The Authority for the Regulation of Subcontracting in the Private Sector (ARSP) has ordered Kamoto Copper Company (KCC) and Mutanda Mining, two Glencore subsidiaries, to terminate contracts concluded with service providers deemed non-compliant. More than 1,500 companies are said to be affected by this measure, involving contracts representing an estimated turnover of more than USD 5 billion.
ARSP tightens the screws
The Congolese subcontracting regulator is taking action. Following an inspection carried out last July, the ARSP identified a significant number of service providers that do not meet the legal conditions required to operate in the private sector subcontracting chain.
At KCC, around 950 suppliers out of the 1,427 declared are said not to meet the eligibility criteria. At Mutanda Mining, nearly 40% of the approximately 1,300 service providers identified would also be affected by irregularities.
Contracts worth more than USD 5 billion
According to data communicated to RFI by the ARSP, the companies targeted by this operation would benefit from contracts representing an estimated turnover of more than USD 5 billion.
For the regulator, this situation raises both a question of compliance with the rules in force and that of access by Congolese companies to the opportunities generated by the mining industry.
The rule of majority Congolese capital
Congolese legislation reserves subcontracting for companies whose capital is majority-owned by Congolese. These companies must also hold a license issued by the ARSP to carry out their activities.
The validity period of this license has increased from three to five years, as part of recent changes to the regulatory framework.
A 30-day deadline for KCC and Mutanda
The ARSP has instructed the two Glencore subsidiaries to remove non-eligible service providers from their files and to proceed with the cancellation of the contracts concerned.
KCC and Mutanda Mining have a 30-day deadline to present the regulator with a schedule for terminating the contracts. The ARSP also warns that failure to comply with its injunctions exposes the companies concerned to sanctions.
A new test for mining subcontracting
This decision comes a few months after the appointment of Ted Beleshayi at the head of the ARSP. It constitutes one of the first large-scale operations carried out under his leadership and places the question of the participation of Congolese companies at the heart of relations between mining principals and subcontractors.
The implementation of this measure will be particularly closely followed in the sector, given the weight of KCC and Mutanda Mining in Congolese copper and cobalt production.
Héritier Maila / RFI
Keywords: DRC, ARSP, subcontracting, KCC, Mutanda Mining, Glencore, USD 5 billion, mining sector, Congolese companies, copper, cobalt, Ted Beleshayi, suppliers, value chain.
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