Banro, USAID Seek to Regulate Congolese Small-Scale Gold Miners

Canada’s Banro Corp. (BAA) may partner with the U.S. Agency for International Development to help regulate small-scale gold mining near its Twangiza project in eastern Democratic Republic of Congo, the company said.

About 3,000 unauthorized artisanal miners are working at the outer edge of Twangiza, Banro officials said in a meeting today with USAID Administrator Rajiv Shah at the mine, about 80 kilometers (50 miles) outside Bukavu, the capital of South Kivu province. The goal is to find an alternative site for small-scale miners to dig on Banro’s land concession and promote other sources of income-generation, Banro Chief Executive Officer John Clarke said at the same event.

“If we want to be successful in the DRC we have to do this,” Clarke said.

While Congo holds deposits of gold, cobalt, tin ore and diamonds and was the eighth-largest copper producer globally last year, the United Nations ranks it the least-developed country in the world along with Niger. Armed groups and some members of Congo’s army in eastern Congo are reaping profits by controlling or taxing the mineral trade. Congo’s army and United Nations peacekeepers this month defeated the M23 rebel group, the region’s most powerful, ending a 20-month rebellion in the east and bolstering stability. Dozens of Congolese and foreign armed groups are still active in the area.

Second Mine

Banro began commercial production at Twangiza in Sept. 2012 and plans to start output at its second mine, Namoya, in the first quarter of next year. It targets 200,000 ounces of gold annually from about 80,000 ounces this year, Clarke said. The company holds permits that stretch for more than 200 kilometers across South Kivu and Maniema provinces.

Beginning in May, the U.S. Securities and Exchange Commission will require companies it supervises to report if gold, tin, tantalum or tungsten in products has supported conflict in Congo. The U.S. passed the law in 2011 to cut the links between the mineral trade and armed groups.

USAID and Banro have each pledged $2 million for the artisanal mining program, which will used to relocate workers and formalize the trade so the gold can be certified as conflict-free, Shah said. The support could be extended to other mining companies in the region, he said.

“The mining sector will be the engine of growth in Congo and our goal is to build public-private partnerships ensuring that as it develops it will promote transparency, rule of law, help fight corruption and ensure that benefits of economic opportunity accrue to the poor,” Shah said.

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

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