HomeBase MetalsDRC mining contracts complete by end September

DRC mining contracts complete by end September

Freeport-McMoRan Copper
& Gold – one of the
companies involved in
contract re-negotiation
in the DRC
Kinshasa, DRC — MININGREVIEW.COM — 1 September 2008 – The review by the government of the Democratic Republic of Congo (DRC) of all its mining contracts with foreign and local companies will finish on 30 September.

Reuters reports from here that, confirming this undertaking, deputy mines minister Victor Kasongo said companies which had signed deals in the copper, tin and cobalt-rich central African country might have to cede much greater ownership to state-owned miner Gecamines, with flagship project Tenke Fungurume earmarked for increased national involvement.
“By 30 September we will have the conclusion,” Kasongo told Reuters. “We will have completed the review process, which covers 61 contracts signed with mining firms, including majors such as Freeport-McMoRan and AnglogoldAshanti.”

Kasongo stated that firms whose contracts were not approved would be able to re-negotiate terms with the government. “Today we are writing to companies to organise negotiations,” he said.

Reuters reports that Freeport is the majority owner of the Tenke Fungurume project, described as one of the world’s richest unexploited copper and cobalt resources, and due to begin commercial production in 2009-10.

The DRC government wants a bigger stake in this project. “We are looking to improve the deal,” Kasongo confirmed.

State-owned mining firm Gecamines owns 12.5% of the project, and the state itself a smaller percentage, while Freeport owns 58% and Lundin Mining 25%.

We are asking to go back to the conditions of the original public offering,” said Mines Ministry deputy chief Gaby Matshafu. When Lundin signed the original contract on Tenke Fungurume in 1996, the DRC government was to be allocated a 45% stake.

“Of the 61 contracts to be re-negotiated, 14 are classed as ‘green’, meaning acceptable; 26 are ‘orange’ which require agreement on some points, and 21 are ‘red,’ which means they face cancellation,” Kasongo explained. He did not specify which contracts fell into which category.