congo status, page-2

Couldn't find anything more than what we already knew. There was just this article in the FT. But really we knew all this and all of the miners have appealed, at the end of last month. So it's really only of academic interest.

Happy Easter folks.

KKR



FT.com site : Congo asks for bigger mining share.
Rebecca Bream in London

20 March 2008

The government of the Democratic Republic of Congo on Thursday published plans for the review of its mining contracts, in a move critics see as an attempt to strong-arm international companies into giving state mining companies greater ownership of their assets.

The Kinshasa government published a long-awaited report on the review of the country's mining contracts, saying companies had made "enormous gains without corresponding benefits to the DRC" and that the contracts needed to reflect the sharp rise in world copper prices.

The government of president Joseph Kabila is looking at overhauling 61 different mining contracts, including some signed during Congo's 1998-2003 civil war in less than transparent circumstances.

Companies ranging from major miners like De Beers and Freeport McMoRan to smaller groups like Anvil Mining and First Quantum Minerals could be affected by the move, which is likely to give a bigger role to state-owned copper mining group Gecamines.

The report also recommends the cancellation of some contracts awarded to smaller, unlisted companies operating in the violent east of the country.

The report by the government-appointed Review Commission was released to the public on Thursday, although the companies involved had been informed of the recommended changes last month.

Toronto- and London-listed First Quantum Minerals has been told that its title to its huge copper and cobalt project at Kolwezi in Congo's southern Katanga province was improperly structured. The Review Commission said the Kolwezi title had been sold off too cheaply and has advised the contract to be redrawn to include "up-front payments" of cash and a more active role for Gecamines in management.

A spokeswoman for First Quantum said on Thursday that it was "in discussions" with the government about the proposed changes, and that the group felt its contract was "fair and legal".

If companies disagree with the Review Commission's proposed changes, they can appeal to a taskforce of government ministers in Kinshasa, the capital, and submit any fresh data.

One of the biggest recommended changes concerns the massive Tenke Fungurume copper project, which is being developed by US copper company Freeport McRoRan. The report recommended renegotiation of Gecamines' role in the project, and that Gecamines' stake rises from 17.5 per cent to 45 per cent.

A spokesman for Freeport said the group had already responded to the government's letter about modifications to the Tenke contract, and the company would argue to maintain its existing terms. "Our contract was negotiated transparently, complies with all laws, was approved by the government and we believe the terms are fair and equitable. We will work with the Ministry of Mines to resolve these matters and continue with our project development activities."

Companies including First Quantum have warned the Congo government that they might take their cases to the international courts.