Congo to Close Freeport Contract Talks by Month’s End
2009-02-06 16:07:03.785 GMT
By Franz Wild
Feb. 6 (Bloomberg) -- Democratic Republic of Congo’s government will conclude talks with Freeport McMoRan Copper & Gold Inc. and other mining companies on a review of contracts “before the end of the month,” Deputy Prime Minister Emile Bongeli said.
While Freeport and five other companies have yet to finish negotiations, talks “have advanced a great deal,” Bongeli said today in an interview in the capital city of Kinshasa. The other companies are First Quantum Minerals Ltd., AngloGold Ashanti Ltd., Gold Fields Ltd., Banro Corp. and Mwana Africa Plc.
The announcement marks the culmination of a much-delayed process aimed at boosting state revenue from the industry. The central African country is depending on proceeds from its mineral reserves, which include a third of the world’s cobalt and 4 percent of all copper, to rebuild an economy shattered by persistent civil wars.
Congo’s government sought a larger share of profits as metals prices soared and investors became less concerned about local risk following landmark elections in 2006. Some projects that had struggled to find financing as long as uncertainty remained over their titles were cut back as the world financial crisis set in last year.
“We want to guarantee all the investments, but we also want the state budget to grow so we can rebuild our country,”
Bongeli said.
Interest Rates
Congo, which last month cut import and export taxes for miners, will continue to improve its investment climate, Bongeli said. “We are doing what we can to make this an attractive environment,” he said.
The nation’s central bank raised its main interest rate yesterday for the third time this year with a boost to 65 percent, up from 28 percent at the beginning of January. The Congolese franc has sunk because of stunted mine output linked to plummeting metals prices and spending on a war against rebels in the country’s east. The currency has slid 19 percent to about 713 francs per dollar since Jan. 1, data compiled by Bloomberg shows.
Metorex Ltd. became the latest miner to announce the final results of Congo’s review today. The Johannesburg-based company agreed to yield a 5 percent stake in its Ruashi copper project to state-owned Gecamines and raised a one-time mineral fee due to the government by $1 million to $4 million. |
