DRC: cancellation of exploitation rights of 29 mining companies sparks controversy

An order signed on July 31 by Michel Kibonge Nyekuma, chief of staff of the minister of mines, canceled the operating rights of 29 companies in the DRC, raising concerns about the country’s vital sector and the livelihoods of many people. .

These companies include Cico, Cilu, Comide, Boss Mining, Ruashi Mining, PPC Barnet and Chemaf, all owned by Congolese groups, as well as German, Kazakh, Chinese, Indian, South African and Australian companies.

Although the Congolese government has not formally justified the reasons for this decision, sources close to the matter suggest that it was taken due to the lack of specifications relating to corporate social and environmental action.

In March 2018, the government promulgated a new mining code in which these issues became paramount, and there is talk of a new amendment to the code to further strengthen these requirements.

For the companies affected, the financial by-product will obviously be significant. “The initial investment required to launch and sustain mining operations is often substantial and is amortized over several years,” explains a consultant specializing in the African mining sector.

“Moreover, in such an uncertain environment, the withdrawal of authorizations can potentially affect relations with investors and bankers, making access to new financing difficult. »

“We don’t know how we’re going to live.”

The implications of the decree go well beyond: in the DRC, the mining sector is the largest provider of jobs, both directly and indirectly. The sector represents 43% of the national budget, 47% of GDP, 95% of exports and a quarter of jobs.

In affected localities, uncertainty over whether mining will resume is causing great concern.

Our lives depend on these mining companies

“We are the ones who are suffering now. We have just gone through three difficult months and our activities are at a standstill,” says a resident of Kakanda, a town in the province of Lualaba, in the former Katanga, one of the richest mining regions in the country.

“We don’t know what’s going to happen… we don’t know how we’re going to live. »

Another member of his community says: “The consequence of Boss Mining’s suspension is a generalized crisis here. We are in the back-to-school period and everything is becoming difficult for us.

The impact on small businesses and local suppliers is also worrying. “This brutal decision really makes us angry, because our lives depend on the employees of these companies,” said a local trader.

“They come to buy from us and we make a living from it. Today, there is no more money in Kakanda.

It’s the same story everywhere, from Goma to Kinshasa, via Bukavu and Lubumbashi. “Our lives depend on these mining companies,” says a supplier from Kolwezi, who does not know how much longer he can last.

Take control of a key sector

This measure comes at a time when the Congolese government intends to reorganize the mining sector, in particular by regaining control of some of its natural resources.

With one of the richest subsoils in the world (gold, diamonds, copper, etc.), particularly in minerals essential to the energy transition or the composition of batteries (lithium, cobalt, coltan, etc.), the DRC is largely dependent of its deposits.

The government’s desire to regain control seems laudable, but this measure sends a worrying signal to international investors, who could therefore hesitate to commit funds in an environment perceived as unstable.

This climate of uncertainty would not only affect the mining industry, “it could also discourage capital injections in other sectors of the Congolese economy,” says an analyst.

“The real challenge is finding a balance between the economic interests of the state, environmental and social standards and the need to attract investors. The Congolese government must demonstrate clarity and transparency to reassure the various actors involved.