Congo's state mining company, Gecamines, has asked companies
that have recently signed amended mining contracts to speed up
payment of signing bonuses to enable it avert a financial
crisis.
According to a statement from the Federation of Businesses of
Congo, Gecamines wants the early payments to improve its financial
position, which has been bruised by effects of the current global
economic crisis.
According to the statement, Prime Minister Adolphe Mizito met
with company representatives last week and urged them to speed up
the payments.
Since last year, the Congolese government has been reviewing up
to 61 mining joint ventures which were signed between Gecamines and
various international companies between 1996 and 2003; most of the
companies have since signed revised contracts and are required to
pay signing bonuses.
According to a company official, Gecamines expects to raise more
than $500 million from signing bonuses.
Gecamines is facing a financial freeze blamed mainly on
dwindling mineral exports. U.N.-sponsored radio Okapi reported in
January that Gecamines was indebted to Congo's national electricity
utility, SNEL, to the tune of $282 million. The company also owes
around $30 million to the national railway company. Rail workers in
mineral-rich Katanga province have been on strike since the start
of February over delayed salaries. The strike has since paralyzed
railway operations in the province.
Some of the companies that have signed revised contracts include
South Africa-based Metorex Ltd. (MTX.JO), Lundin Mining Corp.
(LMC), Freeport McMoRan Copper and Gold Inc. (FCX), BHP Billiton
(BLT.LN) and Anglogold Ashanti Ltd. (AU).
-By Nicholas Bariyo, contributing to Dow Jones Newswires;
+256-75-2624615; bariyonic@yahoo.co.uk