Long wait over for DRC miners

The government of the Democratic Republic of Congo (DRC) says its seemingly unending mining contract review is over at last.

Well, mostly.

Officials say the massive Tenke fungurume project owned by Freeport McMoran (FXC-N) and Lundin Mining (LUN-T) still awaits final approval, but four other miners are breathing easier.

The government has approved contracts with AngloGold Ashanti (AU-N, AGG-A), Banro (BAA-T), Mwana Africa (MWA-L) and Gold Fields (GFI-N, GOF-L)

The latter, however, must still finish a feasibility study at its Kisenge project before its contract is fully approved.

The contract review was initially launched in early 2007 and examined 61 mining deals.

The government said the review was necessary to correct any bad deals that came out of the chaos of the 1998-2003 war. It has looked at 61 deals in the mining sector, the rest of which have already been settled.

The government says it has notified Freeport and Lundin that they have two months to get the review wrapped up.

The stumbling block on a deal appears to be over extra royalties payable to the government and on how large a role state-run Gecamines will play in the mines development and operation.

And while Freeport and Lundin will, no doubt, be working hard to complete a deal, one company, Vancouver-based First Quantum (FM-T), received a definitive answer. Unfortunately it wasn’t the answer it was hoping for.

The government has cancelled a copper and cobalt mining contract with the company for failing to move into commercial exploitation in the time frame laid out in the original contract.
First Quantum did receive some good news from the government in neighbouring Zambia.

The company was given the go-ahead to open a new copper mine in the country that will provide ore for its suspended Bwana Mkubwa processing plant.

In Toronto on Aug. 6 Banro shares were up 5¢ to $2.60 while First Quantum’s shares were off 8% to $69.85.