DR Congo president likely to sign mining tax law if accompanied by broader deal

DR Congo president likely to sign mining tax law if accompanied by broader deal

The president of the DR Congo will meet with international mining industry leaders to discuss a mining code bill adopted

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Photo: Simon Dawson/Bloomberg

The president of the DR Congo will meet with international mining industry leaders to discuss a mining code bill adopted by parliament.

Awaiting President Joseph Kabila’s signature, the bill would increase royalties collected from the mining industry, particularly cobalt, by fivefold to 10%.

But miners argue the law would damage investor confidence, as 33% of the country’s GDP derives from its industrial output primarily comprised of mining activities. As Mr Kabila is heavily invested in the sector, owning close to 150 companies with permits in the DR Congo, he faces a conflict of interest as both investor and politician.

The president’s economic and political power means he is in a strong negotiating position. While his personal finances—and the country’s economy—may suffer from divestment if the bill is signed, Kabila might be able to leverage the move to fend off political challenges to his legitimacy. However, Kabila’s likely course of action will be to negotiate an agreement in which he signs the bill but discusses alternatives, such as an agreement on future contracting or long-term tax relief to appease industry leaders and protect his own wallet. 

Delve deeper: The cobalt boom: recharging trouble in the Congo

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