The Democratic Republic of the Congo (DRC) has recently implemented a new distribution of mining royalties through amendments to the Mining Code and the Mining Regulations. These modifications have generated significant interest and are crucial for certain stakeholders in the mining industry who must comply with the obligation to pay mining royalties.
Article 242 of the Mining Code and Article 526 of the Mining Regulations stipulated that the mining royalty was to be paid by the holder of the mining exploitation title as follows :
50% to the Central Government;
25% to the Province where the project is located, to be deposited into an account designated by the Provincial Administration;
15% to the decentralized territorial entity within whose jurisdiction the mining operation takes place, to be deposited into an account designated by it;
10% for the benefit of the Mining Fund for Future Generations.
Article 242 of the Mining Code was amended by Article 25 of Law No. 22/065 of December 26, 2022, which establishes fundamental principles concerning the protection and reparation of victims of sexual violence related to conflicts and victims of crimes against peace and security of humanity.
This law established the National Fund for the Reparation of Victims of Sexual Violence Related to Conflicts and Other Crimes Against Peace and Security of Humanity, abbreviated as Fonarev, the statutes of which were set by Decree No. 22/38 of December 6, 2022, as amended and supplemented by Decree No. 23/20 of June 9, 2023.
This public institution is tasked with mobilizing and collecting financial resources at both national and international levels, intended for the reparations of victims of sexual violence related to conflicts and victims of crimes against peace and security of humanity.
In this context, Article 25 of the aforementioned Law provides that among the resources to fund Fonarev, 11% of the mining royalties paid by holders of the mining exploitation title shall be allocated as follows :
6% from the portion due to the Central Government (50%);
2% from the portion due to the Provincial Administration (25%);
1% from the portion due to the decentralized territorial entity (15%);
2% from the portion due to the Mining Fund for Future Generations (10%).
To finalize this amendment to the Mining Code, the Prime Minister, through Decree No. 23/32 of August 26, 2023, also amended Article 526 of the Mining Regulations to clarify the modalities for the collection and distribution of mining royalties, taking into account the 11% reserved for Fonarev.
Consequently, in accordance with these two amendments, the new distribution of mining royalties shall be applied as follows :
44% to the Central Government;
23% to the Province where the project is located;
14% to the Decentralized Territorial Entity within whose jurisdiction the mining operation takes place;
11% for the benefit of the National Fund for the Reparation of Victims of Sexual Violence Related to Conflicts and Victims of Crimes Against Peace and Security of Humanity;
8% for the benefit of the Mining Fund for Future Generations.
This modification of the distribution of mining royalties reflects the DRC's commitment to addressing the needs of victims of sexual violence related to conflicts and ensuring a more equitable management of revenues derived from mining operations, thereby paving the way for better protection of the rights of local communities.
[1] Law No. 007/2002 of July 11, 2002, on the Mining Code, as amended and supplemented by Law No. 18/001 of March 9, 2018.
[2] Decree No. 038/2003 of March 26, 2003, on the Mining Regulations, as amended and supplemented by Decree No. 18/024 of June 8, 2018.
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