February 5, 2018 / 2:16 PM / 3 months ago

Congo's Gecamines wants to revise contracts with mining partners

* Gecamines wants renegotiations to start in second quarter

* Congo is Africa’s biggest miner of cobalt, copper

* Foreign investors raise concern about new mining law

By Barbara Lewis

CAPE TOWN, Feb 5 (Reuters) - Democratic Republic of Congo’s state mining company Gecamines said on Monday it wanted to renegotiate contracts with its international partners this year to give the state a bigger share of the revenues.

Congo is Africa’s biggest copper and cobalt producer and also mines gold and diamonds, but it is one of the world’s least developed countries with an annual budget of roughly $5 billion.

Parliament passed a new mining code last month to raise royalties and taxes, prompting international miners to say it would deter foreign investment. President Joseph Kabila has yet to approve the new law.

Gecamines’ partners on mining projects include Glencore , China Molybdenum and Ivanhoe.

Gecamines Chairman Albert Yuma told a mining conference in Cape Town that talks on contract revisions should to start in the second quarter and be completed by the end of 2018 or start of 2019.

He said existing deals did not give Gecamines or the state “a sufficient share” of the nation’s mineral wealth.

“This imbalance is mainly the result of a history that has placed our state in a difficult situation and forced it to negotiate in a weak position,” he said.

“We therefore call for a rethink of our past partnerships to enable them to achieve the only purpose for which they were signed: to provide benefits for the state and Gecamines,” he said.

Gecamines, which is heavily indebted and has consistently failed to meet production targets, said it had carried out contract audits in the past but had not revealed the results.

Since its heyday in the mid-1980s, Gecamines has sold most of its assets and entered joint ventures with foreign partners, which include 12 joint ventures and five mine leasing contracts.

The U.S.-based Carter Center said in a report in November that Gecamines failed to internally register $750 million in income between 2011 and 2014, and that much of this was now untraceable. Gecamines denied the charge.

Elisabeth Caesens, director of Resource Matters, a Brussels-based group that advocates better resource management, said any renegotiation had to ensure all Congolese people benefited.

She said Gecamines had “little to show for the hundreds of millions it collected from the previous contract renegotiations in 2006-2009”.

Gecamines says international non-governmental organisations have overstated the firm’s revenues while understating its contributions to the national treasury.

Editing by Aaron Ross and Edmund Blair

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