katanga mining contract review

Sounds familiar. Put the cart before the horse!



Katanga is the latest DRC mining company to face new terms
Natalia Kassakovich

22 February 2008
Source: Metal Bulletin News Alert Service

Katanga Mining faces new demands from the Democratic Republic of Congo (DRC) if it is to retain its mining licences in the country.

The company is the latest in the string of mining companies in the DRC that must comply with more stringent rules the Ministry of Mining is introducing as part of its review of mining contracts.

Its Kamoto Copper Company and DRC Copper and Cobalt Project (DCP) joint ventures have received written notification from the DRC minister of mines "outlining a number of points that require further discussion", it said.

To fully comply with the government's demands, the company will need to submit feasibility studies from the joint ventures, it said.

It will also need to address Gécamines' role in the management of the joint ventures; the submission of schedules of achievements for social projects; and the re-examination of royalty payments for lease facilities.

In addition, with respect to DCP, the status of the plant lease and payments to Gécamines are to be clarified. Other documentation matters need to be addressed with respect to both joint venture contracts.

"Katanga is confident that the matters referred to in the letters will be addressed concurrently with the unification of the joint venture agreements of DCP and KCC and the completion of the definitive agreement… dated February 8, 2008," it said.

This definitive agreement relates to the transfer of the Mashamba West and Dikuluwe deposits to Gécamines, and the transfer of the exploitation permits and mining rights over an agreed area from Gécamines to KCC, and is due to be completed within a 90-day period.

Katanga's announcement follows those by other DRC producers First Quantum, Anvil Mining and Metorex, who all need to comply with new terms.

The proposed changes come after the DRC government began the mining contract review last year.