Rights-DRC:Another Demonstration of the Paradox of Plenty
Inter Press Service (Johannesburg)
June 2, 2005
Posted to the web June 2, 2005
Moyiga Nduru
Johannesburg
A report by the New York-based Human Rights Watch claims the competition for gold in the Democratic Republic of Congo has led to widespread abuses in the central African country.
According to 'The Curse of Gold', released Wednesday, tribal militias backed by Uganda and Rwanda have fought for control of extensive gold deposits in north-eastern DRC, as the region struggled to extricate itself from civil war.
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From 2002 until 2004, about two thousand civilians were killed and tens of thousands displaced in the battle for one of the most important mining areas, Mongbwalu - this as militants sought to enrich themselves from gold, the profits from which also financed their war effort. Ethnically-motivated killings, torture and rape were also reported in the scramble for reserves of the ore.
Human Rights Watch (HRW) describes the militias, the Nationalist and Integrationist Front (FNI) and the Union of Congolese Patriots, as being "proxies" for Uganda and Rwanda, which occupied Congo-Kinshasa during the country's five-year civil war (1998 to 2003).
Investigations by the United Nations have found that Uganda and Rwanda were themselves guilty of illegal resource exploitation in the DRC during the war, in which they backed various rebel groups.
"(Uganda's) soldiers took direct control of gold-rich areas and coerced gold miners to extract the gold for their benefit. They beat and arbitrarily arrested those who resisted their orders," observes the HRW report, adding that gold worth more than nine million dollars is believed to have passed into Ugandan hands in the course of the war.
The rights group says the post-war period in the DRC has seen AngloGold Ashanti, a leading producer of gold, set up operations near Mongbwalu, after having provided "financial and logistical support" to the FNI. This was in spite of the group's poor human rights record - and the fact that it remained outside the Congolese peace process.
AngloGold Ashanti, a subsidiary of the international mining group Anglo American, allegedly paid eight thousand dollars to the FNI. While the company had already won rights to the region's gold concessions in 1996, the advent of war forced AngloGold Ashanti to withdraw from the DRC until late 2003.
HRW notes further that gold mined under duress on behalf of armed groups continues to be exported to Uganda, from where it is sold on the international market. This has made gold the East African country's third largest export, even though Uganda clearly lacks the ability to produce substantial quantities of ore locally.
"Official statistics show that Ugandan gold production accounts for less than one percent of the official gold exports. When we asked the ministry of energy and mineral development representatives to explain this discrepancy they refused to comment," Anneke Van Woudenberg, a senior researcher at HRW, told a press conference held in Johannesburg, Wednesday.
"The gold is smuggled out of Congo and when it arrives in Uganda it becomes legal. Then a certificate is issued to export it to Europe and beyond," she added.
Uganda has denied any involvement in the looting of Congo's resources. The Kampala government first crossed into the DRC to help depose long-time dictator Mobutu Sese Seko - later turning against the man installed in his place: Laurent Kabila.
When Uganda and Rwanda starting backing rivals to Kabila, the Congolese leader and his successor - son, Joseph - solicited support from Angola, Namibia and Zimbabwe. The UN has also pointed a finger at Zimbabwe regarding the illegal exploitation of Congolese resources. As with Uganda, both Rwanda and Zimbabwe deny such allegations.
AngloGold Ashanti, in its turn, has poured cold water on the HRW report.
At an impromptu press conference organised in Johannesburg Wednesday, the company's chief executive officer, Bobby Godsell, described the document as "unfair, unjust, unhelpful and flawed."
Nonetheless, the company did admit to making payments to the FNI.
"We have acknowledged the payment by AngloGold Ashanti to the FNI in January (2005) of an extorted sum of 8,000 dollars, and further sums totalling about 1,000 dollars last year in respect of an authorised arrangement related to cargo delivered to the local airstrip," AngloGold Ashanti said in a statement.
"AngloGold Ashanti does not and will not support militia or any other groups whose actions constitute an assault on efforts to achieve peace and democracy (in the DRC)," the firm added. "Should we find ourselves in a situation where there is pressure on our staff again to yield to extortionate demands, we will consider that to be grounds for our withdrawal from the exploration project."
Rights campaigners would doubtless view this as a strategy that should have been adopted earlier.
"As a company committed to corporate social responsibility, AngloGold Ashanti should have waited until it could work in Mongbwalu without having to interact with abusive warlords," said Van Woudenburg in a HRW press release issued Wednesday.
"Congo desperately needs business investment to help rebuild the country, but such business engagement must not provide any support to armed groups responsible for crimes against humanity," she added.
A Swiss-based gold refining company, Metalor Technologies, is also named in the HRW report, which says it bought potentially suspect gold from Uganda. But, following consultations with the rights group, Metalor has announced the suspension of gold purchases from Uganda.
Van Woudenberg believes the deployment of UN peacekeepers and government troops would ultimately bring militias in north-eastern Congo under control - and prevent the mass smuggling of gold into Uganda.
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At present, a force of almost 17,000 peace keepers is thinly spread over the DRC's extensive territory, in a bid to make remote regions governable ahead of elections that are expected to take place next year. Congo is currently ruled by an interim government of national unity, headed by Joseph Kabila.
About four million people are believed to have died in the country' s civil war, both as a direct result of the conflict, and because of the hunger and illness that fighting inflicted on communities.
SA Left Out of Global Mining Boom - Study
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Business Day (Johannesburg)
June 3, 2005
Posted to the web June 3, 2005
John Fraser
Johannesburg
WHILE the world was in the grip of a mining boom last year, it passed SA by, a recent report by PricewaterhouseCoopers shows.
In fact, South African companies had a tough 2004, with lower returns and a squeeze on profits - due to higher costs and the strong rand.
The PricewaterhouseCoopers report was based on data from 40 mining companies that accounted for 80% of global total market capitalisation in mining.
"We called the report Enter The Dragon - but an earlier draft was called Enter the Dragon; Exit the Springbok," said Hugh Cameron, the PricewaterhouseCoopers partner in charge of mining. He was at the local launch of the report, which was released in London at the beginning of this week.
Cameron said last year was "spectacular" for the global mining industry, with a 19% rise in market capitalisation, revenue up 39%, and profits doubling for a second year in a row.
By contrast, it was "a tough year for the industry in SA".
The market capitalisation of South African mining firms fell 9%, revenue was up just 3% in rand terms and profits in rand terms tumbled 42%. Return on equity slumped to 9,7% from 17,5% the previous year.
Cameron said the problems of local mining companies were due largely to significant cost pressures in rand terms, combined with the effect on earnings from the stronger local currency.
Cameron said the most recent weakening of the rand had brought a dramatic improvement for local gold producers, with the rand gold price shooting up from R82000/kg to R92000/kg in the space of a fortnight.
"If the rand settles at R7 to R7,50 to the dollar, and commodity prices remain where they are, we will see some very good results," said Cameron.
He said the global mining industry had outperformed both the Dow Jones and the Standard & Poor's 500 stock market indexes for the last three years, due to base metals and energy stocks "and this trend is likely to continue this year".
Cameron said commodity prices had been performing well in dollar terms, but were "pretty flat" in rand terms - meaning that SA producers had been unable to cash in on the commodities boom being led by China.
He said those global companies that had achieved the best return for shareholders last year had all been in the base metals, uranium and coal sectors.
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The PricewaterhouseCoopers report noted that said mining companies had large cash reserves and Cameron said this represented "quite a big war chest" to fund acquisitions.
He said junior mining companies were exploring more, "and when they find something, the majors buy them out".
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