DRC says it wants to work with mines in enacting new law
The Democratic Republic of Congo (DRC) has tried to strike a more conciliatory tone after a week of increasingly heated exchanges between Africa’s top copper producer and some of its largest foreign investors.
Mining companies are furiously lobbying the government to roll back a reformed mining law passed in January by the DRC parliament with lastminute changes that will financially hurt producers in the country. The dispute escalated when the country’s biggest state-owned miner pledged to renegotiate its partnerships with international mining firms.
The DRC wanted to work with the mining industry to implement the new law, minister of mines Martin Kabwelulu told executives at the Mining Indaba in Cape Town on Wednesday. However, Kabwelulu gave no indication that the government could reopen the debate on the legislation.
“We have walked this road together,” he said of the fiveyear-long mining code reform process. The new legislation would have to be applied by the government and the private sector together, he said.
His comments did not persuade Randgold CEO Mark Bristow. “We did have a constructive engagement and we did reach agreement,” Bristow said. “The code that was presented to parliament was not that draft.”
Mining executives are lobbying President Joseph Kabila, who must sign the new legislation into law, to reopen the debate. The president was yet to sign the legislation, Kabila’s chief diplomatic adviser, Barnabe Kikaya Bin Karubi, said by phone from the DRC capital Kinshasa.
Kabwelulu “compared the new code to a bushfire which only plants with strong roots will survive”, Congo mining expert Elisabeth Caesens said after attending the meeting. “Investors will use all means at their disposal to avoid billions in investment getting burnt down, but there’s little indication that there’s room for negotiations.”
Billionaire mining investor Robert Friedland said he was hopeful for more dialogue.
Friedland, whose Ivanhoe Mines is developing Africa’s biggest copper discovery in southeast DRC, said he did not mind paying higher royalties or taxes, but that stability and transparency was key for the industry. “Everything is based on trust,” Friedland said. “We can work together.”
Absent from the meeting was Gecamines chairman Albert Yuma Mulimbi, who was a key supporter of the new legislation’s most aggressive tax hikes.
Yuma Mulimbi has accused the country’s biggest copper miners — including Glencore and China Molybdenum — of heavily indebting their local operations and failing to share profits with the DRC state. He is also chairman of the DRC’s biggest private sector organisation, the Federation des Entreprises du Congo or FEC, which houses the country’s chamber of mines. Its members — including Randgold, Ivanhoe and Glencore — lobbied against the changes, making his support for the reforms controversial for many executives.
“I would share my disappointment in the FEC chairman,” Bristow said. “Suggesting nationalisation, suggesting all sorts of accusations towards the mining industry” was completely inappropriate, he said.
INVESTORS WILL USE ALL MEANS AT THEIR DISPOSAL TO AVOID BILLIONS IN INVESTMENT GETTING BURNT DOWN