Canadian mining billionaire Robert Friedland has pleaded with investors not to “freak out” over a Congolese plan to hike mining taxes, despite the heavy damage that the plan has already inflicted on the stock prices of miners in the country.
Mr. Friedland, founder and executive chairman of Ivanhoe Mines, says the international miners have been “gored” but they are like “a herd of antelopes with our horns pointing out” as they co-operate on a united campaign against the sharp tax increases in the Democratic Republic of the Congo.
Ivanhoe’s stock price has fallen by 24 per cent since the new mining code was enacted last week. Ivanhoe is developing the huge Kamoa-Kakula copper project in Congo, which Mr. Friedland predicts could eventually become the biggest producing copper mine in the world.
The revised mining law would increase copper royalties from 2 per cent to 3.5 per cent, and would create a 50-per-cent “super-profits” tax if commodity prices rise much faster than expected. It also eliminates a clause that would have protected existing miners from tax increases for 10 years.
Congo’s parliament approved the new tax code last week, but the law has not yet been signed by President Joseph Kabila.