Mining companies return to Congo

Mining companies are stepping up their activities in the Democratic Republic of Congo following the end of the war and the introduction of a World Bank-drafted mining code since elections last year.

by Financial Times
Last Updated: 23 Jul 2013

The world's biggest mining companies said at a conference in South Africa last month that they were going back into the country, which was devastated by a war that ended in 2003.

Congo's huge mineral deposits include diamonds, gold, copper, bauxite, nickel, iron ore and cobalt and, unlike most countries, it has many deposits that have yet to be exhausted. Warlords and foreign armies fought over control of these deposits in the war years. Today many of the miners are individual prospectors operating outside the formal economy.

Anglo-American is planning to open two offices this year in the capital Kinshasa and in Lubumbashi, the capital of the copper-rich province of Katanga.

Rio Tinto returned to DRC in 2005, after a 50-year absence, in the belief that the mining code and an improved security of tenure and application of the rule of law made it a worthwhile commitment.

BHP Billiton, the world's largest mining company, has one of the biggest land holdings in the DRC and is looking at constructing an aluminium smelter powered by hydroelectricity from dams on the River Congo.

Risks still exist however. The extent of government control is questionable, and conditions in Congo are harsh, with the ever-present dangers of malaria and violence. Artisanal miners might resent the likes of Rio Tinto taking over mining areas. Lack of transport and energy infrastructure is another headache.

Several smaller mining companies from the UK, Canada and Australia are already working in DRC, buying land and signing joint ventures with the near bankrupt state companies. There are concerns over some of the deals, such as one signed with Gecamines, the state-owned copper company, that were made in less than fully transparent circumstances.

The DRC government will have to show that concessions can deliver tangible benefits for the people of Congo in order to avoid recurrent political tensions.

Stability tempts mining companies back to Congo
Financial Times, 21 February
Review by Joe Gill



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