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Correspondent for African Network of Centres for Investigative Reporting
20 Feb 2015 00:00
Artisanal gold miners excavated this 20m pit on Concession 40 in the Ituri district of Orientale province. (African Network of Centres for Investigative Reporting - Ancir)
In a deep pit, its bottom covered with mud-brown, stagnant water, 50 men hack at the crumbling sides. Others try to coax an old water pump into life so they can drain the pit.
This is Iga-Barrière in Ituri, in the Democratic Republic of Congo (DRC), and these men are digging for gold.
Back in the West, campaigners, policymakers and consumers, alerted by United Nations Group of Experts (GoE) research and others that gold mined in this way is the largest source of funding from minerals for conflict in the DRC, crave a simple explanation to help them figure out what they can do about it.
Facts on the ground, though, stubbornly refuse to oblige.
Western companies mining gold industrially in DRC have diggers on their land, but fear that if they work them the companies will be accused by international nongovernmental organisations (NGOs) of funding conflict.
Most of the gold is smuggled to Uganda and other neighbours of eastern DRC. It then goes to Dubai, where lax customs reporting requirements means the trail runs cold.
The Iga-Barrière diggers work under the watchful eye of a team employed by the Société des Mines d’Or de Kilo-Moto (Sokimo), a state-owned mining company. Leaning on the bonnet of an old, mud-spattered vehicle, the head of the Sokimo team explains: “This pit has already been worked twice, but there’s still gold there. Production is quite good. We know these men well. We’re here to make sure Sokimo gets its cut.”
ProfitsThe diggers are required to hand 30% of all gold they mine to the company and 50% to the chef du puits, the pit boss, who directs the mining operation. There is not much left for anyone else.
Sokimo claims 30% on the grounds that the diggers are using the company’s permit. It has held the permit since the late 1990s, as well as those for 17 adjacent sites, in a joint venture with AngloGold Ashanti (AGA).
The permits are known collectively as “Concession 40”, and the joint venture is called Ashanti Goldfields Kilo (AGK).
Miners pan for gold in Mukungwe, Katanga province, where traders buy the yellow metal. (Ancir)
For 20 years, AGK remained stuck in exploration mode, never shifting to production, to the frustration of the people who live in the area. In 2010, its head office in Johannesburg took the decision to proceed with the development of an industrial gold mine on Concession 40.
But three years later, facing a falling gold price and rising costs, AngloGold Ashanti conducted a strategic review of its global operations that saw the axing or suspension of a number of projects, including AGK.
It tried to lure South African miner Randgold Resources – its partner in the Kibali gold mine in the far northeast – to the Ituri project. Randgold rejected the overture.
SA-style black economic empowerment dealAngloGold Ashanti has since explored the possibility of a South African-style black economic empowerment deal with AGK’s Congolese managers, intended to hand control of the asset to them at some point.
No official announcement has been made about the progress of this deal and, in Ituri, no one seems to have been told what is going on.
Anglo spokesman Chris Nthite confirmed that AGA entered into partnership with Sokimo in 2010 “in terms of which AGA indirectly has an 86.22% shareholding in AGK while Sokimo holds the remaining 13.78%”.
“The joint venture has not proceeded with building a mine at Mongbwalu, following a decision to stop the project due to weaker gold prices over the past two years. AGA has funded all exploration activities at the Mongbwalu concession and has neither received any funding from Sokimo, nor has it generated any revenue from any of the concessions at Mongbwalu,” Nthite said.
Asked why there is no serious effort to stop illegal mining at Concession 40, he said: “AGK has had ongoing engagements with artisanal and small-scale miners [ASM] through a provincial structure, called the ASM steering committee, to educate them on the dangers of illegal ASM. The area under AGK’s control has been fenced off in an effort to prevent the miners from encroaching into AGK’s concession and letters have been sent on a number of occasions to the authorities to make them aware of the ongoing challenges AGK faces regarding illegal mining in the DRC.”
On future plans for Concession 40, Nthite said Anglo was in the process of divesting its interest in AGK.
He said he could not comment on the artisanal miners because Anglo had carried out limited explorations and did not employ miners. He said AGA took its employees through a human resources process but, “given the DRC’s history, we undertook the decision to employ candidates who had been through the UN demobilisation process. Prospective employees who fall in this category are required to submit their demobilisation certificates upon employment.”
Artisanal gold diggersUncertainty about the fate of the mine has not stopped artisanal gold diggers flocking to Concession 40. An estimated 100?000 people are now working the site. AGK’s managers have always insisted that the diggers have no right to be there. However, as many of the miners are ex-combatants from Ituri’s bloody civil wars who never surrendered their weapons, there has been no serious attempt to stop them.
Instead, Sokimo does what it can to collect a percentage of the diggers’ production.
Said a senior Sokimo official at the company’s operational base in Bunia, who asked not to be named: “There are so many diggers and our teams are so few. And we have no transport. So most of the gold from here goes out without us seeing it.”
Precarious lives: Teams of artisanal miners work a colonial-era industrial gold mine on Concession 40 in Ituri district. (Ancir)
Another problem, the official said, was the Chinese companies working in the area. “They drag the rivers for gold and smuggle it out – we don’t know where [to],” he said.
Semi-industrial Chinese mining companies are scattered across the AGK permit areas, though their owners claim that they operate legally under Sokimo licences. But a source close to AGK’s senior management insisted that “they’re stealing AGK’s gold. There’s no doubt about it. It’s happening in collusion with the authorities here.”
The pit bosses claim a large percentage of the diggers’ output because they buy the mining equipment and fuel for the pumps. They also feed the diggers and pay them a small daily sum even when the veins of gold prove elusive.
The longer diggers go without finding gold, the more indebted they become to the pit bosses. When they finally hit pay dirt, they have to surrender a larger slice of their output to service their debts. At one artisanal gold mine in South Kivu, diggers said they had laboured for two years without finding gold.
Their pit boss said: “Gold used to be mined here – lots of it. We’re certain there’s still gold underground. But we haven’t struck a vein for a long time. Many diggers have been discouraged and left.
“But others are still here. I buy the food and pay them what I can, but I’ve run out of money to fuel the pumps. That makes our work even harder. But we will find gold one day, and then I’ll be repaid.”
He refused to say how he gets money to pay diggers. Pit bosses rely on local gold buyers for funding who, in return, demand that the bosses sell gold exclusively to them.
UN GoE reports state that local buyers are typically pre-financed by larger-scale buyers who operate from Congolese towns such as Uvira, Bukavu, Butembo and Bunia, where they aggregate the gold and then smuggle out a few kilograms at a time. The smuggling is overland to Bujumbura in Burundi, Kampala in Uganda and, increasingly, the Kenyan capital Nairobi. Gold buyers in these regional centres usually pre-finance the big Congolese buyers, with whom they often have ties stretching back generations.
Gold smugglingThe governments of the region have undertaken to combat gold smuggling from the DRC, but the traffic continues unhindered, with up to 20 tonnes of gold a year being traded, the GoE estimate.
In March 2007 the UN Security Council slapped sanctions on companies owned by two of the region’s biggest gold-buying families, the Lodhias and the Vayas of Kampala. The crackdown came after the UN GoE proved that the families were buying gold on which the Ituri warlords had levied hefty rents, providing them with the funds to sustain the bloody conflict.
The GoE alleges that the Vayas and Lodhias continue to buy smuggled Congolese gold. The families have formally denied the allegations in correspondence to the UN Security Council.
A report titled All That Glitters Is Not Gold found that, once the gold has been aggregated in Kampala, Bujumbura and Nairobi, where it is mixed with production from countries such as South Sudan and Uganda, it is flown to Dubai. The 2014 study of the trade in Congolese artisanal gold was carried out by Partnership Africa Canada (PAC).
A gold trader in Kampala, who insisted he had “suspended operations”, said: “Before everyone used to declare gold exports. But nobody liked to say the gold was from Congo. Or even from here. People would say it came from South Sudan. But then the government brought in rules saying we had to produce documents to show where the gold came from. Since then, more of the gold has been smuggled out of here.”
A senior official in the Uganda Revenue Authority agreed: “There has been a sharp drop in official gold exports since that rule was changed.”
Research by the GoE and PAC indicates that the import of Congolese gold is usually declared in Dubai. The snag is that Dubai customs officials do not require the final destination of the gold to be stated, making it impossible to trace it later on.
Back in Iga-Barrière, diggers laugh bitterly when asked whether there are schools for their children or clinics when they fall ill. “There is nothing like that here,” says one. “There’s nothing for us.”
At least, the diggers concede, soldiers of the Forces armées de la République démocratique du Congo (FARDC, the Congolese armed forces) do not trouble them, and several years have passed since Ituri was under the control of violent militias.
During their reign of terror in the early 2000s, the militias imposed huge taxes on artisanal gold miners. Now many former militiamen are miners themselves.
During the fighting, Concession 40 was under the control of the predominantly Hema Union des Patriotes Congolais (UPC), but in March 2003 the UPC was pushed out of the area after heavy fighting with its main rival, the predominantly Lendu rebel group, Front des nationalistes et intégrationnistes (FNI).
Both militias profited from gold mining, though the FNI’s reign was cut short by the European Union’s Operation Artemis, which swiftly defeated both militias and handed the area over to UN forces in September 2003.
Today the presence of Sokimo and AngloGold seems to have deterred any major deployment of FARDC troops on AGK’s concession, though soldiers still extort bribes from vehicles at night on certain routes.
Outside the concession, however, conditions are often very different. At Mambasa, west of Bunia, combatants loyal to Mai Mai Morgan repeatedly robbed and extorted gold diggers until his surrender to the FARDC in mid-2014, according to the Antwerp-based research team International Peace Information Service (IPIS).
In Irumu, north of Bunia, combatants of the Forces de résistance patriotique de l’Ituri (FRPI), a militia headed by Cobra Matata, regularly extorted payments from artisanal miners, according to IPIS. Matata apparently ended his rebellion in November and is based in Bunia, but many of his fighters remain at large.
Illegal taxesRepresentatives of local NGOs say they strongly suspect that both Morgan and the FRPI have close links with senior FARDC commanders, and may have been deployed to the gold mines by these commanders to extract illegal taxes.
In the two Kivu provinces south of Orientale, many FARDC commanders still have big interests in gold.
Major General Gabriel “Tango Fort” Amisi, who, in September, was appointed commander of the “first defence zone” comprising the western provinces, has had a major stake in the Omate gold mine at Walikale, North Kivu, for many years, according to GoE reports.
When Amisi was the FARDC commander-in-chief, wrote the GoE, he had troops permanently stationed in Omate to protect his interests, with the result that they could not engage rebel militias nearby.
A recent study by the Organisation for Economic Co-operation and Development (OECD) on the Mukungwe artisanal gold mine near Bukavu in South Kivu, reports that the mine was heavily militarised for years because local families competing for control of the mine employed FARDC commanders to fight their battles for them.
The notorious warlord Bosco Ntaganda, indicted by the Inter–national Criminal Court in The Hague for war crimes, was paid for terrorising the enemies of the family that hired him in Mukungwe, according to the OECD report.
The report found, thanks to the efforts of the Observatoire gouvernance et paix, a South Kivu-based NGO, Mukungwe has been largely demilitarised.
Mukungwe lies in the permit area of the Banro Corporation, a Toronto-listed industrial gold miner. Banro also mines at nearby Twangiza, where it managed to move diggers from the main pit but the company has not succeeded in doing the same at the Mukungwe site. The policy of the South Kivu government is that the Mukungwe diggers must relocate to another mine, but finding one as productive as Mukungwe has so far proved impossible and the diggers do not want to leave.
The OECD study said diggers called for Banro to buy their gold, but, fearing it will be accused of buying conflict minerals, Banro has resisted doing so.
Despite the tough conditions and the diggers’ precarious livelihoods, they are determined to stay.
“This country is rich,” said one digger. “Why can’t we all profit from it?”
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