Possible changes to DRC minng code, page-312

DRC downgraded to join risk rating alongside Venezuela

https://www.miningreview.com/top-stories/drc-downgraded-risk-venezuela/

A total of 30 countries have witnessed a significant increase in resource nationalism risks over the last year, including 21 major producers of oil, gas and minerals, according to a new index from global risk consultancy Verisk Maplecroft.

The Resource Nationalism Index (RNI) – which measures the risk of expropriation, the imposition of more stringent fiscal regimes, and pressure for companies to source goods and services from local providers – names the Democratic Republic of Congo (DRC) and Russia as two notable movers on the list. Both have been downgraded to ‘extreme risk’ in the ranking of 198 countries and join a group of eight nations where the risks to business from governments taking greater control of natural resources is highest.

Countries now rated ‘extreme risk’ for the issue include: Venezuela and DRC (joint highest risk globally), followed by Tanzania (3rd), Russia (4th), North Korea and Zimbabwe (joint 5th), Swaziland (7th) and Papua New Guinea (8th)........................................

DRC’s downward spiral

When it comes to squeezing investors, DRC is an extreme case in point. The country’s downgrade from 6th highest risk in the index to joint 1st was precipitated by its new Mining Code, which imposed onerous fiscal terms on existing operators and allows heightened levels of government interventionism in the sector.

Since June 2018, when the code came into law, the government has attempted to block commercial asset transfers, tried to usurp operators to glean more profit, and choked exports from a cobalt mine.

“The situation in DRC won’t improve anytime soon,” warns Verisk Maplecroft Africa Analyst, Indigo Ellis.

“The new president, while seemingly a change from the old guard of President Kabila, will not represent a significant departure from the status quo for mining regulation.”

In fact, the government is likely to include copper as a ‘strategic’ substance that will be subject to the punitive 10% royalties currently levied on coltan, germanium and cobalt.

With events moving fast in the country, we could see this come into force in 2019.