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Copper output in D.R Congo falls; drops revision of the mining code

Copper output in D.R Congo falls; drops revision of the mining code

Democratic Republic Of Congo

Copper production in Democratic Republic of Congo dropped for the first time in six years in 2015 and this year could be another tough one, according to the country’s the Chamber of Mines.

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.

We can't add to the crisis we are in

“Inadequate and highly non-transparent management by state-owned electricity supply company SNEL is the single biggest factor inhibiting the development of the mining industry” the chamber said in a statement.

Since 2012, inadequate power supply has required copper miners to import electricity from neighboring Zambia or invest in expensive diesel-powered generators, increasing operating costs at a time when metal prices are falling.

According to the country’s central bank, 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 mineral rich country has also dropped plans to revise its mining code to boost government revenues, the country’s mines minister said on Wednesday.

“We can’t add to the crisis we are in,” said the Mines Minister, Martin Kabwelulu.

Congo began reviewing the mining code set in 2002, in 2014.

Revised laws approved by the government in March included increasing profit taxes to 35% from 30%, raising the state’s free share of new mining projects to 10% from 5% and royalties on copper and cobalt revenue to 3.5% from 2%.

The chamber of mines had opposed revisions to the code because of the potential negative impact it could have on investment in mining.

Mining and specifically copper output has been the key driver of growth in Congo since the end of civil war in 2003.

The economy is forecast to expand 7.3 percent this year, the fastest in sub-Saharan Africa after Mozambique and Ethiopia, according to data from the International Monetary Fund.

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