Engineering & Mining Journal

JUL 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 57 of 75

DRC UPDATE 56 E&MJ • JULY 2018 The Democratic Republic of Congo (DRC) hopes to walk the fine line between at- tracting mining investment with balanc- ing the pressing social needs with which the country is faced. At the recent Katan- ga Business Meeting (KBM) conference held in Lubumbashi, the DRC business leaders and government officials put their heads together over how best to develop the country's mineral wealth, but also fo- cused on how to roll back one of the high- est poverty rates in the world. If it gets it even half right, the DRC could become a formidable economic force and the driver for development far beyond its borders. "The DRC is a vast country, the size of Europe," said Costas Coursaris, CEO of Musal Communication and founder of the KBM. "It has huge un- tapped potential and can become a lever for Africa's economic awaking." The KBM, Coursaris said, brought to- gether industry leaders and government officials from around the country. The forum allowed them to compare notes, particularly regarding the changing reg- ulatory environment. The KBM was also building bridges with similar forums around Africa, making it a pivotal event in tapping the pulse of the region. The DRC itself is attempting to grow its economy beyond mining, to sow the seeds of a middle class. "The country has a national budget of $8 billion, to serve a population of 80 million," said econom- ics professor, Claude Sumata, of the Na- tional Pedagogical University in Kinshasa on the sidelines of the KBM. Most of the country's people lived off less than a dollar a day, below the inter- national standard for poverty. A new mining code introduced in March over industry objections aims to increase the state's take of resource in- come. "It's inevitable that changes to the law happened, because we need to help maximize state revenue from mining," said Sumata. Provisions include increased royalties from 2% to 3.5% and for designated "strategic minerals" such as cobalt the rate goes to 10%. The state's free share in mining projects doubles to 10% and a 50% tax on "super profits" of more than 25% are included. Leading miners such as Randgold, Ivanhoe and Glencore that operate in the country argue that the measures will cost the DRC investment. Even though the new royalties and taxes are modest compared with some destinations, especially South America, the DRC has a deficit of infra- structure that pushes up mining costs. "Africa has countries with access to the sea, and others that are landlocked," Jean Claude Masangu Mulongo, former Central Bank governor in the Democrat- ic Republic of Congo told the forum. "Katanga and the copper belt region are effectively land-locked and exports must go through Zambia, Zimbabwe and South Africa." Exports from the region leave via the DRC national railway network, a key part of the international rail corridor that links the DRC Copperbelt to major seaports at Durban and Richards Bay in South Africa, and Dar es Salaam in Tanzania. Most re- cently, a new rail route to Lobito in Angola began operating. The DRC Balancing Act At the recent conference in Lubumbashi, DRC leaders discuss how best to develop the country's mineral wealth, while improving one of the highest poverty rates in the world By Gavin du Venage, South African Editor Jean Claude Masangu Mulongo, former Central Bank governor in the Democratic Republic of Congo, said infrastructure remains a problem for African countries. The DRC is one of the fastest growing mining destinations, with investment going up 18% this year.

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