Mining industry representatives on Thursday submitted a formal proposal to the Democratic Republic of Congo (DRC) Ministry of Mines, aimed at addressing concerns about the country’s recently revised mining code and government’s revenue needs.
The submitting members represent more than 85% of the DRC’s copper, cobalt and gold production, and include diversified and/or gold miners Randgold Resources; Glencore; Ivanhoe Mines; Gold Mountain International/Zijn Mining Group; MMG; Crystal River Global; AngloGold Ashanti; and China Molybdenum.
The submission proposes linking a sliding scale of royalty rates to the prices of key commodities, which the industry representatives believe would be a more effective mechanism than the windfall tax – introduced in the new code – and at current prices would immediately give the government a higher share of revenues than what is provided in the new code.
It also stresses that the 2002 mining code contained a ten-year stability clause, which provides that the holders of mining and exploration titles will continue to be governed by the terms of the 2002 mining code for such a period, in the event of the implementation of any new law.
The revised code, signed into law on March 9, removed the measure protecting mining licence holders from complying with changes to the fiscal and customs regime for ten years.
The code also raises royalties on minerals across the board, with a 50% tax on super profits.
On March 15, a legal and technical team representing the major mining companies arrived in Kinshasa for 30 days of engagement with the government on the new mining code. This followed an earlier meeting where DRC President Joseph Kabila gave an assurance that the issues raised would be resolved through transitional arrangements, mining regulations and agreements, as well as guarantees. source: Bloomberg