HomeBase MetalsReduced mining output slows DRC growth

Reduced mining output slows DRC growth

The Ruashi copper-
cobalt project in
the DRC
Kinshasa, DRC — MININGREVIEW.COM — 26 November 2008 – A reduction in the output of the mining industry in the Democratic Republic of Congo (DRC) is the main factor behind an expected slowdown of between 5.7 and 7.4% in the Central African country’s economic growth.

This is one of the findings of a government-appointed commission set up to explore future economic growth in the DRC, and to identify the various contributing factors which need to be addressed.

“The growth estimates notably take the reviewed production and investment forecasts of mining companies into account,” the Commission on the Financial Crisis said in a report e-mailed by the nation’s central bank today in the DRC capital, Kinshasa. The commission’s estimate compares with an official government forecast of 9.2% for 2009.

The DRC government is also busy with a mines contract review, which started last year and covers 61 contracts signed with mining companies including such majors as Freeport-McMoRan and AngloGold Ashanti. The government wants to increase state revenues by amending these contracts.

The DRC has a third of the world’s cobalt reserves and 4% of all copper. At least 43 out of 75 copper and cobalt producers in the nation’s southern Katanga province have stopped production since prices tumbled.

The government created the commission earlier this month to deal with the effects of the global financial crisis on its economy.