As many as 25 copper, diamond and gold deals in the Congo could be cancelled

18 October 2009 | 04:29 Code : 19586 Geoscience events
Some 25 mining contracts in Congo involving "second tier" copper, diamond...

Some 25 mining contracts in Congo involving "second tier" copper, diamond, and gold assets could be scrapped if companies fail to present the results of feasibility studies by a December dealine, the Ministry of Mines said on Thursday."We will see if the studies were done. They will be able to present their reasons, and the cabinet will decide whether to extend (the deadline) or withdraw the permits. The goal is to have these assets in capable hands," Deputy Mines Minister Victor Kasongo told Reuters.Congo completed a review of 61 mining contracts in August as part of an effort to boost state revenues from agreements signed mostly during the chaos and corruption of a 1998-2003 war and the transitional government that followed.However, many companies that saw their partnerships approved by the review panel have yet to present required feasibility study results, Mines Minister Martin Kabwelulu told an investor conference in Kinshasa on Wednesday."Certain partners started work without finalising their feasibility studies," he said.The companies were initially asked to present the results among documents submitted at the start of the long-delayed review process. But the government extended the deadline when it became clear that the majority of companies had not yet completed their studies."Eleven companies were either in production or gave feasibility studies. The rest gave nothing. So far we’ve still received nothing, and we’ve asked," Kasongo said Thursday.He said around 25 projects in possession of what he described as "second tier assets" in the copper, diamond, and gold sectors were subject to the December deadline. He did not name the projects.Congo cancelled a copper and cobalt mining contract with Kingamyambo Musonoi Tailings, a unit of First Quantum in August on the grounds that it had failed to enter into commercial production within an agreed timeframe.Freeport McMoran and Lundin Mining, parnters in the giant Tenke Fungurume Mining copper and cobalt project, have been given until October 12 to complete negotiations with the government or risk losing their permit.But despite lingering doubts over the fate of the country’s largest foreign-owned projects, analysts had expected completion of the review to boost investor confidence in Congo’s high-risk but potentially lucrative mining sector.

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