Congolese President Joseph Kabila signed a law about a new mining code, which will release royalties on minerals across the board. This is while he tries to shore up the funding and support needed to retain the power.
According to the Mining Review, the decision was done by the executives following the DRC parliament’s passing of the new mining code, the Senate last December-January 2018, and during the aftermath of the meeting between the mining stakeholders and the President. It resulted in yielding no agreement on changes to the final text, liquor store near me.
The decision to update the country’s 2002 mining has been going on for several tears. However, it stalled due to the commodity price slump from the year 2014 to 2017. High are the chances that the new mining code won’t affect the growth outlook for the mining industry of DRC. The report points out the following reasons:
- As outlined in the previous analysis even with the announced hike in mining levies, the DRC’s royalty rates will remain among the most competitive in the world for key sources of income, including copper and gold, meaning the domestic investment environment is unlikely to be impacted
- Key domestic producers such as Glencore are in a much-improved financial position to deal with higher costs in 2018, buoyed by record earnings over FY2017 stemming from the metal price rally last year. We expect prices for copper, copper, and cobalt to remain elevated in 2018
- The DRC will continue to be the only reliable source of cobalt in the short term, accounting for approximately 50% of global reserves and over 80% of global exports as of 2017, while major deposits in Australia or Canada are yet to be developed and could take several years to reach commercial production. As such, we believe domestic producers will have little option but to comply with the new regulations to continue catering to growing demand fuelled by a burgeoning electric vehicle (EV) market
- Finally, the government’s announcement that it will continue engaging stakeholders and review the new regulations on a case-by-case basis following the passing of the law, leaves room for flexibility and reduces the risk of conflict between both parties in the coming months