MINING EXTRACTS, #1

UNCLAS SECTION 01 OF 02 KINSHASA 000056 SIPDIS SIPDIS SENSITIVE E.O. 12958: N/A TAGS: EMIN ECON ETRD PGOV ZI CG SUBJECT: MINING EXTRACTS, #1 REF: A. KINSHASA 49 ¶B. 05 KINSHASA 1500 ¶1. (U) Summary. Several artisanal diamond miners died in mining-related accidents, and diamonds illegally exported from Zimbabwe are reportedly appearing for sale in the DRC. Delays in obtaining and importing adequate equipment is causing construction delays for major copper/cobalt mining projects. The GDRC is planning to launch new petroleum concession tender offers, although many concession agreements await presidential approval. End summary. Copper/Cobalt Industry -------------- ¶2. (SBU) At least two of the largest copper/cobalt projects may not meet their initial targets of production start-up in 2008. Nikanor, a London Alternative Investment Market-listed company, now projects a 2010 operational launch date for KOV, potentially the most lucrative of its three copper/cobalt mines. A Phelps Dodge (PD) official told EconOff PD is experiencing delays too, in part because PD, like other copper/cobalt mining companies, cannot obtain and import necessary equipment and supplies as quickly as needed. Not only is there a shortage of needed goods, but also the GDRC is slow to decide which of the imported items will receive tax exoneration requests. Diamond Industry -------------- ¶3. (U) Utilizing a periodic, random scan of personnel, MIBA (the DRC's diamond mining parastatal) allegedly detected 136 white diamonds of an undetermined value in the digestive tract of one of its guards. The diamonds were recovered at a local hospital, and legal proceedings have been initiated against the guard. MIBA is certain the guard could not have acted alone, and is conducting an investigation. ¶4. (U) Newly-discovered, unpolished Zimbabwean diamonds are being illegally exported into the DRC for sale. One private sector contact told EconOff the diamonds are extremely unique, with a dark brown coating, and could only have come from Zimbabwe. Petroleum Industry -------------- ¶5. (U) The GDRC may divide the Ministry of Energy and Hydrocarbons into a Ministry of Hydrocarbons and a Ministry of Energy (covering water, electricity and other sources),according to officials within the Energy Ministry and in the private sector. ¶6. (U) A Ministry of Energy official told EconOff the GDRC hopes to launch tender offers in February for several petroleum exploration blocks in the DRC's Central Basin, a region of potential oil reserves including Bandundu and Equateur provinces. The official said a Brazilian laboratory is examining petroleum samples from the Central Basin and will propose to the Energy Ministry the number and layout of the concession blocks. ¶7. (U) Several pending petroleum concession agreements continue to await presidential approval, including deals for exploration on and around Lake Albert and for onshore exploration in Bas Congo province. Mining Accidents -------------- ¶8. (U) Yet another cave-in has killed at least 15 artisanal diamond diggers and left 30 or more missing, in the Tshikapa, Western Kasai alluvial diamond mining area. The ravine where the hundreds of diggers were working, itself created by water erosion, collapsed December 5, likely caused in part by heavy rains. ¶9. (U) CHEMAF, an Indian-owned mining company, is sponsoring the relocation of several hundred artisanal miners from one of its open pits near Lubumbashi, Katanga province, following a violent December 28 conflict between the miners and local police (reftel A). About 200 diggers are being moved to an alternate mine site, and CHEMAF is giving each miner some food and about USD 40. According to Congolese media, CHEMAF has selected five sites for this planned relocation of about 1,500 artisanal miners. Mining Company-GDRC Disputes -------------- ¶10. (SBU) South African mining company Metorex says there is no merit to the GDRC's claim that Metorex was polluting the Ruashi KINSHASA 00000056 002 OF 002 River in Katanga province (reftel B). A Metorex official told EconOff that GDRC officials visited several mining companies in late 2006 in connection with such claims and that the visits were perceived to be little more than "tax collection efforts." MEECE