Glencore, Randgold among miners opposed to Congo measures
Subsidiaries of Glencore, Randgold Resources and other mining companies operating in the Democratic Republic of Congo have asked lawmakers to rethink proposed new taxes and other measures.
The miners have written to the presidents of Congo's senate and national assembly urging them to suspend adoption of the new rules and consult with the industry, Bloomberg reported.
The national assembly on 8 December approved higher royalties on copper, cobalt and gold, a windfall tax on profits and a doubling of the state's free share to 10%.
Congo's proposed new legislation also reduced guarantees of contract stability to five years from 10 years. The bill has been transferred to the senate and if passed would be sent to President Joseph Kabila to be signed into law.
In the letter to the senate's Leon Kengo wa Dondo and the assembly's Aubin Minaku, the miners said the legislation would "significantly lessen the confidence of investors in [Congo's] regulatory environment", reduce investment and tax income and threaten jobs, social programmes and infrastructure projects. The companies said they had been largely ignored and that the changes risked triggering a "lasting dispute".
The companies said they would “protect their investments by all domestic and international means at their disposal" and offered to support a consultation to devise another mining code during 2018, Bloomberg said.
Congo is Africa’s biggest copper producer and the world’s largest source of cobalt. Mining companies invested heavily in the country after the current mining law was passed in 2002. After shelving revisions to the mining code during the commodities crash of 2015 the government has reintroduced them in a bid to raise more revenue.
The new laws are not wholly dissimilar to those recently passed in Kabila's former home of Tanzania under President John Mugulifi, who last year host a banquet for President Kabila. Tanzania this year passed three bills aimed to take what it sees as a fairer share of profits from its mining sector, lifting royalty rates for gold, copper, silver and platinum exports to 6% from 4% and giving the government a stake in mining companies operating there.