HomeCentral AfricaThe plight of foreign miners in Africa

The plight of foreign miners in Africa

The government of Zimbabwe is consulting the country’s mining industry about legal changes that would be likely to encourage mining companies to start exploiting the country’s mineral deposits.

Zimbabwean minister of mines and mining development Obert Mpofu has revealed that the new laws would be based on the principal of “use it or lose it” for mineral deposits. He says that new mining laws will be pushed through parliament quickly to help revive growth in the economy.

Meanwhile in Zambia it’s reported that international mining companies are seeking assurance of tenure on their assets, as well as a clear legislation process, before they plough their money into African countries with mining potential.

Revealing this in Lusaka, Zambian Chamber of Mines president Nathan Chishimba said higher copper prices would benefit copper miners in Zambia, provided the government’s mining policies satisfied the needs of investors.

“Higher copper prices are a good development for copper producers like Zambia, but government policies should be consistent to encourage more investment,” he added. “The chamber is happy with the political will shown by the Zambian government to increase production of the metal, but investors need policies that benefit them as well.”

The Zambian government is reported to be planning to raise its stake in all foreign-owned copper mines to 25% from 15%. “According to mines minister Maxwell Mwale, the move will allow the government to have a bigger say in the running of the mines and to prevent closures.

Labour unions have also asked the government to increase its stake in mines to end job losses.

“Existing and potential investors are watching the situation with keen interest,” Chishimba said. “We believe that the government will do its best to ensure both parties benefit from the higher copper price and increased demand for the metal,” he added.

Across the border in the Democratic Republic of Congo (DRC), the government is reported to have cleared four major mining deals after completing its long-delayed mining contract review, but the massive Tenke project has yet to be fully approved.

A statement on the DRC government website confirmed that it had approved contracts with AngloGold Ashanti, Banro, Mwana Africa, and Gold Fields, provided it completed a feasibility study at its Kisenge project.

Separately, deputy mines minister Victor Kasongo said the government had given two months to Tenke Fungurume Mining – the giant copper and cobalt project backed by Freeport McMoran and Lundin Mining – to complete the review of its mining contract in the country.

“Tenke has yet to agree to the rewriting of the contract in accordance with new legislation, extra royalties on additional production, and the integration of the state company into management structures,” Kasongo explained.

The DRC government has also cancelled a copper and cobalt mining contract with a unit of First Quantum Minerals, following the review of major contracts launched two years ago, Kasongo said.

“We haven’t missed any schedule or received any notification from the government about a cancellation,” company president Clive Newall responded in a phone interview. “We are in the process of talking with the government,” he added, but declined to disclose details of the talks.

DRC state-owned mining companies are renegotiating contracts with 61 foreign and local investors. The contract review was launched in early 2007 in an effort to boost the government’s stake in the 61 agreements, most of which were signed during the chaos of a 1998-2003 war, and by a corruption-plagued post-war transitional government.

www.first-quantum.com

LATEST FEATURES