March 9, 2018 / 7:05 PM / 12 days ago

Congo's Kabila signs into law new mining code

DAKAR (Reuters) - Democratic Republic of Congo President Joseph Kabila signed into law on Friday a new mining code that raises royalties and taxes on operators, the presidency said in a statement.

Congo's Mines Minister Martin Kabwelulu flanked by mining executives operating in Congo addresses a news conference after a meeting President Joseph Kabila (not in the picture) in Kinshasa, Democratic Republic of Congo March 7, 2018. Picture taken March 7, 2018. REUTERS/Kenny Katombe

International mining companies that operate in Congo, Africa’s top copper producer, have vigorously opposed the new law, although Kabila pledged this week to work with them while implementing it.

The law, passed by parliament in late January, replaces an earlier code from 2002. It raises royalties on minerals across the board and removes a clause that protected miners from changes to the fiscal and customs regime for 10 years.

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Executives from Glencore, Randgold, China Molybdenum and Ivanhoe failed to convince Kabila during a six-hour meeting on Wednesday to re-open negotiations over the code, which they say will deter investment and violate existing agreements.

The two sides agreed, however, to open negotiations next week over measures to implement the code, and Mines Minister Martin Kabwelulu said the companies’ concerns would be considered on a case-by-case basis.

Royalties on cobalt, a vital component in electric car batteries, could increase fivefold to 10 percent if the government designates the metal a “strategic substance”. The law also introduces a windfall profits tax.

Reporting By Aaron Ross, editing by Larry King

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