KINSHASA – The Democratic Republic of Congo’s central bank plans to use the country’s updated mining law to buy dollars from mining companies in exchange for Congolese francs to shore up dwindling foreign currency reserves.

The government’s demand for dollars is “to assure the resilience of the national economy” as Congo looks to qualify for a formal loan program with the International Monetary Fund, Prime Minister Sylvestre Ilunga Ilunkamba said in a February 26 letter to Louis Watum, president of Congo’s Chamber of Mines, a division of the country’s main business lobby group.

Mines Minister Willy Kitobo confirmed in a text message the purchase of foreign currency from mining companies active in the country is being “proposed in two stages” to allow the government to “increase the country’s international reserves.”

A senior official from the Chamber confirmed the letter’s authenticity. Neither Watum nor Ilunga’s spokesperson Albert Lieke responded to Bloomberg’s requests for comment.

JOINT DELEGATION
The government has sent a joint delegation from the central bank and mines ministry to the provinces of Lualaba and Haut Katanga, where all of Congo’s copper and cobalt is produced, to discuss “concrete arrangements for the purchase of a quota of repatriated foreign exchange,” according to Ilunga’s letter. Major international companies including Glencore and China Molybdenum mine and export metals from the country.

The delegation has already met with the “majority” of the mining companies to discuss the idea, Kitobo said.

In December, the IMF injected about $370-million into Congo’s reserves, which had fallen to “critically low levels” due to central-bank financing of government spending.

Congo’s miners must repatriate at least 60% of their export revenue to accounts in the country, according to mining legislation that was revised in 2018. This law allows the state and the central bank to buy the dollars “if the needs of the national economy require it.” The amount and exchange rate of the purchase are negotiable, the new mining code says.