Wednesday, September 30, 2009

DRC Senate Report Denounces Bad Practices In Mining

KINSHASA 29 September 2009 Sapa-AFP


A report for the senate in the Democratic Republic of Congo
shows that the mining sector is riddled with fraud, incorrect
figures and bad management that costs hundreds of millions of
dollar a year.

"No state service ... is up to date to give reliable figures" on
the "number of operators in the mining sector, their quality and
the quantity of products exported," said the report, passed by the
senate on Saturday and made available to AFP.

Products exported under inaccurate names and the underestimation
of weight are aspects of the industry where "statistics fail to
tell the whole story," according to the document, which noted how
one mineral export of 33 tonnes was recorded "as 3.3 tonnes, at the
whim of an official."

The state "lost more than 450 million dollars in 2008,"
according to the president of the Senate commission of enquiry,
David Mutamba, who added that this figure was based only on
available statistics.

But mineral production in the DR Congo -- which has 34 percent
of world reserves of cobalt, 10 percent of copper and plentiful
supplies of gold, diamonds and uranium -- should cover more than
half the country's budget receipts, according to the senators.

The report blames bad management at the top level of government,
stating that the ministries of mining and finance charge much too
little for mining concessions, "in flagrant violation of the
constitution and the law, to the detriment of the public treasury."

Senate investigators found that "80 percent of mineral ores are
fraudulently exported" in the eastern provinces of the DR Congo,
where rebels and armed groups are active.

In the diamond-rich central Kasai Occidental province, local
authorities "stand by powerless during unprecedented pillage by
numerous national mining exploiters or by foreigners guarded by
uniformed men."

The lack of equipment, rundown infrastructure and poor rates of
pay for civil servants and mining industry employees all help to
explain why the mining sector is a mess.

The report gives the example of the directorate of mines in
Kinshasa, which is responsible for statistics, but only has a
"single, antiquated computer with a very low capacity." There are
also no archives.

The Senate team recommends a revision of the mining code of
2002, since some of its clauses are judged "inefficient," like the
"disorganised distribution of mining rights across the territory."

A total of 4,542 mining concessions were granted to 642
companies according to a count in November 2008, but "numerous
operators exploit our mineral resources without abiding by the
demands of the mining code," the report said.

"The services of the state know this situation, but they give
the impression of being determined not to remedy the excessive
growth, which is surrealistic in a state that wants to be modern."

"Even if we revise the code, we'll get the same results," said
opposition senator Ramazani Baya, who stated that the management of the mining sector was "calamitous."

Senators Henri-Thomas Lokondo and Denis Engunda regretted that
the Senate commission did not "give the names of the bad managers, nor those of the operators involved ... and even less (proposed) sanctions."

The pair made recommendations that will be added to the report.

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