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Congo to re-evaluate new mining code next week

After buying out Gertler’s equity stakes in the Mutanda and Katanga mines for about $530 million in cash earlier this year, the Swiss-based resources company owns even larger interests in Congolese copper and cobalt deposits. (Image: Musonoie-T17 open pit mine. Courtesy of Katanga Mining)

Democratic Republic of Congo’s legislators are set to review next week a long-delayed revision to the mining code, which is said to be crucial for the country, as the nation needs the higher revenues a revised legislation would generate.

The country’s government abandoned plans to change the mining code in February last year, on fears the move would have driven away investors at a time of historically low commodity prices and energy shortages that were hurting output in the country.

Government halted plans to change the mining code last year due to low commodity prices and fears the move would have driven away investors. 

But Mines Minister Martin Kabwelulu told Reuters Friday the government was ready to re-introduce the project in parliament, though he didn’t say whether it would be identical to the earlier proposal to replace the current code, which was passed in 2002.

Top mining companies including Glencore (LON:GLEN), Randgold Resources (LON:RRS) and China Molybdenum (HKG:3993) currently operate in the DRC, which is Africa’s top copper producer and the world’s largest source of cobalt.

Through the chamber of mines, an industry lobby group, companies have opposed to the approval of a new code, saying that while it would boost government revenues, it would also make investments in the sector unprofitable.

Activists, however, dismiss those claims and argue higher revenues are crucial to supporting public services.