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UPDATE 3-Congo's Kabila to sign new mining code soon after meeting with miners

Published 2018-03-07, 07:09 p/m
© Reuters.  UPDATE 3-Congo's Kabila to sign new mining code soon after meeting with miners
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(Recasts lead paragraph, adds no further comment from miners,other meeting attendee)

By Amedee Mwarabu

KINSHASA, March 7 (Reuters) - Democratic Republic of CongoPresident Joseph Kabila will soon sign into law a new miningcode, the government and the country's mining companies said onWednesday. The code has been vigorously opposed by the miners.

The announcement followed a nearly six-hour meeting betweenKabila and mining executives in Kinshasa about the new code,which will raise taxes and remove a stability clause in thecurrent law protecting miners from changes to the fiscal andcustoms regime for 10 years.

"The president of the republic assured the miners ... thattheir concerns will be taken into account through a constructivedialogue with the government after the promulgation of the newmining law," a joint statement said.

Glencore GLEN.L , Randgold RRS.L and China Molybdenum 603993.SS all operate mines in Congo, Africa's top copper andcobalt producer, and have said the changes in the code adoptedby parliament in January would scare off new investment andviolate existing agreements. Ivanhoe IVN.TO is developing amine and upgrading another that is not currently in production.

Mining executives declined to answer questions fromreporters after the meeting, with Randgold Chief Executive MarkBristow saying they had "work to do".

Ivanhoe and China Moly declined to comment further whenreached via email.

Mines Minster Martin Kabwelulu told reporters after themeeting that the companies' concerns would be treated on a"case-by-case basis".

"After the promulgation of the code, we are going to waitfor the mining companies ... to send us their concerns,"Kabwelulu said. "We are going to re-examine those concerns,first with (government) experts ... and with the miningcompanies' experts."

Participants in Wednesday's meeting included Bristow,Glencore CEO Ivan Glasenberg, China Molybdenum executivechairman Steele Li and Ivanhoe chairman Robert Friedland.

Randgold, which operates the giant Kibali gold mine innortheastern Congo, said last month that it would challenge thenew code through international arbitration if it was notreferred back to the mines ministry for further consultationwith industry government has disputed the companies' claims that thenew code will make them unprofitable and said the revision isneeded to boost meager public revenues in a country with anannual budget of only about $5 billion.

Under one provision in the proposed code, royalties oncobalt, a vital component in electric car batteries, couldincrease fivefold to 10 percent. The law will also introduce awindfall profits tax.

Congo is the world's biggest source of cobalt. Its outputjumped 15.5 percent last year to 73,940 tonnes.

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