Investor relations and media

Significant progress on talks regarding TFM’s additional royalty as the DRC Government takes a clear stand

2022-03-30 22:58:07

On March 28th, local time, the DRC Ministry of Communication and Media issued a press communique that delivers a clear stand on the difference between Gecamines and TFM that "the government has proposed a roadmap to address the difference along with a timeline for the two parties to come to an agreement under the guidance of the Prime Minister through coordination between the relevant ministries. In the meantime, the judicial procedure remains suspended to restore the peaceful and amicable exchanges between the two parties." This marks an important step forward in the communications between CMOC and the DRC Government regarding the additional royalty payment for increase of reserves at TFM.
The communique reaffirmed the DRC Government's stand to maintain a sound business environment and protect the interests of investors and "condemned the uproar over the 8 March 2022 order for information collection issued by the Lubumbashi court."
Since the second half of 2021, as commodity prices rise, there have been some talks in the DRC around mining policies in the hope of driving economic development, creating more jobs, and rebalancing interests. In response, CMOC has been in close communications with the DRC on the matter of additional royalty payment by TFM. On December 23rd, 2021, when meeting with Mr. Sun Ruiwen, CEO of CMOC, President Tshisekedi made it clear that he welcomed and encouraged CMOC to increase its investment in the DRC, and that the DRC government was committed to creating a favorable and stable business environment for companies to reach win-win cooperation. Lukonde, the Prime Minister of the DRC, expressed similar opinion when meeting with Mr. Sun Ruiwen on Marth 8th, 2022, giving clear instructions on the issue of TFM's additional royalty payment that “it shall be resolved fairly under the leadership of government ministries in accordance with international practice by engaging an internationally recognized third-party to conduct an assessment to protect the interests of investors and achieve win-win cooperation."
Since Q4 2021, CMOC and TFM management have maintained communications with authorities and relevant parties in the DRC regarding the additional royalty. While during such time, Gecamines has pursued its claims through various means, including legal actions. Although the court order issued by the Lubumbashi court on March 8 was not executed, misunderstandings have been caused and the peaceful and friendly environment was impacted, drawing great attention from the DRC Government. The communique released by the DRC Government is intended to reveal the facts, clarify its position, remove misunderstandings, and ensure both parties could work together through peaceful and friendly talks. The two parties will align themselves with the DRC Government's guidance by engaging an internationally recognized third-party to conduct an assessment for a definitive solution to the additional royalty payment by TFM.
Mr. Sun Ruiwen, CEO of CMOC, remarked, “it’s a great pleasure for us to reach a consensus on this important issue. The DRC Government has once again demonstrated through a press communique its determination to honor contracts and protect the rights and interests of investors. This will facilitate the expedited resolution of dispute within the contractual agreements and further strengthen our confidence in investing in the DRC. CMOC is very optimistic about the opportunities brought by the new energy sector and the development of the mining industry in the DRC. In 2022, we will make every effort to promote the construction of the TFM and KFM projects, and actively cooperate with the Government to explore the extension along the value chain. We will create more local jobs in the DRC, drive its socio-economic development, and benefit more local people."