When the Democratic Republic of Congo introduced its new Mining Code into law in 2018, it was largely met with resistance.
Taxes have been increased and amnesty periods removed. But, the country still holds some of the richest mineral deposits in the world which therefore begs the question – should you invest in the country, or not?
This is the question the mining industry and its strategic stakeholders have been trying to figure out since the Mining Code was introduced in June last year.
Since then the situation has ‘worsened’ further – in December the government declared a 10% super tax on battery metals.
As you know, the DRC is home to abundant reserves of cobalt which falls within the battery metals group.
So this will have a major impact on a large percentage of miners in the country who produce both copper and cobalt.
It also applies to coltan/tin and this of course will likely impact Alphamin Resources and its Bisie tin project, due to be commissioned shortly, in the north of the country.
Unfortunately for those who have invested millions or billions into the country it is difficult to exit now but it does beg the question – will they invest further in the country?
There are at least two junior mining companies that have revealed exit strategies and the assumption can be made that it is a result of the unfriendly investment code.
But – is it possible to operate profitably under the new code? If yes then surely it remains a worthy investment destination.
The price of cobalt, although far below the highs experienced earlier in the year, are still considerably higher than they were in previous years – and surely this would offset higher taxes?
A recent twitter poll conducted by Mining Review Africa asking our audience this very question revealed that 64% of those who participated feel the DRC remains attractive for investors.
That is a fairly significant majority and good news for the country’s mining sector.
For now – it’s a wait-and-see situation.
The best place to get the latest news around this issue is DRC Mining Week – which draws government representatives and officials as well as all key industry stakeholders.
If you want to know more about the conference, click here