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REGIONAL NEWS - AFRICA 24 E&MJ • APRIL 2018 www.e-mj.com Mining Industry Submits Code Proposal to DRC Government On March 29, executives with mines operating in the Democratic Republic of Congo (DRC) submitted a formal pro- posal to the country's Minister of Mines Martin Kabwelulu that is designed to ad- dress concerns about the recently revised mining code as well as the government's revenue needs. The executives represent- ed more than 85% of the DRC's copper, cobalt and gold production and the most significant development projects, includ- ing Randgold Resources, Glencore, Ivan- hoe Mines, Gold Mountain International/ Zijin Mining Group, MMG Ltd., Crystal River Global Ltd. and China Molybdenum Co. Ltd. (CMOC) and AngloGold Ashanti. Among other things, it proposes link- ing a sliding scale of royalty rates to the prices of the key commodities, which in- dustry representatives believe would be a more effective mechanism than the wind- fall tax introduced in the new code and at current prices would immediately give the government a higher share of revenues than what is provided in the new code. It also deals with stability arrangements, state guarantees and mining conventions. Along with the stability afforded to convention holders, enshrined in the 2002 mining code is a 10-year stability clause which provides that the holders of mining and exploration titles will continue to be governed by the terms of the 2002 mining code for such period in the event of the implementation of any new law. This is the result of mid-March meet- ing convened in Kinshasa after DRC Pres- ident Joseph Kabila revised the mining code raising royalties on minerals and removing the stability clause, which re- sulted in more than $10 billion in direct investments by the mining industry. Spe- cifically, Article 276 states: Article 276: "The State guarantees that the provisions of the present Code can only be modified if, and only if, this Code itself is the sub- ject of a legislative amendment adopted by Parliament. The rights attached to or deriving from an exploration licence or mining exploita- tion licence granted and valid on the date of the enactment of such a legislative modification, as well as the rights relat- ing to or deriving from the exploitation licence subsequently granted by virtue of such an exploration licence, includ- ing among others, the tax, customs and exchange regimes set forth in this Code, remain acquired and inviolable for a ten- year period from the date of: a) the entry into force of the legisla- tive modification for the valid exploitation licences existing as of that date; b) the granting of the exploitation li- cence subsequently granted by virtue of a valid exploration licence existing on the date of entry into force of the legislative modification." The new proposal accepts 76% of the articles in the 2018 code and suggests changes to the rest only to ensure the ef- fectiveness and legality of the code. The mining industry representatives believe these changes will resolve issues with the code and contractual relationships while giving the DRC and its people increased participation in the proceeds of mining. At the beginning of March, Randgold Resources' and AngloGold Ashanti's Kiba- li mine, Glencore's Mutanda mine and Ka- moto Copper Co., the Kamoa-Kakula mine, MMG's Kinsevere mine and CMOC's Tenke Fungurume mine resigned from the Feder- ation des Entreprises du Congo (FEC), the Congolese Chamber of Commerce. These mines, which represent more than 85% of the DRC's copper, cobalt and gold pro- duction, said the FEC does not adequately represent their interests. Sissingué Reaches Commercial Production Commercial production has been achieved at the Sissingué gold mining operation in Côte d'Ivoire, according to Perseus Mining. Ramp-up of operations at the Sissingué gold mine has been completed ahead of schedule. Mill throughput rates, gold recov- ery rates, grade reconciliation, mining rates exceed the criteria established by Perseus to define "commercial production" and the mine was cash flow positive on March 31. "Reaching commercial production at our Sissingué is a very important mile- stone for Perseus as we now have a sec- ond, high-quality cash flow stream that materially reduces our reliance on our Edikan mine in Ghana for cash gener- ation," said Perseus Mining Managing Director and CEO Jeff Quartermaine. "Cash flows from both operations will be deployed to partially fund the Yaouré gold mine, our third planned operation, the development of which is scheduled to start later this year, now that Sissingué is successfully up and running." Perseus has transformed from a single mine, single country operation into a mul- timine, multijurisdictional business, and the company said it is well-positioned to Surrounded by mining executives, the DRC Minister of Mines Martin Kabwelulu speaks at a news conference in Kinshasa on March 7. Robert Friedland, chairman, Ivanhoe Mines, stands to Kabwelulu's right. Mark Cutifani, CEO Randgold, stands to the right of Friedland, and Glencore's CEO Ivan Glasenberg can be seen between Friedland and Kabwelulu.



