Detailed regulations drafted for implementation of the new DRC mining code have been finalised, but have made limited concessions to the requests of large mining companies in the country, Reuters has reported.
The draft of over 700 pages recently circulated by the Ministry of Mines reportedly retains the windfall tax and the “special tax on excess profits”, despite opposition and proposals for alternative measures from the companies. The draft also retains the ability for the Prime Minister to designate minerals by decree as “strategic substances” potentially subject to a 10 percent royalty rate. The prime minister’s office has reportedly said that cobalt will be designated a strategic substance with copper and others under consideration.
The draft regulation is expected to be presented to the Minister of Mines who will work with an inter-ministerial commission before presenting for government approval. Time is running out to for companies to negotiate any changes since the deadline for the new regulations must be signed into law within 90 days.
Our View: Revision of the code was concluded by parliament in late January and signed into law by President Kabila on 9th March 2018 despite intense lobbying by the mining companies. Although tin does not currently appear to be under consideration as a “strategic substance”, it will likely be affected by other measures, including an increase in base metal mining royalties from 2% to 3.5%, a doubling in the government’s free share of mining projects to 10%, a reduction on the period during which contract stability is guaranteed down to five years, and the new ‘supertax’ if prices rise above certain levels.