8 March, 2018 Kinshasa
It is time to change again (after another 20 year failure) the leadership of the DR Congo.
DAKAR, March 9 – Democratic Republic of Congo President Joseph Kabila signed into law on Friday a new mining code that raises royalties and taxes on operators, the presidency said in a statement.
International mining companies that operate in Congo, Africa’s top copper producer, have vigorously opposed the new law, although Kabila pledged this week to work with them while implementing it.
The law, passed by parliament in late January, replaces an earlier code from 2002. It raises royalties on minerals across the board and removes a clause that protected miners from changes to the fiscal and customs regime for 10 years.
Executives from Glencore, Randgold, China Molybdenum and Ivanhoe failed to convince Kabila during a six-hour meeting on Wednesday to re-open negotiations over the code, which they say will deter investment and violate existing agreements.
The two sides agreed, however, to open negotiations next week over measures to implement the code, and Mines Minister Martin Kabwelulu said the companies’ concerns would be considered on a case-by-case basis.
Royalties on cobalt, a vital component in electric car batteries, could increase five-fold to 10 percent if the government designates the metal a “strategic substance”. The law also introduces a windfall profits tax.
The president of the Democratic Republic of Congo signed the controversial new mining code into law, despite a personal intervention by the chief executives of some of the largest international mining companies.
President Joseph Kabila said the miners’ concerns will be taken into account after the law passes, according to a statement issued after a meeting with the heads of Glencore, Randgold, China Molybdenum and Ivanhoe Mines, who had travelled to Kinshasa to lobby against it. “The president of the Republic assured the mining operators that they are economic partners of the Democratic Republic of Congo and their concerns will be taken account of through a constructive dialogue with the government after the promulgation of the new mining law,” said mining minister Martin Kabwelulu in a statement.
The cobalt, copper, zinc, tantalum and coltran mines are all located in the SE corner of DR Congo. The Bechtel Master Plan high-lighted their orderly development through a democratic government, infrastructure construction and operations. That never saw the light of day.
Instead, President’s Kabila I and Kabila II chose to fill their pockets, start a civil war, start an international war with Uganda and Rwanda, then Angola and Zimbabwe joined in, and now you have the mess created when people don’t listen to 1000 investors in Brussels (December 1987), Canadian Master Planners who write intelligent Actions Plans to rebuild destroyed countries (Robert S. Stewart at Bechtel Corp.) and all the US engineering companies, Canadian and Swiss mining corporations listed below.
The new mining code has already been passed by both chambers of the parliament in the DRC and will be promulgated “shortly,” the statement said. The outcome is a blow to the mining companies that have lobbied publicly against the new mining code, which will substantially hike royalties on copper and cobalt mining. It is also a victory for Mr Kabila as it comes just as demand surges for cobalt, a key ingredient for electric car batteries.
Over half of the world’s cobalt comes from the DRC, mostly mined by Switzerland-based Glencore. Prices for the metal have more than doubled over the past year. The new mining code, which is a revision of a 2002 law, could see royalties rise as high as 10 per cent for minerals deemed “strategic” by the government.
It also applies immediately as it scraps a provision in the previous code that said miners would have 10 years following any change in the law to meet the new conditions. The meeting in Kinshasa was attended by Ivan Glasenberg, the chief executive of Glencore, Mark Bristow, the chief executive of Randgold, Robert Friedland, the chairman of Ivanhoe Mines, and representatives from China’s MMG, Zijin Mining and China Moly.
Kabila defies calls for election clarity as Congo conflict escalates. President under mounting pressure to deliver credible poll and leave office. President Joseph Kabila has refused to say whether he will retire or try to run again. Few of the people waving flags at a pro-government rally in central Kinshasa last week could explain why they supported President Joseph Kabila.
“Er, he’s good for the country. How can I describe it?” Franck Matuaka, a 24-year-old information sciences student, said of the man who has ruled the Democratic Republic of Congo since Laurent Kabila, his father and predecessor as president, was assassinated in 2001 by a bodyguard.
But when pressed about the man who is holding the resource-rich but impoverished country to ransom by refusing to leave office despite his mandate ending in December 2016, Mr Matuaka had no answer.
Mr Kabila failed to organise elections in 2016 but through control of the courts and the security forces he has managed to stay in power. Nationwide protests have been brutally suppressed, leaving scores dead.
Presidential and parliamentary elections are scheduled for December and preparations are on track, according to the electoral commission’s timetable. But the 46-year-old president, who “prefers acting to speaking” according to his spokesman Lambert Mende, has refused to announce whether he will retire, as the constitution stipulates, or try to run again.
The DR Congo is vast. It is the size of western Europe and boasts rich copper reserves and half the world’s cobalt, a crucial component in electric cars. But it also hosts one of Africa’s worst humanitarian crises, which diplomats say the political limbo is exacerbating
While Mr Mende insists the elections will take place on time, many Congolese are suspicious of Mr Kabila’s silence.
A camp for internally displaced Congolese in Bunia. Some 4.5m people have fled their homes. Politicians, analysts, activists and religious leaders fear Mr Kabila is plotting to prolong his time in office. He could achieve this either by engineering further delays to the polls or, as rulers in neighbouring states such as Congo-Brazzaville and Rwanda have done, alter the constitution to allow additional terms. An alternative theory is that Mr Kabila will install a puppet and rule from the senator-for-life post that he will assume.
“It’s crucial that we have a legitimate government through fresh elections,” said Adolphe Muzito, who was Mr Kabila’s prime minister from 2008-2012. “However, I don’t think there will be an election this year.”
One person who knows the president well says the video games and luxury cars enthusiast does not want to leave office because he is “afraid of tomorrow, partly because of what happened to his father”.
“The people who are closest to him are his brother and sister and he doesn’t trust anyone outside his family,” the person said. “He says little and the people who can read his silence and interpret what he doesn’t say have the most influence.”
Nickson Kambale, the director of the Centre for Governance, an independent research organisation in Kinshasa, says: “If he [Mr Kabila] says tomorrow ‘I won’t be a candidate’ the national tension will decrease massively. But it would trigger conflict within the family and the ruling elite because they will all start fighting for supremacy.”
However, pressure is mounting on Mr Kabila, both from abroad and at home, to deliver a credible election and leave office. Last week Botswana issued a surprisingly blunt warning that the failure to hold elections would aggravate Congo’s security crisis.
It was referring to the escalating conflict in Congo’s eastern regions where UN sources say 127 armed groups are active, with 32 having emerged in the last year. Some 4.5m people have fled their homes, 1.9m of whom left last year, according to the UN. The UN has 16,000 soldiers in DRC, its largest peacekeeping operation in the world.
Mr Kabila has also lost important regional allies in South Africa’s Jacob Zuma and Zimbabwe’s Robert Mugabe. Emmerson Mnangagwa, Mr Mugabe’s replacement, delivered a forceful message on the need to hold elections during a visit to Kinshasa last week, according to diplomats in the city. And Moussa Faki, the chairperson of the African Union Commission, has visited Kinshasa recently to maintain pressure.
Hans Hoebeke, a DRC analyst at the International Crisis Group, a Brussels-based think-tank, says the regional pressure is driven more by a desire for stability and to avoid a repeat of the Congo wars of the 1990s and 2000s rather than a championing of democracy.
“They want the building to remain, they just want the concierge to go,” Mr Hoebeke said. “Kabila’s failure is that unlike other leaders in the region he has not been able to ensure an internal transition or change the constitution.”
Mr Kabila is helped by a leadership vacuum in Congolese opposition politics. No one has filled the mantle of Etienne Tshisekedi, the longtime opposition leader who died last year. And Moise Katumbi, the former governor of the resource-rich Katanga region who is way ahead in the opinion polls, is in exile having been convicted of dubious property offences.
But this void is being filled by the influential Roman Catholic Church, which led opposition against dictator Mobutu Sese Seko in the 1990s and the Belgian colonisers in the 1950s. On February 25, for the third time in as many months, priests led after-mass protests at 150 churches to maintain the electoral pressure on the president. All but a handful of protests were crushed by the police, although with fewer fatalities than in December and January.
Father Jean-Claude Tabe, the priest at St Benoit’s Church in Kinshasa, where one demonstrator was shot dead in the protests, said the police tactics spoke volumes about Mr Kabila’s intentions. “He just wants to retain power and he’ll do whatever it takes to do so.”
The Catholic church has led dozens of protests against President
Democratic Republic of Congo President Joseph Kabila will soon sign into law a new mining code that is vigorously opposed by industry, according to the government and mining companies.
The announcement followed a nearly six-hour meeting on Wednesday between Kabila and mining executives in Kinshasa about the new code, which will raise taxes and remove a stability clause in the current law protecting miners from changes to the fiscal and customs regime for 10 years.
“The president of the republic assured the miners … that their concerns will be taken into account through a constructive dialogue with the government after the promulgation of the new mining law,” the statement said.
Participants in Wednesday’s meeting included Glencore CEO Ivan Glasenberg, Randgold CEO Mark Bristow and China Molybdenum executive chairman Steele Li.
Glencore, Randgold, Ivanhoe and China Molybdenum all operate mines in Congo, Africa’s top copper producer, and have said the changes in the code adopted by parliament in January would scare off new investment and violate existing agreements.
Mines Minster Martin Kabwelulu told reporters after the meeting that the companies’ concerns would be treated on a “case-by-case basis”.
“After the promulgation of the code, we are going to wait for the mining companies … to send us their concerns,” Kabwelulu said. “We are going to re-examine those concerns, first with (government) experts … and with the mining companies’ experts.”
Participants in Wednesday’s meeting included Glencore CEO Ivan Glasenberg, Randgold CEO Mark Bristow and China Molybdenum executive chairman Steele Li.
Randgold, which operates the giant Kibali gold mine in northeastern Congo, said last month that it would challenge the new code through international arbitration if it was not referred back to the mines ministry for further consultation with industry.
The government has disputed the companies’ claims that the new code will make them unprofitable and said the revision is needed to boost meager public revenues in a country with an annual budget of only about $5 billion.
Under one provision in the proposed code, royalties on cobalt, a vital component in electric car batteries, could increase fivefold to 10 percent. The law will also introduce a windfall profits tax.
Congo is the world’s biggest source of cobalt. Its output jumped 15.5 percent last year to 73,940 tonnes.
LME rethinks cobalt contract for electric vehicle sector
The exchange has abandoned plans for a cobalt sulphate contract for the electric vehicle battery supply chain because pricing for the chemical has historically been based on the metal it is derived from, cobalt industry sources said.
The exchange is instead looking at offering a cash-settled cobalt metal contract, which will trade alongside its physically deliverable metal contract launched in 2010.
Interest in battery metals such as cobalt, nickel and lithium has soared over the past year on the automotive industry’s ambitious plans to produce electric cars and cut noxious fumes from vehicles powered by fossil fuels.
However, prices of cobalt sulphate, which alongside nickel sulphate and lithium are used to make the rechargeable batteries used to power electric vehicles, are typically based on the metal plus or minus a dollar amount.
“The amount depends on whether the sulphate market is in surplus or deficit; there is no fixed formula,” one cobalt industry source said.
“The LME’s existing cobalt contract isn’t very liquid. A cash-settled contract could have more success, but there’s no reason why we can’t two have contracts.”
The exchange’s new cobalt contract was likely to be for cobalt sulphate.
“We are investigating the possibility of a cash-settled cobalt contract to expand our offering in battery metals,” an LME spokesperson said in response to a request for comment.
“If we were to launch a new cash-settled cobalt contract it would not be until the end of 2018 or early 2019.”
The LME recently asked companies that assess traded cobalt metal prices — Metal Bulletin, Argus Media and CRU Group — to submit proposals to supply prices that can be used as a reference for a cash-settled contract, sources said.
“Metal is a smaller part of the cobalt market than chemicals, but this is how the industry has developed over the years,” one cobalt producer said.
Consultants CRU Group estimate that cobalt metal accounted for 36.8 percent of nearly 104,000 tonnes of consumption last year, with the remainder going to chemicals for batteries used in mobile devices and electric vehicles.
CRU expects the metal component to fall to 32 percent, or about 46,000 tonnes, in 2021 in a market it estimates will total more than 144,000 tonnes.
Growing dominance of chemicals is mainly due to electric vehicles.
Volkswagen, for example, last November approved a five-year spending plan to further the German group’s goal of transforming itself into a leading force in electric cars.
Volkswagen is planning spend more than 34 billion euros ($41.80 billion) on electric cars, autonomous driving and new mobility services by the end of 2022.
Such ambitious moves by the car sector are why the LME has been consulting with companies in the supply chain — metal producers as well as chemicals, battery and car companies — about what the industry needs and what is feasible.
One source said the LME was still looking at lithium, in which the choice is between carbonate and hydroxide, but that the idea of a nickel sulphate contract had been shelved because, as with cobalt sulphate, pricing is based on the metal rather than the compound. ($1 = 0.8133 euros).