KINSHASA, July 17 Growth in copper production in
Democratic Republic of Congo will slow in 2014 from its rapid
pace the previous year due to insufficient energy supply and
uncertainty over new mining laws, Congo's mining chamber said.
Copper production leapt to a record 914,631 tonnes last year
from 620,000 tonnes in 2012 as new mining projects and expansion
plans came online.
In a report on the first quarter of this year, the mining
chamber predicted that copper output in 2014 would inch up to
922,000 tonnes, annual growth of just 0.82 percent compared with
the 47 percent leap the year before.
"(Congo) still has the potential to produce over a million
tonnes in 2014 and even more in following years, if it controls
the parameters that influence investment, notably electricity
supply and the revision of the mining code," the report said.
The mining sector helped drive economic growth of 8.5
percent in Congo in 2013, which is forecast to rise further to
8.7 percent this year.
Congo possesses enormous reserves of gold, diamonds, copper,
cobalt and tin, but the majority of its 65 million people live
in poverty due to corruption, mismanagement and war.
International mining operations are drawn to Congo's
copper-rich Katanga province, but they have been hamstrung by a
lack of reliable energy from dilapidated power sources and
energy grids. Congo's national energy company (SNEL) lacks the
finances to overhaul its equipment.
"Demand (for electricity) has exceeded what can be delivered
by SNEL since 2009, and with the exception of 2011, the gap has
only grown, which is more than worrying," the report said.
In a January letter, Prime Minister Augustin Matata Ponyo
asked mining companies in Katanga to suspend expansion plans and
respect energy rationing imposed by the government, in an effort
to cope with the power deficit.
Companies have united, meanwhile, to oppose proposed changes
to the mining code. Mining representatives are negotiating with
the government over the proposed changes.
The government is seeking to increase royalties on mined
material and to reduce stability clauses, a plan that the mining
chamber has said will reduce foreign investment in the sector in
the long term.
The report also highlighted an expected surge in industrial
gold production from 6,149 kg in 2013 to 18,872 kg in 2014.
"The spectacular increase in industrial gold production is
due to several projects coming online, which were in the
construction phase," the report said.
"It would have been difficult to launch these projects ...
under a mining code with a heavy fiscal burden and a stability
clause reduced to three years."
(Reporting by Peter Jones; Editing by Daniel Flynn and Jane