It has been reported that the government of the Democratic Republic of the Congo is planning to privatize its mining operations in that country. As reported by FT.com, the DRC government is intending to transform its state-owned companies into private concerns.
According to Victor Kasongo, Congo’s deputy minister of mines, the privatization would take place later this year. As reported by Global Investment Watch earlier this year, the government has undertaken a review of its mining contracts negotiated by the previous government. “Mr. Kasongo said that of the 61 mining companies involved in the review, the government was satisfied that 14 were developing their projects in a way that was fair and transparent. But 25 companies would have their contracts modified and a further 22 companies “have contracts so far out of line with mainstream international practice as to warrant cancellation”. These groups would have to renegotiate their contacts completely.” [1. FT.com 9/8/2008]
Some of the companies impacted by the contract review include Freeport McMoRan, Lundin Mining, Anvil Mining, Katanga Mining and First Quantum Minerals. All of these companies are currently in negotiations with the government.
According to Mr. Kasongo, “The first mining flotation should happen “in less than 12 months. “Gecamines [the state copper company] is a very interesting asset. And Okimo [the state gold company] has a lot of good reserves, it could be a good company for an IPO.”
Though there have been improvements in control of corruption in the country, the DRC remains one of the worst countries with respect to this problem. Despite any changes in contract terms with the private sector and the privatization of state-owned mining interests, it is unclear whether this effort by the Kinshasa government will have any significant, positive impact on its citizens.
It would be interesting to know details