* Congo gets only "modest" benefit from rising output-Kabila
* Meeting comes two months after IMF stopped planned loans
* Congo produced almost 600,000 tonnes of copper in 2012
By Jonny Hogg and Clara Ferreira-Marques
LUBUMBASHI, Congo, Jan 30 Congo must tighten
controls on granting mining licences and fight corruption so
that the country can benefit fully from rising copper
production, President Joseph Kabila said on Wednesday.
The Democratic Republic of Congo has some of the world's
largest copper deposits, and is also rich in tin, diamonds, gold
and other commodities, but its mining sector has been held back
by decades of underinvestment, conflict and corruption.
Just two months ago the International Monetary Fund halted
$240 million in planned loans to Congo for failing to disclose
details of a mining deal.
"We need to put an end to the paradox which sees huge mining
potential, and ever more intense mining activity, but only
modest benefits for the state," Kabila told government officials
in the southern city of Lubumbashi, Congo's mining hub.
In a rare display of support for a clean-up of the mining
industry in what the United Nations deems the least-developed
country in the world, he said, "This has negative consequences
for the improvement of the population's living conditions."
Kabila came to power after the assassination of his father
at the height of a 5-year war over territory and mineral
resources, which dragged in at least six neighbouring countries
and left millions dead before a peace deal in 2003.
Speaking at the start of a high-profile gathering intended
as a gesture to the sector and the international community,
Kabila said the state initiative would concentrate on better
geological assessment, improved power supply, a major concern
for miners, and unspecified efforts to combat corruption.
Companies including Freeport-McMoRan, Glencore
and ENRC are increasing production, and Kabila
said copper output hit almost 600,000 tonnes in 2012, a leap
from under 20,000 a decade ago, at the height of the war, and
from 190,000 tonnes of output in 2007.
He said the state would grant licences only to investors
with "technical and financial expertise", apparently excluding
the middlemen who have been at the heart of Congo's mining
industry since the end of the civil war.
The role of shell companies and non-mining investors acting
as intermediaries in Congo's mining sector has long contributed
to accusations of corruption and a reputation for poor
transparency, implicating major producers operating there.
Kabila, whose own ties with intermediaries are under
scrutiny, gave no details, but his comments were seized upon by
others in government.
"We have to put an end to all of that, they are just
adventurers. What we've got to do is invite the big mining and
oil companies, then everyone will know who they are," employment
minister Modeste Bahati Lukwebo told Reuters.
However, both Glencore and ENRC have been critised by
transparency activists over deals in Congo but deny any
Miners regularly complain of demands for illegal payments
from officials and say the government must improve its own
ability to retain revenue and keep up with a dynamic private
In 2010, according to the latest report by transparency
initiative EITI, the government said it received almost $876
million in payments from the mining sector.
But the country's mining code is under review and Congo
could demand a larger share. In an early draft, the country
demanded a 35 percent stake in any new mining project, up from 5
percent - a move widely criticised by the industry.
"Certainly some investors are worried about how (the mining
code revision) will be done, but from the state's point of view,
they desperately need the money to pay for social services ...
the mining sector is the most obvious source for that," said
Neil Wigan, British Ambassador to Congo.
"This meeting is meant to be a demonstration of political
will ... but now the question is how that will be implemented,"