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Mining majors propose changes to DRC mining code

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Mining majors propose changes to DRC mining code

A group of international mining companies submitted a formal proposal recommending changes to the new mining code to relevant ministry in the Democratic Republic of the Congo, according to a March 29 news release.

The companies include Randgold Resources Ltd., Ivanhoe Mines Ltd., AngloGold Ashanti Ltd., Glencore PLC, MMG Ltd., China Molybdenum Co. Ltd. and Zijin Mining Group Co. Ltd. The group said the proposal will address industry concerns about the recently revised rules as well as the government's revenue needs.

According to a recent Reuters report, the government rejected the proposal by mining companies to relax some provisions in the new mining code in return for higher royalties.

President Joseph Kabila signed the code into law March 9, which hiked mining royalties to 3.5%, increased the tax on strategic minerals to 10% and ended a 10-year stability clause.

The miners said that they accept 76% of the articles in the new code and proposed changes to the remainder to ensure the effectiveness and legality of the code.

The proposal suggested linking a sliding scale of royalty rates to the prices of key commodities instead of a 50% windfall tax for cobalt, gold and copper, among others, as it would yield higher revenues to the government at current prices.

The companies also addressed stability arrangements, state guarantees and mining conventions in the proposal, according to a March 29 joint statement.

"Ivanhoe encourages caution in reviewing reports and statements made before these discussions are concluded and the mining regulations are brought into effect," said Robert Friedland, executive chairman of Ivanhoe Mines.