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DRC mining review completed

Aerial view of the
Tenke Fungurume copper
project in the DRC
Kinshasa, DRC — MININGREVIEW.COM — 27 March 2009 – The government of the Democratic Republic of Congo (DRC) has completed its mining review process and will not be making any significant alterations to its contracts with Freeport-McMoRan Copper & Gold Incorporated, Lundin Mining Corporation and First Quantum Minerals Limited.

“A final report on the review will be published very soon,” mines minister Martin Kabwelulu said in an interview here with Bloomberg News. The three companies are among six that had not agreed final terms after the re-negotiation of their accords.

“It’s finished,” Kabwelulu said. “This has been a long process, but we got there in the end. Unfortunately the climate isn’t very good at the moment, but the foundations for our mining sector have been laid.”

The DRC began reviewing 61 mining contracts in 2007 as part of a plan to boost state revenue from the industry. The central African country is depending on proceeds from its mineral reserves – which include a third of the world’s cobalt and 4% of all copper – to rebuild an economy shattered by persistent civil wars.

Phoenix-based Freeport has a 57.75% stake in the US$1.9 billion (R18 billion) Tenke Fungurume project, which it describes as one of the world’s best undeveloped copper and cobalt deposits, while Lundin holds 24.75%. First Quantum is developing the Kolwezi copper-cobalt mine in the DRC.

“Neither company needs to give the DRC government a larger stake in the ventures, nor do they need to pay a higher signing bonus,” Kabwelulu said.

“Freeport has invested a lot of money,” Kabwelulu added. “We decided to let them carry on as they are, and we haven’t significantly changed those contracts. With First Quantum, it’s the same thing,” he concluded.