DEMOCRATIC Republic of Congo’s Mines Minister Martin Kabwelulu said he has dropped plans to change the mining code in Africa’s biggest copper producer after opposition from mining companies.
“The mining code, which is currently in place, will stay in place,” Mr Kabwelulu said at a speech to investors in Cape Town on Wednesday.
“You don’t have to think about modifying your business plan. Those who are thinking of investing can do so based on this code.”
Copper production in the country dropped for the first time in six years in 2015, and this year could be another tough one as low commodity prices continue to bite, the Central African country’s chamber of mines said in Kinshasa on Wednesday.
Output dropped 3.3% in Africa’s top copper producer to 995,805 tonnes from 1.03-million tonnes in 2014, the first time production fell since the global economic downturn in 2009.
The sharpest fall was in the fourth quarter when production slumped 12% year on year, in part due to the suspension of some production at miner and trader Glencore’s Katanga Mining unit, the industry group said in its annual report.
The mine, one of the largest in Congo, producing 113,674 tonnes of copper in the first nine months of 2015, is not expected to reopen until mid-2017.
Congo’s economy is highly dependent on the mining sector, which accounts for about 20% of gross domestic product (GDP). Copper and cobalt alone accounted for 79% of the country’s exports in the first half of 2015, the central bank said.
Benchmark copper fell 25% last year, a slump that the chamber said could continue. Indeed, copper prices were expected to hit their lowest average in more than a decade this year as global supply outran demand, a Reuters survey of metal analysts showed in January.
The government scaled back its 2015 growth estimate to 7.7% from more than 10% because of low metals prices. It has said Katanga Mining’s 18-month suspension would cost it more than $200m in tax revenues this year.
The government expects growth to rebound to 9% this year while the International Monetary Fund (IMF) predicts 7.3% growth.
The country’s copper-producing southeast receives only about half the electricity it needs. The government is backing a series of projects to boost supply but the chamber said “inadequate and highly non transparent management” of the sector led to “little progress” in 2015.
The chamber’s report, however, cited causes for optimism, noting that new mines started commercial production in 2015 and several major projects that were expected to come online in the coming years.
Ivanhoe Mines’ Kamoa project, slated to begin production in 2018, is thought to be the world’s largest untouched high-grade copper discovery.
In the same report, the chamber of mines said gold production rose 30% to an estimated 25,516kg, partly because of stronger-than-expected production at Randgold Resources’ Kibali mine. Congo’s industrial gold production stood at near zero in 2011.
Production is likely to rise further as Randgold, AngloGold Ashanti and Banro Corporation continue to ramp up output at large mines they have opened in the past five years