Congo Must Add Value to Its Natural Resources, President Says

Democratic Republic of Congo needs to change the way it exports natural resources if the country wants to fight its way out of poverty, President Joseph Kabila said.

Miners should process minerals and other raw materials within Congo, and the country should reduce its reliance on small-scale and independent mining, Kabila, 39, said in his annual state of the nation address to parliament in the capital, Kinshasa, today.

“Economic rationale requires that from now on, we should limit the export of raw minerals,” Kabila said. “Increasing their value locally should become the rule,” and the same principle should apply to timber and oil exports, he said.

Since taking over as Congo’s first democratically elected president in 40 years in 2006, Kabila has struggled to get the country back on its feet. Years of dictatorship and war destroyed Congo’s infrastructure and paralyzed its economy. According to the United Nations Development Programme, Congo ranked second to last in human development out of 169 countries surveyed this year.

Still, Congo holds a third of the world’s cobalt reserves and 4 percent of its copper. It is Africa’s largest producer of tin ore and holds deposits of gold, coltan and diamonds and is home to the second-largest tropical forest in the world. The country is also exploring for oil.

Conflict

Continued conflict in the east has hampered investment by major miners and oil companies, leaving the bulk of exploitation to independent, or artisanal, operators, a practice Kabila wants to change.

“After nearly 40 years of following a policy of artisanal mining in which neither the country nor the diggers themselves saw any visible dividend, it’s time to re-examine the wisdom of that policy,” he said.

Industrial production of copper and cobalt has already increased in Katanga province, Kabila said. Toronto-based Banro Corp., Johannesburg-based AngloGold Ashanti Ltd., and Jersey- based Randgold Resources Ltd. have said they will begin gold production in two other eastern provinces over the next three years.

Kabila’s first five-year term ends in 2011. He called for next year’s elections to be conducted with “respect for rules of procedure and in the spirit of patriotism.”

In 2007, hundreds died in the streets of Kinshasa when forces loyal to Kabila fought with supporters of his main rival, former rebel leader Jean-Pierre Bemba. Bemba is on trial at the International Criminal Court in The Hague for war crimes committed in Central African Republic in 2002 and 2003.

Kabila’s main opponent will probably be Etienne Tshisekedi, 77, head of the Union for Democracy and Social Progress party. Tshisekedi is scheduled to return to Kinshasa today after a 3-year self-imposed exile in Belgium, according to the UDPS website.

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.

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