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Mining industry of the Democratic Republic of the Congo
Mining industry in the Democratic Republic of the Congo From Wikipedia, the free encyclopedia
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The mining industry of the Democratic Republic of the Congo (French: Industrie minière de la République Démocratique du Congo) is a major global supplier of minerals including cobalt, copper, diamonds, gold, tantalum, and tin. The DRC supplies over 70% of global cobalt and mineral exports account for more than 95% of the country’s export revenues.[1]
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Mining includes large-scale industrial projects, semi-industrial ventures, and widespread artisanal and small-scale mining (ASM), often under dangerous and exploitative conditions.[2]
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Mining types
Industrial mining
Large industrial mines are typically joint ventures between foreign firms and DRC parastatals such as Gécamines. Permits are administered through the Cadastre Minier (CAMI). Industrial mining requires major investments and long development times.
Artisanal and semi-industrial mining
Artisanal miners operate outside formal regulation despite the establishment of Artisanal Exploitation Zones (AEZs). Most use hand tools under hazardous conditions, including widespread child labour. Semi-industrial mining uses some mechanization but remains distinct from large-scale industrial operations.[3]
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Major commodities
Copper and cobalt
Most mining occurs in the Copperbelt region. Cobalt, vital for electric vehicle batteries, is sourced from both industrial and artisanal mines. The government created Entreprise Générale du Cobalt (EGC) to regulate artisanal cobalt production.[4]
Diamonds
The DRC is among the largest diamond producers by volume, mostly through artisanal mining. A significant share of production is industrial-grade.[5]
Gold
Gold mining is concentrated in eastern provinces. Gold smuggling across borders, particularly to Uganda and Rwanda, finances armed groups.[6]
Lithium
The Manono-Kitolo region holds large lithium deposits under development.[7]
3T minerals (Tantalum, Tin, Tungsten)
The so-called 3T minerals—tantalum, tin, and tungsten—are mined artisanally in the eastern DRC.[8]
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History
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Pre-colonial mining (c. 14th century)
Mining in the DRC was carried out by Indigenous peoples for centuries before colonial powers arrived. For example, the Katanga Cross, made from sand cast copper, existed from at least the 14th century, and evolved in use first as a symbol of wealth, and later a form of currency. The accounts of explorers such as David Livingstone and Frederick Stanley Arnot brought news of the mineral wealth of Katanga to Europe for the first time in the 19th century.[9][10][11] At the time of the Berlin conference that precipitated the Scramble for Africa, the copper mining region of the DRC was controlled by Indigenous peoples, mainly the Yeke Kingdom headed by Msiri. The kingdom had an already well-established trade network in resources, with copper from the Katanga region making up an important part.[12]
Colonialism in the DRC (1885-1960)
The Democratic Republic of the Congo has a long history of colonization, divided into two major parts: the reign of King Leopold II from 1885 to 1908, and Belgian colonization from 1908 to 1960.[13] During this colonial regime, the Congolese were subjected to massive exploitation and human rights abuses. The country attracted European powers due to the increased global demand for rubber. In order to keep up with the demand, a reign of terror was imposed on the citizens.[13] Those who refused or failed to deliver the quotas of rubber had their right hands severed by soldiers, as ordered by King Leopold II. Eventually, because of the human atrocities committed during this time, Leopold was forced to give up power, signing it over to Belgium, who renamed it to the Belgian Congo. Up until its independence in 1960, the DRC continued to be subjected to exploitation, discrimination, and racial segregation.[13]
Congo Free State and Belgian Congo (1885–1960)
Several mining companies were established under Belgian rule, such as Union Minière du Haut-Katanga in 1906, Forminière in 1913, and Société minière du Bécéka in 1919. Mines active in this period included the Kipushi Mine. For example, the Belgian colonial administrator Georges Moulaert was active in setting up several mining companies, but was publicly criticized for heavy use of forced labour in his gold mining operations.
DRC and Zaire (1960–1997)
During the Congo crisis, Belgian companies were significant supporters of the failed attempts by the State of Katanga and South Kasai to establish their own states independent of the DRC. Patrice Lumumba was the country’s first democratically elected prime minister, however, this anti-colonial view was rejected and Belgian mercenaries conspired to assassinate him. A violent dictator, Joseph Mobutu was put in his place and upheld the Western agenda for 32 years.[14] Following the end of the crisis, most of the mining assets of Belgian-owned companies were nationalized as Congolese state-owned companies, usually known as parastatal companies.
Mass scale looting (1998)
After Rwanda, Uganda, and Burundi's successful 1998 invasion of eastern and southeastern DRC in the Second Congo War (1998-2003), "mass scale looting" took root, according to the United Nations.[15]: 8 While initial invasion tactics were still being worked out, military commanders were already making business deals with foreign companies for the Congo's vast mineral reserves.[15] Between September 1998 and August 1999 stockpiles of minerals, agricultural products, timber, and livestock were illegally confiscated from Congolese businesses, piled onto trucks, and sold as exports from the confiscating countries.[15] ↵Rwandan and Ugandan troops forced local businesses to shut their doors by robbing and harassing civilian owners. Cars were stolen to such an extent that Uganda showed a 25% increase in automobile ownership in 1999.[15] DARA-Forest Company illegally logged then sold Congolese timber on the international market as its own export.[16][15] ↵An American Mineral Fields executive allowed rebels to use his private Learjet in return for a $1 billion mining deal.[17] Global Witness in 2004 described the mining corporations' rush to acquire coltan-rich land in the rebel territory of the DRC as a continuation of the pattern of exploitation in play since the 1885 Conference of Berlin.[17][18]
Mining resumes (2001–present)
Following the peace accord in 2003, the focus returned to mining. Rebel groups supplied international corporations through unregulated mining by soldiers, locals organized by military commanders and by foreign nationals. The political framework was unstable.
The mass looting died down as stocks of minerals were depleted, and soldiers were encouraged by their commanders to take part in small-scale looting, which started an "active extraction phase".[15]: 8 Natural resources that were not stolen were often purchased with counterfeit Congolese francs, which contributed to inflation. Air transportation companies that once operated in the Congo disappeared and were replaced by companies affiliated with foreign armies. The Congolese government lost tax revenue from natural resources entering or leaving its air fields; air services were controlled by Rwandan and Ugandan troops, who routinely exported coltan from the Congo. The increase in air transportation networks also increased exploitation because of the new transport routes.[15] Coltan is the most profitable mineral export from the Congo, but it is particularly difficult to track because it is often listed as cassiterite, for which export taxes are lower. Coltan had been illegally extracted and sold via Burundi since 1995, three years before the invasion began.[15] The International Monetary Fund (IMF) stated that Burundi has no "gold, diamonds, columbotantalite, copper, cobalt or basic metals" mining operations, but has nonetheless been exporting them since 1998.[15]: 22 ↵Likewise, Rwanda and Uganda had no known production sites for many of the minerals they exported at vastly increased rates after they invaded the DRC.[15] "Free zone areas" make diamonds difficult to track because they can be repackaged and "legally" sold as diamonds from that country.[15]: 17 The DRC exported few minerals after the invasion because its rural infrastructure was destroyed; mining and agricultural outputs waned.[15] Yet the air transportation networks' new transport routes increased exploitation by the invaders.[15]
In 2000, Rwanda spent $70 million supporting about 25,000 troops and Uganda spent $110 million supporting twice as many troops.[15] Rwanda and Uganda financed their war efforts through commercial deals, profit-sharing with companies, and taxation, among other things. Rwandan soldiers stole coltan collected by villagers and sold it to diamond dealers. From the coltan trade alone, the Rwandan army may have collected $20 million per month, and coltan profits have been used to pay back loans from foreign creditors.[15]
Rebel groups MLC, RCD-Goma, and RCD-ML each made their own deals with foreign businessmen for cash and/or military equipment.[15] Battlefields most commonly centered on areas that held a lot of diamond and coltan potential and foreign armies' occupation of the eastern region was maintained by illegal resource exploitation.[15] For $1 million per month rebel group RCD-Goma gave a coltan monopoly to SOMIGL which they in turn poured into efforts to gain control from RCD-ML of mineral-loaded land.[15] To get fast cash to gain control of government land, the DRC gave a diamond monopoly to Dan Gertler's International Diamond Industries (IDI), which was supposed to pay the Congolese government $20 million for it. But it paid only $3 million, yet continued to extract diamonds from the region and sell them internationally.[15] Upon request of the IMF and World Bank the DRC liberalized diamond trade, after which IDI threatened to sue for breach of contract, a contract they themselves did not honor.[15]
Corporations and Western countries purchasing coltan from Rwanda, Uganda, or Burundi were aware of its origin; aid from western donors was funneled directly into Rwandan and Ugandan war efforts.[citation needed] The German government gave a loan to a German citizen to build his coltan export business in the DRC, for which he enlisted the help of RCD-Goma soldiers. Mineral plunder in the DRC was easy once the central authority had collapsed because of the extremely weak financial system, as well as the international corporations and governments that imported illegal minerals disregarding illegal conflicts on the part of proper standards.[15]
The US documented that many minerals were purchased from the DRC even though the DRC had no record of exporting them.[15] A lack of state stability combined with international corporations' and foreign governments’ interest in investing in Congolese minerals increased the pace at which the DRC was shaken from its fragile foundation. The UN identified the perpetrators of illegal resource exploitation in the DRC, but was unable to help prevent the economic exploitation of the country.[15]
IMF loan for debt relief (2009–2012)
In 2009 the DRC signed a loan contract with the International Monetary Fund (IMF) for $12 billion of debt relief in 2010. The loan included trade conditions, such as liberalization of the diamond trade.[19] The same year, the IFC began working with the DRC on legal and regulatory improvements through an advisory service called "Conflict Affected States in Africa" (CASA). It suspended most activities during a dispute between IFC and the DRC over the expropriation of a mining investment.[20]: 14
In September 2010, the Forces démocratiques de libération du Rwanda (FDLR), a group of mostly Hutu rebels, were reported to exploit timber, gold and coltan in North Kivu and South Kivu.[21] In September 2010, the government banned mining in the east of the country, to crack down on illegal organisations and corruption.[22] In 2011, the DRC was accused of "selling off billions of dollars of mining assets at knockdown prices".[citation needed] In 2012 the DRC began reviewing its 2002 mining code. It received warnings from the World Bank, was heavily lobbied by mining companies and investors who wanted to be included in the revision discussions, and did not complete the project.[23]
In 2012 the DRC failed to provide sufficient details on the process whereby state mining company Gécamines ceded mining assets to a company based in the British Virgin Islands, and the IMF called off a $530 million loan.[24] At the end of 2012 the IMF suspended the last loan payments, because of a lack of transparency in the DRC's process for awarding mining contracts.[25][26] The mining sector has since expanded, but commodity prices have declined and this has hampered the DRC's progress.
In July 2013, the IFC advisory service CASA re-engaged and helped the DRC adopt and implement the Organization for the Harmonization of Business Law in Africa (OHADA) Treaty.[20]: 14 Despite Congolese military operations to take Kinshasa mines from the Mai-Mai militia and the FDLR, the guerillas still controlled some of the mines and created disturbances. In 2014 Kabila told mining companies in Katanga province to postpone plans that would require more power due to an "energy crisis".[27] In March 2016, 42 NGOs urged Kabila to update the 2002 mining code after a draft was submitted to parliament in March, but Kabila decided to wait until metal markets recovered.[28]
Canadian, Chinese, and Australian companies are heavily involved in DRC mining. Chinese companies, supported by the Belt and Road Initiative, have significantly expanded their footprint.[29]
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Mining companies
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Canada
In 2004, the FARDC killed between seventy and one hundred civilians in the town of Kilwa, near Anvil Mining's Dikulushi mine, which resulted in legal proceedings against Anvil Mining in the DRC and Canada, investigations by the Australian Federal Police and by the World Bank Group's Office of the Compliance Advisor/Ombudsman.[30][31][32] In 2005, the World Bank's Multilateral Investment Guarantee Agency (MIGA) funded the first DRC project by Canada and Ireland as co-investors, on behalf of the Dikulushi Mine held by Anvil Mining in Katanga Province. According to the Congolese government, in 2009 Canadian companies held US$4.5 billion in mining-related investments in the DR Congo.[33][34]
In 2009, First Quantum Minerals, active in the D.R.C since 1997, reported its corporate social responsibility contributions amounted to 3% of the Congolese gross national income.[35] It was the DRC's largest taxpayer that year, accounting for between one-eighth and one-quarter of collected revenue.[36] Since 2009, First Quantum Minerals and Heritage Oil,[37][38] had their mining permits revoked by the DRC government. First Quantum closed all its Congolese operations in 2010, and in concert with other stakeholders initiated international arbitration proceedings against the Congolese government.[39][40][41][42] The Congolese revocation was seen as a rebuke for the Government of Canada's alleged attempts to obstruct the negotiation of International Monetary Fund and World Bank debt relief to the DRC in 2010.[43][44][45][46] In 2012, First Quantum's legal dispute with the DRC ended in an out-of-court settlement.[47]
By the late 2000s, the DRC was either the top or second-leading African destination for Canadian mining activity.[48] According to the Canadian government, 28 Canadian firms were involved in mining and exploration in the DRC between 2001 and 2009, with four carrying out commercial-scale extraction; collectively, these companies' assets in the DRC ranged between Cdn.$161 million in 2003 and $5.2 billion in 2008.[49]
Canada's mining ministry, Natural Resources Canada, estimated the 2009 value of Canadian-owned mining assets in the DRC at Cdn.$3.3 billion, ten times more than in 2001, making the DRC the African country with second-highest African level of Canadian investment after Madagascar, and Canadian investment in the Congo representing a sixth of total Canadian mining assets in Africa.[49] In 2011, Natural Resources Canada valued Canadian mining assets in the DRC at Cdn.$2.6 billion.[50] Most Canadian mining firms operating in the DRC during the 2000s—or earlier—focused on exploring, developing, or extracting copper and cobalt on a large scale. According to the World Bank, three Canadian companies—First Quantum Minerals, Lundin Mining (in partnership with U.S.-based Freeport-McMoRan), and Katanga Mining—were expected to account for over two-thirds of Congo's copper production between 2008 and 2013 and a similar share of cobalt output from 2008 to 2014. These companies, and Canadian-incorporated Anvil Mining, were involved in industrial copper and cobalt extraction during 2000–2010.[36]
As of early 2011, another eight junior Canadian mining companies including Ivanhoe Mines and Rubicon Minerals, reported holdings of copper and cobalt concessions in Katanga province. Nine Canadian junior mining companies, including Kinross Gold, previously held copper and/or cobalt concessions, but have since abandoned them, or sold them to other Canadian or South African firms.[51][52][53] In the diamond sector, Montreal-based Dan Gertler has been active since 1997.[54][55] Seven other Canadian junior companies reported owning properties in the DRC during 2001–2009, including Canaf Group through its 2008 acquisition of diamond mining company New Stone Mining, and BRC DiamondCore.[56][57][58] Montreal-based Shamika Resources has been exploring for tantalum, niobium, tin and tungsten in the eastern DRC and Loncor Resources for gold, platinum, tantalum and other metals.[59] Two Canadian-registered companies own petroleum concessions in the DRC: Heritage Oil, whose founder and former CEO is Tony Buckingham, and EnerGulf Resources.[60][61][62][63]
Up until early 2011, four of the nine International Finance Corporation sponsored or proposed DRC projects were for Canadian-owned companies active in the DRC: to Kolwezi/Kingamyambo Musonoi Tailings SARL owned by Adastra Minerals ($50.0m., invested in 2006), Africo Resources Ltd. (acquisition of Cdn.$8m. in Africo shares, invested in 2007), and Kingamyambo Musonoi Tailings SARL as acquired by First Quantum, proposed in 2009 at a value of US$4.5 million in equity funding. Still in 2011, Canada's Fraser Institute annual survey of mining executives reported the DRC's ranking of its mining exploration investment favorability fell from eighth-poorest in 2006 down to second-poorest in 2010, among 45 African, Asian and Latin American countries and 24 jurisdictions in Canada, Australia and the United States, and this was attributed to "the uncertainty created by the nationalization and revision of contracts by the Kabila government".
In 2012, Banro Corporation began gold production at its Twangiza Mine, after owning gold concessions in the South Kivu and Maniema provinces, the Twangiza-Namoya gold belt, since 1996. Six other Canadian companies have previously owned Congolese gold properties, including Barrick Gold (1996–1998),[64][65] and Moto Goldmines (2005–2009).
China
China and the DRC signed an MOU on the Belt and Road Initiative (BRI) cooperation during a tour of China's Foreign Minister, Wang Yi, making the DRC, China's 45th Belt and Road Initiative partner in Africa.[citation needed] Also known as the “New Silk Road,” the initiative consists of a network of railways, pipelines, highways and ports linking these networks of infrastructure to other Belt and Road Initiative partner countries in Russia, Europe, India, Central Asia and Southeast Asia. A positive move for the DRC and China relations when China decided to write off debts from the DRC and the new partnering for the Belt and Road Initiative, this will encourage further cooperation between the two countries and encourage investment from more Chinese miners, like China Molybdenum, to enter investments into the Congolese copper and cobalt industry.[citation needed]
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Environmental and human rights concerns
Mining in the DRC has caused environmental degradation, water pollution, and severe public health issues. Research in Katanga found dangerously high levels of cobalt and uranium in residents.[66][67] Mining activities have also led to widespread forced eviction, labour exploitation, child labour, sexual violence, and displacement.[68][69] Children born in the Copperbelt region were found to have more birth defects than those born outside of it. [70] Major Rivers near the Copperbelt have been contaminated by waste and refinery processes, leading to loss of income for locals reliant on the waters for usage and fishing.[71]
Regulation
The DRC’s mining sector operates under a revised mining code, passed in 2018, which increased royalties and taxes compared to the 2002 code. Despite opposition from mining companies, the reforms aimed to boost government revenues.[72]
Efforts like the iTSCi traceability initiative and OECD guidelines exist, but enforcement remains weak.[73]
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See also
References
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