What does Article 71 of the DRC Mining Code mean?

Article 71 of the DRC Mining Code sets out the conditions that a company must satisfy to receive an exploitation permit. The most discussed provision is the mandatory 10 percent non-dilutable free-carried equity interest granted to the DRC state at permit issuance.

That interest is granted at no cost to the government and cannot be reduced by subsequent capital increases or dilution mechanisms.

Plain-English answer

When a company applies to convert an exploration permit into an exploitation permit — the right to mine — Article 71 requires it to demonstrate four things: technical capacity to operate the proposed mine; financial capacity to fund the capital programme; compliance with environmental conditions, including receipt of a Certificate Environnemental; and formal acceptance that 10 percent of the project's operating company is transferred to the state.

The 10 percent interest is held by a designated state entity — typically Gécamines or a government vehicle specified for the relevant sector — and generates royalty-equivalent value through the equity stake's entitlement to dividends and exit proceeds. The state does not pay for this interest; it is granted as a condition of permit issuance.

The 10 percent state share in practice

The practical effect of Article 71's state equity requirement is that every new PE-stage project in the DRC begins with a 10 percent government stake. For projects developed under the 2002 Code, the free-carried interest was 5 percent; the 2018 revision doubled it.

Existing projects that were mid-development when the 2018 Code passed had to renegotiate.

State participation interest can coexist with other state-related interests: Gécamines may hold a separate contractual stake negotiated outside the free-carry provisions of Article 71. TFM, for example, has Gécamines holding 20 percent, which exceeds the Article 71 minimum and reflects historical contractual negotiation.

Links to environmental and social conditions

The environmental certificate required under Article 71 must be obtained from the Ministry of the Environment before CAMI issues the PE. The certificate confirms that the ESIA has been reviewed and approved. Social obligations attached to the PE — including the Plan de Développement Communautaire and the Cahier des Charges — are specified in the PE conditions and must be funded from the date production begins.