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UPDATE 2-Congo bans exports of copper, cobalt concentrates

Wed 17th April, 2013 8:27pm

* Congo says companies have 90 days to clear stocks

* Other emerging countries have taken similar steps

* Glencore, Freeport McMoRan already process copper in Congo

(Updates with details on mining companies)

By Jonny Hogg

KINSHASA, April 17 (Reuters) - The Democratic Republic of Congo has banned exports of copper and cobalt concentrates to encourage miners to process and refine the red metal within its borders, according to an order from the Mines Ministry.

The order, seen by Reuters on Wednesday, provides companies 90 days to clear stocks before the ban is enforced. It is dated April 5 and signed by Mines Minister Martin Kabwelulu.

Congo is not alone among emerging, resource-rich nations in discouraging exports of concentrates - the intermediate products that feed smelters and refiners - to focus on producing higher-value intermediate or finished products.

These, countries often argue, bring more revenue into state coffers and demand an increasingly skilled workforce.

"Little by little, within the next three months, we need to no longer export concentrates," Kabwelulu told Reuters by text message on Wednesday.

The ban is largely unlikely to affect major producers like Freeport McMoRan FCX.N and commodities trader Glencore

GLEN.L , which already process the bulk of their copper inside the country.

Among those most impacted along with small-scale miners, however, is Kazakh miner ENRC ENRC.L which exports concentrate to be processed across the border in Zambia. It is commissioning a new mine, Frontier, which will produce 40,000 tonnes of copper in concentrate in 2013.

ENRC declined to comment. Other miners affected include Mawson West MWE.TO and Tiger Resources TGS.AX .

Congo produces around 500,000 tonnes of copper each year. It was not immediately clear how much is exported as concentrate.

Freeport McMoRan's Tenke Fungurume project produced 158,000 tonnes of copper in 2012 and nearly 12,000 tonnes of cobalt. Glencore's projects produced 180,000 tonnes between Katanga and Mutanda, but that includes copper in metal and concentrate.

Several industry sources questioned on Wednesday, however, whether the measure could really be implemented - just as Congo tries to woo increasingly risk-averse mining investors.

Congo attempted to introduce similar rules in 2007 and again in 2010, but each time the decision was reversed.

The announcement also comes at a time when investors are already expressing concern over government plans to overhaul mining laws with an eye to boosting state revenues.

Congo already suffers from acute electricity shortages which have hampered production and growth in the copper mining heartlands of Katanga. Frequent blackouts have not encouraged plans to build more refining capacity.

Allowing some leeway, Kabwelulu said in a separate letter seen by Reuters that companies would be able to get around the ban on exporting concentrates, providing they make extra payments to the state.

(Additional reporting by Clara Ferreira-Marques in London; Editing by David Lewis and Bob Burgdorfer)

(( 33 864 5076)(Reuters Messaging:


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