MAC: Mines and Communities

EU involvement in DRC mining project draws protest

Published by MAC on 2008-11-05
Source: Michel Deilbert, IPS (2008-10-28)

LONDON - The involvement of the European Union in a mining project in the Democratic Republic of Congo (DRC) has drawn a chorus of protest from local and international human rights advocates. They say the project is rife with problems relating to transparency and accountability.

Located some 175 km north-west of the DRC city of Lubumbashi in Katanga province, the Tenke Fungurume vein is thought to be one of the largest unexploited seams of copper and cobalt in the world. It has proven alluring to mining companies in recent years as the DRC attempts to extract itself from a civil war during which some six million people have died.

Mining of this resource has fallen to Tenke Fungurume Mining SARL (TFM), a joint concern combining Gécamines, Congo's state mining concern, with Lundin, a Swedish mining company, and the U.S.-based mining concern Phelps Dodge.

The latter merged with gold-and-copper giant Freeport-McMoran in 2007 and has since become Freeport-McMoran Copper & Gold Inc.

After construction on the Tenke mining facility commenced in 2007, the European Investment Bank (EIB), the investment arm of the European Union, agreed that same year to help finance the project with a loan of 100 million euros.

It regarded the project as ''highly significant from an economic and developmental point of view'' and that ''environmental and social issues (connected with the project) have been subjected to careful in-depth analysis...''

However, the EIB's move has been criticised both by international bodies, such as the Paris-based Les Amis de la Terre (Friends of the Earth), as well as local organisations in the DRC, such as Action Contre l'Impunité pour les Droits Humains (Action against impunity towards human rights).

''The EIB seems totally unaware of what was going on during the signing of the (Tenke) contract and their assessment seems purely financial,'' says Anne-Sophie Simpere, a campaigner for the reform of international financial institutions working with Les Amis de la Terre.

''We feel that they shouldn't finance that kind of extractive industry project in Africa until they have experienced staff to assess it.'' Objections to the project have ranged from what groups say was an inadequate consultative process (the use of French language documents to explain the Tenke endeavour to a largely-illiterate, Swahili-speaking population) to the displacement of local residents from towns such as Mulumbu to make way for mining activities before replacement housing had been built for them, rendering them essentially homeless.

Perhaps even more controversial, in June 2005 the Lutundula Commission concluded that Lundin Holdings made its first payment towards the Tenke concession - totalling nearly 50 million dollars - in 1997. This was a year after it had gained the concession in what was viewed as a largely non-competitive bidding process.

The Lutundula commission consists of Congolese parliamentarians charged with investigating business contracts signed during DRC's civil war.

The deposit, the commission discovered, was paid into the account of Rwanda-based Comiex Limited, a company partly owned by Laurent-Désiré Kabila, the Congolese rebel leader who had just seized power in the DRC after ousting long-time dictator Mobutu Sese Seko. Kabila was assassinated by one of his own bodyguards in 2001 and his son, Joseph Kabila, the DRC's current president, assumed the office that he holds today.

Recently, the Congolese government completed a further year-long review of 61 mining contracts in the country, the results of which have not yet been officially announced. Lubin and Freeport-McMoran are among those whose contracts are being reassessed.

Requests for comment by Lundin Holdings went unanswered. The EIB, for its part, takes a more circumspect view of the situation, and points to the fact that the disbursement of the loan has been put on hold pending the outcome of the mining review.

''The EIB is aware that a review of the mining projects in the DRC has been published, and an independent commission established to renegotiate the mining contracts,'' says Una Clifford, a press officer with the EIB.

''The EIB's discussions with the project sponsor have been suspended pending clarity on the final outcome of the work undertaken by the independent commission.

''The EIB has conditionally approved a loan of 100 million euros for Tenke (but) this loan will not be signed until the bank receives the final go-ahead from the DRC government.''

The Tenke controversy is illustrative of the discomforting ways that commerce and political patronage frequently intersect in foreign companies' involvement in the DRC.

South Africa's AngloGold Ashanti mining company has come under fire for links with and payments made to the Front Nationaliste et Intégrationniste (FNI), one of several ethnically-based militias that helped turn the eastern Congolese region of Ituri into a killing field earlier this decade in a conflict that claimed at least 60,000 lives.

One former leader of the FNI, Mathieu Ngudjolo, is currently awaiting trial at the International Criminal Court in The Hague for war crimes and crimes against humanity. Another, Floribert Njabu, is currently in detention in the DRC's capital of Kinshasa.

For its part, the Australian company Anvil Mining, the leading copper producer in the DRC, has been accused by human rights organisations and investigators for the United Nations peacekeeping mission of having provided logistical support to the Congolese army during their siege of the town of Kilwa. At least 73 people were killed in that town, which is in Katanga province. (END/2008)

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