March 10, 2016 / 5:18 PM / 3 years ago

UPDATE 1-Congo mining code revision suspended until metal prices recover -minister

(Adds minister’s comment)

KINSHASA, March 10 (Reuters) - Democratic Republic of Congo’s government has suspended consideration of a new mining code until metal prices recover, the country’s mines minister said on Thursday.

The government of Africa’s leading copper producer started a review of the 2002 mining code in 2012, aiming to increase state revenues and tighten regulations, but encountered fierce resistance from industry, which said new taxes and royalties would drive away investment.

“We have said that reform is suspended and we are going to continue when the context allows it,” mines minister Martin Kabwelulu told reporters in the capital Kinshasa.

Benchmark copper prices fell 25 percent last year and several mines in Congo’s copper-producing southeast have cut their workforces. It traded at $4,878 a tonne late on Thursday.

However, activist groups urged the government on Thursday to revive plans for a new code, saying the higher revenues it would generate were vital to supporting a young democracy.

A group of 42 Congolese non-governmental organisations (NGOs) that have been in talks with the government and mining sector said difficult market conditions did not justify delays.

“Not doing it now is prolonging the bleeding of revenues in the sector which are needed to support our young democracy,” they said in a statement that urged the government to clarify its position.

Congo held its first free election in decades in 2006. It is set to hold another election in November when President Joseph Kabila is due to step down. The country has never had a peaceful transition of power.

The NGOs called the recent decline in minerals prices “a temporary and random event” and noted the existing code was passed when the average price of copper was about $1,500 per tonne in 2002.

Congo produced 995,805 tonnes of copper in 2015, down slightly from 2014. It also mines significant quantities of gold, tin and cobalt. (Reporting By Aaron Ross; Editing by Matthew Mpoke Bigg and David Evans)

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