“I believe the demand for cobalt, and copper to a lesser extent, will override the financial impacts of the revised DRC Mining Code,” says Laura Cornish, editor of the mining trade journal Mining Review Africa.
She adds: “the electric vehicle and battery markets are growing and require cobalt to operate. Profits due to higher cobalt prices should lessen the impact of higher taxes.”
Last week Friday, DRC President Joseph Kabila signed the revised Mining Code into legislation, just two days after government met with the country’s major mining houses to negotiate terms that would be beneficial to all stakeholders.
The new Mining Code and how it will impact the industry is high on the agenda of discussions at the upcoming DRC Mining Week conference and exhibition in Lubumbashi from 13-15 June.
“Mining industry has not fully embraced code” “The Mining Code in essence has increased taxes on the minerals mined and processed in the DRC,” says Cornish, “and the code will likely impose higher royalties on cobalt, a critical metal for electric vehicles – a market that is growing exponentially every year. Royalties on cobalt could rise to 10% if it is determined ‘strategic’ by the government, up from 2%.”
“I understand that the country would like to realise greater revenue generation from its mining industry and copper and cobalt in particular and I appreciate this need, but I believe it would have been better for government to engage more with the industry to find a resolution that benefits all, including the investors. At least they have most recently showed this intention.”
She continues: “the mining industry has not fully embraced the revised Mining Code – primarily because the government did not engage with them during the initial revision stages. Secondly, the government invited the mining houses to engage with them on the code last week, indicating they were open to discussion, only to introduce an unchanged code into law two days later. Naturally mining companies would be opposed to legislation that impacts on their profits and shareholder returns without forewarning.”
“We need to have a transparent platform”
At the recent Mining Indaba in Cape Town in February, Randgold Resources CEO, Mark Bristow, openly stated that the revised DRC mining code was not beneficial to investors and stakeholders.
“When we set out in 2014 to negotiate the code” he said at the time, “we did have constructive engagements and we made progress and we reached agreement on just about every contentious issue, but the code that was presented to Parliament the last time was not that draft.”
“We need to have a transparent platform with the intension of finding the most beneficial code for the DRC.”
The Randgold Resources CEO said that through the company’s Kibali gold mine, the company had invested some $3-billion into the economy, its surrounding communities and local skills development and it would continue to do so for its long lifespan.
“We need more investment not less investment, we need big investors because it is going to take tens of billions of dollars to bring this great country to its rightful place, both in Africa and in the world,” said Mark Bristow.
Read the full interview with Mining Review Africa’s Laura Cornish here
Listen to Mark Bristow’s full speech here
As with previous editions of event, DRC Mining Week has already secured impressive industry support for this year from leading industry giants, including Engen and FBNBank as diamond sponsors, Standard Bank and Tenke Fungurume as platinum sponsors while Axishouse, Copperbelt Energy, ERG, IDC and Randgold Resources are back as gold sponsors. Mining Review Africa is the premium media partner for the event.
DRC Mining Week is organised by Spintelligent, a leading Cape Town-based organiser of exhibitions and conferences across the continent in the infrastructure, real estate, energy, mining, agriculture and education sectors. Other well-known events by Spintelligent include African Utility Week, Agritech Expo Zambia, Mining Baraza, Future Energy East Africa, Future Energy Nigeria and Nigeria Mining Week. Spintelligent is part of the UK-based Clarion Events Group.
DRC Mining Week:
Pre-conference Power Focus Day: 13 June 2018
Conference and expo: 14-15 June 2018
Site visit: 13 June 2018
Location: The Pullman Grand Karavia Hotel, Lubumbashi, DRC