The DRC is home to 34% of the
world’s cobalt and 10% of the world’s copper reserves. The Congolese state –
retains a stake in most of the country’s mining projects through the fact that
its state mining enterprises – Gécamines and Sodimico – hold a minority share in
joint ventures with international investors, through which they can expect to
collect dividends.

 

It has recently been reported
that Gécamines and Sodimico have sold off their shares in a number of mining
projects including Mutanda, Lonshi and Frontier, all based in
Katanga province. These deals were
reported after the fact, and appear to have been undertaken without a
competitive bidding process. The buyers of the assets have not been disclosed by
the Congolese authorities. In both cases there is reason to believe that the
assets – collectively worth well over $1 billion – appear to have been sold at
prices significantly below their true value.

 

This would constitute a breach
of the Economic Governance Matrix that the DRC government agreed with the World
Bank in March 2011. The Matrix was a series of agreements that donors and DRC
have committed to in order to improve the governance and transparency of the
mining sector, including the publication of all mining contracts within 60 days,
and an open and competitive process for the selling of mining assets. DRC’s
donors should urgently raise their concerns with the DRC authorities about this
apparent breach in a coordinated and coherent
manner.

 

Furthermore it seems to make
little economic sense that a state-owned enterprise would sell its minority
share in joint ventures in the mining industry at a moment that this industry is
highly profitable and is likely to remain so in the near
future.

 

A statement by Congolese civil
society organisations released on 16 August 2011, questioned the logic of
Gécamines and Sodimico liquidating their shares in mining assets, and called for
the sums received for these assets to be published^[1].

 

Beyond the opaque signing of
mining deals with their one-off bonuses and the shuffling around of state shares
in joint ventures, EurAc believes that DRC must increase its tax revenues from
the mining sector. This would ensure a longer-term source of income that better
reflects market prices. Transparent management of these financial resources is
vital if Congolese citizens are to benefit from the country’s mining
wealth.

 

EurAc urges the European Union
and its member states to:

 

• Follow
  the Congolese government’s management of the mining sector far more closely;
  ensure that the Economic Governance Matrix is respected and that breaches of the
  matrix are continually raised.
• Implement
  transparency rules, as the US has done, obliging European oil
  and mining companies to disclose their payments to governments on a
  country-by-country and project-by-project basis.

 

 

 

 

For
further details:

Kris
Berwouts

Rue des
Tanneurs, 165 B – 1000 Brussels, Belgium

Tel: +32
(0)2 213 04 000

@: kris.berwouts@eurac-network.org

www.eurac-network.org

 

 

 

 ffrom 14 European
countries