Mining Potential and its Limitations
The challenge of formalization and production traceability
“The DRC has huge mineral deposits across a diversity of minerals including copper, cobalt, gold, diamonds, tin and others,” explained Amedeo Anniciello, the CEO of Standard Bank. “There is an estimated US$24 trillion of mineral reserves in the DRC.”
From 1960 – 1980, the DRC experienced relative prosperity due to high copper and other commodity prices. Today, the country accounts for two thirds of global cobalt production, is the largest African producer of copper and the world's fourth-largest diamond producer by volume. DRC surpassed Zambia as Africa’s top copper producer in 2013, with an output of 925,000 mt/y compared to 70,000 mt/y in 2003. By 2015, mining represented 98% of export revenues and 26% of GDP. By 2019, the industry’s contribution to GDP rose to 30%. The mining industry employs 4% of the Congolese population, according to the World Bank, of which the majority participate in artisanal or semi-industrial mining. Artisanal mining remains challenging to formalise and, in another effort to do so, the government created a new committee in February of 2020 to buy and market all artisanal cobalt mined to control the supply chain and bolster government revenue.
“Artisanal miners are mining alluvial metals near Manono. We plan to engage with them and allocate certain areas to for them to work, selected by AVZ and the government. Alternatively, it has been proposed that we turn them into a group of mining cooperatives to assist AVZ from the alluvial side of the project. If progressed this will be completed based on strict safety measures, ensuring no children participate in the mining operations.”
Nigel Ferguson, Managing Director, AVZ Minerals
According to the European Commission and the Global Battery Alliance forecasts, demand for cobalt is expected to grow fourfold by 2030. This is great news for the DRC where more than 60% of the global supply of cobalt is currently sourced. However, a fifth is mined by hand and has been linked to numerous human rights abuses and child labour, especially in the cobalt mines around Kolwezi. In 2014 alone, UNICEF estimated that at least 40,000 children were involved in mineral extraction in the DRC. Concerns over these conditions are diverting investor interest from Africa to Australia. For example, car maker BMW decided to source cobalt from Australia and Morocco as opposed to the DRC. The Congolese state is allowing exploitation by artisanal miners, locally known as creuseurs, to reduce unemployment and community distress. However, creuseurs sometimes mine the same concessions as majors and the activity results in high rates of accidents and fatalities and a negative environmental impact. In September 2020, an artisanal gold mine collapsed triggered by heavy rainfall resulting in more than 50 deaths in the South Kivu province. Formalisation of artisanal mining activities offers a more viable solution than suspension of operations as the industry is vital for world supply and for the DRC’s attempt at inclusive growth and development, but the power of the government to control it is limited.
Many organisations are attempting to formalise artisanal mining activities. Trafigura, one of the world’s largest commodity trading firms, launched the Mutoshi Cobalt Pilot Project in Kolwezi. This attempts to integrate artisanal activities into large-scale mining concessions by working with Chemaf, the cooperative COMIAKOL and the NGO PACT. Between 1,000 and 5,000 miners participated in the project. Meanwhile Global Communities DRC, the USAID’s partner company, is to establish a commercial artisanal mining gold supply chain that originates from the eastern DRC. “It is important to stress that artisanal mining is carried out by millions of people and many more Congolese depend on the income generated by this activity. The artisanal mining sector is therefore considered to be the largest employer in the DRC. It cannot be eliminated without creating social unrest,” elaborated Ikoli, general secretary of the Congolese Ministry of Mines. “To make it more transparent and constructive, this activity should be formalized through efficient and effective technical supervision by the Ministry of Mines. The only remedy is the transformation from artisanal mining to small-scale mining. It will be necessary to provide the Small-scale Mining Assistance and Support Service (SAEMAPE) with the technical and financial resources so they can efficiently accomplish their mission,” he continued.