DRC will approve disputed mining code, but miners say there will be ‘further discussions’
Kinshasa — Democratic Republic of Congo (DRC) President Joseph Kabila will sign off on changes to the country’s mining code but left the door open to further talks after a lengthy meeting with senior industry executives who oppose the legal reform.
Glencore CEO Ivan Glasenberg, Randgold Resources’ Mark Bristow and other top officials met Kabila for five hours on Wednesday in the capital, Kinshasa, to discuss the new rules. The changes will raise taxes and other costs for operators in the DRC, which is Africa’s top copper producer and the world’s main source of cobalt, a critical ingredient in rechargeable batteries.
While the companies failed to persuade Kabila not to sign the law, "the president did promise to continue further discussions with us," Jerry Jiao, CEO of miner MMG, said on Thursday. MMG’s head of operations for Africa, Australia and Asia attended the meeting, he said. Government officials said they would be open to discussing a 10-year stability agreement, which "is very key for everybody," Jiao said.
DRC mining minister Martin Kabwelulu said the content of the law would not be altered in the regulation the government must now produce.
"We will take the measures of the code and put them in the regulation," he told reporters after the meeting. "The law cannot be contradicted."
Companies including Glencore, the world’s largest cobalt producer, and Ivanhoe Mines, which has discovered Africa’s biggest copper deposit in the DRC, face a 50% tax on some profits and increased royalty payments under the new law. It also allows the government to raise royalty payments on cobalt five-fold to 10% if it categorises the mineral as a "strategic substance".
Modifications to the code are intended to boost state revenue in one of the world’s poorest countries.
After Kabila has signed the law, the government will consider mining companies’ concerns on a case-by-case basis, Kabwelulu said.
Executives present at Wednesday’s talks also included Ivanhoe chairperson Robert Friedland, as well as representatives from China Molybdenum, Zijin Mining Group and AngloGold Ashanti.
"The president gave assurances that the questions raised will be resolved through discussions with the government, in the mining regulation to be adopted by the government," Randgold said in a statement on Thursday morning. The company plans to start discussions with the government next week, Bristow said.