Congo mining regulations committee completes work for new mining code

May 15, 2018

A commission that was created to draft regulations to be implemented into a new mining code for the Democratic Republic of Congo completed its work, but major mining companies operating in the region are hopeful that meaningful changes to the code can still be made.

The new mining code includes a super profits tax, royalty increase and strips away a stability clause protecting existing investments from changes to the fiscal and customs regime for 10 years. It also gives powers to the mines minister to raise royalties on minerals considered strategic, Reuters reported.

The commission that submitted the changes represents significant mining development projects and more than 85 percent of the DRC's copper, cobalt and gold production, including Randgold Resources, Glencore, Ivanhoe Mines, Gold Mountain International/ Zijin Mining Group, MMG Limited, AngloGold Ashanti, Crystal River Global and China Molybdenum Co. However, the mining companies said they had not been able to negotiate over key issues in the new mining code as the talks were restricted to drafting the regulations within the parameters set by the new code.

President Joseph Kabila pledged before signing the law in March to work with international mining companies while implementing it.

“(The miners) pointed out again that flaws in the current provisions of the new code would immediately cause numerous practical and legal problems, which would have a negative impact on the development of the DRC’s mining industry as well as the country’s long-term economic prospects,” a joint statement by the mining companies said.

In March, mining companies submitted a proposal that included a sliding scale for royalty rates on key commodities that would replace the windfall profits tax.

The group said it was still waiting for a formal response to its proposal, submitted in March, regarding honoring the rights and suggesting a sliding scale on royalties.

A draft document of regulations seen by Reuters earlier this month showed that the government had made no substantial concessions to the mining companies.

The draft will be presented to the mining minister who will work with an inter-ministerial commission before presenting it to the government for approval, the joint statement said.
 

 

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