Insight
Democratic Republic of Congo - Impact of the Proposed Mining Code Changes
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
In late January 2018, the parliament of Democratic Republic of Congo (DRC) passed a new law that proposed a substantially revised Mining Code. Among a raft of proposed changes, the most pertinent to the copper producers in the DRC are the following clauses: • Royalties to be increased from 2% to 3.5% for non-ferrous and base metals and from 2.5 to 3.5% for precious metals and calculated on the gross market value of the products; • Creation of a special 10% royalty on minerals deemed by the State to be 'strategic substances', the list of such substances to be determined by the upcoming application texts; • Creation of a special 50% tax on 'excess profits', defined as profits made when a commodity exceeds by 25% the price used in the Bankable Feasibility Study. This Insight report examines the implications for the copper mining industry in the DRC.
Table of contents
- Executive Summary
- Copper royalty rise has limited impact, 10% cobalt royalty provides C3 disturbance
- Excess profits tax delivers excessive C3 uplift
- Comparing DRC C3 costs against global mine costs
- Positive DRC cost curve movement eroded
- Country competitiveness challenged, DRC cost quartile positioning slides
- Conclusions
Tables and charts
This report includes the following images and tables:
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Cobalt demand and Cobalt LME priceDRC C3 potential cost change with the new Mining Code royalties appliedDRC C3 cost change with new Mining Code royalties and Excess Profits Tax applied
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Global C3 cost comparison against DRC assets 2018-2025Global C3 cost comparison against DRC assets 2018-2025, with excess profits tax impacts shown on average of only those mines affectedGlobal C3 cost comparison against DRC assets 2015-20252017 C3 country cost curve, showing DRC position against other global copper producersForecast 2019 C3 country cost curve, prior to Mining Code changes, showing DRC position on the global copper cost in the first quartile of producers by countryForecast 2019 C3 country cost curve, with Mining Code changes implemented. DRC pushed from first to fourth quartile on the country cost curve
What's included
This report contains:
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