Slow review hurts DRC miners

Moise Katumbi told Reuters that the delays in the review process were unfairly putting a brake on the investment plans of major mining companies active in Katanga, which holds the bulk of Congo's copper and cobalt reserves.

The vast former Belgian colony in central Africa set up a mining contract review commission last year after a new government took office following the holding in 2006 of the country's first democratic elections in more than four decades.

The process, which aims to overhaul deals agreed during the chaos of a 1998 to 2003 war and ensure a fair share of mining revenues for the state, was initially due to last six months.

Taking too long

"It's a problem that this revisiting of contracts has taken nearly a year," Katumbi told Reuters in an interview.

Congo's mines ministry announced it had completed its review of 60 deals on February 18 and transmitted the results to companies concerned. It said it would institute a "brief and open" appeal process to avoid litigation and international arbitration.

However, many companies are still waiting to meet with state mining authorities to discuss what changes to their contracts will be necessary.

"For the moment, it's frozen. Everyone is waiting for the review. Today the bankers don't want to give credits to miners, because the banks must feel secure. They must be able to clearly see what's going on," Katumbi said.

Investors penalised

Congo's once mighty mining sector, a potential treasure trove of largely unexploited concessions, has seen its output decrease and its infrastructure crumble during years of conflict, corruption and neglect.

Interest in mining has boomed again since the holding of the polls, which confirmed Joseph Kabila as president and were intended to usher in a new era of stability and economic growth.

The huge southeast province of Katanga has seen major investment from international mining companies such as Freeport McMoRan Copper and Gold Incorporated, BHP Billiton, and Katanga Mining Limited.

Katanga's governor said that while he backed a review to clean up the sector and advance development, big investors were being unfairly punished by the slowness of the process.

No "viable" contracts

"(For) those that have had concessions for 20 years and have never done anything... it's normal (to carry out a review). The government must recuperate those concessions and give them to serious companies," he said.

"But we want these large companies that are investing now to have their contract reviews completed as quickly as possible, so they can get started again."

In November, a leaked preliminary report from the review commission said none of the contracts under study was considered "viable" in their current form. It said that all would require renegotiation or should be cancelled.

Congo's deputy mines minister, Victor Kasongo, told a mining conference in South Africa earlier this year that the review panel had been surprised by the number of flawed contracts, which were largely responsible for the delays in the process.

- Reuters