Regulations to immediately implement a new Mining Code in the Democratic Republic of Congo will be signed into law today.
This follows the announcement that Congolese President Joseph Kabila would sign into law a new Mining Code that will raise royalties on minerals across the board in March this year.
The new Mining Code increase royalties on copper from 2% to 3.5%, on gold from 2.5% to 3.5% and could potentially increase royalties on cobalt from 2% to 10%, if deemed a “strategic mineral”.
Additionally, a new 50% tax on so-called super profits, defined as income realised when commodity prices rise 25% above levels in the project’s bankable feasibility study, will be introduced.
Other key changes include a provision that doubles the state’s free share in mining projects to 10% and a reduction on the period during which contract stability is guaranteed down to five years, from 10 years stipulated in the current mining law.
Implications of new regulations
According to Mines Minister Martin Kabwelulu the new Mining Code is without any adjustments to industry demands regarding key amendments.
However, it is notable that this could lead to legal proceedings between the government and major mining companies operating in the DRC, including Glencore and Randgold, who have threatened legal action against the government.
The regulations would first be adopted at a cabinet meeting on Friday and then signed by Prime Minister Bruno Tshibala later and the application of the code will be immediate.