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Congo businesses denounce ‘unjust’ taxes in copper-mining region

KINSHASA – The Chamber of Commerce in Democratic Republic of Congo has complained to the government about a worsening business climate in the country’s copper-mining region, including what it says are unjustified duties on power imports.

In a letter to the finance minister dated June 1, the chamber said Congo’s customs agency has levied more than $300-million in penalties on mining companies for failing to declare electricity imports or making false customs declarations.

The chamber said this was despite the fact the public power utility, rather than the companies themselves, imported the electricity before selling it on, according to the letter.

“To force the companies to pay the unjustly demanded sums, the (customs agency) uses heavy-handed tactics, going as far as withholding the goods of the concerned companies so that they quickly give in and pay the high penalties,” the letter said.

The finance minister, who oversees the customs agency, did not immediately respond to a request for comment.

Authorities routinely say they are committed to improving Congo’s business climate, which ranks a lowly 184 out 190 countries on the World Bank’s Doing Business Index.

However, mining companies say they see little progress and are also concerned about a government proposal to revise the 2002 mining code to raise royalties and other taxes to boost the cash-strapped government’s revenues.

Mines Minister Martin Kabwelulu told Reuters on Friday the proposal would be presented to parliament later in the day.

Despite such concerns, mining giants such as Glencore, Randgold and China Molybdenum have made major investments in Congo, Africa’s top copper producer and a significant producer of cobalt, gold and diamonds.

But electricity poses a knotty challenge. Congo’s copper-mining Katanga region receives only about half the power it needs from the national grid, forcing operators to rely on expensive generators or imports from neighbouring Zambia.

The state power utility recently signed a provisional agreement with South Africa’s Eskom to import 200 MW of power which would be used by mining companies.

Source : Mining Weekly

Banro welcomes safe return of kidnapped employees

JOHANNESBURG – The four employees kidnapped in March while working at dual-listed Canadian gold mining company Banro’s Namoya gold mine, in eastern Democratic Republic of the Congo, have been released after a “long and difficult ordeal”.

The company on Monday announced the safe return of its employees, three Congolese and a French national, who were kidnapped, along with a fifth employee, a Tanzanian who had been later freed, allegedly for ransom.

“Banro extends its heartfelt thanks to all those in the community and government and so many others who supported our efforts to gain our colleagues’ safe return. The priority now is to reunite our colleagues with their families and provide them with support,” the company said in a statement on Friday.

Miningmx earlier reported that the release followed several days of negotiations and demands of a $1-million ransom, in addition to contractual agreements from Banro that it would build basic infrastructure in the area.

It is reported that the kidnappers formed part of the local community and did not think the company was doing enough to provide jobs.

The Canadian gold miner has been a target in recent months, the most recent just over a week ago when armed intruders failed in their storming of the Namoya mine camp. While the mine’s workers were unharmed, there were at least three fatalities – one intruder, one military personnel and one policeman.

This had followed a series of attacks on police and military personnel in the village areas surrounding the mine earlier in May.

“Reinforcements to support the police and military have arrived on site. As a precautionary measure, foreign nationals and non-essential local staff will be leaving site on a temporary basis until the security situation stabilises,” the company had said in a statement on May 18.

Mining operations restarted on May 22.

Banro’s sister site, Twangiza gold mine, continued operations as normal, however. In February, it had also been a target of armed robbers attempting to forcibly enter the site in a siege that left three mine police officers and one of the armedrobbers dead. A security guard was injured.

Further, newswire Bloomberg in September reported an ambush of a convoy of Banro-contracted empty trucks after delivering fuel and mining equipment, when 13 drivers were kidnapped and six trucks burned some 40 km from Namoya.

The 13 drivers were released shortly thereafter after an offensive undertaken by the Congolese army.

The 23 local drivers of the trucks, which were operated by Banro subcontractor Simba Logistics, were immediately released, with the armed group specifically targeting foreign nationals, allegedly for ransom, Bloomberg had reported.

Before this, a Banro spokesperson had told Bloomberg that there had been no similar incident since the company’s establishment in the region in 2004.

Source : Mining Weekly

Congo plans to reintroduce mining code revision next week

KINSHASA – Democratic Republic of Congo’s government plans to reintroduce legislation in Parliament next week to revise the mining code a year after withdrawing it amid fierce opposition from mining companies, the mines minister told Reuters on Friday.

The government of Africa’s largest copper producer suspended consideration of the revised code in March 2016 due to low commodity prices. Companies said its increased royalties and shortened stability clauses would make their projects unprofitable.

Mines Minister Martin Kabwelulu did not say whether the legislation, aimed at boosting government revenues, would be identical to the earlier proposal.

Representatives from the industry-led Chamber of Mines could not be reached immediately for comment.

Low commodity prices since 2015 have left the government in desperate need of cash and caused the franc currency to lose half its value since last year. The mining and oil sectors account for about 95% of export revenues.

Congo’s copper production jumped more than 20% in the first quarter of this year as prices recovered. The Chamber of Mines expects annual production to hit about 1.5-million tonnes in 2018, up from around 1-million in 2016.

Source : Mining Weekly

Kibali officially opened, could herald birth of new DRC economic region

JOHANNESBURG – Democratic Republic of Congo (DRC) Minister of Mines Martin Kabwelulu on Friday officially opened the Kibali gold mine, operated and developed by Africa-focused miner Randgold Resources.

The mine, which would rank as one of the largest gold mines in Africa once it reached full production, was owned by Randgold and gold miner Anglogold Ashanti – each with a 45% stake and more than $2.5-billion invested in the project – in partnership with the DRC State gold mining company Société Miniere de Kilo-Moto.

Kibali, which was currently an operating mine as well as a development project, had produced 88 200 oz of gold and made a profit from mining, before interest, tax and depreciation, of $68.3-million in the three months to December, its first production quarter.

The mine was currently producing gold from its openpit mining operation and oxide circuit.  Commissioning of the sulphide circuit started during the last quarter, while development of Kibali’s underground mining operation remained on track with the vertical shaft reaching the halfway mark and the first underground ore accessed.

The first of four hydropower stations were also currently being commissioned and, with a capacity of 22 MW, it was the largest of its kind in the Orientale province.

Speaking at the opening of the mine, Randgold CE Mark Bristow said the successful development of Kibali could herald the birth of a new DRC economic region to rival the Katanga province.

“To achieve that, we cannot rest here. We need to ensure that we deliver the returns expected by the investors who entrusted us with their money. We have to run a profitable mine, focused on long-term viability, that pays taxes and employs and develops citizens from this region and this country. Kibali must become the catalyst that triggers the additional investment required to grow a strong regional economy,” he said.

Also speaking at the opening, Randgold chairperson Philippe Liétard added that the successful development of Kibali in the face of many infrastructural and other challenges was a triumph for the company’s partnership philosophy.

“Here we have shown what can be achieved in Africa when we all work together; a government that understands the importance of attracting and retaining the investments that are necessary to build a modern economy; two mining companies that believe in sharing the value they create with all their stakeholders, especially the local community; a labour force that is eager to grasp the opportunity of working and learning; and a people who have welcomed us and supported our endeavours,” Liétard said.

Meanwhile, AngloGold Ashanti chief executive Srinivasan Venkatakrishnan said for Kibali’s full potential to be realised it was of the utmost importance that the DRC’s mining code remained supportive of the gold mining sector.

“The government now has an important opportunity to show the world that it is welcoming of gold mining by helping to create what can in a short time become one of the largest gold producers in the world and an engine of growth for this region and this country,” he noted.

 

Source – Miningweekly