DRC Reviewing Mining Licenses


First Quantum Minerals' Lonshi operation in the
Congo, shown here, could potentially be affected by a
government edict banning cross-border shipment of
ore from Congo to Zambia
The government of Democratic Republic of the Congo (DRC) in late March announced that it would review all existing mining licenses and that no new licenses would be issued until the review is complete. The government offered assurances that its objective is to ensure that companies are complying with the conditions of their licenses and that the licenses are fair to the state. If that proved not to be the case, licenses would be renegotiated; however, the government said, it did not intend to annul licenses. The review process was expected to take at least 90 days and to encompass about 70 companies, some of which have advanced mining projects but many more that are still in the exploration stage.

The review provoked very little public comment from companies pursuing advanced projects in DRC. In a conference call on April 11, Arthur Ditto, president and CEO of Katanga Mining, said his company was taking a positive view of the contract review process and that the company’s relations with the government were proceeding in a business-like way.

The conference call focused primarily on progress at Katanga’s Kamoto/ Luilu redevelopment project in the Kolwezi district of Katanga province. The Kamoto underground mine is now operational, with the first round having been blasted on March 21, 2007. Work at the Kamoto concentrator is on schedule for startup in July 2007, and work at the Luilu metallurgical plant is progressing toward startup in September. The company expects to begin shipping electrowon copper during the fourth quarter of 2007.

In other DRC news, in early March, Moise Katumbi, governor of Katanga province, imposed a ban on cross-border shipment of ore from DRC to concentrators in Zambia and said that in six months the ban would be extended to shipment of concentrates from DRC to Zambian plants for downstream smelting or SX/EW processing. The goal of the ban was to keep such value-added processing in Katanga province for the benefit of the province, Katumbi said. Impacted companies include mid-tier copper producers First- Quantum Minerals, which trucks ore from its Lonshi mine in DRC 35 km to its Bwana Mkubwa processing plant in Zambia for treatment, and Metorex, which ships concentrates from its Ruashi mine in DRC to its Sable SX/EW operation in Zambia. How these bans might ultimately play out remained unclear as of mid-April..