Expert Opinion on Accelerating the Implementation of Strategic Mining Initiatives in the DRC: Mistakes Were Made

Faced with the global demand for our natural resources at the heart of the ecological transition, the Democratic Republic of Congo must develop a more equitable remuneration model and negotiate compensation proportional to what it offers. For the President of the Republic, this requires a redefinition of the supply chain of strategic mining products, in particular Lithium, Cobalt, Niobium and Coltan, to which should be added Copper, due to their worldwide demand in view of their industrial applications. This is what he said in his communication to the 37th meeting of the Council of Ministers, on Friday 21 January 2022.

To this end, he instructed, under the coordination of the Prime Minister, the Minister of Mines, and all the Government structures involved, to present within a fortnight, an operational action plan allowing the acceleration of initiatives to develop our strategic mining resources, and the development of local processing chains. He asked that the following projects be given sustained, urgent, and consistent attention. They are in particular:

- The development of the lithium sector in the province of Tanganyika in the wake of the resolutions taken during the last DRC-Africa Business 2021, which had as its objective: "the development of a regional value chain around the electric battery industry, the market? of electric vehicles and clean energies”.

- Of the reinforcement of the industrial cupro-cobalt industry, on the one hand, and the sanitation and development of the artisanal cupro-cobalt industry, on the other hand in Lualaba and Haut Katanga.

The Head of State insisted that the Minister of Mines should supervise in a particular way the actions of the Provincial Government of Lualaba. This is the case of the project of the trading center of Musompo which must be operational as soon as possible to ensure the traceability and to guarantee the socio-environmental conditions of the artisanal production, pledge of a direct access towards the markets of supply of the big world companies of various sectors of the automobile, the electronics and energy.

Engunda Ikala, notes the absence of a clear strategy on “strategic mineral” in the DRC

Engunda Ikala, Research Analyst in "Natural Resource Governance", feels that this operational action plan initiative puts the cart before the horse since it would be wiser to start by adopting a clear strategy on “strategic minerals”, which will then be implemented by the operational action plan. He points out that it is quite paradoxical and somewhat inconsistent to have "declared" cobalt, tantalum, and germanium as "strategic minerals" in 2018, without having formally adopted any strategy on these minerals four years later, and to now want to develop an operational action plan on strategic minerals.

He calls for the establishment of a (new) mining strategy if the DRC really intends to become a major player in the rare earths’ economy, which will indicate the direction to take to meet the challenge and also identify the major orientations, their respective lines of intervention and the objectives that flow from them. He therefore pleads for the President to reverse this instruction to present an operational action plan within two weeks, but instead instructs the government to initiate discussions with the sector's stakeholders (companies, civil society, researchers) to produce and adopt a national strategy on strategic minerals. Then it will be time for an operational action plan to implement this strategy.

Willy Kitobo notes a mistake and recalls the urgency of implementing previous decisions to boost the mining sector.

In reaction to this communication from President Félix Tshisekedi, former Minister of Mines Willy Kitobo believes that the decision to list copper as a strategic substance in the DRC is a strategic mistake that will cost the country time and money in discussions with the miners.

"History already tells us about the resistance of the miners to easily accept cobalt at a low price of 32,000 USD per ton, or 3 times the price of copper. Certainly, today with the improvement in the price of metals; copper around 10,000 USD per ton and cobalt above 70. This will not be possible for reasons such as (1) we are not the only producer of this metal in Africa or in the world; (2) as a producer, we are only the 5th largest producer of copper in the world, and moreover, this production is made by foreign capital such as China; (3) the financial consequences of this decision, noting that strategic substances are taxed for the mining royalty at a rate of 10%, for copper, the latter will therefore be paid by multiplying by 3, which will lead to the closure of production of the majority of companies. Remember the reasons for the closure of Mutanda Mining (MUMI) with the Cobalt whose price had fallen, just to mention this example", he said in a statement released to the press on Sunday, January 23, 2022.

It may interest you to note that the shutdown of production at the largest cobalt mine, MUMI, in Lualaba Province, for at least two years, looks like blackmail by the Swiss mining giant Glencore to the Congolese government. The reason given by Glencore was that the Mutanda mine was "no longer economically viable in the long term" due to the decline in the price of cobalt, rising costs of certain inputs and "additional taxes imposed by the revised mining code" in 2018. This is despite the certain negative impacts on the national economy, local communities, and the company's employees, estimated at over 3,000 people.

In the continuity of the state, a principle according to which a government must honor the commitments made by the government that preceded it, the President is not wrong to take up existing files that were suspended when the government changed. In the DRC, unfortunately, the mistake we most often make is to redo projects that cost the predecessor time and money, forgetting that this behavior sets our country back every time there are new faces in high positions of responsibility.

"Several files are still pending, are slow to be applied and/or put in place, yet most of them have already been accepted by the Council of Ministers of the Ilunkamba Government. I would like to briefly remind you of them, insisting on the fact that their implementation is in line with the vision of making the mining sector a real lever for development by enhancing our mineral resources. It is about (the): The safeguarding of the markets of the strategic substances of the DRC coveted in the world which suffers currently from its non-application however, it is a file initiated and defended by me and which was accepted by the council of ministers and the decree of the Prime Minister Ilunkamba was signed (decree n°. 19/15 of November 05, 2019); The lithium project in Tanganyika has been in progress for a few years with AVZ of the Australians who have already almost completed their project; The Niobium project with the Lueshe project had already evolved with interested partners; The project of the trading center of Musompo did not evolve either since it was necessary to readapt it with the creation of the Agency for Regulation and Control of the Strategic Mineral Substance Markets (ARECOMS), which has regulatory oversight over Entreprise Générale du Cobalt (EGC) and especially to sign a decree of the Minister creating it with a whole manual of the procedures to be followed in accordance with the mining code; ?the file of the mining craft which remains a badly organized sector with frauds maintained in the provinces; it is necessary and urgent to clean up; All the proposal of cleaning up exists within the ministry since the handing over and the resumption and the said file had already been accepted in the council of ministers when I was minister of mines with the signature of the decree carrying creation of the Authority of Regulation and Control of the Markets of the Strategic Substances such as Cobalt, Lithium, Germanium and Coltan (decree n°. 19/16 of 05 November 2019)," recalled Willy Kitobo, Honorary Minister of Mines.

For him, the application of these measures should normally be done by the Prime Minister, the current Minister of Mines and the governors of the provinces concerned and to this should be added the industrial and artisanal producer of cupro-cobalt ores in Haut-Katanga.

"For the rest of the communication of the President of the Republic on other strategic substances and Niobium, in my opinion, there are no new strategies except to remind the current Minister of Mines to apply urgently the measures already taken since 2019 by our Ilunkamba government on the safeguarding and control of strategic substances and particularly Cobalt by ARECOMS and EGC," he concluded.

Kevin Ngunza Maniata

Disclaimers. Any opinions expressed are solely my own and do not express the views or opinions of my employer. Co-writers incorporated herein by reference and their opinions are also their own and do not express the views or opinions of their employers.