The impact of the global financial crisis on mining in Katanga

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This report examines the impact of the global financial crisis on the mining sector in Katanga, the southeast province of the Democratic Republic of the Congo. As far as the industrial mining sector is concerned, it is shown that the crisis exacerbated the uncertainty of mining companies that were waiting for the results of the review of the mining contracts and that were often in the middle of starting up or expanding their activities in Katanga. Nevertheless, IPIS remains convinced that the renegotiation of the mining contracts is of vital importance for the long-term development of the Congolese mining industry. As far as the artisanal mining sector is concerned, it is pointed out that, due to the sharp decline in mineral prices, large numbers of artisanal miners have left the mines. While some of them appear to have found a new source of income in agriculture, there are disturbing reports that others may have chosen to engage in criminal activities in order to stay afloat.
Given the importance of the mining sector as a source of revenue for the Democratic Republic of the Congo, the development of a sound policy for crisis management is of vital importance to protect the health of the Congolese Treasury and to keep intact the possibility of stepping up government efforts in terms of poverty reduction and infrastructure development once the global economy starts to recover. This report shows that both the central government in Kinshasa and the provincial government in Lubumbashi have taken a number of measures to cope with the consequences of the global financial crisis.
Unfortunately, there are indications that the ongoing decentralisation process tends to complicate the cooperation between the two governments. Moreover, as a result of the exaggerated attention for the so-called ‘rétrocession’ issue in the Congolese press, there is a real risk that the anti-crisis measures of the Congolese authorities are not examined in a critical manner.

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