• COUNTRY IN FOCUS
The Democratic Republic of Congo ( DRC ), which produces approximately 70 % of the world ’ s cobalt , a key mineral in the manufacture of batteries that powers electronic devices and electric vehicles , has the largest cobalt reserves in the world . The DRC also has vast reserves of copper , gold , diamonds , zinc , and other minerals . With the ever-increasing demand for battery minerals , as the world transitions to a green economy , and with the trending focus on Environmental , Social , and Corporate Governance ( ESG ) compliance and reporting , the natural expectation is for there to be significant investment in the DRC copper and cobalt .
Covid-19 has taught the world ’ s mining and natural resources sector many lessons , one of which , is how important it is to diversify risk by investing in the so-called ‘ safe haven ’ minerals , such as gold , and the expectation would also be for investors to focus on the DRC , with its substantial gold reserves . Gold has ( despite some ups and downs ) performed extremely well over the last twelve to eighteen months , and investment in exploration and operational mines , shareholding , and physical gold has generally netted good , largely stable , returns .
Despite the DRC being endowed with vast mineral reserves , particularly cobalt , copper and gold , investment in existing operations , and new mines , has not been at expected levels .
There are a number of reasons for this , most notably the fragile political alliance that has been formed following the election of President Felix Tshisekedi , in the place of former President Joseph Kabila , and the substantial changes made to the DRC ’ s mining laws , in 2018 . Other challenges have included socio-economic demands for participation in the benefits that flow from the mining and natural resources sector , with related community activism , and a large artisanal mining subsector , with the consequences that flow from this largely unregulated subsector , such as smuggling , environmental impacts , exploitation of vulnerable people , disputes between the artisanal miners and the large mining companies , and concerns surrounding security , flowing from incursions by organisations which disrupt the mining operations . While attempts have been made to regulate artisanal mining , it is still largely illegal , and goes hand in hand with criminal organisations and structures , smuggling , child labour , and rule by fear .
Politics in mining The current fragile political environment in the DRC has impacted , significantly , on the mining and natural resources sector in the DRC . The mining and natural resources sector engaged for a lengthy period with the DRC government on the proposed changes to the DRC ’ s mining laws , and the expectation was created , including through former president Joseph Kabila , that once the amendments to the DRC ’ s mining laws were promulgated , there would be ongoing discussions in relation to key changes such as the provisions relating to ‘ super profits ’ and the significant increase in royalties , including in relation to those associated with so-called ‘ strategic ’ minerals ( which included copper ).
When President Felix Tshisekedi was appointed , he made it clear that the amended mining laws were in place , had to be complied with , and essentially , that no further discussions would take place . Despite this however , and probably because of ongoing pressure from stakeholders , and the fluctuating ( including significant drop ) prices of key minerals , which impacted on the DRC ’ s perceived position of power , resulted in the DRC government embarking on a popularisation initiative , in support of the DRC ’ s Revised Mining Code ( Revised Code ), which included publication of an annotated version of the Revised Code . The annotated version of the Revised Code has , unfortunately , not provided the required clarity , and in many instances , the annotated version simply restates the content of the Revised Code , without any interpretation . The annotated version of the Revised Code , which was published in July 2020 has therefore unfortunately , not allayed the fears of investors surrounding aspects such as the reduction of stabilisation periods from ten years to five years , calculated from 2018 when the Revised Code came into force and effect , the ‘ super taxes ’ and increased royalties including for strategic minerals .
A revised decree The Revised Code was promulgated on 9 March 2018 and amended the 2002 Mining Code . Later , on 12 June 2018 , the
The DRC hosts vast reserves of minerals .
16 • African Mining • June 2021 www . africanmining . co . za