Bat­tery driven Cobalt boom trig­gers a DRC min­ing code re­vi­sion to broaden min­ing roy­al­ties - con­tin­ued

Zambian Business Times - - BUSINESS REVIEW -

It sets out taxes of up to 5% on "strate­gic me­tals" - most likely in­clud­ing cobalt - and 6% on pre­cious stones.

Kin­shasa is in­tro­duc­ing a form of eco­nomic pa­tri­o­tism by rais­ing the stake of the state in the cap­i­tal of min­ing com­pa­nies and out­sourc­ing tasks re­lated to the in­dus­try "only to firms in which the ma­jor­ity of the cap­i­tal is owned by Con­golese na­tion­als".

DR Congo au­thor­i­ties also want to en­sure the repa­tri­a­tion of at least 40% of the rev­enue of min­er­als that are sold for ex­port.

Multi­na­tional firms have fired back, charg­ing that the new min­ing code would "sig­nif­i­cantly weaken the con­fi­dence of in­vestors", in a joint let­ter to the speak­ers of both houses of par­lia­ment.

The protest was signed by the Con­golese sub­sidiaries of gi­ants in the sec­tor, China Molyb­de­num, Ran­gold, the Swiss firm Glen­core and MMG, an Aus­tralian- Chi­nese ven­ture.

"Our part­ners have for 15 years - these words aren't too strong - cheated and stolen from us. That has to stop," the chief ex­ec­u­tive of­fi­cer of the pow­er­ful Ge­camines state min­ing firm, Al­bert Yuma, stormed in Novem­ber.

'Regime cash ma­chine'

The DRC should con­trol its min­eral re­sources like "our Arab broth­ers have ben­e­fit­ted from the con­trol of oil," said Yuma, leader of the na­tional busi­ness com­mu­nity and close to Pres­i­dent Joseph Ka­bila.

Ka­bila's sec­ond and last elected five-year man­date ended on De­cem­ber 20, 2016, but has been ex­tended in a church-bro­kered deal at the cost of se­vere re­pres­sion.

The vast money in min­ing has to be seen in the con­text of DR Congo's chronic rep­u­ta­tion for cor­rup­tion and the deep poverty that af­flicts most of its 80 mil­lion cit­i­zens.

Re­li­able fig­ures for turnover and em­ploy­ment in the min­ing in­dus­try are elu­sive in a coun­try where much eco­nomic ac­tiv­ity is un­reg­is­tered and even the size of the pop­u­la­tion is un­known, given the ab­sence of a re­cent cen­sus.

Last July the Bri­tish NGO Global Wit­ness de­scribed the min­ing sec­tor as the regime's "cash ma­chine" and its rev­enues were be­ing wasted by a "toxic com­bi­na­tion of cor­rup­tion and mis­man­age­ment".

In Novem­ber, US NGO the Carter Cen­tre es­ti­mated that $USD750mil­lion gen­er­ated by min­ing pro­duc­tion be­tween 2011 and 2014 could not be traced in any "re­li­able fash­ion" in Ge­camines’ s ac­counts, an as­ser­tion that the com­pany an­grily re­jects.

Doc­u­ments re­leased last Novem­ber in the "Par­adise Pa­pers" leak said that Swiss firm Glen­core ac­quired a Con­golese mine for a pit­tance in 2007 through con­tro­ver­sial Is­raeli bil­lion­aire Dan Gertler.

In 2013, the NGO Africa Progress Panel an­a­lysed five min­ing sales to off­shore com­pa­nies linked to Gertler's firm.

"To­gether the five deals cost the DRC at least $USD1.36 bil­lion, an amount equal to al­most twice the DRC's com­bined an­nual bud­get for health and ed­u­ca­tion in 2012," it said.

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