- Country says previous DRC mining code favoured foreign investors at the expense of the economy
- The code seeks to hike taxes in major industry reforms
- DRC is Africa’s leading copper producer and the world’s leading cobalt producer
Democratic Republic of Congo President Joseph Kabila will in March 6 meet bosses from mining firms in the country to discuss a new mining code that seeks to raise taxes, Mines Minister Martin Kabwelulu has said.
DRC mining firms which include Glencore, Ivanhoe Mines, Randgold Resources and AngloGold Ashanti are opposed to the new code saying it threatens to kill the industry.
The revision of DRC mining code was proposed in 2015 but its adoption process was halted in March 2016 due to various objections from mining firms which complained about the fact that it would impact the profitability of investments made in the sector.
But Congo says that the code is essential because previous mining code tended to favour foreign investors at the expense of the economy.
Mining industry is a major economic pillar in the central African country. In 2015, it generated 98% of the DRC’s exports and 25% of government revenues and also contributed more than 21% to the country’s gross domestic product.
Read:New mining code meets stiff resistance from miners in Congo
Leading Cobalt producer
Although the central African country is the continent’s leading copper producer and the world’s leading cobalt producer, 77% of the population lives below the income poverty line.
The new code also seeks to classify cobalt as a strategic substance, essentially resulting in a tax hike.
Demand for cobalt is set to increase sharply as it is used in the making of lithium-ion batteries, which are used to power electric cars and mobile phones.
Electric cars are increasingly being proffered as many countries move away from fossil fuels to meet emissions targets.
Volkswagen AG for instance plans to invest 20 billion euros ($24 billion) by 2030 to roll out electric vehicles, with another 50 billion euros earmarked for batteries.
Fearing for a looming shortage of cobalt, American technology firm Apple Inc. is in talks with a mining company to secure a direct supply of the scarce metal.