COMMENTARY — Congo is open for business

The mining potential of the Democratic Republic of Congo, though tremendous, has not been properly exploited.

As a result of the lack of exploitation of our natural resources, we are experiencing poverty that is unacceptable at the end of this second millennium. This occasion allows me to emphasize those elements essential for my country to regain a level of mineral production comparable to those of 10 years ago.

The changes that took place in the government are allowing state-owned mining company Gnrale des Carrires et des Mines (Gecamines) to accelerate predictions made last year. The mining sector of the Congo is subject to interest comparable to the gold rush that happened in the United States last century. The difference is that international mining companies, rather than prospectors, are the participants.

My country has tremendous mining potential. Copper reserves represent at least 10% of worldwide reserves, whereas cobalt reserves represent half of worldwide reserves. With such ores, among the richest in the world, the Congo could rapidly recuperate the prestigious place it once occupied. It was once the world’s fifth-leading copper producer and premiere cobalt producer.

Gecamines owns two large mining concessions in Katanga province — one copper and the other tin, which occupy respective areas of 20,000 sq. km and 12,000 sq. km.

Gecamines’ production has been dramatically reduced during the past 10 years, as a result of poor management and lack of reinvestment by the state.

As a result of this lack of financial resources, Gecamines has opened its door to management partnerships in order to develop mineral potential and increase current reserves of 55 million tons copper and 36 million tons cobalt.

These partnerships with foreign companies concern the creation of joint-venture projects. The goal is the exploitation of known but undeveloped deposits, the modern metallurgical treatment of old residues, and the reopening of old mines.

These partnerships will also aid in exploration designed to increase reserves and find other minerals and deposits.

In addition, joint ventures will aid in the rehabilitation of existing but deteriorated mine concentrators and metallurgical plants.

Such partnerships are based on the principles of competitiveness.

International mining companies are invited to submit tenders, though some concessions have been granted following negotiations. Companies often become majority shareholders in joint ventures, and are responsible for feasibility studies and the financing needed for mine and plant construction.

This joint-venture strategy currently concerns about 20 projects of all sizes, including projects as small as 10,000 tons copper and 2,000 tons cobalt per year to ones as large as 400,000 tons copper and 20,000 tons cobalt per year. Tenke-Fungurume, one of the larger projects, was granted to the Lundin Group and will require, in the final phase, an investment of US$1.5 billion.

The expected production from these joint ventures should reach 1 million tons copper and more than 60,000 tons cobalt by the first years of the new decade.

If copper production can be consumed in an ever-expanding market, in which Chile will remain dominant, higher production levels of cobalt, a secondary metal, will disturb the market and lower its price. It is for this reason, as well as because of a lack of quotas, that our company and its partners will have to stimulate the uses and consumption of this metal.

— The preceding is from a speech given at a recent conference in Vancouver, B.C. The author is the chairman and chief executive officer of Gecamines.