Swapping aluminum for copper will maintain China’s resources, group says
China depends on overseas imports for 60% of its aluminum resources as opposed to 70% of its copper resources.
By Amedee Mwarabu
KINSHASA, March 7 (Reuters) – Democratic Republic of Congo President Joseph Kabila will soon sign into law a new mining code that is vigorously opposed by industry, according to the government and mining companies.
The announcement followed a nearly six-hour meeting on Wednesday between Kabila and mining executives in Kinshasa about the new code, which will raise taxes and remove a stability clause in the current law protecting miners from changes to the fiscal and customs regime for 10 years.
“The president of the republic assured the miners … that their concerns will be taken into account through a constructive dialogue with the government after the promulgation of the new mining law,” the statement said.
Participants in Wednesday’s meeting included Glencore CEO Ivan Glasenberg, Randgold CEO Mark Bristow and China Molybdenum executive chairman Steele Li
Glencore, Randgold, Ivanhoe and China Molybdenum all operate mines in Congo, Africa’s top copper producer, and have said the changes in the code adopted by parliament in January would scare off new investment and violate existing agreements.
Mines Minster Martin Kabwelulu told reporters after the meeting that the companies’ concerns would be treated on a “case-by-case basis”.
“After the promulgation of the code, we are going to wait for 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 mining companies’ experts.”
Participants in Wednesday’s meeting included Glencore CEO Ivan Glasenberg, Randgold CEO Mark Bristow and China Molybdenum executive chairman Steele Li.
Randgold, which operates the giant Kibali gold mine in northeastern Congo, said last month that it would challenge the new code through international arbitration if it was not referred back to the mines ministry for further consultation with industry.
The government has disputed the companies’ claims that the new code will make them unprofitable and said the revision is needed to boost meager public revenues in a country with an annual budget of only about $5 billion.
Under one provision in the proposed code, royalties on cobalt, a vital component in electric car batteries, could increase fivefold to 10 percent. The law will also introduce a windfall profits tax.
Congo is the world’s biggest source of cobalt. Its output jumped 15.5 percent last year to 73,940 tonnes.
(writing by Aaron Ross, editing by Larry King)
