SA mining in DRC and Zambia

Needham confident about Metorex's standing in DRC, Zambia
Mining Weekly - Garden View,South Africa
Once again proving that ‘Africa is not for sissies', South African miner, Metorex's CEO Charles Needham on Thursday explained the firm's interactions with the governments of the Democratic Republic of Congo (DRC) and Zambia, where it operates copper mines, and assured investors that he felt confident about the company's standing in both countries. Speaking at the company's results presentation, in Johannesburg, Needham said that it had received a letter from the DRC's Department of Mines regarding its mining contracts in that country and that it had now asked for an extension of 30 days to respond. It received the letter on February 18, which was dated February 11, and response was requested from the company by February 20, which the company viewed as impossible  ... "We stand by what we have been saying all along and that is that Ruashi has been doing exactly what it said it would do. We have met all of the various thresholds, we have brought one mine on stream, we are commissioning a second plant, which will probably be the most modern and efficient plant in the country and we are confident that we are not at risk of losing title, and I don't believe we are at risk of changing our equity ratios," Needham stated positively. The letter raised three issues to be addressed. The first was that the government requested the Ruashi feasibility study so as to assess whether or not the returns to respective shareholders, namely Metorex, Gecamines and the government were equitable ... The second issue was about the social programme in the past and going forward. Metorex confirmed that it had provided power and water to the Ruashi village, had entered into a relocation programme with the artisinal miners ... The last point dealt with Gecamines day-to-day involvement with operations. Needham emphasised that high level Gecamines employees already sat on the Metorex board of directors, they meet on a quarterly basis and they were exposed to everything that was happening from a capital perspective, operational perspective, future operations at Ruashi. Gecamines also attended monthly meetings on operations ... commenting on the changes Zambian mining tax regime, Needham said that the propositions were more than doubling its current tax rate, but that the company believed that the propositions could be adjusted through negotiations ... "We have looked at the effect of what they are proposing, and it more than doubles our current tax rate, which is unacceptable to us, we are protected by international law," Needham explained. Metorex's Chibuluma mine in Zambia was protected for a period of 15 years by a taxation stabilisation clause in the Development Agreement signed in 1997 under the Zambian Mining Industry Privatisation process, governed by English law and established in conjunction with the World Bank ...