Identifier
Created
Classification
Origin
07KINSHASA403
2007-04-05 12:14:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kinshasa
Cable title:  

UPDATE ON THE CPPER BELT'S ARTISANAL MINING

Tags:  EMN EAID ECON ETRD CG 
pdf how-to read a cable
R 051214Z APR 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTAT WASHDC 5919
INFO RUEHXR/RWANDA COLLECTIVE
RUCSAD/SOUTHERN AF DEVELOPMENT COMMUNITY
RHEHNSC/NS WASHDC
RUEAIIA/CIA WASHDC
RHMFISS/HQ USEUCOM AIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTHUK
UNCLAS SECTION 01 OF 02 KINSHASA 000403 

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EMN EAID ECON ETRD CG
SUBJECT: UPDATE ON THE CPPER BELT'S ARTISANAL MINING

REF: A. 06 KINSHAS 1590


B. 06 KINSHASA 1500

KINSHASA 00000403 001.16 OF 002


UNCLAS SECTION 01 OF 02 KINSHASA 000403

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EMN EAID ECON ETRD CG
SUBJECT: UPDATE ON THE CPPER BELT'S ARTISANAL MINING

REF: A. 06 KINSHAS 1590


B. 06 KINSHASA 1500

KINSHASA 00000403 001.16 OF 002



1. (SBU) Summary. Artisanal mining in Katanga province
continues to create security, financial and legal problems for
mining companies. With support from the USG and other members of
the international community, social development efforts are
underway to attemptto address the myriad of issues artisanal mining
poses and to assist the local mining communities. The programs are
in their infancy, however, and thus have not yet had significant
impact. End summary.


2. (U) EconOff and USAID officers visited mining concessions
from February 19-23 in Fungurume, Kolwezi, Dikulushi and
Lubumbashi in Katanga province to speak with mining company
managers about ongoing artisanal mining concerns and to see
the progress of social development plans. Fungurume is the
operations base for Phelps Dodge's Tenke Fungurume Mining
(TFM) copper/cobalt project. (Note: Freeport-McMoran recently
acquired Phelps Dodge. End note.) Australian company Anvil
Mining (listed on the Toronto and Australian stock exchanges)
runs a copper tailings project near Kolwezi and copper/silver
mine in Dikulushi, northeast of Lubumbashi, Katanga near
Lake Mweru. South African company Metorex treats copper and
cobalt tailings and is developing a copper/cobalt sub-soil
mine on the outskirts of Lubumbashi.

Artisanals
--------------


3. (U) Artisanal mining poses substantial financial, security
and legal threats to the DRC's growing mining sector, as
discussed in reftel A. Artisanal miners frequently trespass
on mining concessions and extract ore without authorization,
causing financial loss for companies. Further, mining
accidents on the concessions are common, potentially imposing
liability on the concession-holders. Artisanal miners also
pose security risks to the mining companies, primarily
because of their occasionally violent resistance to removal
or exclusion from mine sites, as in Anvil's case (reftel A).
The number of artisanal miners, their communities around the
mines, and the accompanying risks, continue to grow as word
spreads of the development of the mining projects and social
infrastructure programs. For example, Pact Congo (Pact) and
Anvil staff told EconOff one village near the Anvil

concession in Kolwezi has swelled from 60 residents to 6,000.
Unable to find other work, some of these persons resort to
artisanal mining. TFM and Anvil officials say they can
potentially employ only a fraction of those people. For
example, Anvil currently has about 600 employees, 36 of whom
are expatriates.


4. (SBU) Mining officials with whom EconOff met in February
said they have seen no appreciable change in the numbers of
artisanal miners on their concessions, but that the
surrounding communities have grown in the last six months, as
have the accompanying risks discussed above. TFM officials
said although they continue to tightly control access to
their concession, and thus have few illegal diggers on-site,
artisanal miners have been gathering in significant numbers
near the north border of TFM's concession, seeking jobs and
access to the mine sites. (Note: TFM removed many artisanals
from the concession shortly after obtaining rights to it in

2005. End note.) TFM officials say this is creating a
potentially serious security risk. TFM also faces ongoing
local pressure to employ local residents, although it has
thus far managed to diffuse any serious violence. TFM's
social development director said that as part of the
company's effort to prevent security incidents, staff are
repeatedly informing local communities that the project will
employ only a fraction of the job-seekers. TFM currently has
about 1000 employees, most of whom are Congolese. It plans to
employ no more than 2000 during the peak construction phase,
and less than half that figure once mining begins.


5. (SBU) Anvil Mining is struggling to resolve more pressing
concerns the artisanal miners' presence poses in Kolwezi. At
the time of EconOff's visit to Anvil's Kolwezi site, at least
several hundred artisanals were trespassing daily onto the
concession. Tension between Anvil and artisanal miners has
increased since at least April 2006, when a conflict
escalated into violence, resulting in the deaths of three
persons (reftel A). Anvil has since alternated its policies
between trying to exclude artisanal miners from the
concession and allowing them free entry. Anvil also
experimented with purchasing tailings directly from the

KINSHASA 00000403 002.2 OF 002


miners on its concession, but the effort was a financial and
logistical failure. Anvil managers say, regardless of their
approach, the miners continue to collect and sell thousands
of tons of high grade copper and cobalt tailings to
unauthorized traders and that the complicity of police and
other local authorities in the illegal trade has hampered the
company's efforts to stem the theft. Anvil estimates its
weekly loss at USD 250,000, and its official production was
50 percent below target as of late February.


6. (SBU) Metorex and the London AIM-listed Nikanor are also
trying to find ways to address their artisanal mining issues.
A Nikanor manager told EconOff 4,000 to 5,000 artisanal
miners are on its Kolwezi concession. Metorex, operating the
Ruashi Mine, says it regularly has 2,000 to 3,000 artisanal
miners on its concession, including an open pit that has been
the site of at least one fatal cave-in (reftel B). The
general manager said about 2,000 artisanals entered the
Ruashi mine in February after Chemaf, an Indian-owned trading
and mining company, ejected the same miners from one of its
concessions. Ruashi's managers would not take EconOff to
their mine site, suggesting it was not safe to do so. Pact
Congo project manager told EconOff he had tried to visit the
Ruashi mine the same week and that large demonstrations of
artisanal miners prevented his entry. Dempsey admitted to
EconOff the company has not yet figured out how to resolve
these problems.

Social development
--------------


7. (SBU) To try to mitigate the risks posed and relieve some
of the pressure on the growing communities, mining companies
and NGOs, with USG support, have launched social development
projects over the last three to four years. Initially,
mining companies launched these efforts on their own in an ad
hoc fashion, building schools, wells and medical clinics as
they deemed necessary. In the last one to two years, NGOs
such as Pact have worked jointly with some mining companies
to help make these projects sustainable and to develop a more
comprehensive strategy. Pact is working with Anvil and TFM
to build bridges, additional wells and covered village
marketplaces, develop a brick-making operation, small-scale
farming, micro-enterprises (such as bakeries and sewing) and
literacy programs, and to involve the communities in the
management and maintenance of these projects. Through USAID,
the USG is contributing USD 3.5 million over a five-year
period to Pact's projects, against USD 8 million that Anvil,
TFM and U.K.'s development agency (DFID) have pledged. Other
companies, such as Metorex and Toronto stock exchange-listed
First Quantum (FQ),have sought Pact's guidance on specific
artisanal mining issues; FQ is also considering formalizing
the relationship.

Comment
--------------


8. (SBU) The diverse social, economic and security issues
surrounding artisanal mining communities in Katanga province
will not be solved in the near future. Even short-term
solutions will require the expenditure of substantial sums of
money and continued support from the GDRC and international
community. Though the mining companies' motivation to find
solutions is no doubt due primarily to shareholders'
financial and legal interests, their engagement on the issue
is welcome. End comment.
MEECE