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