Congo’s Kabila to sign new mining code soon after meeting with miners

Joseph_Kabila_April_2016

President of the Democratic Republic of the Congo Joseph Kabila.

President of the Democratic Republic of the Congo Joseph Kabila
President of the Democratic Republic of the Congo Joseph Kabila.

Democratic Republic of Congo President Joseph Kabila will soon sign into law a new mining-code that is vigorously opposed by industry, according to the government and mining companies,the Media reports on Thursday.

The announcement followed a nearly six-hour meeting on Wednesday between Kabila and mining executives in Kinshasa about the new code.

The new code will raise taxes and remove a stability clause in the current law protecting miners from changes to the fiscal and customs regime for 10 years.

“The president of the republic assured the miners … that their concerns will be taken into account through a constructive dialogue with the government after the promulgation of the new mining law,” the statement said.

Glencore, Randgold, Ivanhoe and China Molybdenum all operate mines in Congo, Africa’s top copper producer,.

They have said the changes in the code adopted by parliament in January would scare off new investment and violate existing agreements.

Mines Minster Martin Kabwelulu told reporters after the meeting that the companies’ concerns would be treated on a “case-by-case basis”.

“After the promulgation of the code, we are going to wait for the mining companies … to send us their concerns,” Kabwelulu said.

“We are going to re-examine those concerns, first with (government) experts … and with the mining companies’ experts.”

Participants in the meeting included Glencore CEO Ivan Glasenberg, Randgold CEO Mark Bristow and China Molybdenum executive chairman Steele Li.

Randgold, which operates the giant Kibali gold mine in northeastern Congo, said last month that it would challenge the new code through international-arbitration if it was not referred back to the mines ministry for further consultation with industry.

The government has disputed the companies’ claims that the new code will make them unprofitable.

It said that the revision is needed to boost meager public revenues in a country with an annual budget of only about five billion dollars.

Under one provision in the proposed code, royalties on cobalt, a vital component in electric car batteries, could increase fivefold to 10 per cent.

The law will also introduce a windfall profits tax.

Congo is the world’s biggest source of cobalt. Its output jumped 15.5 per cent last year to 73,940 tonnes.