DEMOCRATIC REPUBLIC OF CONGO Democratic Republic of Congo (DRC) President Joseph Kabila signed a law in March to amend the 2002 Mining Code by increasing royalties, taxes and mining companies’ obligations.
Oliva-Velez says the DRC’s amendments are in part a consequence of “increasing social unrest pushing the government into revenue-generating efforts”. He believes that, of all the changes to mining regulations across Africa, the DRC’s new mining code will resonate the most, specifically because of the country’s huge battery metals resources.
The new code designates cobalt as a ‘strategic’ metal, which is used to justify a hike in the royalty rate from 2.0% to 10%. Royalties for copper have also been increased from 2% to 3.5%, and for gold from 2.5% to 3.5%. Another key measure is the removal of a clause that protects miners from changes to the fiscal and customs regime for ten years.
Leon notes that the Prime Minister has the right to designate any mineral substance as ‘strategic’. He explains that, once a mineral is designated as ‘strategic’, the DRC government will be entitled to a 10% royalty, which is all-inclusive and not in addition to any pre-existing royalties owed to the state.
Further, he notes that the DRC’s Mining Code specifies that exploitation licences are initially valid for 25 years, subsequent to which they can be renewed for terms which may not exceed 15 years.
Prior to being amended, Article 67 of the code specified that an exploitation licence could be renewed several times. Leon says that the amended Article 67 also does not impose any restrictions on the number of times a mining licence can be renewed.
The amended code states that, on each renewal of a mining licence, the State will be entitled to an additional 5% interest in the entity holding the right, in addition to its existing shareholding. The code does not place a cap on State interest.
Leon says that government and international mining companies are engaged in negotiations to manage these changes.
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