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Importance of artisanal mining increases in DRC

SUBSISTENCE MINING Artisanal mining in the DRC has become a widespread activity of significant economic importance

SUBSISTENCE MINING Artisanal mining in the DRC has become a widespread activity of significant economic importance

2nd December 2016

  

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The stagnation of the formalised mining sector in the Democratic Republic of Congo (DRC) has led to an increase in artisanal mining activity, says mining representative body DRC Chamber of Mines (CoM).

“Artisanal mining in the DRC has become a widespread activity of significant economic importance and, while the new Mining Code has attempted to control it, much is still conducted illegally,” the body says in its 2015 DRC Mining Report released earlier this year.

The annual report, published in February, outlines the challenges facing the mining sector, while also attempting to analyse the effects and importance of artisanal mining in the country.

Citing the effects of the fall in metals and commodities prices, the CoM notes that, while the DRC has adjusted well enough – with gold production up 30% and copper production only decreasing by 3% year-on-year – economic activity in the country has nevertheless been adversely impacted.

“The global commodity crisis is an unfortunate reminder of certain economic truths. It is already evident that sectors related to the extractive industry will suffer in the coming months,” the DRC CoM says in its report, adding that this has had major consequences on employment and tax revenues in the DRC, as the country’s growth is heavily dependent on mining.

The CoM estimates that the formal mining sector provides about 375 000 jobs throughout the DRC. Considering each employee has an average of five dependants, the CoM infers that the industrial mining sector supports about 1.875-million Congolese nationals.

Despite the lack of conclusive data, the World Bank estimates that artisanal mining provides an income for almost two-million people. There are about 450 000 people involved in artisanal diamond mining, while copper and gold mining of this scale account for about 200 000 each.

The DRC CoM suggests that recent mine closures and production cuts may result in an increased number of artisanal miners.

Citing multinational commodity trading and mining company Glencore’s Kamoto Copper Company’s 18-month-long shutdown, announced in 2015, and the subsequent loss of 1 000 jobs, the chamber suggests that, while some of these workers may be formally employed elsewhere, most will become artisanal miners.

A wider migration of retrenched Zambian workers is also possible.

“More than half of the 514 staff at Chinese metals company Jinchuan Group’s Chibuluma South [were expected to be laid off in December] ; Chinese miner China Nonferrous Metal Company’s Luanshya Copper Mines placed 1 600 staff on forced leave at Baluba [in September 2015], as did Indian miner Vedanta Resources’ Konkola Copper Mines with 133 of its employees [to take paid leave in September 2015],” the CoM recalls. Glencore also retrenched 4 300 workers at the Mopani mine, in Zambia, where a further 2 000 contractors lost their jobs.

Stability Factor

Mining companies face social, security and environmental problems as a result of the widespread artisanal mining activity, the DRC CoM states.

In the 1980s, artisanal mining was primarily focused on diamonds and activity was concentrated along river valleys. “The diamonds were sold to an intermediate dealer who had likely already supplied the miners with food and temporary lodging,” the chamber explains.

Today, artisanal mining has extended to gold as well as copper and cobalt.

It is also even more informal, with it being extremely unlikely that intermediaries will supply food or shelter. This unstable form of informal economy often sees the influx of artisanal miners leading to clashes with established mining operations, the DRC CoM notes, explaining that “licensed companies face huge social and security problems as artisans are reluctant to leave their only source of revenue”.

Higher copper prices in the 2000s meant that the Katanga province experienced a massive influx of artisans because of the rich oxide copper and cobalt minerals exposed at surface. The chamber recalls that, when the price of copper doubled and then tripled, “diggers started to extract malachite from deposits that were legally held by the mining companies”.

Clashes between the artisans and the mines’ security staff have since become frequent and exploration and development programmes are often delayed as a result.

The financiers of these artisanal operations never declare any of the mined product and smuggle it out of the country to avoid paying duties or royalties. This means that neither the State nor the artisans derive any real benefit from artisanal activity. The State loses out on potential revenue and the miners are paid less than half the actual value of the product that the financier channels to market.

Other negative impacts of the proliferation of artisanal mining include the significant environmental damage specifically to rivers that are used to wash mineral-bearing gravels. The polluted water drives away fish, removing a source of food and alternate revenue, the chamber points out, adding that the “land left behind is never rehabilitated and is no longer viable for agriculture”.

In terms of health, of the workers who spend long hours in dirty water, women will suffer from urinary tract infections and any injuries incurred will fester. Additionally, sidewalls of rivers often collapse killing or injuring workers, the chamber warns.

Further, deposits, gold in particular – what should be a development-enhancing national patrimony – are rendered uneconomical to the licensee because of the high-grading practices of artisanal miners, which the DRC CoM says results in losses for the investors, legitimate workers and the State.

The chamber suggests that mining companies should encourage these artisans to form some sort of cooperative that sells its products to the company – a form of contract mining.

However, it notes that this may be unviable in the short term. It was the depressed metals prices that led to the initial job losses, which, in turn, produced the influx of artisanal miners. As such, if licensed companies are to form part of the solution, a more favourable price will likely be needed before they can look to “contract” artisanal miners, the DRC CoM states.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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