UPDATE 1-Congo rejects mining industry proposal to soften new code

KINSHASA, March 23 (Reuters) - Democratic Republic ofCongo's mines minister rejected a proposal by mining companieson Friday to soften some provisions in a new mining code inexchange for higher royalties.

Mining companies said on Friday they would be willing to paythe government more to produce cobalt, gold, copper and otherminerals if the government agreed to respect 10-year exemptionsto changes to the fiscal and customs regimes for existingprojects, and cancel certain taxes.

"We cannot change anything in the mining code," MartinKabwelulu said at the start of talks over regulations toimplement the new code, which President Joseph Kabila signedinto law earlier this month in the face of fierce industryopposition.

"The taxation as laid out in the mining code is untouchable.It stays," he said.

Randgold executive Willem Jacobs, speaking on behalf ofmining companies operating in Congo, had pushed for thegovernment to respect the 10-year exemptions and scrap a 50percent windfall profit tax, which applies if commodity pricesrise above certain levels.

Major international investors in Congo, including Randgold, Glencore, China Molybdenum,Ivanhoe and AngloGold Ashanti, say the newcode will scare off investment and violate existing agreements.(Reporting By Amedee Mwarabu; Writing by Aaron Ross; Editing byEdward McAllister and David Evans)

Glencore

Glencore