Identifier
Created
Classification
Origin
06KINSHASA1590
2006-10-17 11:11:00
CONFIDENTIAL
Embassy Kinshasa
Cable title:  

KATANGA COPPER BELT: MANY ARTISANAL MINERS, MANY

Tags:  EMIN PGOV ECON ETRD CG 
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VZCZCXRO1443
RR RUEHMR RUEHRN
DE RUEHKI #1590/01 2901111
ZNY CCCCC ZZH
R 171111Z OCT 06
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 4968
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEAIIA/CIA WASHDC
C O N F I D E N T I A L SECTION 01 OF 03 KINSHASA 001590 

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/05/2016
TAGS: EMIN PGOV ECON ETRD CG
SUBJECT: KATANGA COPPER BELT: MANY ARTISANAL MINERS, MANY
APPROACHES

REF: A. 04 KINSHASA 430

B. KINSHASA 1500

C. KINSHASA 1234

Classified By: ECONOFF WBRAFMAN FOR REASONS 1.4 B/D.

C O N F I D E N T I A L SECTION 01 OF 03 KINSHASA 001590

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/05/2016
TAGS: EMIN PGOV ECON ETRD CG
SUBJECT: KATANGA COPPER BELT: MANY ARTISANAL MINERS, MANY
APPROACHES

REF: A. 04 KINSHASA 430

B. KINSHASA 1500

C. KINSHASA 1234

Classified By: ECONOFF WBRAFMAN FOR REASONS 1.4 B/D.


1. (SBU) Summary. Artisanal mining is one of the major issues
facing the extractive industries sector, as it moves towards
industrialization. The GDRC is ill-equipped to address this
issue adequately, leaving mining companies to forge their own
solutions with only nominal government support or input. In
Katanga province, copper/cobalt mining companies are
developing various proposed solutions. End summary.


2. (SBU) EconOff met with representatives of several major
mining companies during a September 27-29 visit to Katanga
province, including Phelps Dodge, Anvil, Adastra/First
Quantum and BHP Billiton. Although each company has at least
some artisanal miners on its concession, the extent to which
their presence causes problems varies. Accordingly, each
company handles this issue differently.

BACKGROUND
--------------


3. (U) Under the current Mining Code, adopted in 2002, it is
illegal for artisanal miners to occupy and mine any
concessions. Mining outside of concession property remains
legal so long as the artisanal miners register with the
Ministry of Mines and purchase a permit. Artisanal mining in
the DRC began in earnest, and with little government
prohibition, in the 1980s, when a decrease in government
control and an increase in unemployment drove many to seek
income by independently mining reserves of gold (reftel C),
copper, cobalt, diamonds (septel) and other natural resources
throughout the DRC, sometimes on sites that parastatal mining
companies partially excavated. Estimates are that perhaps one
million artisanal miners work in the Congo, including an
estimated 100,000 to 150,000 in the Katanga copper/cobalt
sub-sector. Few, if any, of these miners register or obtain a
permit.


4. (SBU) Before 2005, hazardous working conditions and the
illegal export of natural resources were the most significant
problems linked to artisanal mining (reftel A). However, in

2005, several major international mining companies, including
American Phelps Dodge, began earnest exploration, and plans
for tailings processing and sub-soil mining, notably in the
Katanga copper belt. Many of these companies anticipate
beginning mining production in 2008. Artisanal miners are
reportedly present on essentially all major Katanga
concessions, selling to "negociants" (middlemen) and to
traders such as Lebanese-owned Bazano Group, Indian-owned
Chemaf and several Chinese companies. (Note: EconOff saw many
Chemaf, Bazano and Chinese-owned trucks loaded with bags of
ore both on and off concessions in Kolwezi and Lubumbashi, in
Katanga province. End note.) The GDRC has demonstrated no
capacity to grapple with this complex issue. Hence, mining
companies are taking the lead addressing the many problems
the artisanal miners' presence causes.


5. (U) All major mining representatives with whom EconOff
spoke in Katanga agree that artisanal miners must ultimately
be removed from the concession areas in which the companies
will operate. They also agree, at least in principle, that
the companies must provide some social support for
neighboring communities and displaced artisanal miners.
Beyond this basic consensus, however, the proposed solutions
vary widely, particularly in the context of security and
other logistical matters.

APPROACHES VARY ACCORDING TO NEEDS
--------------


6. (C) U.S. copper mining company Phelps Dodge (PD),the
operating partner of one of the DRC's potentially most
lucrative copper/cobalt concessions. PD has told EconOff
that it removed all artisanal miners from its concession in
the past year, with the assistance of both the GDRC's Mine
Police and private security, though it declined the GDRC's
offer of military assistance in removing the diggers. PD's
Lubumbashi-based Managing Director and its security chief
told EconOff that now it discourages the entry of additional
miners by strictly controlling entry/exit points and by
seizing any ore that trespassers possess. The DRC director
of an American NGO, PACT, said the prior Katanga-based
managing director was removed in part because of his
heavy-handed methods in removing the miners. According to

KINSHASA 00001590 002 OF 003


PACT's interpretation, PD is not conforming to the
International Finance Corporation's Equator Principles, which
holds that persons occupying or generating income from land
are entitled to compensation if forced to leave the property
or are denied access, even if that occupation is or became
illegal under national law.


7. (C) Anvil Mining is currently taking a different approach,
in part as the result of a confrontation with miners in April

2006. Before this incident, in which three persons died,
Anvil had been pushing artisanal miners off its Kolwezi
concession, in the process of ramping up its tailings
processing operation. (Note: Some in the mining community
claim Chemaf provoked the incident to discourage Anvil from
removing the artisanals from its concession. End note.) Since
the April incident, an increasing number of miners have
re-entered the concession, and an estimated 4,000-7,000 now
work there daily, although Anvil has reportedly been able to
get the diggers to agree to stay out of areas in which Anvil
is working. Although Mine Police and Anvil's private
security circulate through the property in teams, Anvil is
reluctant to use force to limit entry (perhaps to avoid
additional negative press attention) despite the fact that it
incurs losses as a result of the ore removal. (Note: An Anvil
financial manager claimed that mining companies in Kolwezi
may be losing as much as USD 400,000 per month in profit
through illegal mining. End note.) To try to limit losses and
trespassing "negociants," Anvil is buying ore directly from
the artisanals on their concession. However, according to
Anvil's private security, the artisanals and "negociants"
still illegally transport the ore off the concession at
night, a trade in which the Mine Police often act as
negociants. In fact, several members of Anvil's security team
remarked that most Mine Police are considered to be corrupt.


8. (C) BHP Billiton (BHP) and Adastra/First Quantum (FQ) have
different approaches to the artisanal issue, tailored to the
seemingly more limited presence of diggers on their
concessions. BHP's Exploration Manager told EconOff that
"only" a few hundred artisanal miners are on its 620 square
miles of non-contiguous exploration sites, because little or
no excavation has occurred yet, making artisanal mining
difficult. He said that BHP has employed some of these
diggers as manual laborers, although he noted that many do
not keep their jobs for long. He also said BHP uses only
private security, and not GDRC Mine Police, to protect its
concessions. EconOff visited a BHP exploration site a few
miles outside of Lubumbashi and saw only a handful of persons
who appeared to be artisanally mining.


10. (C) EconOff also visited FQ's Kingamyambo tailings site
in Kolwezi, a project in which the World Bank's International
Finance Corporation (IFC) has a 7.5 percent interest
(totaling USD 6 million in equity financing). EconOff saw no
more than 50 artisanal miners on the site. The security
manager told EconOff that FQ does not employ mine police, but
that it has been able to keep some miners out of the most
dangerous areas of the site, including the large mountains of
tailings prone to collapses, by posting (somewhat
disingenuous) signs warning of radioactivity. The difficult
accessibility of other areas of the site may also discourage
artisanals, although EconOff did see a few working along the
steep, hazardous cliffs of a pit that was several hundred
feet deep and wide, with a deep lake at the bottom.


11. (C) Metorex, which operates Ruashi mine, currently
permits hundreds of artisanal miners to dig in an open pit on
its site, although a cave-in recently killed and injured
several miners (reftel B). Entry onto the site is said to be
virtually uncontrolled, and according to PACT, attempts to
remove the miners, who number perhaps 1500 per day, could
easily result in violence. (Comment: Metorex may ultimately
feel pressure to alter its artisanal mining policy in light
of this recent mining accident. End comment.) In addition,
Metorex has recently launched a tailings processing operation
on a separate part of its property, and is working with mine
police and private security to protect its concession, thus
far without serious incident.

COMMENT
--------------


12. (C) The need for the GDRC, mining companies and other
relevant actors to develop a comprehensive strategy to
address the artisanal mining issue is clear and pressing, and
the rights of artisanal miners on concessions is a topic that
could become highly contentious in this discussion. This
issue may become even more urgent once the mining companies

KINSHASA 00001590 003 OF 003


begin producing, attracting diggers to newly-opened pits. It
should be a high priority for the new government, if it is to
support an environment that both promotes industrial economic
growth and social development. End comment.
DOUGHERTY