ABN - In the wake of the signing into law of a new mining code in Democratic Republic of Congo (DRC), environmental NGO Global Witness has warned its ad hoc application could lead to corrupt deals.
On 9 March, DRC’s President Joseph Kabila ratified a controversial new mining code replacing the 2002 law, despite facing stiff opposition from major mining companies with interests and assets in the mineral-rich African nation.
The new mining code will increase taxes on mining firms and increase government earnt royalties in the sector, replacing the previous 2002 code that was increasingly viewed as being too investor-friendly by the state.
After the code was signed into law, Mines Minister Martin Kabwelulu confirmed that companies’ concerns would be considered on a case-by-case basis, a troubling prospect to Peter Jones at Global Witness.
“Case-by-case application of the new law risks opening the door to corrupt deals by unscrupulous companies seeking preferential treatment,” he said.
“The new law’s weak transparency and conflict of interest provisions further do little to prevent dodgy deals from draining revenues from the country’s mining sector.
“Congo must tighten-up its regulation so that such individuals cannot obtain privileged access to the country’s mineral wealth, which should instead be paying for much-needed schools, hospitals and roads,” he added.
DRC is Africa’s largest producer of copper and the world’s largest cobalt supplier, which is a vital component in modern rechargeable batteries, but its mineral wealth has often been abused by corruption and conflict-driven practises in the artisanal space.
Increasing global demand and the doubling of cobalt prices in the last year is thought to have been fundamental in the government’s thinking behind the new law.