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Dealing with DRC’s mining boom

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Dealing with DRC’s mining boom
Now the world’s second-largest producer of copper after Chile, the Democratic Republic of Congo (DRC) continues seeing more investment not only in the mining sector, but also in infrastructure development to support the mining sector. Image credit: SRK Consulting

Dealing with DRC’s mining boom

The DRC has seen considerable investment into infrastructure supporting its mining sector.      

Now the world’s second-largest producer of copper behind Chile, the Democratic Republic of Congo (DRC) is seeing considerable investment in infrastructure to support mining and other sectors.

According to SRK Consulting South Africa’s chairman Vis Reddy, it is now vital for the country to lock-in its progress to date and pave a sustainable way forward that fully leverages the economic spin-off of copper mining. SRK has had a local practice – SRK Congo – in Lubumbashi since 2010, which is staffed, managed and majority owned by experienced Congolese professionals.

“Over the many years of our involvement with clients in the DRC, we have seen considerable developments in this market – which have gathered pace in recent years,” says Reddy. “The copper-cobalt boom is certainly tangible in many regions, and there is growing enthusiasm among investors for the opportunities here, despite the inherent risks.”

The DRC is still a relatively young mining destination for international mining companies in terms of establishing its mining codes and regulations, and these were likely to continue evolving.

As the necessary frameworks are established, it will gradually strengthen the predictability of the mining landscape.

Dealing with DRC’s mining boom

Greater certainty (Dealing with DRC’s mining boom)

“This process is not simple or quick, as there are many cases where there is no precedent for new laws and rules,” he explains.

“It is not always clear how certain aspects of legislation should be interpreted and applied, but over time there will be greater certainty about what is expected of investors, mining companies and other stakeholders.”

SRK Congo chairman Dominique Sambwa notes the positive developments in the Katanga region, where the Lobito Corridor was now open and rail transport trials have been initiated. The corridor stretches 1,300km through Angola to the Atlantic Ocean, and promises to be an important route for commodities from areas like Kolwezi to the export harbour at Lobito.

Dealing with DRC’s mining boom
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Improved infrastructure (Dealing with DRC’s mining boom)

“This is one of the major recent advances to underpin the future of mining in Kolwezi, adding to the new Busanga power station which is now delivering 240 MW,” says Sambwa.

Sambwa further notes that there were also efforts underway to improve infrastructure in newer mining areas like Manono. Here, The Mpiana-Mwanga hydropower station destroyed 25 years ago is now being refurbished to serve growing energy demand as mining activities gather momentum.

“The area remains isolated, however, with about 433 km of transport road needing to be built to the nearest exit port at Kalemie,” he said. “New projects in Manono, which hosts a number of exciting mineral prospects, will face infrastructural challenges for some time yet.”

Urban migration (Dealing with DRC’s mining boom)

The infrastructure challenge extends beyond the operational needs of mines to the migration of people in the DRC to areas where mines are started. Steve Bartels, principal civil engineering technologist at SRK Consulting, highlights basic urban facilities and infrastructure – which are vital for not only supporting the surrounding communities with services but also the mine facilities.

“As settlements mushroom around mining areas, it is important for authorities to adopt an integrated approach to urban infrastructure,” says Bartels. “Just as infrastructure needs to be planned and constructed according to health and engineering standards, so the same approach needs to guide the sustainable provision of water, electricity and other services.”

Economic diversity (Dealing with DRC’s mining boom)

Already there is considerable infrastructure developing to accommodate the growing business traffic from abroad, says SRK Consulting principal environmental scientist Wouter Jordaan, including an international airport, and new hotels to accommodate the influx of additional traffic into the area.

“Fast-developing information technology and communication services and a growing hospitality industry in the DRC can be game-changing, while creating further opportunities to develop new skill sets in the economy,” says Jordaan.

“This is one of the important signs of diversification of economic activity, which will provide and important foundation for the government’s aim of re-establishing a skilled middle class in the country.”

There is wide acceptance that the mining sector, as a pioneer industry, plays a central role in this endeavour. It generates demand for a wide range of services and products, he says, which government wants mines to procure increasingly from the local economy rather than abroad.

Legal requirements like the ARSP, which requires mines to procure certain services and goods from majority locally owned and registered companies, and the Cahier des Charges, which requires mines to invest in local infrastructural development to address community needs within the mine’s zone of influence, have this end in mind.

Investor confidence (Dealing with DRC’s mining boom)

Roanne Sutcliffe, principal environmental engineer, points to the drawing up of DRC mining regulations in 2018, which are now starting to gain traction. These covered issues from sustainability and social development to taxation.

“There is today a greater understanding of what is required of new entrants and existing players in this market, giving a level of confidence to investors,” says Sutcliffe.

“At the same time, mines are seeing that there are sustainable development imperatives to be met across their entire supply chain.”

To the extent that mines can optimise their positive impacts – and avoid operational and reputational risks in their supply chains – the evolving framework in the DRC is creating a more conducive environment for mining investment, she says.

Mining services (Dealing with DRC’s mining boom)

“From our initial focus on exploration and resource estimation, we have developed our services through to environmental, social and governance (ESG) issues,” says Maleba.

Assisting mines in achieving compliance and good international practice, SRK Congo country manager Susa Maleba says that the DRC’s growing mining sector had allowed the Lubumbashi office to extend its disciplines to include hydrogeology and geotechnical studies.

“We are working closely with our experts in global offices including South Africa and China to offer our services to our clients including Chinese clients in the DRC by collaborating on projects whereby our project teams include staff with local knowledge and experience.”

Sambwa says that more mining companies in the DRC were stepping up to meet the specific local requirements of government regulations, while also aiming to achieve global standards – from resource reporting to ESG.

“This is a promising sign, as it indicates that DRC will not be left behind by mainstream trends and benchmarks in the global mining sector,” he says.

Dealing with DRC’s mining boom

Dealing with DRC’s mining boom
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AgricultureEnvironmental Management & Climate ChangeEnergyESGInfrastructureMiningPolitical EconomyTourism and ConservationWater Management