By: Reuters

The Democratic Republic of Congo is considering a plan to help mining employees acquire mandatory stakes in the companies they work for through worker cooperatives and company-financed credit, a draft decree seen by Reuters on Tuesday showed.

Authorities in the world's top cobalt and second-largest copper producer are preparing rules to enforce a law requiring miners to reserve 10% of their equity for Congolese nationals, including 5% for their employees.

Congo introduced the rule in 2018, but no company has yet complied. In January, the government asked miners – the majority of them multinationals including Glencore GLEN.L, Ivanhoe IVN.TO and China's CMOC 603993.SS – to show proof of compliance by the end of July or risk sanctions.

As commodities prices surge, African countries are increasingly seeking a larger share of their mineral wealth.

WORKER COOPERATIVES AND INTEREST-FREE CREDIT

Under the decree drafted by Congo's mines ministry, companies would be required to sell shares to their employees on interest-free credit.

The workers' stakes would be held through cooperatives, while a separate 5% of equity would be reserved for other Congolese nationals, who could hold shares either directly through Congolese-owned companies or via public social security institutions.

A mining executive told Reuters on Monday that a draft of the decree was shared with workers for input.

Under the credit-backed system, workers would reimburse their loans through the withholding of up to 80% of their annual dividends until the debt is fully repaid, according to the draft decree seen by Reuters.

Companies will, meanwhile, not be allowed to dilute the 10% equity for Congolese nationals irrespective of capital increases, the decree added.

Congo's mines ministry and Chamber of Mines did not immediately respond to requests for comment.

Labour groups say the success of the law's 5% worker equity requirement would depend on how the financing arrangements are ultimately structured.

Speaking after discussions with the mines ministry, Juresse Lokosha, head of the Union for Social Peace, said access to shares will not be automatic for all workers but would instead depend on their ability to mobilise financing, whether privately or through a company-backed credit scheme.

Authorities are, therefore, encouraging pooled structures to lower entry barriers, he added.

(Reporting by Ange Adihe Kasongo, Maxwell Akalaare Adombila and Ashitha Shivaprasad; Editing by Joe Bavier)