DRC sees 10% levy on 'strategic metals'

2018-02-09 20:32
(File, iStock)

(File, iStock)

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Kinshasa - The world's biggest producer of cobalt, a key ingredient in modern batteries, plans a five-fold increase in tax on the commodity as part of an overhaul of its mining laws, industrial sources said on Friday.

The Democratic Republic of Congo would impose a tax of 10% on so-called "strategic metals" under the plan, a copy of which was obtained by AFP.

The government last year signalled its intention to reform its 2002 mining code, which it considered to favour foreign investors at the expense of the economy.

A first version of the draft law - examined by the lower house, the National Assembly, in December, and then by the Senate in January - envisaged a tax take of five percent.

This has been revised upward to 10%, under a new draft approved by a joint commission of the Senate and National Assembly on January 27.

At present, the state levies a tax of two percent on non-ferrous metals - copper and cobalt - which is based on the value of sales, from which some costs are deducted.

The draft law is now in the hands of President Joseph Kabila, Mining Minister Martin Kabwelulu said at an annual mining conference in South Africa this week.

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Sources in the mining industry said the prime minister will issue a decree to spell out the commodities on the "strategic metals" list, as the term does not exist under the current mining code.

But, they said they had been informed by government experts that cobalt would be included.

Shareholders in big mining corporations with interests in DRC, including Glencore and Rangold, have written to Kabila to express their concern, hoping that the latest version of the law will be revised, they added.

The global boom for smartphones and electric cars has pushed up the price of cobalt to more than $80 000 a tonne, compared with less than $23 000 a tonne two years ago.

DRC is also the top African producer of copper, which last year recovered from a slump that hit in 2014. Copper is currently trading at more than $6 800 a tonne, around 50% higher than at the trough of the downturn in February 2017.

Read more on:    glencore  |  drc  |  central africa

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