Katanga Mining Ltd Ord KATFF

Co up again on LME; the US$ is weakening; KAT surely basing?

[topdop]

KAT is soft in trade today likely on fresh Royalty Tax woes from DRC subsequent to the proposed new mining code sailing through the Senate late yesterday and without opposition. DRCs new proposed mining code, which may hold back some investment, proposes royalties on base metals of 3.5% and 5% on "strategic metals" (which at this time, may or may not yet include Co.). 59 Senators voted in support of the new code late Wednesday, with Senate and National Assembly versions of the law due to go to committee today Thursday to be harmonised before the final text is sent to President Kabila for signature. The new royalties are expected to hit all established producers but ARE NOT a disaster, in my view, given the exceptionally high grades mined in the DRC. Mining analyst views from London this morning are that the costs associated with corrupt practices and security related to working in the DRC are "far more damaging to business in the region than any royalty increase." I couldn't agree more. With the US$ declining and US$ commodities rising and Co nearing US$80k/t, buy on weakness. These are my views only. Thanks for reading.