Congolese President to Meet Mining Bosses to Discuss New Code

(Bloomberg) -- Democratic Republic of Congo President Joseph Kabila agreed to meet with international mining company bosses who are resisting proposed industry reforms.

Mines Minister Martin Kabwelulu invited senior officials from Randgold Resources Ltd., Glencore Plc, China Molybdenum Co., Ivanhoe Mines Ltd., MMG Ltd., Zijin Mining Group Co. and AngloGold Ashanti Ltd. to an audience with Kabila on March 6, according to a letter sent Friday and seen by Bloomberg.

Kabila's chief diplomatic adviser, Barnabe Kikaya Bin Karubi, confirmed the meeting is scheduled for March 6 and declined to comment further. Kabwelulu didn't immediately respond to requests for comment.

The companies oppose changes to Congo's mining code that were approved by parliament in January and are awaiting Kabila's signature. If enacted, the legislation will overhaul the country's most important economic sector, raising the cost of doing business for investors in Africa's biggest copper producer, while boosting the state's share of mining revenue.

The mining firms requested a meeting with Kabila, “to once again put forward our positions” about changes to the law, in letters sent to the president on Jan. 31 and Feb. 8. The companies claim their concerns were ignored during the revision of the code. They say the law will damage investor confidence in Congo and discourage investment if promulgated.

Higher Royalties

The new code approved by lawmakers removed a measure protecting mining-license holders from complying with changes to the fiscal and customs regime for 10 years. That means all mines will immediately be subjected to higher royalties on metals including copper, cobalt and gold. The proposed law also permits Congo, the world's biggest source of cobalt, to raise the royalty on that metal to 10 percent from 2 percent if the government categorizes the mineral as a “strategic substance."

Kabwelulu's letter is addressed to Mark Bristow, Ivan Glasenberg, Srinivasan Venkatakrishnan and Lars-Eric Johansson, the chief executives of Randgold, Glencore, AngloGold and Ivanhoe, as well as Kalidas Madhavpeddi, who heads CMOC International, the overseas operations of China Molybdenum. Also invited are Qixue Fang, Zijin's vice president, and Mark Davis, MMG's executive general manager.

The executives must personally attend the meeting and cannot send representatives in their place, according to Kabwelulu's letter.

To contact the reporter on this story: William Clowes in Kinshasa at wclowes@bloomberg.net.

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Michael Gunn

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