Business ReportMining firms are in the dark as DRC reviews 61...

Business Report
Mining firms are in the dark as DRC reviews 61 contracts zz Presidential commission to assess whether licences are fair to country
Mzwandile Faniso

5 November 2007
Source:The Star
Independent Newspapers (UK) Limited.

Nikanor, the company developing the largest copper mine in the Democratic Republic of Congo (DRC), has yet to hear from a government panel proposing to renegotiate or cancel some mining licences in the country.

The commission for the review of mining contracts would decide whether 61 deals with private companies, including Nikanor and Freeport-McMoRan Copper & Gold should be reviewed or ended, chairman Alexis Mikandji said on Friday.

First Quantum Minerals, Katanga Mining, De Beers and Moto Goldmines, which also operate in the DRC, said they had not been given notice of any changes to their licences.

“Nikanor has received no official notification of the recommendations of the commission,” said Richard Boorman, the company’s spokesperson.

“When that changes, we will inform the market.”

The company plans to start output at its KOV project by the end of 2009 and reach full production of 250 000 tons of copper a year and 27 500 tons of cobalt in late 2010.

Nikanor, First Quantum and Katanga are seeking to develop copper projects in the country, which has 10 percent of global reserves, after production slumped at the start of the decade because of civil war.

The commission, set up by President Joseph Kabila, is investigating whether licences previously awarded to mining firms are fair to the country.

Nikanor raised £400 million (R5.5 million) this year to help fund construction of its $1.8 billion (R11 billion) mine and signed an accord to sell its output to Glencore International, the world’s biggest commodity trader.

First Quantum had received no notification on the status of its licence, said Clive Newall, the company’s president.

Katanga’s spokesperson David Orford said the firm had not yet been contacted by the government.

De Beers has one joint venture in the DRC, where it had said it had discovered kimberlites, rock formations that contain diamonds. “We’ve not been informed of anything officially,” said De Beers spokesperson Marie-Chantal Kaninda.

Balcatta-based Moto wants to develop DRC’s first commercial gold mine. Deputy mines minister Victor Kasongo said in February that Moto risked losing its property, as it had not done any work on it.

“We have not seen any report, officially or unofficially, and are therefore not in a position to comment,” said Sam Jonah, Moto’s chairman.

The government commission will recommend alterations to 38 contracts and may cancel another 23.

Chief executive of AngloGold Ashanti Mark Cutifani said that his company was awaiting the outcome of the review.