In my view the new mining code for the DRC takes AWAY a lot of the sovereign risk of doing business here.
Instead of having a damocles sword of unknown proportions hanging over the heads of those trying to work out numbers for feasibility of this project, they now have a much greater degree of certainty knowing what is owed to the govt.
Yes the tax/royalty whatever is higher than the past, but as per the article above developing countries were changing the rules everywhere, so what could emerge here was unknown. That's gone, new rules passed by the parliament (representing many parties), now approved by President Kabilla.
Because it was passed by parliament before going to Kabilla, it is also much more likely to stay the law after the next election no matter who wins.
While it might be bad for those that built under the old laws, it provides certainty to those about to start, so IMO DE-RISKS this project.
AVZ Price at posting:
25.5¢ Sentiment: None Disclosure: Not Held
