DRC ‘flexible’ on new mining code

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Kinshasa - The Democratic Republic of Congo (DRC) was prepared to compromise on proposals to increase the state’s share in new mining projects and to triple copper royalties, Chantal Bashizi, the vice-president of a commission studying a new mining code, said yesterday.

The government had already lowered its proposed stake in new projects from 35 percent to 15 percent following an outcry from investors.

“We are now discussing going further, down to 10 percent. In many of the countries in the region it is 10 percent. I think we will approve that,” she said.

The government has proposed tripling copper royalties to 6 percent from 2 percent but Bashizi said this was also under discussion.

The government was revising the DRC’s 2002 mining code in a bid to earn more from mining, while keeping the regulatory environment competitive and attractive to investors, Bashizi said.

The government is due to meet company representatives again tomorrow in an attempt to finalise an agreed draft. Meetings last week ended without a final agreement.

Investors have voiced concern that stability clauses, which protect companies from legal changes for a set period, will be reduced to five years from 10 under the draft code.

Shorter stability clauses would result in a less secure environment, tax expert David Guarnieri of mining company Tenke Fungurume told a recent conference in Kinshasa.

“If an investor chooses to invest, before he can even start production the fiscal regime might change,” Guarnieri said. “Business plans and economic plans then need a complete overhaul. Stability is what is important for investors.” - Reuters


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