According to Tuma-Waku, the current legislation, passed in 2002, has supported the Congo’s development to the point where central African nation has overtaken Zambia as Africa’s largest copper producer.
He echoed the views of investors, saying the government must honour the terms on which mining groups made their original investments, given the risks they took at a time of conflict and turmoil in the country.
“The 2002 code attracts investment but not at the expense of taxes. It is, in fact, a model of its kind, which has exceeded expectations in all the dimensions in which success can be measured,” he said at the Chamber of Mines annual general meeting, according to an e-mailed statement.
President Joseph Kabila is trying 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.
Despite the ongoing slump in commodity prices, mining companies contributed more than $1 billion to the DRC treasury last year, according to the chamber.
“The Kibali gold project, made possible by the [current] code’s provisions, increased the country’s gold production by 250% in its first full year of operation in 2014(…) and the future contribution of the mining sector to the public treasury is expected to rise substantially,” Tuma-Waku said.
He urged the Ministry of Mines to resume industry consultations to maintain a fiscal and regulatory regime that would continue to encourage investment.
“It is difficult to understand why, just at the point when it is beginning to reap the full benefits of creating an investor friendly regime, the government now proposes to break down the very good work that has been done, instead of building on it. Its new-look code will set back the mining industry, and with it the development of the DRC economy, by at least 10 years,” Tuma-Waku added.
The DRC’s significant but under-developed reserves of gold, copper, cassiterite and uranium require large amounts of capital, but the flow has been drying up as a result of electricity shortages, falling prices and uncertainty in the investment climate. According to the Chamber of Mines the new code could make the situation even worse.