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Congo to restart talks over mining code, Randgold CEO says

By Aaron Ross

KINSHASA, April 20 (Reuters) - Democratic Republic of Congo's government has told mining companies it intends to reopen negotiations with them over a revision of the mining code sent to parliament last month, Randgold Resources' CEO said on Monday.

Mark Bristow told journalists in the capital Kinshasa that he had received assurances from Prime Minister Augustin Matata Ponyo's staff that the government would re-engage on fiscal changes that had brought criticism from the industry.

"(Congo's) prime minister has clearly indicated to us ... that he has every intent to reopen the debate and to ensure that we, the industry, along with civil society and all other interested and affected parties wrestle this out," he said.

The latest draft of the code, which revises the 2002 code, was submitted to parliament over industry objections. Mining companies say its more onerous fiscal regimen would deter new investment in the sector.

The draft would increase royalties on base metals such as copper and cobalt to 3.5 percent from 2 percent and on precious metals like gold to 3.5 percent from 2.5 percent. It would also increase the tax on profits to 35 percent from 30 percent and introduce a windfall profits tax.

Mining companies say low taxes and royalties are needed to compensate for Congo's infrastructure deficits and political instability. They have called on the government to change the 2002 code as little as possible.

Congo, which vies with Zambia to be Africa's top copper producer, has increased its production of the metal from 27,359 tonnes in 2002 to 1.03 million tonnes last year.

Industrial gold production has also jumped from almost nothing to close to 20 tonnes over that period.

Randgold operates the Kibali gold mine in the country's northeast in a joint venture with AngloGold Ashanti (Xetra: AOD.DE - news) and state miner Sokimo.

Congo also boasts rich deposits of cobalt, diamonds, tin and tantalum.

Despite its copious mineral reserves, the war-ravaged country remains one of the world's poorest and least developed, in part due to corruption and mismanagement of the mining sector.

Negotiations over a revision of the code have dragged on for more than two years. The mines minister has not yet officially presented the new draft of the law to parliament.

In an April 2 letter seen by Reuters, the president of the National Assembly Aubin Minaku wrote to the Congolese Business Federation (FEC) that he considered additional consultation with industry representatives "an indispensable imperative." (Editing by Joe Bavier and Janet Lawrence)