DRC’s proposed new mining code a ‘grave risk’ - CoM
JOHANNESBURG (miningweekly.com) – The Democratic Republic of Congo’s (DRC’s) revamped mining code is likely to set the mining industry’s development back by at least ten years, DRC Chamber of Mines vice-chairperson and former Mines Minister Simon Tuma-Waku said on Thursday.
The “new-look” proposed legislation, which was submitted by the Ministry of Mines to government last month for review, would place the country’s mining industry at “grave risk”, he added.
Tuma-Waku urged the Ministry to resume industry consultations to maintain a fiscal and regulatory regime that would continue to encourage investment.
“No investor will commit to a country, no matter how impressive its geology, if there [is] no prospect of a reasonable return,” he said, adding that implementation of the code would reduce the return on gold projects to “virtually zero” and impact heavily on the attractiveness of the copper and cobalt sectors.
The amendments would likely see investors earn some 20% of the total cash flow over the life of a mine against the government’s 80% take.
He reiterated support for the ten-year-old legislation that had attracted projects such as the Kibali gold project, which increased the country’s gold output by 250% in its first full year of operation in 2014, and resulted in the DRC surpassing Zambia as Africa’s largest copper producer.
The first big mining projects developed under the 2002 code were now moving into full tax-paying positions, with more than $1-billion injected into the DRC treasury last year.
“The 2002 code attracts investment but not at the expense of taxes. It is, in fact, a model of its kind, which has exceeded expectations in all the dimensions in which success can be measured,” Tuma-Waku concluded.
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