Source:Joe Bavier; Daniel Magnowski, http://www.guardian.co.uk

Congo govt calls for swift end to mining review

• Reuters,
  

KINSHASA, Nov 24 (Reuters) - Congo's recently-appointed government called on Monday for the rapid completion of a delay-plagued review of mining contracts as it seeks to combat waning confidence among investors.

The mineral-rich central African nation set up the review process early last year, aiming to overhaul 61 deals mostly agreed during the chaos of a 1998-2003 war, and guarantee a fair share of revenues for the state.

The review was initially due to be completed within six months.

"We have asked the Mines Minister to accelerate the process in order to reassure our partners," Information Minister Lambert Mende told Reuters following a cabinet meeting.

"He assured us that it was nearly finished," Mende said.

Earlier this month, Congo's central bank governor cited the lagging process, along with weakening global demand for metals and a worsening armed conflict in the eastern borderlands, as responsible for an acute mining sector slowdown.

Congo's mines ministry announced it had completed its initial review of the deals in February and promised a "brief and open" appeal process to avoid litigation and international arbitration.

Of the 61 contracts, 14 are classed as "green" meaning acceptable, 26 are "orange" which require agreement on some points, and 21 are "red" which face cancellation.

However, contract renegotiations between state miners and their private partners have dragged on for months.

Interest in Congo's once mighty mining sector had boomed following 2006 polls, which confirmed Joseph Kabila as president and were intended to usher in a new era of stability and economic growth.

The huge southeastern province of Katanga has seen major investment from international mining companies such as Freeport McMoRan Copper and Gold, BHP Billiton, and Katanga Mining.

The sector has been hit hard by the dramatic fall in copper and cobalt prices in the past six months, however, with many companies now delaying development projects or suspending operations entirely.

Benchmark copper prices as set on the London Metal Exchange ended Monday's trading $3,750 per tonne, down almost 60 percent from the record high they hit in July.

On Friday, Toronto-listed Katanga Mining said it had temporarily halted mining operations at two sites as a result of lower prices of aerospace metal cobalt.

Adding to Congo's woes, a four-year-old Tutsi-dominated rebellion has gained significant ground in recent weeks, throwing the world's largest United Nations peacekeeping mission into disarray, and causing investors to rethink the prospects for long-term stability. (Reporting by Joe Bavier; Editing by Daniel Magnowski)

Source:Joe Bavier; Daniel Magnowski, http://www.guardian.co.uk

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