On December 18, 2018, the Ontario Securities Commission (OSC) approved a
settlement with Katanga Mining Ltd. (Katanga) in relation to
misleading disclosure. Although many of the disclosure violations
at issue are related to Katanga's accounting policies and
procedures, the company also settled violations related to the
adequacy of its foreign corruption risk disclosure. For issuers
that have significant operations abroad, this case highlights the
importance of regularly conducting foreign corruption risk
assessments and carefully considering whether existing risk
disclosures are adequate.
The Katanga Settlement
Katanga is an Ontario reporting issuer that operates large-scale
copper and cobalt mines in the Democratic Republic of the Congo
(DRC). The company operates the mines pursuant to a joint venture
agreement with a DRC state-owned enterprise (SOE). Under that
agreement, Katanga is obligated to pay the SOE a fixed entry
premium and royalties based on mine
