In the run-up to, and in the aftermath of the October 1996 rebellion in Zaire, which led to the overthrow of one of Africa’s most despised despots, Mobutu Sese Seko, international mining companies began swarming.

The reason for the excitement was that the country – which has since been renamed the Democratic Republic of Congo (DRC); some say a misnomer due to the fact that there has not been any democracy since Laurent Kabila took control – is home to some of the richest deposits of copper and cobalt in the world, and is also highly prospective for other minerals, such as diamonds and gold.

South African mining companies Anglo American, De Beers, Billiton and Iscor were among those that joined their brethren from North America and Europe in an effort to get a piece of the action.

It was dubbed the mining ‘rumble in the jungle’, and reached near fever-pitch as the Kabila-led rebel alliance took village-upon-village, town-upon-town in their march to the capital, Kinshasa, during a seven-month campaign.

Mining executives were flying into the country to have an audience with the self-proclaimed Marxist head of a long-standing but little-known guerrilla movement as all resistance crumbled and Mobutu was forced to flee to Morocco, where he later died of cancer. At the time, Kabila was supported by Uganda and Rwanda, which saw his rise as a way to boost their own security; a major problem for the Great Lakes region which has been host to some of the worst acts of human genocide in modern history.

But by August 1998, these countries had turned against the incumbent president of the DRC, and backed (initially in a covert way and eventually quite openly) a new rebellion led by another grouping of Congolese rebels.

The ensuing war erupted into a regional conflict, with Angolan, Namibian, and Zimbabwean troops becoming embroiled in an attempt to defend Kabila’s and their own sectarian and financial interests. However, renewed efforts to end the war are once again sparking interest among mining companies and some are predicting ‘rumble in the jungle 2’.

And, while the second act of this drawn-out drama is not expected to yield the same frenzied scramble, the miners are, nonetheless, smitten with the high-grade deposits and are keeping a beady eye on developments.

They are also, no doubt, beginning to dust off deals signed with Kabila prior to the latest conflict, wondering whether they will be worth the paper on which they are written.

Beyond the political developments, which have involved not only the belligerents but some big regional players, such as South Africa, the Organisation for African Unity and the United Nations, these firms are being given further hope of a future role in the DRC by the abysmal position of the State-owned mining company, Gecamines.

Given its debt and poor recent production record, some of the more opportunistic might even be feeling that there could be even more opportunity than first believed.

However, the once-bitten-twice-shy companies are also going to demand a lot more security before they are prepared to offer any bail-out plans, and are unlikely to want to give Gecamines a free ride through the process; something that could not have been contemplated before.

In the view of the Permanent Secretary of the Goodwill and Facilitation Committee for National Consensus in DRC and former president director-general for the commercial division of Gecamines, Andre Alain Atundu Liongo, the financial situation at the State-owned mining house is “catastrophic”.

Speaking at the South African Institute of International Affairs in Johannesburg earlier this month, Atundu Liongo revealed that short-term debt at Gecamines had risen to nearly US$1-billion while its assets were worth only US$310-million.

He said heavy government intervention in the company, which led to a blurring of political and economic objectives, together with its lack of financial resources, were the two main problems facing the organisation.

Beyond the need for political resolution in the country, which is the primary basis for any private investment in mining in the country, Gecamines, therefore, needed to be restructured in a way that separates it from politics. It also required that greater attention is given to increasing productivity; at present production costs are 90 cents a pound, compared to 70 cents at ZCCM across the border in Zambia and 30 cents at Codelco in Chile.

Production has also slipped significantly since the war, and the ratio of cobalt to copper production has grown in a way that Atundu Liongo views as unsustainable.

Production capacity has fallen from well over 400 000 t/y earlier in the decade to around 300 000 t/y and, under the new management led by Zimbabwean entrepreneur Billy Rautenbach, who took over the Gecamines management contract earlier this year, the copper:cobalt ratio has moved from 19,4:1 to 8:1.

Atundu Liongo believes this ratio is unsustainable, as the metallurgic process has been designed for a far higher copper throughput and a far lower cobalt production.

However, he argues that some well-executed projects could stabilise the situation and bring Gecamines back on to its feet.

To achieve this, private capital and skills will be required and Atundu Liongo is therefore calling for Gecamines to contemplate joint ventures, consortium arrangements and even privatisation of parts, or all, of the business.

“Gecamines is certainly in a situation of insolvency but it has vast reserves and human resources of great value and, if certain requirements are fulfilled, Gecamines could regain its production profile of ten years ago.” Atundu Liongo believes this requires a stable State, a well-defined mining policy, reliable management at Gecamines and new financial and technological assets.

However, some mining industry observers argue this approach to be non-viable, and suggest Gecamines has no role in the future of the industry.

Those holding this view insist that the magnitude of investment required to rehabilitate and rebuild the copper and cobalt industry at Kolwezi, Shituru and Luilu, as well as develop other deposits, can not allow a ‘free carry’ for Gecamines. They argue that Gecamines has been of no benefit to the country over the past 30 years and has not provided the base for development of infrastructure as was first anticipated.

They also believe that its existence merely offers the State two bites at the cherry, as it not only has equity in the project through its Ministry of Portfolio (equivalent to South Africa’s Public Enterprises Ministry) but through Gecamines.

Many mining industry practitioners, therefore, believe that the corporation is not credible, and suggest a revised situation where the private sector takes the lead and the benefit is shared through a tax on mining profits or a royalty system.

They add, too, that if foreign investment is forthcoming all skilled labour will be absorbed, so the social fallout will be minimal.

This is going to be a hard-sell, as the Congolese still view Gecamines as their premier company and will be loath to give it away.

This view is further entrenched by the fact that institutions such as the World Bank generally turn to the company to offer guarantees.

Having said this, there is wide acknowledgement by Congolese officials that there is a need for restructuring at Gecamines. This process has already been put in motion by Rautenbach.

But more far-reaching change is also foreseen and they are not ruling out privatisation of part or all of the company.

If they go that route, however, delays are anticipated and private investors may hang back once again.

Therefore, many in the mining industry are urging those in power and those that may take power in future to contemplate a future without Gecamines.

Whether such a vision can be stomached remains open to debate.

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