Anvil and Katanga unconcerned by Congo mine review Anvil and Katanga Mining aren’t worried about the DRC mining contract review despite saying that the delayed evaluation procedure could stretch to the end of the year.
Author: Eric Onstad Posted: Monday , 08 Oct 2007
LUBUMBASHI, CONGO (Reuters) -
Mining companies in Congo such as Anvil and Katanga that have fulfilled licence conditions have little to worry about from the government's sweeping review of contracts, company officials said.
The process, which has already been delayed, is likely to extend to the end of the year, they added this week during a tour of their mines.
An official of Democratic Republic of Congo, which holds a tenth of the world's copper reserves and a third of its cobalt, previously said the review might be completed by the end of October. No government officials were immediately available for comment.
Both Katanga Mining and Anvil Mining said they had been visited by a government review team and were confident they would not be hurt by the process.
"Our expectation is that the review process will show that our joint venture was construed within the context of the mining code, is consistent with the law, and that it will past muster on that basis," Katanga's Chief Executive Arthur Ditto told reporters during a visit to the firm's Kamoto mine in Congo's copperbelt region in the southeast.
The Congo government launched a review in June of the legality and fairness of over 60 mining licences, most of which were negotiated during a six-year civil war and a three-year transitional period that followed.
Anvil was also confident about the review, especially since it has been helping communities around its mines by building schools, boreholes and medical clinics.
"We are the leaders in the DRC in social development," said Robert Lavalliere, vice president of investor relations.
DRAG EFFECT
Ditto said officials were seeking to wrap up the review as soon as possible and it might be completed by the end of the year. "I don't think it's unreasonable to expect that the end of the year is in the realm of possibility, maybe it will drag on," he said.
"I think the government is sensitive to the fact that this whole undertaking is very disruptive to attracting additional capital into the country and is affecting some of the joint ventures that are here now."
Nikanor Plc, which is also developing a major copper and cobalt mine in Congo, said last month it was positive about its licence since it was agreed after the DRC adopted a new mining code.
Anvil is aiming to boost annual output of copper at its three Congo mines to 110,000 tonnes by 2010 from 45,000 this year while Katanga is rehabilitating a former state-owned mining complex near Kolwezi, aiming to achieve full output of 150,000 tonnes a year by 2011.
The government might target some speculators who have received prospecting licences, but have not done any exploration work on them, said an industry source who declined to be named.
"They are seeking to flip them over to make a profit. We have people coming to us trying to interest us in some of these licences," the source said.
