February 8, 2018 / 12:49 PM / in 8 months

Randgold could lose $10 mln a year under proposed Congo mining code

CAPE TOWN, Feb 8 (Reuters) - Randgold Resources could lose $10 million per year if a proposed change to the Democratic Republic of Congo is signed into law, Chief Executive Mark Bristow said.

“At the top end it would be $10 million a year,” Bristow told Reuters, referring to the financial impact of the new law.

“Which is not of significance to a Kibali-style investment, but if you were a small company delivering a small deposit you would be under huge pressure.”

London-listed Randgold operates the Kibali gold mine in north eastern DRC and represents just under 30 percent of its total group gold production.

The new code, which parliament approved late last month, could see royalties on cobalt, a vital component in electric car batteries, increase five-fold to 10 percent. It also removes a stability clause in the current law protecting miners from changes to the fiscal and customs regime for 10 years.

Congo mines minister Martin Kabwelulu declined to say on Wednesday whether the mining code had been signed into law by President Joseph Kabila.

Bristow said the company was paying 4.5 percent royalty “under duress” as opposed to 2.5 percent required by the mining code of 2002.

This week global mining companies including Randgold, Ivanhoe and Glencore mounted a coordinated campaign against a new mining code they say will stifle investment.

Reporting by Zandi Shabalala, editing by David Evans

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