DRC reviews legality of licences

The Democratic Republic of Congo (DRC) is of growing interest to international mining companies because of its vast reserves of copper and other minerals.

The collapse of the copper price in 1974, followed by years of internal conflict, meant that annual copper production by Gecamines, the DRC state owned mining company, fell from 470,000 tonnes in the mid 1980s, to 14,000 tonnes, in 2005.

However, in September of this year, China announced plans to invest $8.5 in the country’s infrastructure and there are now plans to create a railway link between the southern mining region of the DRC and its Atlantic coast.

The level of China’s investment will only increase international interest in mining opportunities, but the Congolese government is currently working to determine the legitimacy of mining licences that were granted when the country was in the turmoil of civil war.

According to a number of United Nations reports, mining concessions were awarded to finance opposing factions in the conflict and line the pockets of corrupt officials.

As a result, the Kinshasa government is examining 65 mining concessions in a review that is crucially important to a number of companies quoted on the London stock exchange.

These include: Anglo-Gold Ashanti, Central African Mining and Exploration (Camec), Copper Resources Corporation, First Quantum, Gem Diamonds, Metorex, Moto Goldmines, Mwana Africa and Nikanor.

The government wants to establish which licences were legitimately gained and which were the product of corrupt deals.

In this process Victor Kasongo, the deputy mines minister of the DRC, anticipates that: “Some of the contracts will need serious thinking, serious negotiation to get all the parties’ agreement. And some, I am sure, will be found to be simply unlawful.”