Corruption

DRC: Mining multi-nationals get deal of the century

2008-07-18

http://www.pambazuka.org/en/category/corruption/49569

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There is potentially enormous mineral wealth in the DRC province of Katanga. In exchange, investors from all over the world, and especially China, are prepared to offer money and infrastructure to revive the DRC after 15 terrible years of war and invasion. The potential for ecological disaster, social exploitation and corruption is almost limitless.

Le Monde diplomatique

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July 2008 MINING MULTINATIONALS GET DEALS OF THE CENTURY

Copper colony in Congo

There is potentially enormous mineral wealth in the DRC province of Katanga. In exchange, investors from all over the world, and especially China, are prepared to offer money and infrastructure to revive the DRC after 15 terrible years of war and invasion.

The potential for ecological disaster, social exploitation and corruption is almost limitless.

by Colette Braeckman

Lubumbashi is the capital of Katanga, the southernmost state of the Democratic Republic of Congo (DRC). Day and night, huge trucks roar through its streets, making for the nearby Zambian border with cargoes of copper and cobalt on their way, via the Tanzanian port of Dar es Salaam, to Asia. Every month new stores open: fast food joints with American names, and shops where the locals stare in wonder at Chinese consumer goods, finally within their reach.
Lubumbashi is the capital of Katanga, the southernmost state of the Democratic Republic of Congo (DRC). Day and night, huge trucks roar through its streets, making for the nearby Zambian border with cargoes of copper and cobalt on their way, via the Tanzanian port of Dar es Salaam, to Asia. Every month new stores open: fast food joints with American names, and shops where the locals stare in wonder at Chinese consumer goods, finally within their reach.
And there is a third, social threat. The small-scale exploitation of mineral deposits is coming to an end as the big multinationals move in, driving out independent miners.

Until a few months ago the Étoile mine at Ruashi, a few kilometres outside Lubumbashi, was just an open pit where men worked unprotected. Children scurried through unsupported tunnels, pulling out rocks striated with green copper or yellow cobalt and cramming them into jute sacks. Cave-ins and fatalities were so frequent that the miners had their own mutual insurance scheme to cover hospital or funeral expenses.
The terms granted to private companies associated with Gécamines took the commissioners aback. The investment of external partners was systematically overvalued and that of the Congolese (the value of mineral deposits and existing Gécamines infrastructure) underestimated. Fiscal and para-fiscal concessions (such as 30-year tax exemptions) deprived the state of essential revenues. Mining rights were acquired for purely speculative ends (the partners sold the shares on the stock exchange before even starting work on the ground), while social and environmental clauses were ignored, local skills undervalued, local workers underpaid and concession boundaries extended without authorisation.
Unlike western governments, incapable of releasing the credits necessary for the reconstruction of a country four times the size of France, China has been quick to get down to work: several projects have already begun in Katanga, Kivu and Kinshasa, where 250km of roads and 1,000 units of social housing are to be built. The people's hopes are undermined by fears that the arrival of Chinese workers and engineers heralds a new wave of colonisation. The unconcealed displeasure of the West, Belgium especially, could endanger the stability of the government. But the Congolese government is determined to pursue its relationship with China.