DR-Congo New Mining Tax “Untouchable”, Minister Tells Mining
Democratic Republic of Congo‘s mines minister rejected a proposal by mining companies on Friday to retain exemptions and scrap some taxes in exchange for higher royalties than those in a new mining code, calling the taxes “untouchable”.
Mines Minister Martin Kabwelulu was reacting to a proposal from mining companies under which the companies would accept higher royalty payments if the government agreed to respect ten-year exemptions for existing projects from changes to the fiscal and customs regimes and cancel certain taxes.
Mines Minister Martin Kabwelulu and mining company leaders
Following President Joseph Kabila’s signing of the DRC’s 2018 mining code into law, mining industry representatives have been meeting with Kabila and his ministers to resolve industry concerns arising from the mining code.
On March 9th, Kabila reportedly gave them a commitment to continue the meetings to arrive at “productive resolutions.” This was part of a joint statement issued following a “positive and constructive” six-hour meeting in the DRC capital Kinshasa, between Kabila, DRC Mines Minister Martin Kabwelulu, senior members of government and senior executives of international mining companies that have operations in the DRC.
The joint statement noted that Kabila has assured industry representatives that their concerns about the impacts on their DRC operations – that would result from changes to the DRC mining code – will be resolved in legally binding mining regulations.
Companies with representation at CEO-level included molybdenum producer China Molybdenum, diversified miner Glencore and gold miner Randgold Resources. Global resources company Minerals and Metals Group and diversified miner Zijin Mining Group had senior executive representation. Ivanhoe Mines was represented by executive chairperson Robert Friedland.
The latest dismissal of the miners’ proposals supports the position of Knowledge Resources LLC that Kabila–and in deed, much of the Congo–are unlikely to yield to pressure to rescind the law and allow mining companies to continue to enjoy exemptions while reaping benefits from soaring prices of ‘strategic minerals” such as cobalt. DRC, like, many other African mining jurisdictions (such as Tanzania and Zambia) are demanding a bigger share of the mining pie in the form of increased royalties and taxes, a policy stance often called “resource nationalism.”