April 17 (Bloomberg) -- The Democratic Republic of Congo banned exports of copper and cobalt concentrates to force mining companies to add value to minerals before shipping them, Mines Minster Martin Kabwelulu said.
The companies have 90 days to clear their inventories of concentrated minerals, he said in a phone message today.
“We want companies to export mineral products with great added value,” Kabwelulu said. Freeport-McMoRan Copper & Gold Inc. must prove the cobalt hydroxide produced by its Tenke Fungurume Mining project is a “finished product” to avoid the ban, or may pay higher taxes from processing outside the country, he said.
Congo was the world’s eighth-largest producer of copper and the biggest miner of cobalt last year, according to the U.S. Geological Survey. Tenke, Congo’s biggest mining project, produced 11,669 metric tons of cobalt last year according to data on the website of Lundin Mining Corp., which owns 24 percent of Tenke.
The decree is not expected to impact Tenke Fungurume’s exports which are “allowed pursuant to applicable laws and rights under its contracts,” Eric Kinneberg, a spokesman for Freeport, said in an e-mail today. The mine’s products, copper cathode and cobalt hydroxide, are being exported without restrictions, he said.
Eurasian Natural Resources Corp., based in London, and Baar, Switzerland-based Glencore International Plc also produce concentrated copper and cobalt in Katanga province, according to documents on the companies’ websites and Congolese mining statistics for 2012.
Lundin fell 9.9 percent at the close in Toronto. Glencore dropped 2.1 percent and ENRC lost 2.7 percent in London. Freeport stock declined 4.3 percent in New York.
An April 5 decree signed by Kabwelulu and Patrice Kitebi, the minister in charge of finance in Prime Minister Matata Ponyo’s office, does allow for the export of cobalt hydroxide with some limitations.
“No one can export retail mining products where the moisture level is above 25 percent,” according to the decree.
A separate letter dated April 12, attached to the decree and signed by Kabwelulu, says that companies can still export concentrated minerals for further processing if they receive permission from the mines minister, count the final metal content as coming from Congo, and pay the related taxes and fees to the Treasury.
Electricity shortages limited production at some mining companies in Congo last year. The ministry may consider granting exceptions to the ban “to counter any eventual difficulties linked to an energy deficit,” according to the letter.
Congo is revising its mining code, which currently allows for concentrated mineral exports. The Mines Ministry previously banned the export of concentrated minerals in April 2010. That same month, Katanga Governor Moise Katumbi allowed mining companies to export concentrated minerals if they paid a $60 per ton tax.
A spokesman for Glencore didn’t immediately respond to requests for comment made by phone and e-mail. An ENRC spokesman declined to comment by e-mail.
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at email@example.com
To contact the editor responsible for this story: Antony Sguazzin at firstname.lastname@example.org