Congo risking billions with planned tax hike, mining code revision
The Democratic Republic of Congo may lose its position as Africa’s top copper producer amid unresolved disputes over revisions to its mining code, including plans to hike royalties and raise the compulsory stake for state-owned companies in new ventures.
According to the governor of the mineral-rich southeastern province of Katanga, Moise Katumbi, the country is jeopardizing billions of dollars by neglecting the terms on which companies made their original investments, FT.com reports (subs. required).
“It is better to have the old mining code with $200bn of investment than the new one with $5bn,” he was quoted as saying about the long-dragged review of the 2001 code:
“Money doesn’t like noise, investors don’t like noise and bankers don’t like noise. If they respected the mining code, people would have invested $100bn instead of $25bn today.” ~ Katumbi.
The central African nation has been singled out as deliberately increasing the risks mining companies with operations in the country took at a time of conflict and turmoil.
The government wants to increase revenues from the industry by doubling taxes and royalties for miners. Companies, in turn, complain of government harassment and poor power and transport infrastructure.
While the Democratic Republic of Congo holds significant reserves of diamonds, gold, cassiterite and coltan, mining companies have been mostly drawn to invest mostly in copper-rich Katanga.