Mining industry of the Democratic Republic of the Congo
- 1 History
- 2 Foreign involvement
- 3 Impacts of natural resource extraction on the DRC
- 4 See also
- 5 References
- 6 External links
Mass scale lootingAfter Rwanda, Uganda, and Burundi’s successful invasion of eastern and southeastern DRC in the Second Congo War, a great deal of what the UN labeled "mass scale looting" took root. While initial invasion tactics were still being worked out, military commanders were making business deals with foreign companies for the Congo’s vast mineral reserves. 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.
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 percent increase in automobiles in 1999. DARA-Forest Company illegally extracted and sold Congolese timber on the international market. An American Mineral Fields executive allowed rebels to use his private lear jet for a $1 billion mining deal. Some parallel the mining corporations rush to acquire coltan rich land in rebel territory of the DRC to the Conference of Berlin in 1885.
Active extraction phaseWhen the mass scale looting died down as stocks of minerals were depleted, soldiers were encouraged by commanders to take part in small-scale looting which started an "active extraction phase". Natural resources that were not stolen were often purchased with counterfeit Congolese francs which contributed to inflation. Air transportation companies that had operated in the Congo disappeared and were replaced by companies affiliated with foreign armies. The Congolese government lost out of profits from taxes on natural resources entering and leaving air fields because air services were controlled by foreign Rwandan and Ugandan troops who routinely exported coltan from the Congo. The increase in air transportation networks has also increased exploitation because of the emergence of new transport routes.
Rwanda and Uganda have no known production sites for many of the minerals that were exported at vastly higher rates after their invasion of the DRC. "Free zone areas" make diamonds difficult to track because they can be repackaged and "legally" sold as diamonds from that country. The DRC has been exporting few minerals since the invasion because the destruction of the rural infrastructure has caused mining and agricultural outputs to wane.
Coltan is the most profitable mineral export from the Congo, but it is particularly difficult to track because it is often listed as cassiterite, a mineral of lesser quality, for which export taxes are lower. Coltan has been illegally extracted and sold via Burundi since 1995, three years before the invasion. The International Monetary Fund (IMF) states that Burundi has no "gold, diamonds, columbotantalite, copper, cobalt or basic metals" mining operations but has been exporting them since 1998.
In the year 2000 Rwanda spent $70 million supporting about 25,000 troops and Uganda spent $110 million supporting twice as many troops. Rwanda and Uganda finance their war efforts through commercial deals, profit-sharing with companies, and taxation among other things. Rwandan soldiers often steal coltan collected by villagers and sell it to diamond dealers themselves. From dealing in 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.
Rebel groups MLC, RCD-Goma, and RCD-ML make their own deals with foreign businessmen for cash and/or military equipment. Battlefields are most commonly centered on areas that hold a lot of diamond and coltan potential and foreign armies occupation of the eastern region is maintained by illegal resource exploitation.
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 for mineral-loaded land. To try to get fast cash to gain control of government land the DRC gave a diamond monopoly to International Diamond Industries (IDI) which was supposed to pay the government $20 million but paid only $3 million and continued to extract diamonds from the region and sell them internationally. Upon request of the IMF and WB the DRC is trying to liberalize diamond trade and IDI has threatened to sue because they had a contract they themselves did not honor.
Corporations and Western countries purchasing coltan from Rwanda, Uganda, or Burundi are aware of its origin and aid from western donors is funneled directly into Rwandan and Ugandan war efforts. The German government even gave a loan to a private 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 apparent disregard of illegal conflicts on the part of proper standards by international corporations and governments that imported illegal minerals.
The US has documented that many minerals are purchased from the DRC even though the DRC has no record of exporting them. A lack of state stability combined with international corporations and foreign government’s interest in investing in Congolese mineral plunder increased the pace at which the DRC was shook off its fragile foundation. The UN does an excellent job of identifying the perpetrators of illegal resource exploitation in the DRC, but was not able to help prevent the economic exploitation of the country.
In September 2010, it was reported that the FDLR (Forces démocratiques de libération du Rwanda), a group of mostly Hutu rebels, was exploiting timber, gold and coltan in North Kivu and South Kivu.
Foreign involvementIn 2011, at least twenty-five international mining companies were active in the D.R. Congo according to Datamonitor 360. Canadian-domiciled mining companies had the highest presence, with nine in total: African Metals Corporation, Banro Resources Corporation, BRC DiamondCore, El Niño Ventures Inc., First Quantum Minerals, ICS Copper Systems Ltd., Lundin Mining Corp., as well as Anvil Mining Ltd., misidentified as Australian, and Katanga Mining Ltd, misidentified as British.
By comparison, six firms were incorporated in Australia (Austral Africa Resources Ltd., BHP Billiton Group, Green Machine Development Corporation, Lindian Resources Ltd., Mawson West Ltd., Tiger Resources Ltd.), three in South Africa (African Rainbow Minerals, AngloGold Ashanti, Chrometco Ltd.), two in the United Kingdom (Mwana Africa PLC, Randgold Resources Ltd.), two from the United States (Century Aluminum Co., Freeport-McMoRan Copper & Gold Inc.), and one each from China (CIC Mining Resources Ltd., with Japanese Eco Energy Group's African subsidiary, Eco Project Company Ltd.), Morocco (Managem SA), and Switzerland (Xstrata plc).
In 2008 and 2009, the Congolese operations of larger international companies, AngloGold Ashanti, BHP Billiton, and Xstrata were all in the exploration and development phase, while Canada had four companies, Anvil Mining, First Quantum Minerals, Katanga Mining, and Lundin Mining involved in large-scale commercial extraction for several years or more.
In August 2012 the Chinese firm Changfa Mineral Resources acquired the Mokambo Copper mine project on the Mufulira and Democratic Republic of Congo border and it is expected to create around 3,000 new jobs when it begins full-scale operations this year.
CanadaAccording to the Congolese government, Canadian companies in 2009 held US$4.5 billion in mining-related investments in the DR Congo. The DRC ranked either first or second-largest among African countries for Canadian mining at the end of the 2000s. The Government of Canada reported 28 Canadian mining and exploration companies operating in the D.R. Congo between 2001 and 2009, with four carrying out commercial-scale extraction; collectively, these companies' assets in the DRC ranged between Cdn.$161 mill. in 2003 and $5.2 bill. in 2008.
The Government of Canada's mining ministry, Natural Resources Canada estimated that in 2009, Canadian-owned mining assets in the D.R. Congo were valued at Cdn.$3.3 billion, ten times more than in 2001, making them the second-highest African share after Madagascar, and representing a sixth of total Canadian mining assets in Africa. Natural Resources Canada valued Canadian mining assets in the DRC at Cdn.$2.6 bn. in 2011.
The majority of Canadian-domiciled mining companies currently or previously active in the DR Congo have been involved in either exploration and development or large-scale mining of the Congo's copper and cobalt resources. Using World Bank estimates, Garrett and Lintzer reported that three Canadian companies First Quantum Minerals, Lundin Mining (in partnership with the US firm Freeport McMoRan Copper & Gold) and Katanga Mining will have been responsible for more than two-thirds of total Congolese copper output from 2008 to 2013, and for more than two-thirds of total Congolese cobalt output from 2008 to 2014. These companies, along with Canadian-incorporated Anvil Mining, have undertaken industrial copper and cobalt extraction during 2000-2010.
Another eight junior Canadian mining companies including Ivanhoe Nickel & Platinum Ltd. and Rubicon Minerals Corporation, as of early 2011, reporting holdings of copper and cobalt concessions in Katanga province. Nine Canadian junior mining companies, including Kinross Gold Corp., previously held copper and/or cobalt concessions, but have since abandoned them, or had them acquired by other Canadian or South African firms.
Banro Resources Corporation has since 1996 owned gold concessions in South Kivu and Maniema provinces of the DRC, and began gold production in 2011. Six other Canadian companies previously owned Congolese gold properties, including Barrick Gold (1996–1998), and Moto Goldmines (2005–2009). In the diamonds sector, Montreal-based Emaxon Financial International Inc. is currently active, while seven other Canadian junior companies reported previous ownership of properties in the DRC during 2001-2009, including Canaf Group Inc. and BRC DiamondCore.
Montreal-based Shamika Resources is exploring for tantalum, niobium, tin and tungsten in the Eastern DRC and Loncor Resources is exploring for gold, platinum, tantalum and other metals. Two Canadian-registered companies own petroleum concessions in the DRC: Heritage Oil plc, whose founder and Chief Executive Officer is Tony Buckingham, and EnerGulf Resources Inc..
Since 2009, two Canadian companies, First Quantum Minerals and Heritage Oil plc, have had their mining permits revoked by the DRC government. First Quantum closed all its Congolese operations during 2010, and initiated, in concert with other stakeholders, international arbitration proceedings against the Congolese government. The Congolese revocation was linked to alleged obstruction attempts made by the Government of Canada in the negotiation of International Monetary Fund and World Bank debt relief to the DRC in 2010.
First Quantum, which was active in the D.R. Congo since 1997, reported overall corporate social responsibility contributions amounting to 3.0% of the Congolese gross national income in 2009, and was reported to be the DRC's largest taxpayer that year, accounting for between one-eighth and one-quarter of total collected revenue. In 2012, it was announced that First Quantum's legal dispute ended in an out of court settlement.
The first DR Congo project funded by the World Bank Group's Multilateral Investment Guarantee Agency (MIGA), was awarded in 2005 to Canada and Ireland as co-investors, on behalf of the Dikulushi Mine held by Anvil Mining Ltd. in Katanga Province. Four of the nine D.R. Congo projects sponsored or proposed for sponsorship by the World Bank's International Finance Corporation up to early 2011 were for Canadian-owned companies active in the DRC: to Kolwezi/Kingamyambo Musonoi Tailings SARL owned by Adastra Minerals Inc. ($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 m. in equity funding.
The killing by Congolese military of between seventy and one hundred civilians in the town of Kilwa, nearby Anvil Mining's Dikulushi mine in 2004 has resulted in legal proceedings against Anvil Mining in the DR Congo and Canada, and investigations by the Australian Federal Police and by the World Bank Group's Office of the Compliance Advisor/Ombudsman.
In 2011, Canada's Fraser Institute annual survey of mining executives reported the DRC's ranking of its mining exploration investment favourability 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".
Impacts of natural resource extraction on the DRC
Environmental impactsResource extraction has many impacts on the cultural and environmental diversity of the DRC; it is difficult to quantify the environmental degradation of the country. As it is unstable and difficult for researchers to enter and do work in the country also it is always difficult to quantify loss of biodiversity as animals are mobile and the lack of roads and navigable rivers make transportation into the wilderness areas difficult for researchers.
Mining can be an intensive process and has affected some wilderness areas, including national parks and wildlife reserves such as Kahuzi-Biega and the Okapi Wildlife Reserve, both of which are world heritage sites. Mining in these areas is typically artisanal; a small scale mining method that takes place in river beds and can, cumulatively, be very environmentally damaging. Artisanal mining degrades riparian zones, creating erosion and heavy silting of the water. The tailings are often dumped into the rivers and could be contaminated with mercury and cyanide degrading the health of the river systems putting the wildlife and people at risk.
Miners and refugees are relocating to parks in search of minerals; a reported 10,000 have moved into Kahuzi-Biega and 4,000 to the Okapi Wildlife Reserve. This increases the pressures on wildlife as timber is cut down and used as fuel wood to cook with, and wildlife is killed for its meat. Also, as people enter into these areas animals such as primates are collected for trade on the black market. Others are poached for their hides, or for the tusks such as elephants.
The extent of logging has been difficult to quantify. Much of the logging that occurs is primarily for target hardwood species, rather than clear-cutting which can be assessed by satellite imaging. Observations have shown an increased number of logging trucks moving across borders. Logging destroys valuable habitat for animals and increases the access into forested areas making it easier for poachers, miners and refugees to access areas.
Socio-cultural repercussionsThere are many factors which contributed to the Democratic Republic of the Congo’s severe socio-economic hardships, and not all resource extraction operations have had an entirely negative impact on Congolese society at large. That said, the negative consequences brought about by some forms of resource extraction, such as coltan mining, are devastating. For example, worldwide, as demand for goods has increased, so has the demand for tantalum, or coltan (DCA 2006) and reportedly, "much of the finance sustaining the civil wars in Africa, especially in the Democratic Republic of the Congo, is directly connected to Coltan profits" (DCA 2006, pp 1).
Within the DRC, there are both wars between Congolese and conflicts between neighboring nations. Although these wars have components of inter-tribal conflict, in several cases the conflicts have been induced by external forces, such as changes in international support and demands for resource extraction. As a result of tantalum mining and wars, societies in the eastern regions of the Congo are experiencing heightened physical and economic insecurity, health problems and human-rights violations.
In the Ituri region, a violent conflict is occurring between the Lendu and the Hema tribes. Analysts have determined that the conflict has intertribal as well as economic components brought about by the patterns of coltan extraction.
A health problem brought about by resource extraction is the effect of tantalite (coltan) mining on women and children who work in the mines. As more women are turning to mining for income, they are faced with dangerous tasks such as pounding the stone which contains tantalum. The release of fibers that get into the lungs is affecting both the women and their babies, who are passengers on their mother’s backs. "More worrying, the majority of babies, often on the backs of their mothers during the horrendous task of pounding coltan, have started showing similar signs of disease and pain to those of their mothers".
Child labour is common in DRC, and the mining industry is no exception. Children in the region are also being forced and coerced to become soldiers.
The resulting labor shift from farming to mining has been linked to food shortages and insecurity. The DRC has some of the richest soils and favorable climatic conditions for food production on the African continent. Before Mobutu’s reign, the DRC was one of the major exporters of food to the rest of Africa. "The richly fertile soil (especially that in the eastern highlands which is volcanic in origin) could produce enough food to feed half of Africa, but the country is so poor that at present its people do not produce enough food to feed themselves".
Environmental and occupational healthCivilian populations have suffered significant health impacts from mining and the associated conflicts. The exploitation of natural resources is directly related to the ongoing conflict in the region and subsequent humanitarian crises. These health impacts come from labor, human rights violations, and collapse of social norms.
Health and safety standards are largely specified in Congolese law, but government agencies have not enforced them effectively. Because of this, there are many grave labor violations. Minimum wage laws are rarely followed at mines. Work week hour standards, overtime payment and rest periods are largely ignored as well. Child labor laws are rarely enforced. Child laborers make up to 30% of the mining labor force. Because of all of this, deaths and violent injury at mining work sites are common place.
Civilians, including large numbers of children, have been regularly forced into labor, especially as miners and soldiers. Many miners become enslaved when they fail to pay back debt to their employer.
Rebel and militia groups commit widespread human rights abuses, including rape, enslavement, torture, disappearances and killing of civilians. These groups compete for finances from illegal mining. Reports indicate that corporations have facilitated these abuses by obtaining minerals from areas controlled by these groups.
Sexual violence is an especially widespread and devastating issue across the country. Between 1.69 and 1.80 million women reported being raped in their lifetime. Around mines, survival prostitution, sex slavery, and forced child prostitution has been observed. This widespread sexual violence contributes to the spread of HIV/AIDS, as well.
During the Second Congo War, 3 million civilians died, largely attributed to malnutrition or disease. Nearly as many were internally displaced. Destruction of agricultural land and cattle, and the draw of money through mining led to a decrease in food access and increase in malnutrition.
Assessment and assistance by outside organizations has been difficult. Access to mining areas is limited by corrupt government officials and hostile militias. Recently, reductions in mortality rate have been documented. This is linked to improvements in security, humanitarian and politic issues. These improvements, however, are limited by continued unregulated mining. Exploitation of natural resources by rebel groups supplying international corporations continues to impair the growth of peace and stability.
In the United States, the Dodd–Frank Wall Street Reform and Consumer Protection Act requires retailers and manufacturers to track and publish the amount of conflict minerals sourced from the Democratic Republic of the Congo. A recent event, the exact regulations have not yet been determined.
- Copper mining in the Democratic Republic of the Congo
- List of companies based in the Democratic Republic of the Congo
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- First Blood Diamonds, Now Blood Computers? by Elizabeth Dias, Time Magazine, July 24, 2009
- Mining Concessions in the DR Congo, International Peace Information Service. Interactive, searchable map of all mining concessions in the Democratic Republic of the Congo, based on Cadastre Minier (CaMi) data, July 27, 2010.