Baraza

Category: Uncategorized | Date: Jan 22 2009 | By: baraza

Africo Resources, Ltd., is a company engaged in the acquisition, exploration, and development of precious metal and base metal properties principally in the Democratic Republic of the Congo. It primarily explores for copper and cobalt in the Kolwezi District of Katanga Province in the southeast of the Democratic Republic of the Congo. Africo Resources, Ltd. is headquartered in Vancouver, Canada.

Here is one image of what’s happening to copper prices at Africo,

The Congo government put mining contracts on hold to undertake a review of all mining contracts - many companies abandoned their commitments when global commodity prices fell.  While many thought that Africa was somehow insulated from the global economic crisis, this is not true for DR Congo and other countries that depends largely on international mineral trade. The latest analysis predicts a gloomy time.

“The five year across-the-board rally in commodities, which drove up prices to historic peaks in mid-2008, collapsed in the space of three months between August and October as the secondary effects of the international credit crisis rippled through the world economy. This slump caught mining houses and host governments completely off guard, and created an arc of contraction across the mining sector in the Central and Southern African region:

The price of copper fell from its peak of about $4.10 (U.S.) per pound to under $1.40 per pound, and cobalt fell from $53 per pound to about $13 – with all other base metals registering similar quantitative declines.” Oxford Analytica

DR Congo is particularly hard hit and most of the 61 foreign mining companies which returned to the country after the 1998-2003 conflict have suspended, scaled back or withdrawn.

Oxford Analytica goes on to conclude about DRC

“By December, the Ministry of Mines had reported that more than 200,000 jobs had been lost in the mining sector, both formal informal, with a further 200,000 expected in the coming months as the industry in effect goes into hibernation. State revenues from mining are collapsing, companies are complaining of fiscal harassment by government, and the prospect of new revenue streams needed to finance the DRC’s post-conflict reconstruction will not now materialize – perhaps for some years.”

It’s anyone’s guess what will happen in terms of the conflict which many believe has been largely been financed by conflict minerals. At least one NGO, Pact Congo is trying to reduce conflicts in artisanal mines

What do you think will be the outcome of the global recession in the DR Congo…here are my predictions

1. Reduced mining - and less conflict - greater incentive for Congo and Rwanda to be friendly towards each other.

2. Greater poverty - more poaching and logging

Do you have any predictions?

- Paula

Tags: conservation, Copper, DR Congo, Katanga, mining

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