More delays for DRC’s big miners

Miners hoping for an end to the protracted mining revision process in the Democratic Republic of Congo (DRC) will have to wait even longer for a resolution.

Six of the biggest miners with operations in the country have had their proposed revisions rejected by the government, which says it will extend the review yet again, this time by six months.

The miners affected include AngloGold Ashanti (ANGJ-J, AU-N), Banro (BAA-T), First Quantum (FM-T, FQM-L), Gold Fields (GFI-J), Freeport-MacMoRan (FCX-N) and Mwana Africa (MWA-L).

A spokesperson for the government told Reuters that the negotiations are still “far from the terms of reference” and consequently the companies proposals were rejected.

The news is especially bitter for Banro as in February the company announced that the government had told it that its contracts were compliant with Congolese law.

Negotiations have been fraught with delays since the government first announced it would review contracts back in late 2007. Over that time 61 contracts were reviewed, with only these final six remaining unresolved.

The latest rejection came with an ominous threat from the government as well, as it warned that if the proposals were not improved within the six month period, than the projects would be shut down.

The combination of continued operational uncertainty and weaker base metal prices have taken their toll on the once hot copper region in the southeastern part of the country.

Many miners, like London-based Katanga Mining (KAT-T), have scaled back or shut down projects in there region.

That has helped create a bleak picture for a country that was pinning much of its hope for economic revival on the back of mining.

Reuters also reports that local authorities say some 300,000 mining jobs have been lost since the financial crisis struck, and economic growth for 2009 is expected to drop to 2.7% from 8% last year.

As for copper production, the country’s overall forecast for copper exports for 2009 dropped to 365,000 tonnes, down from a previous projection of 410,000 tonnes. Cobalt exports are expected to be cut in half.

The news took its toll on the interested parties stocks as AngloGold Ashanti shares were off 3.13% in New York to US$29.72; Banro shares were off 3.7% in Toronto to $2.07; Mwana Africa shares were down 3.2% in London to £5.93; First Quantum shares were off 3.4% to $43.80; Gold Fields were off 4.2% to US$10.09; and Freeport-McMorRan shares were off 0.8% to US$43.40.