Congo Miners Warn Growth at Risk Even as Output Increases – by Michael Kavanagh (Bloomberg News – May 21, 2015)

http://www.bloomberg.com/

Falling metal prices, power shortages and anticipated tax increases are threatening the Democratic of Congo’s mining industry even as copper, gold and cobalt output hit record highs, the country’s main business group said.

“Exploration projects are being wound down or halted, assets are being sold off and vigorous efforts are under way to cut production costs,” the Chamber of Mines at the Federation des Entreprises du Congo said in a report e-mailed Wednesday from the capital, Kinshasa. “This is certain to result in direct and indirect job losses as suppliers and contractors are squeezed.”

The slowdown wasn’t immediately apparent in the industry’s first-quarter results, the FEC report shows, as copper output rose 15 percent from the same period in 2014, while cobalt production jumped 17 percent and gold more than 37 percent.

Amid global price slumps for many metals, the country’s miners are trying to forestall a revision of the 2002 mining code that would increase mineral royalties and taxes and remove several tax exemptions. While legislative debate on the revisions was originally scheduled in the parliamentary calendar for the session ending in June, Congolese Mines Minister Martin Kabwelulu said Thursday no date had been set.

The government has committed to reopen negotiations over the terms, the FEC said. The revision “could not have come at a worse time, and will have dramatic consequences for the future,” it said.
The government says the revisions will allow it to more equitably benefit from its mining industry, which was nearly ruined during a series of wars that officially ended in 2003.

Copper, Cobalt

Miners produced 265,636 metric tons of copper and 16,293 tons of cobalt in the three months through March, the FEC said.

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