Congo to Revisit Mine-Law Proposals Rejected by Industry in 2015

A revised mining code that the Democratic Republic of Congo’s government will present to parliament is the same draft proposal introduced to legislators in 2015 and opposed by industry, Mines Minister Martin Kabwelulu said.

The proposed changes should be presented to parliament this week, but a date has yet to be set, Kabwelulu said Monday by mobile-phone text message from the capital, Kinshasa.

“It is the same draft,” he said.

A proposed revision of the 2002 mining code was approved by the government in March 2015 and introduced to parliament, but never debated. Planned changes include:

  • Increasing profit taxes to 35 percent from 30 percent
  • Raising the government’s free share of new mining projects to 10 percent from 5 percent
  • Lifting royalties on copper and cobalt to 3.5 percent from 2 percent.

Congo is Africa’s biggest copper producer and the world’s largest source of cobalt. Baar-based Glencore Plc, London-listed Randgold Resources Ltd. and China Molybdenum Co. all have mining projects in the country.

The chamber of mines at the Federation des Entreprises du Congo, the country’s biggest industry group, opposed the revisions when they were submitted to parliament in 2015. “It would spell disaster for both the copper and gold-mining sectors,” the FEC said at the time in a position paper on the new code.

Plans Dropped

Kabwelulu announced in January 2016 that the government had dropped plans to change the legislation. Low metal prices and increased electricity costs meant it was the wrong time to increase the tax burden for miners, he said then. Still, the proposed changes remained with parliament, leaving the door open for the government to revisit them now.

The chamber of mines says it hopes to discuss the revisions again.

“We hope we can work with the natural resources commission within the parliament to discuss the proposals,” Chamber of Mines Secretary-General John Nkono said Monday by phone from Kinshasa. Between 2013 and 2015, the chamber worked with the government on several drafts of the legislation. The government’s first proposal in 2013 doubled royalties on copper and introduced a 50 percent windfall tax.

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