Mining companies operating in the Democratic Republic of Congo underreported a total of $16.8 billion in revenue between 2018 and 2023, according to a state audit, potentially depriving the government and local communities of much-needed funds, Reuters reported.
Under Congo’s 2018 mining code, companies are required to contribute 0.3% of their annual revenue to community development funds that finance schools, clinics, and water systems. However, a June audit by the country’s Court of Auditors, seen by Reuters on October 5, found that while companies declared $81.4 billion to these community funds, they reported $98.2 billion to tax authorities. This discrepancy resulted in $50.4 million in lost contributions to community development, the report said.
The audit identified major firms including CMOC’s TFM, Glencore’s Kamoto Copper, Ivanhoe’s Kamoa-Kakula mine, SICOMINES, Eurasian Resources Group’s Metakol, and Ruashi Mining as collectively underreporting about $10 billion.
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Glencore, the world’s second-largest cobalt exporter, stated that its subsidiary Kamoto Copper had fully met its obligations under the mining code. The company said the discrepancy arose from differing interpretations of when the law took effect, adding that its 0.3% community levy was based on half-year revenues and validated by auditors and the local development agency.
CMOC, the world’s top cobalt exporter, along with SICOMINES, Ivanhoe, Eurasian, and Ruashi, did not respond to requests for comment. “Practically, 70% of the companies did not respect this regulation … and it’s an enormous loss of earnings for the Congolese state,” said Attorney General Jean Chris Mubanga Musuyu.
The Court of Auditors has recommended that the government suspend non-compliant companies, initiate prosecutions, conduct revenue audits, and tighten oversight.
Congo, a leading global supplier of cobalt and copper, essential for battery production, remains one of the poorest nations in the world, with an average annual income of about $580 per person. Despite its vast reserves of lithium, uranium, and other minerals, the country continues to face instability, including deadly clashes with Rwanda-backed M23 rebels in its mineral-rich east.
Civil society groups that pushed for the 0.3% levy intended it to ensure that mining revenues directly benefit local communities. “The idea was to see how we can turn mining into a tool for uplift, not just extraction,” said Emmanuel Umpula Nkumba of the Lubumbashi-based nonprofit AFREWATCH. “If this is well managed, it will improve lives on the ground.”
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Image Credit: Popular Mechanics
