Update on review article
Feb. 5 (Bloomberg) -- The Democratic Republic of Congo, the
world's biggest source of cobalt, plans a ``fast track'' process
to conclude a review of mining licenses after an initial study
showed all existing agreements were flawed.
The new arrangement will include a ``brief and open appeal
process,'' according to a statement issued today by public
relations company Bell Pottinger.
``We actually found that we had not a single contract that
was properly constituted,'' Congo's Vice Minister of Mines
Victor Kasongo said in the text of a speech given today at the
Indaba mining conference in Cape Town. ``What was meant to be a
minor corrective has turned out to be multiple, major surgery.''
President Joseph Kabila's newly elected government began a
review last April of existing mining deals with companies
including Freeport-McMoRan Copper and Gold Inc. and Katanga
Mining Ltd., with the aim of amending those deemed unfair to the
state. The country's southern region is the source of more then
two-thirds of the world's cobalt and a 10th of its copper.
Each of the contracts reviewed by a specially appointed
commission, which was advised by Duncan Allen, Ernst & Young and
the Carter Center, have ``significant flaws,'' Kasongo said.
The flaws include a ``massive'' undervaluation of the
assets of state-owned copper producer Gecamines, which has joint
ventures with most foreign mining companies in the country, as
well as clauses that limit the sovereign power of government, he
added.
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