Doing this financial arrangement after the ML is/was simply not an option....
16 March 2018 Publication
A law (the Law) amending the law No. 007/2002 dated 11 July 2002 setting out the Congolese mining code (the Code) was adopted by the Congolese Parliament on 27 January 2018 and promulgated by the President of the Democratic Republic of Congo (DRC) on 09 March 2018.
Announced and delayed for many months, this Law (the last draft of which was not subject to any real debate with the industry) is in particular aiming at correcting the proclaimed insufficient revenues of the State deriving from the mining sector and the gaps and weaknesses of the existing Code in order to set out a more competitive, fast and transparent mining legislation. Key criticisms from the DRC Government against the existing Code included the ten year legal and fiscal stabilisation clause, the low level of the State’s free interest in mining companies or the lack of transparency.
The Law provides some significant changes which are of immediate and particular concerns for both existing mining operators in DRC and new investors in the country.
Below one of the key points outlined in the last draft of the Law made available:
Corporate/Assignment requirements:
The State’s free interest in the share capital of companies holding exploitation permit is increased from 5 to 10% and Congolese individuals must hold at least 10% of the share capital of companies holding exploitation permits.
The amount of the share capital of an applicant for an exploitation permit must correspond to at least 40% of the financial resources required for the performance of the investment/project.
The conditions for the renewal of an exploitation permit are toughened including the transfer to the State at each renewal of an additional free 5% of the share capital of the company in addition to the initial 10%.
Any transfer of shares in a company holding an exploitation permit leading to the acquisition of the control of the company by the beneficiary of the transfer is subject to prior approval from the State.
Btw. Dathcom Mining SA is a DRC company, it is also the reason that the Australian FIRB cannot stop this deal.
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