The state miner is moving to increase its take from joint ventures with international miners such as Glencore and China Molybdenum, which it accuses of not bringing enough money to the country.
GECAMINES Mining News
Production sharing agreements align the interests of the two partners because the risk now weighs more on the investor than on Gecamines.
Congo is Africa’s biggest copper producer and the world’s largest source of cobalt.
“They are taking unilateral decisions that we haven’t verified, that we haven’t certified” - Gecamines President, Albert Yuma
Investigation is casting a wider net with the addition of Venezuela and Nigeria to its investigation, increasing the likelihood that Glencore’s management will get bogged down in a lengthy legal process.
Shares fell as much as 13% after the miner and commodities trader was told by US Department of Justice to produce documents on Nigeria, Congo and Venezuela.
Miners across Africa are increasingly using one-time payments to settle disputes with governments, a trend that’s disturbing some investors.
Glencore says its subsidiaries will pay Gertler what he’s owed, only the funds will be transferred in euros and U.S. citizens won’t be involved.
The Swiss firm will make mining royalty payments to Dan Gertler in euros so that it doesn’t fall foul of US sanctions, which were placed on the Israeli billionaire last year.
Heavily in debt and with dwindling output, Gecamines has long complained about its joint venture terms.
CITIC Metal will own 20% of the Canadian miner, which makes its biggest shareholder.
Congolese-American businessman and convicted fraudster Charles Brown claims he's owed $1 billion in compensation for a 19% stake he previously held in Mutanda Mining, and which Glencore allegedly sold in two fraudulent transactions, in 2007 and 2012.
Congo's prime minister wants to immediately implement the new mining code without any concessions to industry demands that key provisions be amended.
The decision is a setback for the Swiss commodity trader, which is facing multiple disputes in the central African nation.
Britain’s Serious Fraud Office plans to open a formal bribery investigation into Glencore and its deals with Israeli billionaire and former partner Dan Gertler.
Congo's state miner Gecamines is seeking to dissolve Kamoto Copper Company (KCC), blaming Glencore for high debts that have weighed on the mine for more than 10 years.
Lack of new projects, investment deficit and increasing political risk will hit supply of cobalt, lithium, copper and nickel, key metals for making the batteries that power electric cars.
Gecamines said on Tuesday that debts owed by Kamoto to Glencore and its subsidiaries at the end of 2017 topped $9 billion.
High levels of debt at mining companies are becoming an increasingly heated issue in Congo, the world’s largest source of cobalt.
They said they expected authorities to realize the sliding scale they propose would be a more effective mechanism for the government to share in higher commodity prices than the windfall tax and strategic minerals scheme included in the new code.
The proposal, signed by companies responsible for 85% of the DRC's copper, cobalt and gold output, suggest that sliding royalties will give the government a higher share of revenues.
A new mining code in the cobalt-rich Congo will lead to higher costs for consumers of the battery metal at a time automakers are expanding production of electric vehicles, experts say.
Robert Friedland, founder and executive chairman of Ivanhoe Mines, said he would be happy to pay higher taxes if there is stability in Congo's rules and transparency in the accounting of those royalties.
Some of the company’s international mining partners include major names such as Glencore, China Molybdenum and Ivanhoe.
The nation, responsible for about two thirds of global output, plans to increase tax on cobalt to 5% from 2%.