UN, Congo government try to formalize the mining industry

The plan for formalizing Congo's mining industry relies on the removal of armed groups from the process, but that is a difficult task.

In Enough’s recent reporting from Walikale, a remote, minerals rich area of eastern Congo, we’ve noted in no uncertain terms that the humanitarian, security, and economic situation there is precarious. A decade after large mineral deposits were found in the region, livelihoods have become inextricably intertwined with mining – people prefer to go to the mines than to cultivate or pursue other forms of income generation, leaving communities largely dependent on basic supplies coming from Goma. The benefits of Walikale’s minerals are vast, but they fail to trickle down to the local population.

Several initiatives are underway to try to formalize Congo’s mining sector, with various stakeholders involved in each. Coordination and harmonization of efforts will be a major challenge to declaring Congo’s minerals conflict-free.

One of the most promising initiatives for formalizing the mining industry is the establishment of centres de negoce, or trading centers. The United Nations mission in Congo, or MONUSCO, in conjunction with the Congolese government, is backing the construction of five trading centers in the Kivu region, two of which are located in Walikale territory, one near the massive – and notorious – Bisie mine and another in Itebero, about 45 miles from Walikale town.

Here’s how the process should work:

At the mine: Armed groups and soldiers pulled out of the mine. While civilian control is being established, security will be provided in the mine and along trading routes by mining police, with a security perimeter provided by MONUSCO and the Congolese national army. Authorized miners will have to show mining permits to the mining administration and agents with the Small-scale Mining Technical Assistance and Training Service, or SAESSCAM. Each minerals bag will be tagged as it comes out of the mine. No tax will be collected either at the mine or along trading routes.

At the trading center: Standard set of 10 percent tax will be imposed on each minerals bag brought in by miners, collected by SAESSCAM; mining administration will verify permits for miners and companies/comptoirs; laboratory will determine grade of minerals; price for minerals will be set. Then minerals will be retagged and sold to companies/comptoirs, who will ship them by air or road to export centers. MONUSCO and the mining police will provide security at the trading center.

In export cities (Goma/Bukavu): Mining technical department will checks statistics and mining title conformity. Minerals will be roughly processed, sampled by mining laboratory to determine minerals grade, and issued a delivery certificate. Then minerals will be packed up, and the mines administration will issue mineral export authorization. Before minerals are exported, the Congolese central bank will issue a certificate if the load has gone through due traceability process. Finally, Customs Office will document the shipment, and the minerals will be cleared for export.

Encouraging as this plan is in theory, significant challenges threaten to derail the initiative.

Ultimately, the plan hinges on the withdrawal of armed groups, including the Congolese army, from the mines. It will be a challenging feat considering how deeply members of armed groups are invested in mining – from the rank-and-file soldiers to top commanders, to state officials and, some say, even President Kabila himself. Nevertheless, military commanders in North Kivu say that the military pullout from the mines is already well underway. “The chief commander of the army gave a formal instruction to the army to withdraw from the mines,” Major-General Dieudonné Amuli, chief commander of Amani Leo operation, told Enough. “It’s an order that will be observed by everyone here on the ground. Anyone who infringes on the order will be prosecuted,” he said.

But while the mines may soon appear to be free from the influence of armed groups, the reality will be less clear-cut. Enough heard multiple times from people living near the mine that soldiers just take their uniforms off to look like civilians when they go into the mine. Issuing identification cards to authorize only people with legitimate business to enter the mines should cut down on soldiers posing as civilians, but logistically even this step presents challenges. For instance, miners with the Cooperation of Artisanal Miners of Bisie said they still had not received ID cards for 2011 as of mid-April. Other logistical arrangements are yet to be determined and could undercut the system if conflict minerals are still able to seep in, such as how and where to securely store the stock ready for shipment at the trading centers.

Security remains an acute concern throughout the Kivu region. While the presence of militias has obvious threats for local populations, it also justifies the deployment of soldiers and police to areas at risk, which not coincidentally are also often areas rich in minerals. Gold mining is particularly problematic; armed groups control an estimated 85 percent of gold mines.

Shortages of funding are a continuous threat to certification efforts, and some promising initiatives stalled out during President Kabila’s six-month mining ban that was lifted in March. While the UN mission, the US, UK, and Canada back the centres de negoce initiative, the centers cover just one stage – albeit a key one – on the supply chain. And even if these five centers function effectively, they will likely not be able to cover enough territory or output. The North Kivu mining minister estimated that 15 trading centers would be needed to cover that province’s mining territories alone.

But the extent of the government’s commitment and willingness to follow through may be the biggest unknown. “Some of these key politicians who were brought out of the rebellion made deals with Kabila,” said a UN source. “It’s unclear what they agreed and therefore hard to know whether Kabila has any leverage over them.”

A European mining executive said that he isn’t optimistic that the US legislation will have the desired effect of cutting off armed groups, because of the lack of political will, even as companies stall operations. “The Congolese government still doesn’t believe that the world wouldn’t want its minerals,” he said.

But among communities in Walikale and mining executives alike, there is a real fear – grounded in the experience of the mining ban, when shipments fell from 20 tons to one daily – that a certification scheme won’t be put in place in time to reassure skittish buyers and the business won’t rebound.

“This centre de negoce will be finished within a week or 10 days,” said Sylvain Luendo, an engineering assistant for IOM, the agency implementing the construction phase. “It’s up to the government to decide when they will inaugurate and open it,” adding that he didn’t know when that would be.

– Laura Heaton and Fidel Bafilemba blog for the Enough Project at Enough Said.