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By Julia Payne and Edward McAllister
LONDON/DAKAR, March 29 (Reuters) - International mining firms including Glencore and Randgold on Thursday proposed a sliding scale for royalty rates on key commodities mined in Democratic Republic of Congo as an alternative to a windfall tax.
A new mining code that increases taxes and royalties on miners of commodities including copper and cobalt was signed into law in early March despite industry opposition.
Cobalt, whose price has quadrupled in two years, is one of the metals used to make batteries for electric vehicles and more than 50 percent of the world’s reserves are in Congo.
The mining industry said in a statement that the sliding scale, whereby royalties due to the government move in line with the commodity price, would give Congo an immediately higher share of revenues at current prices than what the new code stipulates.
The statement also said their proposal addressed the 10-year stability clause, state guarantees and mining conventions, without providing details.
The new code strips away a 2002 stability clause protecting existing investments from changes to the fiscal and customs regime for 10 years, opens the door for cobalt royalties to rise five-fold and introduces a 50 percent windfall tax on profits.
The other companies behind the proposal are Ivanhoe Mines , Gold Mountain International/Zijin Mining Group , MMG Ltd, Crystal River Global Ltd, China Molybdenum Co Ltd and AngloGold Ashtanti.
An official at Congo’s mines ministry was not immediately available for comment. However, the mines minister and the prime minister have previously said that the government would not accept any changes to the new code.
The miners said their proposals were “designed to address concerns about the recently revised mining code as well as the government’s revenue needs”.
It said it accepted 76 percent of the articles in the new code and suggested changes to the rest “only to ensure the effectiveness and legality of the code”. (Reporting by Julia Payne and Barbara Lewis; Additional reporting by Edward McAllister in Dakar Editing by Alexander Smith)