Congo launches mining contract review

KINSHASA – Democratic Republic of Congo’s government launched a review of around 60 mining contracts yesterday aimed at ensuring the deals are legal and fair.

Most of Congo’s mining contracts were agreed during a 1998-2003 war or under a three-year transitional government, which included the various factions from the six-year conflict. “The experts will have the delicate job of exposing all irregularities that taint these contracts,” Congo’s Mines Minister Martin Kabwelulu told journalists and diplomats in the capital Kinshasa.”They will highlight the dishonesty in each contract, and then we will make propositions to each partner,” he said.Congo, which holds a tenth of the world’s copper reserves and a third of its cobalt, suspended all negotiations on future mining deals on March 27, pending the completion of the review.Local and international watchdogs have criticised many of its existing deals for not conforming to international norms.A shake-up of the sector had been widely expected since President Joseph Kabila took office in December after winning the mineral-rich but cash-strapped central African nation’s first democratic elections in more than 40 years.With the return of stability in much of Congo, investment by major mining companies has boomed over the past few years.Since the review process was announced in March, ministry officials have sought to reassure investors by saying the review panel is not planning a widespread overhaul of the contracts.However, Kabwelulu stopped short of saying no contracts would be dissolved as a result of the findings.”I don’t want to say just yet if there will be any eventual cancellation of contracts.We are confident that the partners we’ve signed contracts with want to see our country develop.I hope no contracts will be cancelled,” he said.Peter Rosenblum, a lawyer with US-based Carter Centre brought in to advise and monitor the panel’s work, said some cancellation of contracts could be unavoidable.”The revisitation that they are speaking of does not imply cancellation or renegotiation and doesn’t exclude cancellation or renegotiation in extreme circumstances,” he said.”If there are agreements that are patently illegal, then I don’t see how anyone is going to avoid some kind of cancellation,” he told Reuters.Rosenblum said he expects all mining contracts reviewed during the process to be made public in order to ensure transparency.Companies operating or prospecting in Congo’s fast-expanding mining sector include the world’s largest diversified miner BHP Billiton and the world’s third-biggest gold producer AngloGold Ashanti.US major Phelps Dodge, recently purchased by Freeport-McMoRan Copper & Gold Inc, and London-listed Nikanor Plc are investing heavily in projects in Congo’s southeastern Katanga province, the country’s mining heartland.Ministry officials have said they want the entire review of contracts to be completed within 90 days.However, Rosenblum said he expected the process to take around six months.Nampa-Reuters”The experts will have the delicate job of exposing all irregularities that taint these contracts,” Congo’s Mines Minister Martin Kabwelulu told journalists and diplomats in the capital Kinshasa.”They will highlight the dishonesty in each contract, and then we will make propositions to each partner,” he said.Congo, which holds a tenth of the world’s copper reserves and a third of its cobalt, suspended all negotiations on future mining deals on March 27, pending the completion of the review.Local and international watchdogs have criticised many of its existing deals for not conforming to international norms.A shake-up of the sector had been widely expected since President Joseph Kabila took office in December after winning the mineral-rich but cash-strapped central African nation’s first democratic elections in more than 40 years.With the return of stability in much of Congo, investment by major mining companies has boomed over the past few years.Since the review process was announced in March, ministry officials have sought to reassure investors by saying the review panel is not planning a widespread overhaul of the contracts.However, Kabwelulu stopped short of saying no contracts would be dissolved as a result of the findings.”I don’t want to say just yet if there will be any eventual cancellation of contracts.We are confident that the partners we’ve signed contracts with want to see our country develop.I hope no contracts will be cancelled,” he said.Peter Rosenblum, a lawyer with US-based Carter Centre brought in to advise and monitor the panel’s work, said some cancellation of contracts could be unavoidable.”The revisitation that they are speaking of does not imply cancellation or renegotiation and doesn’t exclude cancellation or renegotiation in extreme circumstances,” he said.”If there are agreements that are patently illegal, then I don’t see how anyone is going to avoid some kind of cancellation,” he told Reuters.Rosenblum said he expects all mining contracts reviewed during the process to be made public in order to ensure transparency.Companies operating or prospecting in Congo’s fast-expanding mining sector include the world’s largest diversified miner BHP Billiton and the world’s third-biggest gold producer AngloGold Ashanti.US major Phelps Dodge, recently purchased by Freeport-McMoRan Copper & Gold Inc, and London-listed Nikanor Plc are investing heavily in projects in Congo’s southeastern Katanga province, the country’s mining heartland.Ministry officials have said they want the entire review of contracts to be completed within 90 days.However, Rosenblum said he expected the process to take around six months.Nampa-Reuters