DRC completes mining review, says majors quit talks

KINSHASA - Democratic Republic of Congo has completed a much-delayed review of 61 mining contracts, but majors including Freeport-McMoRan have walked away from renegotiation talks, the Deputy Mines Minister said on Saturday.

"The review is over for everyone but six companies, those that walked away from talks," Victor Kasongo told Reuters.

First Quantum, Banro Corporation, AngloGold Ashanti, Gold Fields and Mwana Africa were the other companies to quit talks, he said.

But Anglogold Ashanti, which is exploring for gold at Mongbwalu, said it had not quit discussions.

"We didn't leave the table. Negotiations were suspended in October," said Guy-Robert Lukama, AngoGold Ashanti's country director in Congo. "It was the government that asked us to wait, but they never called us back," he said.

"We have always confirmed our availability for negotiations."

Kala Mpinga, Chief Executive of Mwana Africa, said his firm was also waiting to be invited to resume talks.

Banro, First Quantum and Freeport were not immediately available for comment.

The mineral-rich central African nation began the review process early last year, aiming to overhaul 61 deals most of which were agreed during the chaos of a 1998-2003 war.

The review was initially due to be completed within six months, but contract renegotiations between state miners and their private partners have dragged on.

Kasongo said the process would now be extended an additional 45 days to allow the six companies to return to the negotiating table for direct talks with government ministers.

"We are now worried about the remaining six contracts. It's a huge chunk of our resources," Kasongo said.

"We want them to sit at the table and finish this thing. It's not the intention of the government to cancel them."

Last month, Congo's central bank governor cited the lagging process, along with weakening global demand for metals and a worsening armed conflict in the eastern borderlands, as responsible for an acute mining sector slowdown.

MAJOR INVESTMENT

After decades of neglect and mismanagement, interest in Congo's once mighty mining sector boomed following 2006 polls, which confirmed Joseph Kabila as president and were intended to usher in a new era of stability and economic growth.

The huge southeastern province of Katanga has seen major investment from international mining companies such as Freeport-McMoRan, BHP Billiton and Katanga Mining.

Freeport has invested $1.75 billion in the Tenke Fungurume project it owns with minority stakeholder Lundin Mining and state copper miner Gecamines.

The mine, believed to hold the world's largest untapped copper and cobalt reserves, is due to come on stream in the second half of 2009 with production expected to reach 400,000 tonnes of copper within five to seven years.

Development has continued despite a dramatic fall in copper and cobalt prices in the past six months that has forced many companies to delay work or suspend operations entirely.

Following the completion of an initial review of the contracts on Feb. 14 were classed as 'green' meaning acceptable, 26 were 'orange' which required agreement on some points, and 21 were 'red' which faced cancellation.

"We have cancelled 15 so far. These are small companies. Some agreed to allow us to buy back the assets," Kasongo said.

Banro Corporation is developing four gold properties along the Twangiza-Namoya belt, First Quantum owns the Kolwezi cobalt and Lonshi copper projects, Gold Fields is exploring at the Kisenge project, and Mwana Africa owns stakes in gold, diamond and copper projects.