Mining News

Reviving mining in the Congo

Posted by Cheryl Rutledge on 5/21/2014 4:39:56 PM

By Alana Wilson

The Economist is reporting hopeful developments in the Democratic Republic of Congo’s mining industry following years of disruption.

The region's mineral sector has been hobbled since 2010, when it was hit by Western embargoes and bans meant to undermine violent militias who control many of the region’s small-scale mines. Production more than halved and prices of some metals dropped by a factor of six as demand withered. The downturn dealt a serious blow to artisanal miners, up to 20% of the workforce in parts of the east, and to the national economy.

The article notes that programs certifying conflict-free status have since been launched, reopening international markets in the more developed and secure region of Katanga in the south. However, farther north in Kiva the industry has struggled. The situation is changing though, following November’s defeat of a major rebel group that has controlled local mines. Regular trade is now moving closer to conflict areas although this progress is not yet secure. Certification programs are also limited to larger mines, often leaving behind artisanal and small-scale miners.

The Democratic Republic of Congo’s performance in the Survey of Mining Companies has also improved in the most recent survey results. The Policy Perception Index (PPI) score for the DRC, which is comprised of survey results on 15 policy factors such as the legal system and taxation regime, increased in 2013 suggesting that the policy environment was becoming more attractive to investment. Its global ranking also improved from 93rd of 96 global jurisdictions in 2012/2013 to 85th of 112 jurisdictions in 2013. However there is much room to improve farther, particularly in its ratings for security, political stability, and taxation regime. While domestic reforms progress, improving the attractiveness of the mining sector to investment and resuming global trade in minerals are promising developments.

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