KINSHASA, March 17 (Reuters) – A sharp increase in mining production will drive economic growth in Democratic Republic of Congo to around 9.5 percent this year, one of the highest rates in Africa, Prime Minister Augustin Matata Ponyo said in an interview.
Congo, a country the size of Western Europe in the heart of Africa, has rich reserves of gold, diamonds, copper, cassiterite and coltan but development of its resources has been hampered by poor infrastructure, corruption and decades of conflict.
Ponyo, a technocrat who took over as prime minister in April 2012, is credited with taming inflation, curbing government debt and boosting economic growth on the back of a mining bonanza. Congo’s roughly $20 billion economy grew by 8.5 percent last year, according to the IMF, as copper production hit a record 942,000 tonnes – making it the largest producer in Africa.
“Mining production is practically exploding and it’s forecast that in 2014 we’ll see much higher production than in 2013,” Ponyo told Reuters. “For 2014, we predict economic growth of around 9.5 percent … among the highest on the continent.”
His forecast topped the IMF’s estimate that Congo’s economy would grow by 8.7 percent this year. Despite robust growth in recent years, most of Congo’s 65 million people live in poverty.
Ponyo said Congo’s growth and low inflation – 1.1 percent in 2013 according to the IMF – made it a special case in Africa. Mining makes up around 30 percent of Congo’s economy, the government says.
Production boomed last year as a number of expansion projects came on line – including at Glencore Xstrata’s Kamoto Copper Company (KCC). Freeport McMoRan is also ramping up output at its giant Tenke Fungurume Mine in the southeastern copper-rich province of Katanga.
The prime minister sought to allay investors’ concerns over proposed new mining and oil codes, due to be approved during a new parliamentary session that began on Saturday.
The government has held talks with investors over a mining code would raise the state’s stake in new projects to 10-15 percent and triple royalties to 6 percent. Ponyo said he would take onboard the opinions of major international companies.
“We are obliged to take their observations into account, while preserving the interests of Congo,” he said in the interview on Saturday.
LACK OF ELECTRICITY HAMPERS MINERS
Ponyo has said the government’s recent success in pacifying some armed groups in eastern Congo – where millions have died from violence, hunger and disease in the past two decades – has helped attract mining investors.
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