DRC Mining Newsletter 27-05-24

Democratic Republic of Congo seeks to regain control of PRIMERA GOLD

The Government of the Democratic Republic of Congo is in the process of acquiring the United Arab Emirates' 55% stake in Primera Gold, a joint venture resulting from a partnership aimed at curbing gold smuggling in the DRC. By acquiring 100% of Primera Gold's shares, the Congolese government aims to refocus the agreement on the country's interests, thereby strengthening its control of the artisanal gold sector to the benefit of local operators and the nation. Learn more.

In 2023, the Democratic Republic of Congo saw a spectacular increase in unrefined gold exports, reaching 182,754 oz compared with 1,490 oz in 2022 thanks to Primera Gold DRC.

With the ambition of surpassing industrial gold exports, which stood at 1,034,938 oz in 2023, Primera Gold DRC forecasts revenues of $1.51 billion from 846,575 oz of gold in 2024 and $2.26 billion from 1,270,000 oz of gold in 2025, underlining the growing importance of artisanal gold in the DRC's economy.

Democratic Republic of Congo plans mega dam and aluminum complex

The Democratic Republic of Congo (DRC) has embarked on a major project involving the construction of one phase of the Grand Inga Project, with a minimum capacity of 7,000 megawatts, out of a total potential of 40,000 megawatts, as well as the establishment of an aluminum smelter with a capacity of 4 million tons per year and an aluminum refinery with a capacity of 8 million tons per year.

This initiative is the result of a memorandum of understanding between the Agence pour le Développement et la Promotion du Projet Grand Inga (ADPI-RDC) and Natural Oilfield Services Limited (NOFLS), which has undertaken to carry out technical, environmental, social and financial studies.

Following this recent development, Fortescue Ltd, originally in charge of developing the Grand Inga project, was replaced by Natural Oilfield Services Ltd, a Nigerian company, to build a scaled-down version of Fortescue's original project, which would have produced around 40 gigawatts of hydroelectricity. Learn more.

Democratic Republic of Congo calls for international embargo on Rwanda mineral exports

The Democratic Republic of Congo has called for an international embargo on metal exports from neighboring Rwanda, whose government is accused of using rebel groups to steal its natural resources. Learn more.

The decision was prompted by the M23's recent takeover of Rubaya, a mining town accounts for around 50% of the country's production of coltan, a mineral essential to the electronics industry due to its tantalum content. The M23 has established a mineral trading post, setting its own prices, and there have been reports of increased mineral trafficking to Rwanda since the seizure of power.

The Congolese government is currently exerting pressure on corporations like Apple to uphold transparency in their supply chains, aligning with increasing apprehensions regarding conflict minerals. Legal representatives of the Democratic Republic of the Congo have recently disclosed that they have acquired new evidence, with Apple remaining unresponsive to inquiries regarding blood minerals in their supply chain. Learn more.

Chinese cobalt giant CMOC accused of anti-competitive practices

China, through CMOC Group Ltd, is accused of using "predatory" tactics to drive down cobalt prices by flooding the market with cobalt from the DRC. Learn more.

In 2023, the Democratic Republic of Congo contributed to an 80% increase in global cobalt supply, supplying around 37kt additional tonnes to the market. CMOC alone increased its total production by 35,000 tonnes from its mines at Kisanfu and Tenke Fungurume, accounting for 94% of the DRC's supply growth, making it the world's largest producer, overtaking Glencore for the first time.

Botswana maintains its African leadership in mining attractiveness, with Morocco and Zambia rounding out the podium. The DRC struggles to stand out

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According to the Fraser Institute's 2023 annual mining survey, which assesses the impact of mineral endowments and policy factors on attitudes toward exploration investment, Botswana (score: 76.87) retains its top position in terms of mining investment attractiveness in Africa, followed by Morocco (69.61) and Zambia (64.23) in 15th, 27th and 34th place respectively.?

Among the 22 countries evaluated within African jurisdictions, Niger (score:14.61) is in last place, preceded by Mozambique (31.90) and Zimbabwe (33.43). As for the DRC, it is ranked 61/86 with a score of 42.97 in the overall investment attractiveness index. Learn more.

Also consider this :

• The price of a carat of diamonds in Mbuji-Mayi has dropped from $2 to less than $1, impacting artisanal diamond mining in the region. Diggers and traders are struggling to sell their diamond parcels due to a lack of buyers and liquidity. Learn more.

• The government of the Democratic Republic of Congo has lifted the suspension order on the COMMUS project, in which Zijin holds a 72% stake. Last month, the Congolese Ministry of Mines suspended operations in order to examine mineral products returned from South Africa due to excessively high radiation levels. Learn more.

• The International Energy Agency's (IEA) "Global Critical Minerals Outlook 2024" estimates that the Democratic Republic of Congo is expected to account for 14% of world copper extraction and 7% of the world refining phase by 2030. Learn more.
• The US government is considering easing the sanctions imposed on billionaire mining magnate Dan Gertler in exchange for his complete withdrawal from the Democratic Republic of Congo, including the abandonment of royalties he collects on three strategic projects. Learn more.

• DRC is recognised as a global copper powerhouse for its massive production (+2.8Mt in 2023). But looking at the entire value chain, the country is mostly present in the mining phase, refining less than half of its minerals. This implies significant value being lost to countries like China that has established itself as the world's copper refining hub.

Our in-house analysts published two op-ed in a leading francophone Africa news outlet Financial Afrik :

• Crise énergétique en RDC : Causes, impact et voies de sortie Lean more
• Contenu local et loi sur la sous-traitance en RDC : chemin vers un regain de souveraineté industrielle dans le secteur minier ? Learn more

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For more detailed analysis on the DRC mining industry, do not hesitate to reach out: +243 820 622 753 // [email protected]

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