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DRC's mine review holds some surprises
Reuters
Posted: Thu, 20 Mar 2008
[miningmx.com] -- CONGO'S mines review panel recommended steps on Thursday to overhaul the vast central African country's minerals sector after years of war and neglect, including renegotiating several major mining contracts.
In its long-awaited report, the panel appointed by President Joseph Kabila's government urged the renegotiation of contracts between state mining companies and mining majors BHP Billiton, Freeport McRoRan Copper & Gold Inc and diamond giant De Beers.
"The government of the Republic intends from now on to ensure efficient management and adequate control of the mining sector so that Congolese mines truly and fully benefit the Congolese nation," said the report, published on the Mines Ministry Website www.miningcongo.cd.
The commission was created last year to overhaul 61 contracts including many signed during the country's 1998-2003 war, which dragged
in six foreign armies from across central and southern Africa, lured in part by Congo's mineral riches.
The report was dated November 2007 and broadly reflected a draft summary document leaked that month by officials in Congo's capital Kinshasa. Letters have since been sent to individual companies for feedback, and some companies have begun new talks.
A "task force" of four senior ministers will oversee the next steps in the mines review process, during which companies are free to submit any fresh factual data, the ministry said.
The report recommended renegotiation of state miner Gecamines' Tenke Fungurume partnership with Freeport McMoRan to increase Gecamines' share in the project, which Freeport considers one of the world's biggest copper and cobalt deposits.
Minority Tenke shareholder Lundin Mining said any uncertainties should be dealt with by an international court.
"We believe we have a very strong agreement where everything is properly regulated when it comes to ownership and taxes, and there is little room to renegotiate the deal," a spokesman said.
The commission also recommended OKIMO, one of a handful of state mining companies that have signed dozens of mining accords and joint venture deals, draw up a new agreement with AngloGold Ashanti and up its stake in their Kilo joint venture.
It said OKIMO should
increase its stake in the joint venture to 45 percent from 13.78 percent currently, and that AngloGold increase the annual fee it pays to OKIMO. It did not say whether or how the stake should be paid for.
An AngloGold spokesman said the company had responded to the government proposals. "We had received the views of the government and we are involved in a process of engagement," spokesman Alan Fine said in Johannesburg.
AngloGold Ashanti has been drilling in the Mongbwalu area of its huge concession around Kilo, and has established an inferred resource of 2.9 million ounces.
It is one of a host of promising prospects the Kinshasa government hopes will soon come into production to help finance reconstruction and development after the war-ravaged country's first democratic elections for over 40 years were held in 2006.
The report recommended that Congolese state diamond miner MIBA renegotiate contracts it has with global mining giant BHP Billiton
and leading diamond producer De Beers, which is 45-percent owned by Anglo American.
De Beers said it was in contact with Congo's government.
The report recommended the cancellation of some contracts awarded to smaller, unlisted companies operating in the violent east of the country.
It also recommended the renegotiation or cancellation of the majority of mining deals involving Gecamines. The Congo company was once a major world supplier of copper and cobalt with copper production of around 500,000 tonnes a year in the 1980s during the regime of late dictator Mobutu Sese Seko.
Gecamines' 2005 output was just 17,000 tonnes.
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