As a demonstration of the enduring commitment to strengthening the relationship between the United States and the Democratic Republic of the Congo (DRC), U.S. Ambassador to the DRC Lucy Tamlyn, with representatives from the U.S. Mission to the DRC, the U.S. Department of State’s Bureau of Overseas Buildings Operations (OBO), and Congolese officials, celebrated the groundbreaking of the new U.S. Embassy in Kinshasa on August 29.

The embassy will be a symbol of our shared commitment to advancing democratic values, sustainable economic growth, and global cooperation.

The project is expected to infuse $170 million into the local economy and provide employment opportunities for more than 1,600 Congolese nationals. Since April 2023, the United States has invested $1.4 million in the local economy to advance this project and expects to procure cement, concrete aggregates, soils and fill materials, and landscaping materials locally. Congolese construction workers will also benefit from skills acquired as part of the project and related safety training.

The embassy design draws inspiration from the diverse environmental mosaic of the Democratic Republic of the Congo. The Department is committed to implementing rigorous energy-saving and sustainability strategies to minimize the environmental impact of construction, optimize building performance, and enhance sustainability and resilience.

SHoP Architects of New York, New York, is the design architect, and B.L. Harbert International of Birmingham, Alabama, is the design-build contractor, with Page of Washington, D.C., as the architect of record.

Since the start of the Department’s Capital Security Construction Program in 1999, OBO has completed 177 new diplomatic facilities, and currently has more than 50 active projects in design or under construction worldwide.

OBO provides safe, secure, functional, and resilient facilities that represent the U.S. government to host nations and that support U.S. diplomats in advancing U.S. foreign policy objectives abroad.

Source: Mirage News

The US is imposing sanctions on six individuals believed to have helped fuel the conflict in the eastern part of the Democratic Republic of Congo.

The six individuals are Rwandans and Congolese rebels, or members of their respective defence forces, in what could signal the cross-border complexity of the conflict.

And according to the US Treasury, each of these individuals has contributed to the instability in the eastern part of the country as DRC struggles to end decades of armed conflict.

They include Apollinaire Hakizimana, a Rwandan national playing his violence in the FDLR rebel group as a ‘defence commissioner.’ He is sanctioned alongside Sebastian Uwimbabazi, also from Rwanda but now in charge of FDLR’s intelligence. Also sanctioned in the group is Ruvugayimikore Protogene, fighting for Maccabe group affiliated to FDLR. He is also from Rwanda.

The US State Department said the individuals had been involved in “numerous cases, committing human rights violations, including sexual violence and violence against children.”

The sanctions also target M23 rebel group. Bernard Byamungu, a Congolese national and deputy commander of operations and intelligence was sanctioned.

The sanctions were also slapped on members of the armed forces in both countries.

Col. Salomon Tokolonga, a Congolese national and commander of the Congolese army (FARDC)’s 3411th regiment was sanctioned for leading armed groups to coalesce against the M23, continuing the conflict.

The US Treasury says he “entered Congolese territory and provided support to the M23, which has long-term connections with the Rwandan government.”

FDLR are an ethnic Hutu rebel group believed to be remnants of those who perpetrated the Genocide against the Tutsi in 1994 in Rwanda. They are seen as public enemy number one in Rwanda and Kigali accuses Kinshasa of supporting the group.

On the other hand, the M23 are composed of Tutsi fighters seen in Kinshasa as being supported by Kigali. It is one of the strongest and more organised rebel groups fighting inside the DRC.

Both sides have denied charges of fomenting instability.

The sanctions announced on Thursday means the US is targeting both sides. The sanctions include the freezing of assets held in the United States by the targeted individuals and a ban on any American citizen or entity doing business with either of them. The ban also covers any material support, in the form of food, goods or services, to these individuals.

In the east of the DRC, hundreds of armed groups have made life hell for civilians, who have fallen prey to barbarism. In the troubled eastern part of the DRC, armed conflict has for a long time fuelled cases of abuse and sexual violence. This violence has increased in intensity. According to a report on the Democratic Republic of Congo by UN Secretary-General Antonio Guterres, “between 2021 and 2022, gender-based violence increased by 23 percent nationally and by 73 percent in the province of North Kivu alone, and this trend is set to continue in 2023.”

“These violations and abuses are linked to the proliferation of armed elements in areas hosting displaced people, and to the frequent failure to respect the civilian and humanitarian nature of refugee and displaced person camps. The number of acts of sexual violence committed against children more than doubled between 2021 and 2022″.

The United Nations Children’s Fund (Unicef) and its partners say they helped about 8,100 survivors of gender-based violence at the national level in 2022, compared with 3,500 in 2021, according to the report on the situation in the Democratic Republic of Congo.

The United States says it is committed to advancing efforts to resolve the crisis and to addressing human rights violations and the dire humanitarian situation.

The sanctions against the six individuals come almost a week after the United States sanctioned Congolese officials for corruption, poaching and illegal trafficking of wildlife in North Kivu.

Cosma Wilungula, former director-general of the Congolese Institute for Nature Conservation (ICCN); Léonard Muamba Kanda, former head of department of the DRC’s management body for the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and director of ICCN; and Augustin Ngumbi Amuri, director-coordinator of the DRC’s CITES management body and legal adviser to ICCN have been banned from travelling to the United States. 

The US State Department said that these officials, “responsible for wildlife protection, abused their public office by trafficking chimpanzees, gorillas, okapis and other protected wildlife from the DRC, primarily to the People’s Republic of China, using falsified permits in exchange for bribes.”

Source: Nation Africa

On the run, the paramilitary chief crisscrossed his global business empire, desperate to show he was still in control; ‘I need more gold’

“For years, Prigozhin had been increasingly living on the run, changing between wigs to impersonate bearded Arab military officers while refueling his jet in the dwindling number of airports that would grant him permission to land.”

New York Times: “Mr. Prigozhin may have been brutally effective, throwing tens of thousands of his fighters into the maw of the battle for Bakhmut in eastern Ukraine, tying up Ukrainian forces in the process and hobbling Kyiv’s ability to stage a counteroffensive. His internet ‘troll farm’ helped the Kremlin interfere in the 2016 American presidential election, while his mercenary empire helped Russia exert influence across Africa and the Middle East.”

“But with his June rebellion, Mr. Prigozhin threatened something even more sensitive: Mr. Putin’s own hold on power. After the crash of Mr. Prigozhin’s plane on Wednesday, the Kremlin appears to be sending the message that no degree of effectiveness and achievement can protect someone from punishment for violating Mr. Putin’s loyalty.”

Source: The Wall Street Journal

The BRICS (Brazil, Russia, India, China, South Africa) summit in Johannesburg could have far-reaching ramifications for the world of finance, specifically for precious metals and the US dollar. As the bloc contemplates expansion and expresses discontent over the dominance of the US dollar in global trade, investors worldwide should be attentive to these seismic shifts in economic power dynamics.

Historically, in periods of political and economic instability, gold and silver have been considered safe-haven assets. As BRICS nations push for a greater role in shaping the global financial landscape and challenge Western supremacy, uncertainties could cause a surge in demand for these precious metals. Additionally, the inclusion of Saudi Arabia, the world’s second-largest oil producer, could provide a further boost. If the bloc promotes trading oil in currencies other than the dollar or even in gold, it could drive up the prices of these metals.

The US dollar’s preeminence in global transactions is under scrutiny. As highlighted in the summit, there’s a growing consensus among BRICS nations to conduct trade in local currencies. While the immediate dethroning of the dollar seems unlikely, a gradual move towards a multipolar financial world, where several currencies co-exist in global trade, is plausible.

Cobus van Staden’s, an analyst at the China Global South Project, analogy of “a lot of paper cuts” perfectly encapsulates the situation. BRICS may not deliver a knockout punch to the dollar, but a series of smaller actions could erode its dominance. These “paper cuts” may include bilateral trade agreements in local currencies, establishment of alternative payment systems, or even gold-backed financial instruments.

An erosion of confidence in the US dollar could trigger a bull market for precious metals. As nations seek to diversify away from dollar-centric systems, they might increase their gold and silver reserves. A multipolar currency world, where local currencies gain prominence, would likely have fluctuating exchange rates. This volatility could further push central banks and investors towards the stability offered by gold.

The US and its allies are closely watching the geopolitical aspirations of BRICS, especially the inclusion of nations like Saudi Arabia. As the bloc grows and its influence expands, it might create a counterweight to Western financial institutions. While the geopolitical repercussions are vast, from a financial perspective, it introduces a new set of players determining global precious metal demand and currency flows.

In conclusion, while the BRICS bloc grapples with internal differences, their united front against the dollar’s dominance signals a transformative phase in global finance. Precious metal investors and dollar watchers alike should keep a keen eye on the bloc’s decisions, as they have the potential to reshape the world’s economic landscape.

Source: FX Empire

The U.S.-DRC-Zambia memorandum of understanding demonstrates how the United States aims to counter China and bolster its clean energy supply chains by deepening ties with African nations. Yet how distinct is the U.S. approach from the Chinese approach to such deals?

In December 2022, at a sideline event during the U.S.-Africa Leaders Summit in Washington, the United States signed a trilateral memorandum of understanding (MOU) with the Democratic Republic of the Congo (DRC) and Zambia for the development of an integrated value chain for the production of electric vehicles (EV) batteries. This MOU aims to develop a complete value chain around EV batteries in the DRC and Zambia—from the extraction of minerals to the assembly line. It also advances U.S. government objectives to secure a value chain for the strategic minerals necessary for the clean technologies that will drive the country’s low-carbon transition. Described by U.S. Secretary of State Antony Blinken as “a truly important initiative for the future,” the MOU reveals much about the Joe Biden administration’s new approach toward the African continent, an approach it characterizes as “strengthening partnerships to meet shared priorities.”

The trilateral MOU comes at a time when U.S.-Africa relations are at a turning point within the context of important geopolitical shifts, including the rise of China as a major economic and political actor. In unpacking the MOU, this article examines the wider geopolitical context of the signing, compares the U.S. approach with the Chinese approach to such deals, and questions how the DRC and Zambia can exercise agency in the MOU’s execution.

The International Energy Agency estimates that manufacturers of clean energy technologies will need forty times more lithium, twenty-five times more graphite, and about twenty times more nickel and cobalt in 2040 than in 2020. Due to this global shortage of critical minerals, Africa—which is home to around 30 percent of the world’s mineral reserves—has become a site of great power competition. The DRC and Zambia, in particular, are among the world’s leading producers of certain critical minerals. The DRC produces close to 70 percent of the world’s cobalt, which is essential for the production of EV batteries (see figure 1). Meanwhile, Zambia is Africa’s second-largest producer of copper, which is used in electrical equipment such as wiring and motors (see figure 2).

In the race involving the United States, China, and European countries, among others, to secure access to the minerals essential to the clean energy transition, China is far ahead in building supply chains for cobalt, rare earth minerals, lithium, and several other essential metals and minerals. China has developed a large presence in minerals supply chains by refining most of the world’s cobalt, copper, lithium, and nickel. Chinese companies have emerged as the major players in the mining sector in the DRC and Zambia, after decades of dominance by Western multinational companies. In the DRC, the Chinese company China Molybdenum controls nearly 80 percent of one of the country’s largest copper and cobalt mines, Tenke Fungurume. Chinese dominance along the entire value chain of strategic minerals worries many in the West, especially in the United States, where the Biden administration is seeking to expand manufacturing and sales of EVs by 2030.

The United States has key vulnerabilities in sourcing critical minerals to meet domestic demand for the transition to a low-carbon economy. The United States is import-reliant (meaning that imports account for more than half of annual consumption) for thirty-one of the thirty-five minerals designated as critical by the U.S. Department of the Interior. Sixteen of those are largely refined in China. Overall, the United States is dependent on China for more than half of its supply of twenty-five minerals, even as some of these minerals are found in abundance in Africa.

The United States is now aiming to address its critical minerals demand by pledging to do mining more responsibly than how China currently does it and how the West has done in the past, by avoiding inflicting harmful impacts on both the environment and local populations. It aims to help transform African economies by leaning into the push for clean energy. The 2023 edition of the annual Mining Indaba, Africa’s largest mining conference, in Cape Town, South Africa, drew the largest and most high-level U.S. delegation ever, including officials from the White House and the Departments of Commerce, Energy, and State. The size and level of this delegation showed the awareness within the U.S. government of the importance of securing access to Africa’s critical minerals. 

More broadly, the U.S.-DRC-Zambia MOU was signed to strengthen already existing cooperation between the DRC and Zambia to develop a cross-border integrated value chain for the production of EV batteries. This MOU is in line with the African Green Minerals strategy put forward by the African Development Bank, whose priorities include the establishment of battery and EV value chains, starting with two- and three-wheeled vehicles and commuter buses.

With the MOU, the United States also aims to help meet the economic and industrial needs of the DRC and Zambia. Yet the MOU constitutes a first-step instrument and political signaling tool. Its successful implementation will depend on specific requirements and input from all three countries.

In unpacking the MOU, three themes emerge that illustrate the broader shifts in U.S. relations with African countries, as well as how the U.S. approach compares with the Chinese approach to such relationships.

The public signature of the MOU, along with other trade and investment deals, at the U.S.-Africa summit in December 2022 is part of the U.S. government’s strategy to make its relations with the continent more tangible and aligned with African aims of getting better outputs from these deals in alignment with their governments’ national priorities. The signing happened at a very different time compared to past decades, when the DRC was considered less reputable and battery minerals were not regarded as critical or strategic. In today’s geopolitical environment, in which China has taken the lead in building out critical minerals supply chains in Africa, the United States aims to both catch up with and counter China.

This public MOU signing seems to be adapted from China’s playbook, especially from Chinese agreements on financing and building hard infrastructure projects in Africa. For example, in 2018, China signed MOUs with thirty-seven African countries and the African Union at a Belt and Road Initiative summit, indicating that efforts to bolster cooperation through summits go very far.

MOUs are both soft-law and soft-power tools that open the door for future negotiations and contracts between foreign entities. Most MOUs are less than ten pages, sometimes only a page or two. (The trilateral MOU in this case is five pages.) Thus, signing a MOU makes sense because it allows for due diligence and sourcing of financing to begin without expending resources in legal and accounting procedures that a full-fledged agreement would require; the transaction costs are lower. MOUs are hence used as first-step instruments for the prenegotiation phase of infrastructure and mining contracts and can serve as a framework and basis for further negotiations.

The U.S.-DRC-Zambia MOU is so far a simple expression of the three countries’ interest in working together. The signing does not guarantee its implementation, which depends on many factors that the U.S. government alone cannot entirely control or anticipate. It is a nonbinding agreement that offers flexibility and avoids the rigidity of a legally binding contract. Moreover, it can be undone.

At the bilateral level, both the United States and China have signed several MOUs with the DRC. The U.S. government has signed three MOUs on mining projects with the country’s Ministry of Mines and the Ministry of Employment, Labour, and Social Security in the last decade. One of the MOUs China signed was for the major Sicomines mining deal project, which included two annexes related to infrastructure and mining parts of the deal, in 2007. While not specifying financial commitments, that MOU gave additional details on the negotiations and led to a cooperation agreement—the final stage of a MOU that leads to detailed formal contracts signed by both countries.

At this stage, the value offered by the U.S.-DRC-Zambia MOU seems more political than actionable and can be considered a push for the U.S. government to have deliverables to point to after the conclusion of the U.S.-Africa summit.

While past bilateral U.S.-DRC MOUs were signed by dedicated ministries and were therefore more specific and less public, the U.S.-DRC-Zambia MOU remains vague. The document does not mention concrete engagements or an action plan, as bilateral MOUs usually do. It specifies neither technological input and transfers nor U.S. financial commitments, saying that “all activities pursued under this MOU are subject to the availability of funds.” It stipulates that it is not intended to be legally binding and does not constitute an obligation.

The MOU is a means to position the United States as a contender not only to China but also to European countries that are courting the DRC and other African countries to secure critical minerals. The broad rhetorical style used at this stage is also a means to signal to the respective constituencies in the United States, the DRC, and Zambia that the three governments are getting important things done.

What is distinct about the U.S.-DRC-Zambia MOU is that it marks the first time that an existing bilateral agreement between two African countries transformed into a trilateral initiative involving three parties. Unlike the Chinese approach that largely centers around bilateral deals in the infrastructure and mining sectors, this MOU includes three parties and evolved out of a bilateral agreement.

China makes greater use of government-to-government and less use of government-private sector MOUs. Chinese official entities also issue MOUs at various levels of the Chinese administration (such as the central or provincial levels), while the United States usually involves both the government and the private sector. Yet, in the trilateral MOU, several questions remain open, including whether U.S. firms—known for their deep risk aversion to Africa—are willing to invest in the initiative and whether funds are available.

The U.S.-DRC-Zambia MOU aims to centralize the production of EV batteries in the DRC and Zambia, despite the current trend of mineral extraction happening in Africa but refinement taking place elsewhere. The follow-up negotiations and execution of the MOU will be greatly informed by the extent to which the two African countries can exercise more agency. The countries’ governments seem more aware of this new geopolitical setting, and the ongoing review and renegotiation of cobalt and copper mining deals between China and the DRC have revealed how the DRC government could increase its agency and play a bigger role in negotiating better mining deals. However, with presidential elections looming (in December 2023 in the DRC), it will be crucial to avoid political interference and conflicts of interests in the negotiation process that may hamper the deals.

Whether the DRC and Zambia can increase their technical capacities will determine their strength in the negotiation process and shape how much they can influence the MOU’s execution. An upgrade of technical capabilities can be done by associating the right expertise both from within their respective cabinets and relevant ministries and external expertise to conduct meaningful cost-benefit analyses to determine the value of the minerals and potential revenues as well as the best investment opportunities.

The MOU’s execution will also be shaped by how the Congolese and Zambian governments  navigate great power rivalry between the United States and China, and to some extent Europe, while prioritizing their populations’ economic and social interests in the long term.

MOUs feature prominently in Africa-China engagement and are usually preferred by both sides to formal agreements, which the United States and European countries lean on more often. Whether bilateral or trilateral, MOUs provide a framework that can be built upon. This is the case for both the U.S. and Chinese versions.

For the U.S.-DRC-Zambia MOU to be effective, the follow-up policy initiatives and negotiation of the agreement should contain concrete measures, have clear benchmarks, and create an oversight mechanism to assure that the objectives are successfully implemented and move beyond political signaling.

Source: Carnegie Endowment for International Peace

To bypass China, Western companies are investing in facilities to process battery metals in countries such as Tanzania, Mauritius and South Africa.

Pressure to create supply chains for electric-vehicle batteries that bypass China is prompting Western miners to do something they have long avoided: process their metals in Africa.

China dominates both the production and processing of critical minerals such as cobalt and lithium that are key to the energy transition. That has led to growing concerns among Western governments, including in Washington, about their dependence on Beijing.

Now, some Western companies and investors are starting to build processing plants in Africa so they can refine the raw materials they mine on the continent locally and export them directly to Europe and the U.S.

The investments show how Western executives have become more willing to swallow the risks associated with many African countries, including poor infrastructure, limited skilled labor and, in some places, a reputation for government corruption. By building processing facilities, companies are also meeting demands from African governments that have long called for more local processing for metals and minerals extracted from their soil.

Western companies are starting to build processing plants in Africa to refine the raw materials they mine on the continent locally and export them directly to Europe and the U.S., because of growing concerns among Western governments about their dependence on Beijing.

BHP Group has invested $100 million in a nickel mine in Tanzania along with Lifezone Metals, with plans to build a processing plant to refine the metal in the country.

Investments in processing facilities in Africa are likely to rise given the expected boom in demand for battery metals.

Vision Blue Resources, a London-based $650 million fund, is investing in a new graphite mine in Madagascar and a related processing facility in nearby Mauritius. It is also backing a cobalt refinery in Zambia that it says will be the world’s third largest and the biggest outside of China.

Despite growing interest from investors, huge challenges remain for companies that want to do business in Africa. For example, Zimbabwe banned the export of raw lithium in December, effectively forcing foreign companies to process it there, and Chinese competitors still have the upper hand. Many Westerners say the opportunity now outweighs the risks of doing business in Africa. ReElement Technologies is building a processing facility in South Africa to refine lithium mined in South Africa to battery grade.

Boris Kamstra, chief operating officer at Premium Nickel Resources Ltd, said people are now looking for non-Chinese sources of battery metals.

Source: The Wall Street Journal

Even though the timing of the new BRICS (Brazil, Russia, India, China, and South Africa) currency is still a big unknown, it is an inevitable outcome, according to Andy Schectman, President and Owner of Miles Franklin.

“I do believe that the BRICS will issue a common settlement currency, and it will be backed by something,” Schectman told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. “It’s coming. Whether or not it is a gold-back currency that is introduced in a few weeks or in a few months, or next year, to me, the alliance that is being built represents the majority of the human population.”

In the lead-up to the BRICS summit taking place in Johannesburg on August 22-24, there have been conflicting reports about whether a gold-backed currency was going to be discussed.

According to Anil Sooklal, South Africa’s Ambassador at Large to Asia and BRICS, told reporters last month that a BRICS currency was not on the agenda for the upcoming summit.

“There’s never been talk of a BRICS currency, it’s not on the agenda,” Sooklal said. “What we have said and we continue to deepen is trading in local currencies and settlement in local currencies.”

The more immediate goals for the BRICS bloc are to sidestep the SWIFT system and have the ability to avoid Western sanctions. And there is one event that investors need to closely monitor concerning this – Saudi Arabia’s participation at the upcoming BRICS summit.

The BRICS alliance is expected to expand its membership soon, with over 20 countries formally asking to join the BRICS, including Saudi Arabia, Argentina, Iran, the United Arab Emirates, and more.

But how the BRICS bloc expands will play a vital role in the global de-dollarization move as member countries continue to push to ditch the greenback and trade using their own currencies.

Schectman sees Saudi Arabia as an essential player in this transition, with eventually 85% of the global population dumping the U.S. dollar.

“There is this cohesion of countries that have joined together to break free from the Western hegemony,” Schectman said. “And I look to Saudi Arabia as the linchpin of all of the issues surrounding the de-dollarization and the dollar hegemony.”

This all hinges on the petrodollar and how other countries need to hold the greenback to buy oil from Saudi Arabia.

Schectman referred to the deal struck between the Nixon administration and Saudi Arabia in the 1970s, which saw Saudis trade oil exclusively in dollars in exchange for security guarantees from the U.S. Following this deal, there was also a shift within the OPEC itself to keep oil in dollars.

“That was the deal we struck with Saudi Arabia and, by extension, OPEC, who has for almost 50 years [conducted] about 90% of all the oil sales across the globe in dollars,” Schectman said. “And this has created a synthetic demand for the dollar.”

This has given the greenback its petrodollar status. But the recent moves from Saudi Arabia should be alarming to the world’s reserve currency, Schectman pointed out.

“I see Saudi Arabia as a very important cog in that [de-dollarization] movement because when Saudi Arabia accepts other currencies for oil, the lack of settlement in the dollar will have substantial effects,” he said. “The glue that will make all of this work is indeed having a currency backed by commodities, presumably gold, using distributed ledger technology or blockchain.”

This whole move against the dollar also goes far being the BRICS bloc, Schectman added. If all the new alliances come together, it would represent 85% of the human population. “If you put together the Belt Road Initiative, the BRICS, the Shanghai Cooperation Organization, and the Eurasian Economic Union … it is a very big deal,” he noted.

Another recent development was Saudi Arabia approving the decision to join the China-led Shanghai Cooperation Organization (SCO) as a dialogue partner. The SCO is a political, security and trade alliance created in 2001 to counter Western influence. Its members include China, Russia, India, Pakistan, and four central Asian countries.

“This is a very big deal. The Shanghai cooperation organization is the largest regional military and financial organization in the world. It represents about 60% of the Eurasian landmass and 40% of the global GDP,” Schectman said. “We can see how they are pushing away from the Western influence and getting very close with some powerful entities.”

The de-dollarization trend has not only been accelerating, but it is also irreversible at this stage, we are at a point of no return – “past the Rubicon”, according to President and Owner of Miles Franklin. “When you see all of this settlement outside the dollar, that’s significant. It creates less demand for the dollar and an environment where the dollar has to fall, and interest rates have to rise to compensate.”

Schectman sees 85% of the global population dumping the greenback in due time. “It’s like a game of Jenga. You keep pulling out these pieces of the dollar hegemony one by one. At what point does it tumble? It’s not going to happen overnight, but you can see the acceleration. So little by little, and then all at once.”

Source: Kitco

When Guy Robert Lukama looked out at thousands of illegal gold diggers hacking away at the verdant hills in remote northeastern Congo, he glimpsed opportunity where previous owners saw only an intractable problem.

Lukama’s former employer, South Africa’s AngloGold Ashanti, had for years sought to develop the 3,260 square kilometre Mongbwalu concession but pulled out partly due to concern over the sprawling blue-tented camps full of miners.

When he led a buyout of AngloGold’s 86 percent stake in the Mongbwalu Gold Mine (MGM) last year, Lukama knew he couldn’t chase them away if he was to succeed in mining any of the 2.5 million ounces of gold estimated to lie trapped in the earth. Instead, he decided to put them on the payroll.

“We cannot avoid the fact that … we [have] to manage the presence of [the diggers],” Lukama told Reuters.

It is an innovative attempt to address one of the knottiest problems facing industrial miners around the world and the first initiative of its kind in Congo, where up to 2 million people mine with rudimentary tools, most illegally and in dangerous conditions.

While some mines in South America and elsewhere in Africa have experimented with similar concepts, MGM’s could be the most ambitious, particularly in light of concerns over so-called Congolese “conflict minerals.”

Armed groups have long dominated small mines in eastern Congo, a legacy of nearly two decades of war and unrest.

A study by the Antwerp-based International Peace Information Service found that 64 percent of gold miners in Congo work under the influence of armed actors, most commonly government soldiers.

Once the scene of militia violence, Mongbwalu is peaceful these days but the police and army continue to levy illegal taxes on artisanal miners.

“It’s a very fundamental problem,” said Valery Mukasa, chief of staff to Congo’s mines minister. “We don’t need armed men where there is mining.”

Conflict minerals

The 2010 U.S. Dodd-Frank financial reform law requires firms sourcing gold and the “3Ts” — tin, tungsten and tantalum — from Congo or neighboring countries to conduct supply chain due diligence.

Traceability schemes, such as “bag and tag,” which labels minerals by point of origin, have helped reduce armed influence over 3T extraction but have proved unworkable for gold, which is much more lucrative.

In his shop in downtown Mongbwalu, one middleman boasted that he once smuggled abroad 850 kg of gold — worth almost $34 million at current prices – bought from local diggers.

“You put the gold in the suitcase and you drive into Uganda,” he laughed, brandishing a 500 gram brick of solid gold in one hand, a Ugandan driver’s license in the other.

A panel of U.N. experts estimated in 2013 that 98 percent of Congo’s artisanal gold production was illegally smuggled out of the country.

Lukama’s solution depends on establishing partnerships with cooperatives of about 100 diggers each who will work limited plots that can be monitored for evidence of armed influence.

They will be given better equipment and access to areas with high ore grades but which are not suitable for industrial mining. Most importantly their ore will be processed more efficiently at MGM’s industrial plant, allowing the company to
pay them better than the smugglers.

MGM plans to start buying from local miners next month and pour its first gold in the first quarter of next year.

“If MGM helps us with small things … people are going to accept it because they are looking for a livelihood and nothing else,” said digger Freddy Ngoy, 44, over the churning of pumps draining flood water from the recent rains.

“Outside the box”

Not everyone is happy with MGM’s plan. Since March, as the company has laid the groundwork for its scheme, tens of thousands of new illegal diggers have flocked to its concession. Lukama and local activists say they are backed
by local military and political officials.

Congo’s army spokesman did not respond to requests for comment. The director of the provincial division of mines referred questions to the governor of Ituri province, who did not respond to requests for comment.

Even if the initiative succeeds in Mongbwalu, there’s no guarantee other companies will be willing to replicate it, said Gregory Mthembu-Salter, a former member of the U.N. panel of experts specializing in mining supply chains.

“The precedent is a difficult one for industrial miners to swallow because they like to deny the presence of artisanal miners on their concessions,” he said.

MGM estimates around 25,000 diggers mine its concession illegally. Others put the figure as high as 100,000. At most the new scheme will employ around 1,500 informal miners.

Though MGM’s initiative also aims to promote agricultural jobs and develop infrastructure that should boost the local economy, Lukama fully recognizes its limitations.

But with up to 10 million people, or around one in seven Congolese, economically dependent upon the informal mining sector, Lukama said it’s imperative that companies play a role in improving those livelihoods.

“We are not there to fix all the problems. … In a post-conflict area, you should from day one keep in mind how to make it beneficial for most of the stakeholders,” he said. “We have decided to think outside the box.”

Source: VOA News

Global nations are accelerating their efforts to acquire the rich resource base of the African continent, which is expected to become one of the world’s main sources of raw materials in the future.

Perhaps one of the most important of such states is the Democratic Republic of the Congo (DRC). Once a Belgian colony, according to analysts, the country has an economic potential comparable to the strongest regional powers, although currently remains one of the world’s poorest countries.

Being the second largest African country, the DRC is incredibly rich in natural resources. Oil, coal, diamonds, cobalt, zinc, silver, tungsten and other rare metals have been found and mined here. Moreover, the share of the republic in the global production of cobalt reaches 70%. The situation is almost the same with tantalum and coltan (a mixture of columbite and tantalite), which are necessary in the production of electronic equipment, in particular, for military purposes. In addition, the country ranks fourth in the world in terms of diamond production.

Still, political instability and the resulting decentralization of power have resulted in almost 30% of all mining activities in the country being carried out artisanally in hand-dug mines, where safety standards are absent and child labor is actively used. Only in the last two years the government of Kinshasa (the capital of the Congo) has been taking efforts to bring this situation under state control.

According to experts of the Russian Izvestia business paper, until the early 2000s, the DRC, like its neighbours in Central Africa, regularly served as a resource base for Europe (mainly France) and the United States, despite its formally independent status received in 1960. The main assets were controlled by North American (First Quantum Minerals, Barrick Gold, Chevron Texaco and others) and European (Glencore, Areva) companies. For Washington, this source is still of strategic importance. According to some reports, 75% of the cobalt and 50% of tantalum used in the US military-industrial complex is mined in the DRC.

In recent years, the DRC, along with other African states, which are characterized by rich raw material resources, have faced an active expansion of Chinese investors. Over the last decade, overall capital investments of Chinese business in the African mining sector have grown by 22 times, to US$220 billion, and the volume of issued loans increased 74 times (US$100 billion). A significant part of these investments was accounted for in the DRC.

In recent years, imports of some critical minerals, which are produced in the African continent for China, has also increased. For example, since 2015 imports of cobalt to China have grown by 3,000% and copper ore by 1,700%. In the case of the DRC, for 20 years Beijing has effectively withdrawn the US from the mining sector of the country. The latest major US asset in the country’s mining industry was Tenke Fungurume Mining, which was sold to China Molybdenum in 2020.

In the meantime, the mining sector of Congo, along with the country’s hydrocarbons resource base, is also within the sphere of interests of Russia for which the expansion in the African continent, after the exodus from the majority of Western markets, is considered as one of its priorities. As part of these plans, Russia plans to transfer some of its technologies in oil and gas production to the DRC, that will allow to significantly increase their production already in the short-term.

At the moment, the country produces only 22,000 of oil barrels per day, although the DRC hopes to increase these figures by more than 10 times.

Still, the traditional political and economic instability and the simmering military conflict with neighboring Rwanda, which led to the Second Congo War (the origins of which, go back to the bloody war between the Hutus and Tutsis in Rwanda) poses a threat for the active development of the DRC’s rich raw materials base.

The biggest instability is currently observed in the eastern part of the DRC. The situation is complicated by the fact that the republic’s central government does not fully control individual regions of the country. Chinese and Western companies have learned to work in this environment. They seek to form an autonomous environment which includes tools to ensure the security of mines under their control, create logistics corridors, conduct a dialogue with local communities.

According to analysts, the future situation in the region will be determined by the ability of the central government of the Democratic Republic of the Congo to establish control over the activities of foreign business and limit the influence of other regional players, including Rwanda and Tanzania, as well as to send an income from the export of raw materials to the development of the eastern provinces of the country.

Source: Resource World

A DW journalist has been given unprecedented access to rebel-controlled gold mines in the Democratic Republic of Congo. Miners and civilians are forced to risk their lives, while the wealthy buy gold in the global north.

We’ve been waiting for hours to meet rebel leader William Yakutumba. As darkness falls, a man who had introduced himself as Raymond, Yakutumba’s secretary general, assures our group of journalists that the rebel strongman is marching through the forest that surrounds Misisi town with his security escort.

He and some other rebels are drinking beers in a hideout, which from the outside looks like a hotel closed for construction. But from behind a barrier, it serves as a base for the Mai-Mai Yakutumba rebels who are from one of the most active groups in eastern Democratic Republic of Congo (DRC).

The Mai-Mai Yakutumba are feared for their brutality. They have repeatedly attacked an ethnic group called the Banyamulenge, a Tutsi group, that they say doesn’t belong to the DRC. They drive them out, indiscriminately raping and killing as they burn down entire villages.

‘Friends in high places’

The rebels can move freely without having to hide because they work together with the army, Raymond explains.

“A colonel of the Congolese army is my good friend,” he brags, calling what he says is the colonel’s number. He has a brief conversation on speakerphone — “proof” for the international journalists.

He shows us pictures on his cellphone: His rebel colleagues posing with AK47s and other heavy weapons as children stand among them. They all wear uniforms he claims they stole from defeated Congolese army soldiers.

“We have all kinds of uniforms. If I want to, I can become a police officer.” He joined the rebels after his whole family was killed when he was 9 years old, he says. They see themselves as a self-defense group against their enemies.

We wait in vain. Yakutumba never shows up. But we receive his permission to enter two mines that the group controls: Mitondo and Makungu, near Misisi town.

Who controls the mines?

According to a recent UN report, the group not only controls these two mines but also the routes to them and a vast area around them.

Our journey brings us to Nyange village, located beside the mines. But the village chief is not happy with our permits. Nor is he convinced by our letter stamped by the governor of South Kivu region. It seems the local chief doesn’t want us to go there.

Officially, the mine is controlled by the local authorities and the mining ministry, but after hours of discussions the village chief eventually admits to our local contact: He can’t let us go to the mines — it’s not safe because the rebels control it, not him.

After a long conversation, we admit to him that the rebels have given us their permission to visit.

He’s stunned. And lets us proceed. But only after we agree to be accompanied by a police officer, a soldier, an intelligence officer, the son of the chief, and a man who introduces himself as part of the local mining cooperative — but whom we later learn is actually one of the rebels.

Rebels in red

We notice all rebels we meet wear something red. Red trousers, red hats, a red ribbon somewhere. Red is their distinguishing feature so that villagers know who they are. They live among the villagers. Everyone knows they control the mine and tax the people working there.

According to the UN report, the Mai-Mai have been in control since December 2021, when they forced government troops out.

The Mai-Mai appointed a parallel administration to govern the mine, says the UN report, which miners confirm.

According to the report, up to 150 diggers are at the site, which produces between 1 and 2 grams of gold per week.

Miners extorted

At the Mitondo mine, our local contact manages to distract our entourage, allowing us to hide in one of the narrow tunnels and speak to one of the miners, who we call Michael. He tells us that he has to pay a “tax” of a few dollars each month to the rebels just to access the mine.

Together with different government taxes and the contribution for the mining cooperative, there’s not much of his salary left on which to survive.

“They take over what is most lucrative. They know exactly which mine is producing most gold, down to which tunnel,” Michael tells us.

In meter-wide tunnels that feel overwhelmingly hot, he scrapes out a gold-bearing rock. He tells us about their special breathing technique to help deal with the stifling heat. Flat, regular breaths to prevent fainting. “When you go to work, you just pray to God. Because we’re feeling like it’s a death sentence,” he says.

Often it is — when the mines cave in. Six years ago, more than 20 people were buried alive.

Another digger, Patrice, remembers it well. “I was there with my three brothers and other miners. All of them were trapped inside the mine. Up until now, their bodies are still inside. I was sad, really sad. But I can’t be sad for long. I have to earn a living.”

Other miners have similar stories. They say the Mai-Mai are never far away, even now that they’re hiding further up the mountain because they were told that we were coming.

Later, we confronted the Mai-Mai Yakutumba via WhatsApp about these allegations, but they never replied. Local government officials also repeatedly declined our interview requests. Several sources tell us that the rebels often work together with local authorities and even share profits with them.

Surviving a rebel attack

We later meet Esther Nanduhura, who is from the Banyamulenge ethnic group targeted by the rebels. She describes how she survived an attack by the Mai-Mai Yakutumba. 

“They found us at the place we had sought refuge and they killed three people. Then they murdered my father-in-law and injured my mother-in-law,” she recalls.

Both of them were over 80, she says. She and her family were forced to march for days with no food. Then they took her husband. She never saw him again. Later she learned he had been hacked to death with a machete. They killed dozens, displaced hundreds in several attacks. 

Now Esther is safe, sheltering with her eight children at a friend’s house in a bigger city.

She is aware that gold from DRC ends up in the rich part of the world; people there pay a lot of money for it.

“The Mai-Mai sell gold to white people to buy weapons — that’s why they sell the gold. I want to tell these white people to stop buying from them. So they stop killing us with these weapons.”

For Esther it is a simple equation: As long as armed groups can reap profits from gold mining, they will keep earning the cash to kill. 

Fake gold certificates

The Democratic Republic of Congo has some of the purest gold in the world. Belgian businessman Yasin Karim Somji tells us that he is convinced of the purity of the gold in Misisi and other places in the North and South Kivu regions. He plans to soon open the first gold refinery in the DRC and export the gold to Europe, Asia and America.

“At the moment we are in long discussions with the government. They will check all artisan mine workers who will come here; they will try and trace it and maybe it will help. I hope it will help,” Somji says.

But it will be hard to make sure the gold that comes out of the region is not linked to rebels. Traders tell us that tracing certificates that indicate the origin of the gold are already altered in the first city they reach, Bukavu, in the DRC’s East.

From here it is often smuggled or officially exported — with fake certificates — across the border to Rwanda and other East African countries. Then it is transported to Dubai, a worldwide trading center for gold.

Eventually, it’s sold to the end consumer in Europe, the United States and other countries.

The vast majority of gold from DRC is smuggled illegally across the border. When it reaches its final destination it is virtually impossible to know where it originally came from.

Source: DW