Congo's mining tax increase plan rattles investors

Wed Mar 26, 2014 10:34am EDT
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* Congo wants to nearly double tax revenues to 25 pct of budget

* Revising mining code to raise royalty tax

* Miners warn that changes to code could defer investment

* Infrastructure gap in Congo makes investment threshold higher

By Peter Jones

GOMA, Democratic Republic of Congo, March 26 (Reuters) - D emocratic Republic of Congo aims to double tax revenues from minerals but investors warned that an overhaul of the mining code could remove incentives to invest there.

Prime Minister Augustin Matata Ponyo told a mining conference in the eastern city of Goma that the government intends to increase tax revenues from mining to 25 percent of the national budget by 2016, from 14.5 percent at present.

"Exploitation of natural resources is key to our ambition of becoming an emerging market country by 2030," he said.

Congo produced a record 943,000 tons of copper last year, making it Africa's largest producer and driving economic growth of 8.5 percent. Mismanagement, corruption and two decades of violence in eastern Congo have hampered development of other minerals, including diamonds, gold, cassiterite and coltan.   Continued...