Mines Minister Martin Kabwelulu says industry leaders need to work to implement the code, which has been fiercely opposed by international miners.
The Democratic Republic of Congo’s (DRC) new mining code, which has been fiercely opposed by international miners, cannot be called into question, the country’s mines minister said on Wednesday (September 12).
Speaking at a mining conference in Kolwezi, Martin Kabwelulu said industry leaders need to work to implement the code as it was promulgated by President Joseph Kabila.
“It is not the place of any participating party, whether civil society, mining companies or even the government to try to call into question the text governing the mining sector,” Kabwelulu added.
The new mining code was signed by Kabila on March 9, despite opposition from international miners.
The legislation removed a measure protecting licence holders from complying with any rule changes for 10 years. It also hiked royalties on minerals across the board and added a 50-percent super profits tax.
According to Reuters, Kabila addressed the conference later urging all parties to implement the new code and called on mining companies to explore beyond their existing concessions.
“I call on investors to move beyond the comfort of the land and concessions that were ceded to them by different state companies … to take real risks by exploiting the rest of the country,” Kabila said.
In August, international miners with assets in the DRC established a new industry body to engage the government on their concerns about the mining sector.
The Mining Promotion Initiative was launched by mining companies including top cobalt producer Glencore (LSE:GLEN), Ivanhoe Mines (TSX:IVN) and MMG (HKEX:1208). The miners represented by the organization account for 80 percent of copper and cobalt production in the country.
According to analysts, consumers could be the most impacted by the new code, as it is likely the changes could lead to higher costs for the battery metal. Cobalt metal prices on the London Metal Exchange are currently sitting at US$61,250 per tonne.
Looking ahead, Kabila said the DRC also plans to establish special economic zones for companies that manufacture goods from the country’s minerals.
“There is a need to create special economic zones for the final users of Congolese natural resources,” Kabila said. The area will allow producers of electric vehicles, smartphones and other goods to “install themselves in the DRC,” he added.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.