MINING SECTOR UPDATE

UNCLAS KINSHASA 001500 SIPDIS SIPDIS E.O. 12958: N/A TAGS: EMIN ECON SENV ETRD PGOV CG SUBJECT: MINING SECTOR UPDATE REF: KINSHASA 1398 ¶1. (U) Summary. During the past month several miners died in mining-related accidents, and two conflicts between mining companies and the GDRC have arisen. End summary. Mining Accidents -------------- ¶2. (U) The Mayor of the Western Kasai diamond-mining town of Tshikapa has banned some mining operations following the September SIPDIS 17 drowning of three underwater diamond diggers. Such deaths occur frequently around Tshikapa, where most of the diamond mining is alluvial. The Mayor banned exploitation of the river section where the recent deaths occurred and all night time operations. However, a Tshikapa-based American businessman told EconOff that it is unlikely that such an edict is enforceable. (Note: See reftel for other examples of diamond-sector artisanal miners' deaths. End note.) ¶3. (U) On September 14 at least four miners were killed, 16 injured, and many remain missing after a cave-in at a large artisanally-mined copper pit in Katanga province near Lubumbashi. Metorex, a South African company, operates the concession adjacent to the pit (Ruashi Mine) and, along with other companies, buys mined ore from the diggers. (Note: According to a counselor to the Minister of Mines, the pit is actually part of Metorex' concession, but is fenced-off and used only by artisanal miners. End note.) A mining expert working with an American-funded NGO in Katanga said "The artisanal mining sector in Katanga worsens daily; this accident was waiting to happen." Mining Company-GDRC disputes -------------- ¶4. (U) Metorex is facing a potential conflict with the Katanga government. In early September, the Governor of Katanga province reportedly ordered the closure of a water purification plant on the Ruashi River, claiming that Metorex' Ruashi mining operations, which include cooper and cobalt tailings processing, are polluting the water. The river is a potable water source for Lubumbashi. ¶5. (U) South African company Kumba Resources and Canadian company First Quantum are in a dispute with Gecamines, the DRC's copper mining parastatal, over the Kipushi zinc/copper mine in Katanga. Kumba and First Quantum claim rights to the concession, having announced this August their intention to reopen the mine. Gecamines denies the companies' claim to the concession and in September launched an international tender for new joint venture partners in the concession. A counselor to the Minister of Mines told EconOff that the dispute has arisen because of the existence of two conflicting presidential decrees granting concession rights. ¶6. (U) Comment: Mining accidents and conflicts between the GDRC and mining entities will likely continue as commodity prices (particularly copper, cobalt and zinc) remain high and available undeveloped mining sites become harder to find. The high prices make the GDRC, mining companies and artisanal diggers eager to take advantage of potential revenues, thereby creating a race to extract as much ore as possible while prices are high, with many miners unwilling or unable to take appropriate safety precautions in their urgency to earn a living. The government is seeking nearly any opportunity possible to push mining companies to produce quickly and under terms as favorable as possible to the government, while paying little or no attention to miners' safety. End comment. MEECE