Glencore and Randgold Resources are among major mining companies in the Democratic Republic of Congo clubbing together in a bid to stop sweeping legal reforms, claiming their interests were poorly served by the existing industry body.
As reported by Bloomberg, a letter sent to Congolese President, Joseph Kabila, on February 8, investors requested a meeting “to once again put forward our positions” about changes to the mining code approved by lawmakers January 27.
The new code will overhaul Congo’s most important economic sector if Kabila signs it, raising the cost of doing business for investors in Africa’s biggest copper producer, while boosting the state’s share of mining revenue.
Investors want the newly created body to replace the Chamber of Mines, which is part of Congo’s main private sector lobby group, after it “was unable to satisfactorily consolidate and communicate our wishes during the re-visitation of the Mining Code,” according to the letter. China Molybdenum Co., Ivanhoe Mines, MMG, Zijin Mining Group Co. and AngloGold Ashanti also signed the letter.
In December, companies including Glencore, Randgold and China Moly said they would defend their investments “by all domestic and international means at their disposal.” Randgold is considering launching international arbitration if Kabila gives his assent to the legislation.
“Watching people shoot themselves in the head, not even in the foot, is frustrating for me,” Randgold Chief Executive Officer Mark Bristow said in an interview in Cape Town on February 5. “The mining environment in the DRC needs to be improved, but improved in consultation with the main investors, which are China Molybdenum, Glencore and ourselves,” he said.
The miners that wrote to Kabila have “decided to formalize our relationship by establishing an association of major mining companies in the DRC,” according to the letter. The existing Chamber of Mines is a sub-committee of the Federation des Entreprises, headed by Albert Yuma, who is also chairperson of State-owned mining company Gecamines.
‘NOT REPRESENTED’
“We would like to place on record that the FEC did not represent the views or analysis presented by its own Chamber of Mines, nor did it consult with our companies and at no stage did it have the mandate to represent our positions,” the letter said.
Yuma said he hasn’t seen the letter.
“There are procedures to withdraw from FEC, so they must respect the procedures,” he said by phone from Congo’s capital, Kinshasa.
Consulted by a parliamentary commission as FEC president last month, Yuma said updating the mining code was “necessary,” while FEC members such as Randgold and Glencore have argued against many of the proposed changes.
“It is a pity that these companies are making a move outside FEC’s Chamber of Mines,” Kabwelulu said. “The body has participated in discussions with all stakeholders since 2012.”
Glencore, Ivanhoe, MMG, Randgold and China Moly declined to comment. AngloGold and Zijin didn’t immediately respond to requests for comment.
Source: Bloomberg
