Definition & Context
Free carry interest refers to the DRC government's right to hold an equity stake in any mining project without contributing capital. Under the 2018 Mining Code, the state is entitled to a 10% free carry interest in all mining joint ventures and projects (increased from 5% under the 2002 code). For strategic minerals (cobalt, coltan, germanium, lithium), the government can increase its stake up to 15%. This equity position entitles the state to dividends and participation in corporate decisions proportional to its shareholding. The free carry interest is separate from royalties, taxes, and other fiscal obligations. It is a common mechanism across African mining jurisdictions, though the specific percentage varies by country.
Key Facts
- • State receives 10% equity without capital contribution
- • Increased from 5% under the 2002 Mining Code
- • Can increase to 15% for strategic minerals
- • Entitles the state to dividends proportional to shareholding
- • Separate from royalties, taxes, and other fiscal obligations
- • Mandated by the 2018 Mining Code (Law No. 18/001)
Global Context
Free carry interest is common across African mining jurisdictions. Tanzania requires 16% free carry, Ghana 10%, and Zambia 5-15% depending on the mineral. The DRC's 10% rate (potentially 15% for strategic minerals) is competitive but adds to the overall fiscal burden alongside high royalties and the super profits tax.
Frequently Asked Questions
What is free carry interest in DRC mining?
Free carry interest is the DRC government's right to hold a 10% equity stake in mining projects without contributing capital. For strategic minerals like cobalt, this can increase to 15%.
Does the government pay for its mining shares?
No. Free carry means the government receives its equity stake at no cost. The 10% is automatically granted upon issuance of an exploitation permit under the 2018 Mining Code.