The Democratic Republic of Congo’s Senate approved legislation that raises taxes and royalties on metals including copper and cobalt under reforms fiercely opposed by the mining industry.
The National Assembly’s version:
- increases royalties on copper and cobalt to 3.5 percent from 2 percent and gold to 3.5 percent from 2.5 percent;
- introduces a profit-windfall tax;
- doubles the state’s free share in mining projects to 10 percent; and,
- reduces the period during which contract stability is guaranteed to five years from 10 years.
The code would also permit Congo, the world’s biggest source of cobalt, to raise the royalty on that metal to 5 percent if the government opts to categorize the mineral as a “strategic substance.” A byproduct of copper and nickel used to harden steel, cobalt has become a highly coveted commodity as the metal’s efficiency conducting electricity has made it essential for rechargeable batteries used in electric cars.
A commission representing both houses is meeting Thursday to “smooth out the divergences so that the two chambers adopt an identical document,” before it’s sent to President Joseph Kabila for his signature, Mulumba said.
While existing stability clauses mean companies with valid mining contracts, like Glencore Plc, China Molybdenum Co. and Randgold Resources Ltd., won’t have to comply with most reforms for 10 years, the increased royalty rates will be applied to all projects immediately, Mining Minister Martin Kabwelulu told Senators on Jan. 2.