a notice of dispute and a notice of expropriation to the Congo Republic’s government in mid-December, after which a 60-day period of negotiation is set out by Congolese law. That period expired on Feb. 15.

“Congo Iron will seek the payment by Congo of fair compensation for the expropriation of the mining permit and damages for other breaches of the Convention and the applicable law,” Sundance said.

The company, which said in December it would seek damages of $8.76 billion, said it would be represented by Clifford Chance.

A Congo Republic mines ministry spokesman could not immediately be reached for comment.

Sundance, which is also in dispute with Cameroon over its Cam Iron subsidiary’s Mbalam iron ore project, said it decided to extend the negotiation period with Cameroon by a further 30 days.

In December, Sundance said Cameroon breached obligations to the company because the president did not issue an implementing decree required for Cam Iron’s exploitation permit to be deemed valid.

A Cameroon government spokesman could not immediately be reached for comment. (Reporting by Helen Reid; Editing by Jason Neely and Barbara Lewis)