Huge sums in mining revenue off the books in DR Congo

Kinshasa, DR Congo | AFP |  Some $750 million (644 million euros) in revenue from Democratic Republic of Congo’s mines between 2011 and 2014 “cannot be reliably tracked” in the records of the state-owned Gecamines, the Carter Center said Friday.

The US foundation, in a report, suggested Gecamines used “its privileged position to generate US$1.1 billion from copper and cobalt deals between 2011 and 2014” yet had failed to reliably account for almost two-thirds of the revenue.

Gecamines wields control of the vast nation’s “best mining permits”, enabling it “to generate substantial revenues from its partnerships, averaging US$262 million per year in royalties, bonuses and other contractual fees from 2009 to 2014,” the report said.

“Those revenues are not directed to the public treasury, and they are largely beyond the realm of public oversight,” it said.

It noted that significant income generated by mining proved “difficult to trace” ahead of elections that took place in 2006 and 2011, both won by President Joseph Kabila.

“As the country faces a period in which critical elections are supposed to take place, conditions are ripe for additional unreported sales and revenue diversion,” the report warned.

“It is troubling that Gecamines has refused to publish contracts for several mining deals that may have generated more than half a billion dollars in 2016-2017.”

The next presidential election is overdue, for Kabila refused to quit at the end of his second constitutional term last December, sparking protests, bloodshed and arrests.

The vote was set to take place this year under a transitional deal reached on New Year’s Eve, but the electoral commission has since said that there can be no vote before early 2019, mainly since a voters’ roll is unfinished in the troubled Kasai region.

No immediate reaction could be obtained to the report from authorities.

The NGO Global Witness charged in July that the Congolese mining sector served as a funding machine for the Kabila regime, which has been in power since 2001.

“A toxic combination of corruption and mismanagement in Congo’s revenues agencies and state mining companies is leaching a fifth of mining revenues away from the state budget that should be used on vital public services such as schools, hospitals and roads,” Global Witness asserted in its report.

The Carter Center said its report is based on 200 interviews, the study of more than 100 mining contracts, more than a thousand corporate documents and data from the Extractive Industries Transparency Initiative covering 2007–2014.

The foundation was set up by US former president Jimmy Carter to promote democracy and human rights around the world.

The world’s leading producer of cobalt and fifth largest copper producer, the DRC is one of the world’s poorest nations, where 90 percent of its estimated 71 million population lives in extreme poverty.