Fools rush in[ldots]and out?


Last April and May, the newly installed government of the Democratic Republic of the Congo made a series of high-profile announcements detailing contracts with several junior mining companies. Now, it seems that the government has discovered that it had signed the deals on totally inadequate information. It wants out and has cancelled a whole sheaf of agreements.

While the majors, including De Beers which had been virtually thrown out on its ears, are wearing smug smiles, the juniors are hopping mad. For some, it had seemed that Christmas had indeed arrived early and they had hoped to make a killing. Now they are being shown the door and they are not going to go without a fuss. President Kabila and his mining henchmen can expect a series of writs to arrive on their doorstep.

The sorry saga goes back to the country's independence. A wealth of geological data and maps was stored at the Kinshasa University of Lovanium and at the Ministry of Mines. Over the years, this has slowly seeped out and is now lost. According to a Belgian geologist, some important documents have even been found wrapped around fish and other items at the local market. The government and the Ministry of Mines therefore had virtually no knowledge at all of its mineral deposits.

But somebody else had. Some of the geological information had been copied prior to independence and stored at the geology department of the Royal Museum of Central Africa in Tervuren (Belgium). Over the last two years, Western mining companies such as the UK's Cluff Mining, Canada's Barrick Gold, Anglo-American, De Beers and Anvil have been happily poring over the documents in Belgium. The only major party blithely ignorant of their existence was the DRC government.

Thus when the former dictator, Mobutu Sese Seko's departure from power was imminent, a number of new players rushed to the scene to find the new strongman, Mr Laurent Kabila, more than happy to sign up mining rights.

A case in point is the contract for the exploitation of the Kolwezi copper and cobalt tailings signed between American Mineral Fields International (AMFI) and the Congolese parastatal Gecamines, last April. This was before Mr Kabila actually became president. It was seen as a reward to AMFI's main shareholder, the Mauritian Mr Jean-Raymond Boulle who had provided Mr Kabila with a jet to move about the country. One month later, the Swedish businessman, Mr Adolph Lundin obtained confirmation from Mr Kabila that the contract he...

To continue reading