M a r k e t N e w s
Kinshasa: Congo Shelves New Mining Tax Law
Posted on : Tuesday, 15th March 2016
AFRICA's largest copper producer, the Democratic Republic of Congo (DRC) has reportedly suspended consideration for a new mining tax law until the prices of the metal improve.
According to international media, the DRC government says it suspended the consideration of the mining code awaiting recovery of the prices on the international market.
"We have said that reform is suspended and we are going to continue when the context allows it," Mines minister Martin Kabwelulu was quoted as having told reporters in Kinshasa last Thursday.
Determined to increase State revenues while tightening regulations, the government has been reviewing the 2002 mining code for some time, amid resistance from mining investors who warn of possible loss of investments.
Several mines in the southeast of the country have downsized their workforce due to the fall in the prices of copper, whose benchmark prices went down by 25 per cent last year.
Although still Africa's largest copper producer, DRC's production slightly went down to 995,805 tonnes last year but there is still pressure for the government to get more revenue from the sector.
For Zambia, last month Cabinet announced the redesigning of a sliding mining taxation regime to enhance mine operations, reduce job cuts and increase revenue from the sector when copper prices rise.
In another development, the Ndola District Chamber of Commerce and Industry (NDCCI) is hoping that the recent rebound in copper prices can be sustained for mining houses to re-engage suppliers.
Last week, copper prices on the London Metal Exchange (LME) rose by five per cent, trading above US$5,000.
NDCCI secretary, Paul Chisunka said although the rebound looks marginal it would have a positive impact on the economy.
"The movement is marginal and we hope that it can be sustained for the country's economy to stabilise," Mr Chisunka said.
Mr Chisunka said reduced copper prices had affected many spheres of the economy causing liquid to decline but with rebound - if sustained - many companies would reconsider reinvesting and re engage the workers they had laid off.
He encouraged stakeholders in the economy not to lose focus on the diversification drive because of the rebound in copper prices.
Source : allafrica.com
