The second day of the Digital DRC Mining Week webinar series gathered commodities experts, mining
executives, power project developers and hosted a discussion about the
development of local talent for the mining and related industries.
The first session of the day looked at: Which commodities are showing more resilience from COVID-19 and why?
Simon Tuma Waku, Deputy MD of DRC’s Tenke Fungurume Mining said that the country’s copper sector was “not only controlled by but is also dependent on China.” He said there was a correlation between China’s recovery from the pandemic and commodity price’s recovery. “DRC’s economy has been badly affected, particularly its SMEs, but will not be hit as badly as Europe because of its mining sector that has a cushion role on the economy.”
Mining is capital intensive
Cyrille Mutombo, Country Manager, Kibali Goldmines, DRC said that the Kibali
mine in the DRC was doing well. “We converted Ebola protocols to address the
COVID-19 pandemic. He said the DRC economy was expected to retract by 2.4% this
year and was heading into a recession. “Gold is a safe haven again so you can’t
regard gold as a strategic mineral.”
The DRC’s new mining code came up again in the discussion Cyrille stating that “certain issues are still quite blurred, loan repayments for instance. Mining is very capital intensive, you need lots of investment. And you need to provide miners with incentives to create all the infrastructure such as roads to be able to mine.”
“When COVID struck there were many reasons to be negative, and April was the worst month for automotive sales globally since 1998” said, George Heppel, Senior Analyst Base Metals, CRU Group in the UK. “We expect the automotive car market to decline by 20% in 2020. However, European electric vehicles sales have done surprisingly well with Q1 reporting the highest sales ever.”
Asked how the auto industry will mitigate the risk of its cobalt supplies he answered: “in general, car manufacturers aren’t really concerned yet about their cobalt supply. It feels like they are pushing a lot of the responsibility up the chain to their battery manufacturers. There are two exceptions to this rule. Obviously there is BMW who have signed a cobalt supply agreement with mines in Morocco and in Australia and then there’s Tesla who recently announced that they have entered a purchasing agreement with Glencore.” According to George many battery manufacturers seem to mitigate their long-term supply risk by going into JVs with refineries in China.
The panel agreed that the COVID-19 pandemic would not be
over anytime soon but that it would be handled and mitigated like any other
crisis.
“We’ll have to learn to live with COVID-19 anyway” said Simon Tuma Waku,
“copper and cobalt is still there and will continue to depend a lot on China.
As it brings back projects the demand will be high. I don’t see a crisis in the
future.”
On track for energy regulator
The strongest message that emerged from the second discussion on power projects
in the DRC was that the country needs a dedicated energy regulator to make it
easier to develop generation projects, obtain financing and set tariffs.
“DRC’s energy sector lacks regulation and security for
licences and concessions for power projects” was the opinion of Raphael
Khalifa, CEO of Tembo Power based in Mauritius. Tembo Power runs 10 projects in
Africa, all as IPPs in hydropower in the DRC, Kenya and Burundi, totalling half
a billion dollars in investments. He added that the lack of a regulatory
authority added to the risk and therefore also the cost of a project.
Serge Nawej Tshitembu, Main Advisor for Geosolar in the DRC agreed: “we are on
track to establish an energy regulator which will make things a lot easier,
creating more visibility and providing more stability to investors.”
He added that the majority of energy generated in DRC is renewable, mostly
hydropower and that there was a lot of appetite from international investors,
particularly the UK, for the DRC.
Both agreed that the current estimated demand of energy in DRC is around 4200
MW.
Local content important driver
The last webinar session of the second day of the Digital DRC Mining Week
focused on: Local content and capacity building after
COVID-19: an opportunity to build an efficient economic model.
“Local content is an important driver to allow the
Congolese to benefit from their wealth” said Mrs Gety Mpanu Mpanu, Deputy
Chief of Staff of The Head of State in charge of Infrastructure, Mineral
Resources, Hydrocarbons, Energy and PT-NTIC, in the Presidency. She added
that the DRC must become “a viable and profitable investment platform and as
part of developing local content subcontracting must be reserved for companies
with a majority of Congolese capital.”
Furthermore she felt that “improving the performance of the mining crafts
requires training the leaders of mining cooperatives.”
“The concept of local content is a very important one for our country and our mining sector,” stated Justin Kashala, Human Resources Manager at DRC’s Ivanhoe Mines, “there is an opportunity for vertical integration of the entire production chain on the economic level. Our training programmes need to be reviewed so we can train people who have the skills needed in the current mines in the DRC”
Lorenzo Giacomin is the Project Director for EDUKAT, a Belgian development agency active in Katanga and focuses on support for technical education and vocational training in Katanga province, both formal and non-formal. He was upbeat about their contribution to the region’s employment or self-employment prospects. “Collaboration is the most important” said Lorenzo, “we are in partnership with the government regarding the policies and orientations they have put in place with private companies. These are win-win partnerships.” He added: “the key word of our project is support. Training is not enough, you have to use skills and allow people to find jobs.”
Macaire Mulundu, Ruashi Mining’s HR Manager pointed out
that one of the unexpected results of the COVID-19 pandemic had been that it
had created opportunities for local talent to show their metal. “The pandemic
has reduced mobility and expatriates cannot all be on the premises. Some
positions are vacant and Congolese have been chosen to fill these positions,
temporarily or permanently.”
Join us for the last three sessions today, Friday 19 June. Click here to see the programme and to register.DRC Mining Week is
organised by Clarion Events Africa, a leading Cape Town-based and multi-award
winning organiser of exhibitions and conferences across the continent in the
infrastructure, energy and mining sectors. Other well-known events by Clarion
Events Africa include African Utility Week & POWERGEN Africa, Africa Mining
Forum, Nigeria Mining Week, Future Energy East Africa and Future Energy
Nigeria. The company is part of the UK-based Clarion Events Group.
DRC Mining Week dates and location:
Digital conference (online): 17-19 June 2020
Webinar series (online): 20 May-30 Sep 2020
Keynote opening session live event: 7 October 2020
Live expo and conference: 7-9 October 2020
Location: The Pullman Grand Karavia Hotel, Lubumbashi, DRC