DRC Mining Code Enforcement: Government Unveils Financing Mechanism for Mandatory Local Ownership
Nearly nine years after mandating local ownership in its mining sector, the Democratic Republic of Congo (DRC) has finally detailed a plan to bring mining companies into compliance. The government’s proposed mechanism, outlined in a draft decree, aims to facilitate the mandatory 5% equity stake reserved for local employees, a provision that has remained largely unimplemented since the revised mining code was adopted in 2018.
According to a draft decree cited by Reuters, the Ministry of Mines has developed a structure that combines cooperatives with interest-free loans to finance this critical aspect of local participation. This initiative follows a stern reminder in January from Mines Minister Louis Watum Kabamba, who reiterated the legal obligation for mining operators to transfer 10% of their share capital to Congolese nationals, with a specific 5% allocation for employees.
Authorities have set a firm deadline of July 31 for operators to comply with this requirement. In anticipation of this deadline, major mining companies convened this month to seek clarity on the regulatory framework governing the local ownership mandate. The draft decree represents the government’s latest effort to address these concerns and has reportedly been shared with workers for feedback prior to its finalisation.
Under the proposed framework, mining companies would facilitate the transfer of shares to employees through interest-free loans. These acquired stakes would then be held collectively by cooperatives on behalf of the workers. Employees would be responsible for repaying these loans through deductions from dividends generated by their shareholdings, effectively extinguishing the debt over time. The remaining 5% stake, designated for other Congolese nationals, can be held directly through Congolese-owned companies or via public social security institutions.
Crucially, the draft decree also includes provisions to prohibit any dilution of the mandatory 10% Congolese ownership stake during future capital increases. However, the document has not yet been publicly released as the government continues to refine its provisions.
If confirmed, these measures promise to establish a clearer pathway for increased Congolese participation in the nation’s vital mining industry. Nevertheless, several uncertainties persist. Financial publication Bankable recently highlighted unresolved issues, including the question of whether the ownership requirement will be applied retroactively to companies established before the 2018 mining code revision.
This government initiative underscores a broader strategic ambition to ensure that Congolese citizens, particularly mining employees, derive a more substantial share of the economic benefits generated by the country’s abundant mineral resources. The response from major mining groups, including Glencore, CMOC, Zijin Mining, and Ivanhoe Mines, which operate extensively in the DRC – the world’s largest producer of cobalt and second-largest of copper – remains to be seen, as operators have not yet publicly commented on the proposed framework.
