LONDON Nov 23 Never a destination for the
faint-hearted investor, the Democratic Republic of Congo is
again worrying those betting on its mines and vast mineral
wealth, as rebels battle government troops in the country's
Goma - a lakeside trade town at the centre of an eastern
region that once exported signficant quantities of tin, gold and
tantalum, a metal used in electronics - has been taken by the
M23 fighters, who are now progressing south.
The eastern Kivu regions had seen exports tumble even before
the recent months of fighting, as tighter controls on companies'
supply chains hit the mostly artisanal mining operations.
Without tags to certify origin, buyers like electronics
powerhouses Apple or Intel steer clear of the
Industry sources and analysts say the fighting - in an area
that has seen recurring ethnic strife - is unlikely to spread
far beyond the region, certainly not as far south as the major
copper mines of Katanga, a region more than 1,000 kilometres
(625 miles) south of Goma that has been the heart of Congo's
"This is not national. You can't correlate it with (the
civil war of) 2003; it is a different conflict," said Mark
Bristow, CEO of Randgold, which works in Mali and Ivory
Coast and is developing the Kibali project in Congo's northeast.
"Without wanting to downplay the seriousness of this - and
it is serious - it is fairly well defined to the region. We
don't see it spreading, and it is very encouraging the
population at large is clear about (wanting) national unity."
But campaigners and industry analysts say the unrest will
set back efforts to boost legitimate mining in the east, and to
clean up Congo's tarnished reputation.
Unchecked progress towards Bukavu - 200 km by road from
Goma, south along Lake Kivu - will bring the rebels closer to
Canadian miner Banro's Twangiza operation, Congo's
first new gold mining project for more than half a century, and
hailed at its debut last year as a symbol of revival in a
Banro's shares have lost more than a quarter of their value
since reports of fighting began to emerge this month, though the
company has said operations are normal.
Congo is the world's 24th-largest gold producer, according
Still recovering from years of under-investment in its
mining infrastructure, Congo attracts most attention for its
vast reserves of copper. It produced 435,400 tonnes last year,
according to metals research group GFMS, making it the world's
10th largest producer of the metal.
Congo's major international copper miners, from Freeport
McMoRan to Glencore and ENRC, operate
in Katanga, and have soothed investors by emphasising their
distance from the fighting, hundreds of kilometres away.
Company officials from the major miners told Reuters they
were monitoring the situation, but all said their export routes
and production were unaffected.
Canadian-listed Alphamin is drilling in the Bisie
tin deposit in North Kivu, one of the biggest in the region and
a project that has long been fought over by the army and rebels.
Alphamin did not respond to a request for comment.
BAG AND TAG
The main impact, industry analysts say, is likely to be on
longer-term efforts to bring "bag and tag" initiatives to the
volatile east - allowing electronic giants like Apple and other
buyers to come back without falling foul of the Dodd Frank law.
Under rules only finalised this year, the law requires U.S.
companies to ensure their supply does not come from areas
controlled by armed groups or corrupt soldiers.
As a result of concerns over conflict minerals, Congo made
up only 1.5 percent of the global tin market last year - down
from 4 percent in 2008.
But the region has pushed ahead with initiatives like the
cooperative-operated Kalimbi mine in South Kivu, which has been
tagging its tin to secure legitimate - and better priced -
"Considerable efforts are being made in the region to set up
responsible, conflict-free supply chains. We need to make sure
this progress isn't reversed by the M23's advance," said Annie
Dunnebacke, a senior campaigner at Global Witness.
Fighting in the region has long been linked to the
plundering of its mineral wealth - illegally mined tin, gold and
coltan, shorthand for an ore that is mined for tantalum.
United Nations investigators have said that rebel groups and
rogue elements in the army have smuggled minerals abroad,
circumventing government mining and export bans on metals. Much
"conflict" metal is shipped through Rwanda, experts say.
Though only a small portion of the world's tantalum reserves
are in central Africa - less than 10 percent according to
research firm Roskill - a large portion of tantalum comes out of
the conflict region. Roskill estimates conflict tantalum made up
23 percent of primary supply in 2011.