Monday, March 2, 2009

Congo Diamond Mine Recovery Prospects

Coffey Mining, a Canadian firm with interests in the Democratic Republic of Congo (DRC), recently reported on its efforts to revitalize the Mbuji Mayi mine, once one of the most productive diamond mines in the world. The mine's output has dwindled to a trickle--along with the rest of the country's legitimate diamond industry--as war continues to take its toll on the DRC. The company's report mirrors the fate of the diamond mine in Heart of Diamonds.

The report points out that, since the 1960's, the DRC has historically produced ten million carats of industrial diamonds each year, but production declined sharply as war raged from 1998 to 2003, then collapsed to less than one million carats in 2007.

Dr. Norman Lock, senior principal consultant and regional manager for Coffey Mining, is overseeing the restoration of the Mbuji Mayi mine, which is a key part of the larger goal of rebuilding the region's ailing diamond industry. He points out that there's more to the project than pumping money into mining operations:

"...we can't develop just a technical solution alone. Any money poured into that would be like water in the sand. We also need to look at social issues in the region like poverty, which have contributed to the decline of the mine."
Among the problems faced is the prevalence of illicit mines in the Mbuji Mayi concession. They not only operate without paying legitimate taxes or royalties, which impair the government's ability to provide security and services to the country, but are grossly unsafe and dangerous as well. Dr. Lock says the problem is massive:
"About half of the actual productivity from the concession area has been legitimate legal mining. The other half has been illegal mining from artisanal mines. Any action to try and stop that is going to run up against tremendous resistance from the local community so this is an issue that will have to be addressed somehow."
Restoring the legitimate mine to profitability, however, faces other big hurdles:
"The mine is also dramatically overstaffed. If this was a fully operational modern mine, it would have a complement of around 500 staff but it currently has over 5000. Therein lies a problem. The local community is dependent on this mine and they are going to be laying off two to three thousand people."
Lock calls for retraining of the laid-off miners as the solution, but other problems remain, not the least of which is the near total lack of environmental awareness in mine operations.
"The mine has been operating in the same way it was back in the 1950s so they have some archaic practices in place. For example, basically the tailings are pumped straight into the river, which is a big no-no."
Instability in the Congo's government and continued violence in the country has deterred investors from putting up the massive amounts of money needed to turn the industry around. The current global economic meltdown doesn't bode well for the DRC, either, but the longer term prospects may be brighter than we realize. The Congo's potential is so great that it will take only a brief movement toward peace and stability to attract the needed investment.

Dr. Lock says Coffey hopes to address not only the Mbuji Mayi mine's operating problems but the larger ones of the surrounding community as well:
"We are anticipating that a more holistic approach to managing the economic and social issues at the mine - as well as the technical ones - will increase the mine's chances of success."

Dave Donelson, author of Heart of Diamonds a about in the

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