Congo minister declines to say whether new mining code signed into law

CAPE TOWN (Reuters) – The Minister of Mines for Democratic Republic of Congo, Martin Kabwelulu, declined on Wednesday to say whether President Joseph Kabila had signed a new mining code into law that the industry opposes because it will raise royalties and taxes.

The new code, which parliament approved late last month, could see royalties on cobalt, a vital component in electric car batteries, increase five-fold to 10 percent. It also removes a clause in the current law protecting miners from changes to the fiscal and customs regime for 10 years.

“Journalists ask me whether the president has promulgated the code. I won’t answer that question here. The code is with the president,” Kabwelulu told reporters and mining executives at a conference in Cape Town.

International mining companies in Congo, which include Randgold, Glencore, China Molybdenum and Ivanhoe , have said they will challenge the new law through international arbitration and are lobbying Kabila not to sign it.

Congo is the world’s biggest source of cobalt and Africa’s largest copper producer. The industry-led chamber of mines said on Wednesday that copper production rose 6.9 percent in 2017 to 1.09 million tonnes, while output of cobalt jumped 15.5 percent to 73,940 tonnes.

Gold production rose 2.7 percent to 23,270 kg, the chamber said.

Low commodity prices in recent years hit Congo’s resource-dependent economy hard, causing inflation to swell to more than 50 percent in 2017, and the government is desperate to increase its revenue.

The country’s state mining company said this week that it intended to start renegotiating contracts with its international partners to boost its share of revenues.

Kabwelulu on Wednesday likened the new code to a “bush fire”, saying: “The fire is not going to destroy everything. There are plants that will keep their roots. New plants will grow.”

Speaking after him, Randgold’s Chief Executive Officer Mark Bristow urged the government to return to the negotiating table: “We can dance around, we can ignore the elephant in the room. Or we can find a real, proper solution for the DRC and its people.”

Pressed by reporters on whether the government would be willing to do so, Kabwelulu would only say that the code had gone through all the necessary stages and was now with the president.

Writing by Aaron Ross, Editing by Christian Schmollinger and Louise Heavens

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