Details of Katanga's Renegotiated DRC Contract Released; Shares Down

Investors in the Democratic Republic of Congo [DRC] have waited with baited breath to find out what will come out of the contract renegotiations with mining companies. Katanga Mining Ltd. (KATFF.PK) announced its revised deal Tuesday morning, providing some potential guidelines for the other contracts. The shares fell about 10%.

Katanga's revised contract includes a change in the royalty rate from 1.5% to 2.5%. The company will also increase its board from five directors to eight, and three members will be appointed by Gécamines, the DRC's state-owned mining company and Katanga's joint venture partner. Share capital of the merged joint venture will rise to C$100-million from C$1-million.

Katanga will retain 75% of the joint venture, while Gécamines will hold 25%. That is unchanged from the previous contract. 

Other mining companies with big vested interests in the DRC include Anvil Mining Corp.(AVMNF.PK), Lundin Mining Corp.(LMC), and Freeport-McMoran Copper & Gold Inc. (FCX).