DARREN SCHUETTLER, Johannesburg | Thursday
FOREIGN mining firms are assessing the security of their potentially lucrative deals in mineral-rich Democratic Republic of Congo, where President Laurent Kabila was reported wounded or killed this week.
Veteran African miners were confident they could work with any new leader in Kinshasa, but this latest upheaval would further delay a mining revival in the former Zaire.
”We dealt with the previous (Mobutu) regime, we dealt with the Kabila regime and obviously now we are going to deal with a new regime,” said Hans Smith, chief executive of South African metals group Iscor Ltd.
Although South African, British and North American companies have signed mining conventions with Kabila’s government, few have made serious financial commitments while a civil war has raged since 1998.
Iscor agreed two years ago to spend several hundred million rand to rehabilitate the Kamato copper/cobalt mine, but later suspended the project due to security concerns.
Iscor subsidiary Zincor is also studying the feasibility of redeveloping the Kipushi zinc mine with US-based partner, America Mineral Fields International (AMFI).
”Obviously we are not going to move into that part of the world until we get full political cover for any capital investment,” Smith said.
AMFI Chief Executive Tim Read said he was not worried about the security of the firm’s Congo interests, which include a joint venture with mining giant Anglo American.
The former Zaire was once the world’s fifth largest producer of copper, but production at state-owned miner Gecamines plunged due to years of neglect and mismanagement under former dictator Mobutu Sese Seko.
Mobutu’s ousting by Kabila in 1997 fuelled hopes of a mining renaissance in the rich central African copperbelt that the Congo shares with neighbouring Zambia. At the time, Kabila’s jazz-loving mines minister Kambale Mututulo stunned investors at a mining conference when he sang ”I have a dream” and declared his bankrupt country open for business.
Two years later, Mututulo was out of a job and investor expectations were dashed by a rebellion launched by Rwandan and Ugandan-backed rebels against Kabila, which continues today.
The government admitted last year that the civil war had scared off $600m in planned mining investment and up to $360m in minerals exploration. By contrast, over $1bn in projects have been committed to Zambia, where output is seen rising sharply after last year’s sale of state-owned mines to several companies, including Anglo American Plc. – Reuters