Congo Drops Revisions to Mining Code on Industry Oppositionby
Government had proposed increasing profit tax, royalties
Changes to code had been opposed by miners including Randgold
The Democratic Republic of Congo, the world’s largest source of cobalt and Africa’s biggest copper producer, dropped plans to change its mining code after opposition from mining companies, Mines Minister Martin Kabwelulu said.
“The mining code which is currently in place will stay in place,” Kabwelulu said at a speech to investors in Cape Town on Wednesday. “You don’t have to think about modifying your business plan. Those who are thinking of investing can do so based on this code.”
Congo began reviewing the 2002 mining code in 2014. Revised laws approved by the government in March included increases in profit tax to 35 percent from 30 percent, raising the government’s free share of new mining projects to 10 percent from 5 percent and royalties on copper and cobalt revenue to 3.5 percent from 2 percent.
The Chamber of Mines at the Federation des Entreprises du Congo, a business lobby group, had opposed revisions to the code because of the potential negative impact it could have on investment in mining. Randgold Resources Ltd. Chief Executive Officer Mark Bristow said in October the proposed revisions to the code risked destroying the industry.
Randgold mines gold in the Congo in a joint venture with Johannesburg-based AngloGold Ashanti Ltd., while companies including Baar, Switzerland-based Glencore Plc and Phoenix, Arizona-based Freeport McMoRan Inc. extract copper from the central African nation.