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Mining companies are not amused by new Congolese mining law
The new Congolese mining law, which has yet to be signed by Joseph Kabila, the country’s embattled president, drastically raises royalty rates paid to the government on most of the minerals extracted in the country.
If signed, it will, unlike most revisions to mining codes, go into effect immediately. Such rates will rise from around 2% to around 3.5 percent on most metals. But they could go up to as much as 10 percent on cobalt, under a clause allowing the government to designate certain metals as “strategic”.Bob Friedland, the boss of Ivanhoe Mines, a large Canadian firm that explores copper and zinc in Africa, is talking clear text. In his speech to an annual mining industry jamboree,
Mining Indaba, in Cape Town, his promises about the potential of the business were as copious as the ore bodies his firm mines. But amid the hyperbole about electric cars, Chinese consumers and the “most disruptive copper discovery in the world” there was a note of panic. Money, he warned, is “a coward”, and maybe about to flee.
The cause of fear is a new mining code that was passed by parliament in the Democratic Republic of Congo on January 24th. Congo is Africa’s biggest copper producer; its reserves, mostly in the southern copper belt, are among the world’s richest. As important, it has emerged recently as the world’s leading producer of cobalt, a by-product of copper smelting that is used in batteries for electric cars. It also produces gold, zinc, tin, and diamonds.