HomeBase MetalsDRC will retain 35% of all future mining ventures

DRC will retain 35% of all future mining ventures

DRC mines minister
Martin Kabwelulu
Kinshasa, DRC — MININGREVIEW.COM — 14 June 2010 – State-owned mining companies in the Democratic Republic of Congo (DRC) will retain a 35% stake in all future mining ventures in the central African country under a proposed “model contract” drawn up by the Mines Ministry.

“The document will provide an example for all accords with the DRC’s state-owned mining companies,” Valery Mukasa, the deputy chief of staff for mines minister Martin Kabwelulu, said here in an interview with Bloomberg News. “The model was completed last month and is awaiting approval by the government,” he added. “Thirty-five percent is the wish.”

Many of the DRC’s current joint ventures would not meet the 35% threshold and the Mines Ministry hasn’t followed the policy consistently in the past, Bloomberg reports.

The ministry’s desire to increase the state-owned Gecamines 17.5% stake in Freeport McMoRan Copper & Gold Incorporated’s US$1.8 billion copper and cobalt project in the DRC is at the heart of an ongoing contract dispute between the two parties.

In December, the DRC reduced the stake of state gold miner Okimo in Kibali Goldmines SPRL from 30 to 10%. The Kibali gold project “’ a joint venture with Randgold Resources Ltd. and AngloGold Ashanti Limited “’ is the largest undeveloped gold deposit in Africa, according to Randgold.

The model contract also requires companies to pay a signing bonus of at least 1% of the value of their mineral concessions to the state-owned mining partner. Joint ventures will also owe the state-owned miner 2.5% in royalty fees on gross receipts from all mineral product sales.

In addition, companies must agree to conform to the requirements of the Extractive Industries Transparency Initiative, the contract says. The initiative is a global standard that aims to improve accountability in the mining, oil and natural-gas industries.