drc minister assures mining companies , page-3

UPDATE:Congo Mine Contract Decision By End Month-Cadastre Minier

7 November 2007

Source:Dow Jones Commodities Service

Congo's Ministry of Mines is reviewing the recommendations of a Congolese commission on the country's mining licenses and will make a final decision by the end of the month, the technical director at Congo's state-run Cadastre Minier said Wednesday.

A final report will be released after the government has completed its review, Justin Nyembo Mutahile told Dow Jones Newswires.

Mining companies that have left concessions idle and have failed to develop properties are at risk of having their licenses revoked, he said. But contracts between private companies and state-owned mining companies like Gecamines, Sodimico and Okimo are likely to be the most affected by the outcome of the review, he added, largely because the terms are unfavorable to the state.

Attention is focused on those licenses issued between 1996 and 2005. A version of the commission's report was leaked on the Web site of a Kinshasa-based newspaper over the weekend, and recommends that 38 contracts be amended, and 23 contracts be canceled entirely.

Tuesday, Congo's Ministry of Mines called the leaked report "grossly misleading" and moved to reassure mining companies that their interests were being protected.

"It is expected that, after all irregularities have been corrected, the great majority of companies currently in the DRC will remain in the country for the long term," said Martin Kabwelula, Congo minister of mines. "This has been and will remain the position of the government."

The leaked report said First Quantum Minerals (FM.T) and Anvil Mining (AVM.T) have projects among the cancelations, while Nikanor PLC (NKR.LN), Katanga Mining Ltd. (KAT.T), Lundin Mining (LUN.T) and AngloGold Ashanti (AU) would face amendments to their contracts. The result was a drop in the share value of some companies, and a police investigation into the source of the leak.