Congo Rejects Miners' Contract Proposals

The Democratic Republic of Congo has rejected contract revisions proposed by six of the biggest mining firms there and will extend a much delayed review by six months, the deputy mines minister said.
The review, which aims to boost state revenues from agreements mostly signed during the chaos of the 1998-2003 war and a corruption-plagued post-war transitional government, was initially due to last six months.
Of 61 contracts evaluated under the review launched in 2007, six are unresolved. They include deals with AngloGold Ashanti, Banro, First Quantum, Gold Fields, Freeport-MacMoRan and Mwana Africa.
"The outcomes of negotiations to date are far from the terms of reference, therefore they have been rejected by the government," Victor Kasongo told Reuters.
Banro said it had received official confirmation from the government in February that its contracts were compliant with Congolese law and not heard anything to the contrary since then.
Negotiations between the six companies, representatives from state mining companies and the mines ministry broke down late last year. The government accused the companies of walking out of talks, a claim the miners denied, and earlier this year extended talks an additional 45 days.
"These companies have over 60% of our proven reserves. We can't just leave it like this ... They can come to discuss how to improve their proposals, or, in six months time, we'll shut down everything," Kasongo said.
Cash-strapped Congo's mining-dependent economy has suffered greatly due to a worldwide slump in demand for mineral exports - its primary foreign currency earner.
The majority of companies operating in its copper and cobalt sector, once a promising treasure trove of largely unexploited concessions, have either suspended projects or closed down.
In December, Congo lowered its 2009 copper export forecast to 365,000t from a pre-crash projection of 410,000t. Expectations for cobalt were slashed by more than half.
Local authorities in Katanga province, the country's mining heartland, estimate that around 300,000 miners have lost their jobs due to the crisis.
Projected direct foreign investment to Congo for 2009 has been cut by two-thirds. Economic growth this year is expected to drop to 2.7% from a 2008 average of 8%.