BREAKING!!! Congo’s New Mining Code Becomes Law as Kabila
Shows His Balls to Mining Companies
International mining companies that operate in Congo, Africa’s top copper producer, have for two years 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.
Executives from Glencore Plc (LON: GLEN), Randgold Resources (NASDAQ: GOLD), China Molybdenum (SHA: 603993) and Ivanhoe Mines Ltd. (TSE: IVN) 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 five-fold to 10 percent if the government designates the metal a “strategic substance”. The law also introduces a windfall profits tax.