New DRC mining code comes into force

After months of outcry from foreign mining companies active in the Democratic Republic of the Congo (DRC), the new DRC mining code proposed in March was signed into law with no adjustments on June 8, effectively raising taxes and increasing carried ownership by the DRC government in major mining projects in the country. The new mining code boosts royalties on copper to 3.5% from 2%, on gold to 3.5% from 2.5%, and may increase royalties on cobalt to 10% from 2%, if cobalt is deemed a “strategic mineral” — and it’s hard to see why it wouldn’t be. There is also a new 50% tax on so-called superprofits, which is defined as income realized when commodity prices rise 25% above levels in a project’s bankable feasibility study. The tax on regular profits has increased to 35%, from 30%. There are also provisions to double to 10% the DRC government’s free share in mining projects and reduce the period during which contract stability is guaranteed to five years, from the 10 years stipulated in the previous mining law introduced in 2002. There are also changes to mining-title applications subject to an environmental certificate by the Agence Congolaise de l’Environnement, which will include a requirement that 0.3% of a company’s turnover is spent on local development. Continue reading at The Northern Miner.