DAKAR (Reuters) – In an ornate room in Democratic Republic of Congo’s presidential palace last week, some of global mining’s most powerful men faced off against government officials over proposed changes to the country’s mining code.
Facing the officials, including President Joseph Kabila, the executives at times threatened to pursue arbitration or close mines if the government went ahead with changes including royalty increases, according to one of the president’s top advisers, Barnabe Kikaya bin Karubi, who attended the meeting.
But there was no mistaking the sense of defeat as executives from Glencore, Randgold, Ivanhoe and other firms descended the red carpeted stairs after six hours to accept before the media a mining code that hikes taxes and removes exemptions for cobalt and other minerals.
It was an extraordinary climb down for companies that had campaigned tooth-and-nail for six years for better terms, and the president signed the bill into law two days later.
Congolese officials close to the process say that, in being so publicly combative, the miners overplayed their hand, and in so doing hardened the government’s resolve. “We realised the bad faith on their part,” said Patrick Kakwata, president of the National Assembly’s Natural Resources Commission, which oversees mining legislation.