Insight: Congo’s neglected state miner hankers for past glory – by Clara Ferreira-Marques and Jonny Hogg (Reuters Canada – February 22, 2013)

KAMBOVE, Democratic Republic of Congo (Reuters) – At the heart of the Democratic Republic of Congo’s southern mining belt, Kambove once churned out tonne upon tonne of copper for Gecamines, a sprawling conglomerate that used to make up 60 percent and more of the country’s exports.

Now, inside the rust-streaked corrugated iron walls of the Kambove copper plant, the conveyor belts run erratically and the corroded walkways have holes so large that visitors can see through to the workers milling below.

Today, like much of state-owned Gecamines, the processing operations are working at a fraction of their capacity, slowly crumbling in the searing African heat. Kambove, however, is part of an ambitious government plan to put state-owned Gecamines back on the map as a miner and producer and reverse decades of underinvestment, war and kleptocracy presided over by the late dictator Mobutu Sese Seko.

Under technocrat managers appointed in 2010 and a plan laid out last year, Gecamines would no longer just hold minority shares in mines across Congo’s south, but aim to triple its own production by 2015, thanks to investment in new machinery and a push into exploration. The group last month took its first minority stake in an asset outside Congo – cobalt refinery assets in Finland – a move it says will help raise and improve its bruised international profile.

“Gecamines has a great story,” Chief Executive Officer Ahmed Kalej Nkand, a former central bank official, told a room of mining investors in Cape Town. “It is the story of a mining giant that is awakening from its slumber.”

The ambition, Gecamines executives say, is to be an African Codelco, which is Chile’s state copper miner and the world’s largest producer of the metal, producing just under 1.7 million tonnes last year. That ambition is, at best, a very long way off. In its 1980s heyday, Gecamines made nearly 500,000 tonnes, but it reported only 35,000 tonnes in 2012, and its target of 100,000 tonnes in 2015 looks tough enough.


Financing is a major hurdle, at a time when the International Monetary Fund has halted its Congolese loan program over mining transparency concerns, prompting questions over Gecamines’ more ambitious plans, including a 500 million euro ($670 million) power plant fuelled by coal from deposits at Luena, just north of the copper belt.

Kalej Nkand says the plant will help meet its own energy needs and those of a broader industry currently suffering constant power cuts due to a 200 megawatt shortfall. But he is vague on where the cash would come from; Gecamines, he said, could finance a feasibility study but would then bring in as-yet-unnamed international partners.

Mining analysts and executives, though, say debt-laden Gecamines will struggle to raise money in a tough environment where investors are only too aware of Congo’s poor reputation.

Despite potentially lucrative concessions, mismanagement has left Gecamines with little to show for it but acres of rusting, archaic equipment.

To make matters worse, the average age of Gecamines’ swollen workforce of 12,000 – three times what it says it needs – is 56.

In a 2006 U.S. embassy cable from Kinshasa published by Wikileaks and dating back to previous management under Canadian lawyer Paul Fortin, even U.S. diplomats suggested Gecamines should throw in the towel.

“Rather than trying to remake Gecamines, the region and the country may be better served if Fortin eliminates the company’s mining operations and focuses only on its role as a holding company,” the cable said. “Political and economic conditions do not suggest that Gecamines should do otherwise.”

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