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Congo plans to re-introduce mining code revision next week
May 19, 2017 / 9:52 AM / in 5 months

Congo plans to re-introduce mining code revision next week

KINSHASA (Reuters) - Democratic Republic of Congo’s government plans to re-introduce legislation in parliament next week to revise the mining code a year after withdrawing it amid fierce opposition from mining companies, the mines minister told Reuters on Friday.

The government of Africa’s largest copper producer suspended consideration of the revised code in March 2016 due to low commodity prices. Companies said its increased royalties and shortened stability clauses would make their projects unprofitable.

Mines Minister Martin Kabwelulu did not say whether the legislation, aimed at boosting government revenues, would be identical to the earlier proposal to replace the current code, which was passed in 2002.

“We look forward to presenting our point of view on the outstanding points ... notably on stability clauses, the royalty rates and the exchange rate used for VAT reimbursements,” John Nkono, secretary-general of the industry-led Chamber of Mines, told Reuters.

Major investors in Congo’s mining sector include Glencore, Randgold Resources and China Molybdenum. In addition to copper, the country mines significant quantities of cobalt, gold, diamonds and tin.

Congolese activist groups dispute the companies’ claim that the reforms would make them unprofitable and say the higher revenues that would be generated by a new code are vital to supporting public services.

Low commodity prices since 2015 have left the government in desperate need of cash and caused the franc currency to lose half its value since last year. The mining and oil sectors account for about 95 percent of export revenues.

Congo’s copper production jumped more than 20 percent in the first quarter of this year as prices recovered. The Chamber of Mines expects annual production to hit about 1.5 million tonnes in 2018, up from around 1 million in 2016.

Reporting by Aaron Ross; Editing by Joe Bavier and Elaine Hardcastle

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