Key Mining Contracts in Katanga: the economic argument for renegotiation
Author
Rights and Accountability in Development
Edition
PDF
Published
Oxford; RAID
Year
2007-04-12
Pages
21
Abstract
Analysis of Katanga Mining Ltd’s Kamoto contract, iin light of the continuing controversy surrounding key mining contracts with the DRC’s state mining enterprise, Gécamines. It highlights two flaws in the Kamoto contract: 1. The long-term copper and cobalt prices when compared with prices based on real historical data appear to have been underestimated, which skews the benefits stream; 2. The considerable value of Gecamines’ assets, which include the reserves of copper and cobalt as well as the plant and equipment, have never been properly assessed. Gécamines – which was in the early 1990s the most lucrative source of state revenue – has now been stripped of virtually all of its assets and ore bodies through a number of disadvantageous contracts. Many of the concessions were awarded behind closed doors in violation of the new mining code, which was created with the support of the World Bank.
