On April 5, 2013, the minister of mines of the Democratic Republic of the Congo (“DRC”), jointly with the minister of finances, enacted the Inter-Ministerial Decrees No.122/CAB.MIN/MINES/01/2013 and No.782/CAB.MIN/FINANCES/2013 on the regulation of commercial mineral products’ export (“Decree”) which raised strong oppositions from the mining industry in the DRC and negatively impacted the share prices of several listed mining companies active in the DRC.
The Decree banned the export of copper and cobalt concentrates while giving a 90-day moratorium to mining operators who still hold mining stockpiles of concentrates. Furthermore, the Decree specified that the stockpiles needed to be reported to the relevant departments of mines.
As pointed in our previous article on the analysis of the DRC’s ban on export of copper and cobalt concentrates (http://www.lexology.com/library/detail.aspx?g=60d620e7-5275-44ce-98e8-aef48d99e8ee), the Decree encountered many legal and practical challenges.
From a legal point of view, matters covered by the Decree may only be regulated by a law adopted by the DRC parliament. Such law is currently under preparation within the framework of the revision of the Mining Code. The implementation of the Decree encounters practical challenges as processing plants are today facing huge electric energy shortages making it difficult to transform concentrates in the DRC.
Acknowledging the lack of electric energy supply, the minister of mines, jointly with the minister of finances, enacted the Inter-Ministerial Decrees No.0327/CAB.MIN/MINES/01/2013 and No.855/CAB.MIN/FINANCES/2013 on July 4, 2013 (“new Decree”) that amends the Decree by postponing the ban on export of copper and cobalt concentrates.
More specifically, the new Decree amends the Decree by providing that exports of copper and cobalt concentrates are prohibited. At the same time, it gives a moratorium of up to December 31, 2013 for all mining operators who produce copper and cobalt concentrates.
Furthermore, the new Decree provides that during the period of moratorium, mining operators producing copper and cobalt concentrates may transform minerals either in the country or abroad. However, for transformation outside of the country, approval from the minister of mines shall be obtained. A copy of the contract with the foreign transformation entity shall be filed along with the approval request.
In addition to the many legal challenges encountered by the decree, as the lack of electric energy supply cannot be resolved before end of this year, it is highly probable that at the expiry of the period of moratorium, another moratorium on the ban on export of copper and cobalt concentrates will be granted to mining operators.