What is on the Chamber’s agenda for 2020?

To enable the mining industry to contribute substantially to the economic development of the Democratic Republic of Congo (DRC) and agree on a vision to create wealth from the country’s exceptional mineral endowment in order to share that wealth in a fair and equitable manner amongst all stakeholders.

Two years after the passage of the controversial new mining code that attempts to increase governmental control of the sector, to what extent did it increase/decrease investment in the sector?

It would not be fair to directly link the new mining code to any increase or decrease in investment in the sector due to many external factors that have also been at play in the past two years, including the all-consuming Covid-19 pandemic, the uncertainty created by the trade war between China and the US, etc.

Be that as it may, investments in the sector continue unabated, with Ivanhoe Mines’ flagship Kamoa project well-positioned to start production in July 2021.

How has COVID-19 impacted the mining industry in the DRC in terms of M&A?

I believe it is too soon to assess the full impact of the Covid-19 pandemic on the industry as the world is experiencing a second wave, which is going to further impact the world economy. In terms of M&A, Chinese companies in particular have kept the same appetite despite the Covid-19 pandemic. We are more likely going to see additional transactions happening in the near future.

With an estimated US$24 trillion in untapped deposits of cobalt, diamonds, gold, copper and other minerals, the DRC is a key mining destination. What are the key ongoing exploration activities attempting to tap these resources?

DRC’s mineral endowment is indeed exceptional, making it a key mining destination. Greenfields exploration is, however, lagging behind. Ivanhoe Mines is exploring its 100%-owned Western Foreland exploration licences, while Barrick Gold is exploring goldfields in N-E DRC.

In order to attract further investment in exploration activity it is key that the government ensures regulatory framework certainty, stability and transparency, and makes it easier for well-established exploration companies to obtain the required permits.

What do you believe is the remedy to artisanal mining in the DRC, which is stalling the industry’s long-term growth?

It’s important to articulate and execute a plan that will gradually put an end to artisanal mining and redirect artisanal miners towards sectors of the formal economy which contribute to the DRC’s development. In order to do so, institutional capacity and funding are needed to diversify the economy and create ecosystems of development around artisanal mining sites, which will include agriculture, construction projects, manufacturing etc.

The above programs – which will teach artisanal miners skills in areas such as carpentry, masonry, mechanics, electricity, mechanical, boiler making, brick making etc. – will be critical in absorbing artisanal miners gradually into various sectors of the workforce.

What role do you see the DRC playing in the global mining industry as demand for electric powered batteries increases in the upcoming years?

The significant quantities, in terms of both tonnage and grade, of key metals needed in electric vehicles positions the DRC to play a significant role in supplying global mineral demand for green technologies. Any major upset in DRC that can negatively affect production of these metals will clearly and directly impact commodity pricing and supply. Provided the government ensures regulatory framework certainty and stability, I expect to see more investments in exploration and development of key metals needed in electric vehicles and batteries.

As the DRC unexpectedly suspends VAT exemption on imports, is there an ongoing dialogue between mining companies and the government to address how this will affect cash-flow in the industry?

We’ve had meaningful interaction with all key decision makers three months ago, and have come up with the agreement that no VAT payment will be collected on our imports. Instead VAT on imports will be managed through a simple accounting exercise, which will not affect cash flow.

Further to this, the government has also committed to allocate resources in next year’s budget to start repaying gradually outstanding VAT repayment owed to the industry after reconfirming the amounts owed, and proportionally to State revenues to be generated next year.

Do you have a final message to our international readership?

DRC remains a prime destination for mining exploration and development investment given its exceptional mineral endowment. For those who do their homework diligently before deciding to invest in the country, long-term returns can be extremely rewarding; far beyond stakeholders expectations. This homework consists essentially in first understanding how the country works, the people, the regulatory framework etc., and calculating what the real cost of doing business is. It secondly consists in looking very carefully at their business model to ensure it is robust enough to still be profitable and resist when the operations hit turbulent zones.

And finally it consists in making sure they have on board a strong local management team capable of executing the company business plan with military effectiveness, and produce targeted results irrespective of adverse conditions found along the journey.