Mining companies active in the Democratic Republic of Congo (DRC) have established a new industry body, the Mining Promotion Initiative (MPI), to engage with government on industry concerns about the country’s new mining code and any other material issue concerning the mining industry in the DRC.
These mining companies, which include Randgold Resources, Alphamin Bisie Mining, CMOC International, Glencore, Ivanhoe Mines, and MMG, account for 80% of copper and cobalt production and 90% of gold production in the DRC.
MPI general secretary Richard Robinson says the industry’s main issue remains the application of the 2018 Mining Code.
The code will affect those investors who have invested in the country individually and alongside State companies, on terms guaranteed by government through legislation, specific guarantees and bilateral trade agreements.
Further, should some of the key issues in the new code not be addressed, it would discourage further investment in large and small sustainable projects, which are crucial for the DRC economy and the mining sector.
Robinson notes MPI members seek a sustainable outcome for all DRC stakeholders.
Miners active in the DRC earlier this year submitted a formal proposal to the DRC Ministry of Mines, aimed at addressing concerns about the country’s revised mining code and government’s revenue needs.
The mining industry representatives stated that they accepted 76% of the articles in the 2018 mining code and that change would be required to the rest to ensure the “effectiveness and legality of the code”.
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.
Further, the submission deals with stability arrangements, State guarantees and mining conventions.
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.