new article, page-11

Extract from:
ANDY HOFFMAN
MINING REPORTER
6 November 2007
The Globe and Mail

At least two of the companies said the leak to a newspaper in Kinshasa, the capital, was driven by political manoeuvring.

Shares of Anvil Mining Ltd. fell as much as 20 per cent on the Toronto Stock Exchange after the newspaper Le Phare published details it claimed were from a government panel report recommending the contract regarding Anvil's Dikulushi copper and silver mine be cancelled.

Signed in 1998 amid a bloody civil war that took more than four million lives, the Dikulushi agreement is one of 23 that the Commission for the Review of Mining Contracts is urging the government of the mineral-rich country to terminate, the newspaper said.


In response to the reports, Montreal-based Anvil issued a statement saying it “has received no written communication from the Minister of Mines or the commission (or any other government body in the DRC)” in respect to renegotiating or ending any agreement to which Anvil or any of its subsidiaries is a party.

The company noted the commission panel, which consists of several elected officials including many who are members of political parties opposed to President Joseph Kabila, “is mandated to issue recommendations only, and does not appear to have the power itself to renegotiate or terminate any contracts.”

Haywood Securities analyst Kerry Smith said he did “not believe for one minute” that Anvil's Dikulushi contract would be cancelled. “You talk to government officials, and they hold up Anvil as the model corporate citizen,” he said in an interview.

In addition to Anvil, shares of other Congo-exposed mining firms including Katanga Mining Ltd. of London and First Quantum Minerals Ltd. of Vancouver were hit hard.

Art Ditto, Katanga's Canadian-born president and chief executive officer, called the leak of the report a “circus,” driven by political motivations. “The commission was supposed to table this report to the government, not to the press,” he said in an interview.

Katanga is developing the Kamoto project, which is reportedly on the list of contracts that the panel is recommending changing but not cancelling. Mr. Ditto said the Kamoto contract goes above and beyond the DRC's mining code rules.


Hoping to build on its 2003 mining code legislation, (which calls for a 30-per-cent corporate tax rate, a 2.5-per-cent royalty on metal sales and a 1-per-cent export royalty), the new DRC government wants to ensure it is fairly compensated for allowing foreign companies to mine there.