Last Updated: Friday - 09/24/2010
January 19, 2009
Jesuit helps Congo in quest for larger share of mining profits
BY MARY DURRAN
CATHOLIC NEWS SERVICE
KINSHASA, Congo — A Congolese Jesuit said he is optimistic that 60 government contracts with international mining companies will be renegotiated to provide the government for one of the poorest countries in Africa with more revenue.
“Mining companies have already accepted to renegotiate the contracts in 57 out of the 60 that were revised,” said Jesuit Father Ferdinand Muhigirwa, director of the Centre for Studies for Social Action.
In 2007 the government appointed a commission under the Ministry of Mines to review 60 mining contracts signed between the state and international mining companies from 1996 to 2006, a politically unstable period before President Joseph Kabila was elected in 2006. The commission also was charged with following up on the work of a UN panel, which found in 2000 that many mining companies had paid bribes to government officials and local strongmen to obtain lucrative mining concessions.
MINING AND CONFLICT LINKED
The panel said there was a link between mining activity and the armed conflict that has persisted in certain regions of the country.
Of the 60 contracts, none was determined by the commission to have offered satisfactory terms for the Congolese government.
For example, Muhigirwa said the original contract between Freeport McMoRan Copper and Gold “and the government over the Tenke Fungurume copper mine, worth some US$20 billion over the next several years, set out that the company got 83 per cent of the profits and the state only 17 per cent.”
The Tenke Fungurume project represents one of the world’s largest supplies of copper, with an annual output of 40,000 tons.
Congo has some of the world’s richest mineral resources, but its people are extremely poor. Renewed violence in eastern Congo has displaced a quarter-million people.
“In 2007 revenues from mining amounted to US$25 million to the state,” Muhigirwa said.
“However, the World Bank has shown that just with the new terms of these 60 contracts mining can generate at least US$184 million annually for the state.
. . . It would now be very difficult for a few individuals . . . to pocket any of the mining revenues.”
Congo also has signed on to the Extractive Industries Transparency Initiative, launched by former British Prime Minister Tony Blair in 2002. The initiative requires all revenues and payments by mining companies to be made public.