Congo and Kenya are among a string of minerals-rich countries across Africa seeking to raise state holdings in lucrative resource contracts, in a trend that could deter international investors.
Shares in Tiger Resources, which produces copper at the Kipoi mine in DRC, slumped 16 percent to A$0.305 on the back of the news, even though Kipoi is already 40 percent owned by DRC’s state-owned Gecamines.
“We believe existing mining operations terms and conditions affecting Tiger will be honoured,” Tiger Resources Managing Director Brad Marwood said in a statement.
Congo — which holds rich deposits of copper, tin, cobalt and gold — is reviewing its ten-year-old mining laws after the government said it wanted to increase receipts from the sector. The new law is expected early next year.
“We’ve proposed (a government stake) of 35 percent when an exploration permit is transformed into an exploitation permit. It is currently 5 percent,” Mines Minister Martin Kabwelulu told Reuters by text message on Tuesday.
Chinese-controlled MMG Ltd, which acquired the Kinsevere mine in DRC with its $1.3 billion takeover of Anvil Mining in February, said companies need stable rules to justify investing in power, road and rail infrastructure for mines.
“Now would be the wrong time for the government to make a greater grab for share,” MMG spokeswoman Sally Cox said.
MMG and Tiger both said they were talking to the government about the proposed changes.
“We welcome their commitment to further consultation and we’ll continue to work on any changes,” Cox said.
MMG’s bid for Anvil was delayed late last year due to prolonged negotiations with DRC’s Gecamines over the change of control at Kinsevere.
MMG shares rose 0.3 percent to HK$3.09 in early trade in Hong Kong. Reuters