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COMMENT
July 2016
MODERN MINING
3
W
estern-style mining compa-
nies – the type that are typi-
cally listed on stock exchang-
es in Australia, Canada and
the UK and who issue regular
quarterly and annual reports – tend to get a bad
press in Africa, often being accused of extract-
ing the mineral wealth of the countries they op-
erate in without giving much in return.
Having visited many mines around Africa,
I don’t personally place much credence in
these allegations. In my experience, the mines
owned by these companies have generally been
properly planned, designed and engineered,
are operated according to the best safety and
environmental standards, and pay significant
amounts of money to their host countries in
the form of taxes and royalties. Moreover, most
will have well-paid, well-trained workforces
drawn mainly from local communities.
Compare this with the alternatives – either
unrestrained artisanal mining or mining by
shadowy unlisted companies, either based in
Africa or offshore, who lack accountability and
who operate with a total disregard for local
communities and the environment.
The points I make above are well illustrated
in the rich goldfields of the eastern Congo in
the area to the west and south-west of Bukavu,
where, on the one hand, one has Canada’s
Banro Corporation operating two well-run
mines – Twangiza and Namoya – and, on the
other, a gold rush on the Ulindi River (which
started in 2013 but has now tapered off) whose
beneficiaries have included, according to inter-
national NGO Global Witness, “armed groups
and a predatory Chinese-owned company, Kun
Hou Mining, rather than the local population.”
Global Witness has just released a report
on the Ulindi River gold rush – which it says
generated more than a tonne of gold per year
worth about US$38 million – entitled
River
of Gold
and sub-titled
How the state lost out
on an eastern Congo gold boom, while armed
groups, a foreign mining company and pro-
vincial authorities pocketed millions
. Global
Witness, of course, is not – generally speaking
– a friend of the mining industry but its reports
are invariably well researched and written, and
this latest report is no exception.
The full report, which is available for down-
load on the Global Witness website, runs to 32
pages (and also, incidentally, includes some
very interesting photos). Space constraints
don’t allow me to go into the details of its alle-
gations but the nub of them is contained in a
DRC gold rush
analysed
in Global Witness report
short executive summary which takes just a few
minutes to read.
According to Global Witness, its research
revealed that Kun Hou Mining paid US$4 000
to Raia Mutomboki armed groups – ‘Raia
Mutomboki’ apparently means ‘angered citi-
zens’ in Swahili – operating along the banks
of the Ulindi and also gave them two AK-47
assault rifles in order to secure access to rich
gold deposits on the river bed.
“Kun Hou Mining ran four semi-industrial
river dredging machines along the Ulindi in the
boom,” says Global Witness. “Members of the
same armed groups also earned up to $25 000
per month by regularly taxing the workers on
locally-made dredgers who were doing the
dangerous job of manually sucking up gold
from the river bed. Up to 150 of these manually
operated dredgers worked along the river at the
height of the rush. South Kivu officials charged
with oversight of the province’s artisanal gold
sector appeared to defend Kun Hou Mining
rather than enforce Congolese law and hold the
company accountable for its illegal activity.”
Needless to say, much – probably most – of
the gold from the Ulindi boom has left the DRC
illegally and Global Witness notes that South
Kivu’s provincial accounts for 2014 and 2015
show no evidence of any gold rush in the area.
The NGO also says that the town which was at
the epicentre of the rush, Shabunda, has been
left in the same state as it was before the rush
started. It describes it as a “deprived enclave
with no roads, running water or electricity and
its people suffering grinding poverty.”
Compare what has happened on the Ulindi
River with Banro’s activities. The company’s
two mines produced a record combined 49 673
ounces of gold in the second quarter of this
year. The company, of course, pays all the taxes
and royalties that it should and almost 92 %
of its roughly 1 500 employees in the DRC are
Congolese citizens.
In addition, it operates the Banro Foundation
which is its vehicle for long-term community
development. The Foundation was founded in
2005 – long before either Twangiza or Namoya
were established – and since then has invested
more than US$5,5 million in more than 70
projects. In June this year, it won – for the sec-
ond time – a major award at the DRC Mining
Industry Awards for its social investment
programmes.
So there you have it – the two faces of min-
ing in Africa. I know which I prefer!
Arthur Tassell
“Members of
the same armed
groups also earned
up to $25 000 per
month by regularly
taxing the workers
on locally-made
dredgers who
were doing the
dangerous job of
manually sucking
up gold from the
river bed.”