HomeBase MetalsDRC to reconsider taxes on exported copper and cobalt

DRC to reconsider taxes on exported copper and cobalt

DRC prime minister
Adolphe Muzito
Kinshasa, DRC — MININGREVIEW.COM — 04 August 2010 – The government of the Democratic Republic of Congo (DRC) is to reconsider taxes levied on exports of semi-processed copper and cobalt, after appeals from the country’s business community, which says illegal taxes are crippling sectors across the board.

Prime Minister Adolphe Muzito addressed more than 100 business leaders at a special meeting during which the country’s business federation FEC complained of "unjustifiable poverty" and "persistent problems" throughout the resource-rich country.

“We are going to reconsider our position,” Muzito told the room, packed with business leaders and journalists, but said he could not make a decision on the spot.

Mining ventures owned by Freeport McMoRan, First Quantum, ENRC and several others have been paying millions of dollars to cover the new US$60 per tonne tax on unfinished copper and cobalt, introduced in April to encourage miners to add value to DRC’s resources in-country and to export finished products.

Mining companies complained that many in the market required semi-finished products rather than finished products, and that attempts to invest in DRC’s value chain had been hampered by a two-year mining contracts review, as well as the world economic crisis.

Disputes with First Quantum and Freeport McMoRan have yet to be resolved, and the DRC faces international arbitration over First Quantum’s US$700 million copper tailings project, which was halted last year citing contractual problems.

Risk insurers say investment premiums have risen 40%in the past year, and that the DRC is losing at least US$100 million a year in investment as a result of its poor business climate.

The World Bank ranks the DRC 182nd out of 183 countries in the world, according to its ease of doing business. DRC President Joseph Kabila has said he wants reforms to the business climate to see the country leap 20 places this year.