Thursday, May 28, 2009

Inside Heart of Diamonds

WBAI-FM's Wuyi Jacobs recently produced a series of shows about the Congo for his program, AfroBeat Radio. The last installment included a long conversation with me about Heart of Diamonds and how the book reflects the true Congo. Wuyi also asked me about my travels in Africa and how Joseph Conrad's Heart of Darkness influenced Heart of Diamonds.

The program aired May 16, 2009, as part of WBAI's fundraiser. To hear a 26-minute excerpt (mp3), click here.

Previous programs in the series included interviews with Congolese activists Joseph Mbangu and Misengabo Kapuadi as well as several scholars and knowledgeable observers of the DRC.

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

Wednesday, May 27, 2009

"Ruined" Benefit For Congo Women

If you haven't yet seen "Ruined," Lynn Nottage's Pulitzer-prize-winning play about rape in the Congo, make sure to attend the June 14 matinee in New York. Proceeds from that performance will go to support women in the Congo through the work of Friends of the Congo and Congo Global Action. I saw the play early in its NY run and can't say enough about it's importance in understanding the terrible effect of terror rape on the victims and society in the DRC.

Following this special performance, filmmaker Lisa Jackson will moderate a panel of Congolese women who will speak out about the continuing violence. The participants include Amini Kajunju, Georges Malaika Foundation; Marie-Claire Faray, Common Cause UK; Marie Mossi, National Network of Women; Gorethy Nabushosi, Congo Restoration; and Maman Jean Kasongo, Fondation Shalupe. In addition to Friends of the Congo and Congo Global Action, the panel is sponsored by the Ellen Stone Belic Institute for the Study of Women & Gender in the Arts and Media Columbia College Chicago.

This video underscores the importance of this event:

The play and panel discussion will be at the Manhattan Theater Club, New York City Center at 130 West 56th Street. Tickets are available through the box office or Friends of the Congo.

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

Tuesday, May 26, 2009

A Sobering View Of Africa's Future

Africa: Altered States, Ordinary MiraclesAfrica: Altered States, Ordinary Miracles
by Richard Dowden

As an author and activist, I am generally optimistic about Africa's future, but Richard Dowden tempered my hope with a sobering dose of reality based on his decades of reporting on the continent. His powerful guide to sub-Saharan Africa is a must-read for anyone who hopes to understand why Africa is the mess it is.

Dowden is the director of the Royal African Society and spent two decades as Africa editor of the Independent and the Economist. His book is filled with both studied thoughts on the forces that have shaped Africa's history and pertinent personal tales of his experiences there. His message is ultimately fairly simple: Africa's problems can only be solved by African people.

The depressing counterweight to that conclusion that I drew from Dowden's accounts is that corruption is so ingrained throughout the power structure of most nations in Africa that it is unlikely that solutions can ever be implemented.

Having set my latest novel in the Democratic Republic of Congo, I was particularly interested in his conclusions about that beleaguered nation:

"In December 2005 a new constitution was confirmed by a referendum and elections were held in July 2006. The assumption of outsiders was that, forced to govern together, the warlords would check each other's theft and violence. The opposite happened. They keep the country divided, cut deals with each other and filled their pockets."
Dowden makes another observation which mirrors my own experience:
"Despite the politics of theft, violence and patronage, Congo still inspires great patriotism among its long-suffering citizens. They may have little loyalty to institutions or a ruler, but Congolese believe desperately in the Congolese nation and a few are prepared to fight its looting bosses."
Africa - Altered States, Ordinary Miracles reveals Dowden's great love for the continent he has spent his life discovering. It is no dewy-eyed romance, however. He reveals all his lover's warts and blemishes, bad breath and occasional frequent bouts of ill-temper in a paean to her beautiful potential.

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

Sunday, May 17, 2009

China Gains, Congo Loses, In Mine Deal

The recently-announced copper/cobalt mining contract between the Democratic Republic of Congo and China--widely proclaimed as bringing $9 billion in development aid to the DRC--looks like another unfortunate deal for Congo. According to my back-of-the-envelope calculations, it is probably even more one-sided than American multinational Freeport McMoRan’s arrangement for Tenke Fugurume that I examined recently.

Last year, the Congolese Ministry of Mines announced that it had signed an agreement between China's Exim Bank, the Kinshasa government, Congolese state mining company Gecamines, China's Sinohydro Corp, and China Railway Engineering Corp forming a joint venture to develop the Mashamba West and Dikuluwe copper and cobalt deposits, concessions originally scheduled to be developed by Katanga Mining Ltd through a joint venture with Gecamines. The deposits are believed to hold ten million tons of copper and two million tons of cobalt.

While complete details of the contract are yet to be announced, what is known doesn’t look particularly profitable for the Congolese. On the surface, the deal sounds fine, with the Chinese agreeing to build $6 billion worth of roads and railroads and another $3 billion in mining infrastructure in return for rights to operate the mines. Gecamines is to own 32% of the venture, too, or nearly twice as large as the share it has in Tenke.

Using recent prices for copper ($4500/ton) and cobalt ($30,000/ton) and spreading production over the 25 year term of the deal, annual gross revenues of the mine will be $4.2 billion. Using the same operating cost assumptions as at Tenke, profits will be approximately $2.6 billion annually. Gecamines share could be $832 million.

The devil, though, is in the details. First, the $9 billion from the Chinese is not a gift—it’s a loan secured by the mines and to be repaid from the Congolese share of the operation’s profits. Generously assuming that the loan will be for the 25-year life of the project and carry an interest rate of only two percent (much less than I expect it will be), Gecamines will be on the hook for $540 million in annual debt service. That leaves only $292 million as the Congo’s share of the mine’s profits. By comparison, Gecamines’s deal with Freeport annually yields $100 million more.

Additionally, Gecamines has agreed to either give Katanga Mining deposits carrying nearly four million tons of copper and 200,000 tons of cobalt or pay the company $825 million as compensation for giving up the Mashamba West and Dikuluwe concessions. This additional cost, of course, further reduces the DRC’s take from the deal with China.

The IMF has objected to the deal on the basis that Congo is simply trading $11 billion in current debt (which the DRC hopes to have canceled) for $9 billion to the Chinese, and that the state guarantees of those loans are ill-advised at a time when the government can’t fund basic services, much less invest in the country’s growth. The IMF has said it might go along with the deal pending a study to make sure the mine’s reserves cover the cost of the infrastructure and if the terms are renegotiated.

The Chinese stand to gain in several ways from the deal as announced. In addition to their nearly $1.8 billion in annual profit from the mine, they’ll earn perhaps $4.5 billion in interest on the development loans—more if they carry an interest rate higher than two percent. There also looms the very large question of who will get the profits from the contracts to build the promised infrastructure. My assumption is that China's Sinohydro Corp and China Railway Engineering Corp will be awarded those contracts on a no-bid basis, which means they’ll take home another billion or so in profits on the project.

It would seem to me that a better deal for Congo would be a straight-forward mining concession with the Chinese along the lines of those typically negotiated by Zambia and South Africa, where the parastatal companies get 51% of the operation. The infrastructure could be financed from those revenues, open-bid contracts for the roads, railroads, and power facilities let to the lowest bidders (maybe even Congolese companies), and funds would still be left over for the state general revenue coffers.

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

Saturday, May 16, 2009

Rape Testimony Moves U.S. Senate

Chouchou Namegabe Nabintu testified this week before the Senate Committee on Foreign Relations Subcommittee on African Affairs and the new Subcommittee on International Operations and Organizations, Human Rights, Democracy and Global Womens Issues, moving the audience with her eloquent appeal for US help in stopping terror rape in the Democratic Republic of Congo.

Senator Barbara Boxer said after Chouchou's testimony that "In the Senate today, the silence on this issue has ended."

The hearing was titled "Confronting Rape And Other Forms Of Violence Against Women In Conflict Zones Spotlight: DRC and Sudan". Also testifying were Melanne Verveer, US Ambassador-at-Large for Global Women’s Issues, Esther Brimmer, US Assistant Secretary of State for International Organization Affairs, Phil Carter, Acting Assistant Secretary of the Bureau of African Affairs, Eve Ensler, founder of V-Day, Robert Warwick, Country Director of Southern Sudan International Rescue Committee, Neimat Ahmadi, Save Darfur Coalition, and John Prendergast, founder of The Enough Project.

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

Thursday, May 14, 2009

WBAI-FM Features Heart of Diamonds

Heart of Diamonds will be featured on AfroBeat Radio at 2:30 PM, Saturday, May 16. Listeners can hear it on WBAI FM 99.5 or streaming online.

AfroBeat Radio host Wuyi Jacobs has been examining many aspects of the Congo crisis for several weeks now, talking to activists and writers such as myself. During our interview, I'll talk about how the very real war over the Congo's mineral wealth shaped my novel Heart of Diamonds. We'll also discuss some of the DRC's unfortunate history and, on a more positive note, what I see needs to be done so the country can achieve its wonderful potential.

Listeners will also have an opportunity to get a copy of Heart of Diamonds as a premium during WBAI's fund-drive.

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

Thursday, May 7, 2009

Freeport Trucks Billions From Congo Mine

While the eyes of the world are drawn to the brutal war over an estimated $200 million in annual illegal mineral revenues in the eastern provinces of the Democratic Republic of Congo, negotiators for American and Chinese corporations are angling to control ten times that amount in mining contracts in Katanga Province.

Two multi-billion-dollar copper and cobalt contracts are currently being negotiated by the DRC Ministry of Mines. One is for Tenke Fungurume, which is managed by American mining goliath Freeport MacMorAn. It’s one of six existing contracts the DRC wants to renegotiate. The other is with two Chinese firms, Sinohydro Corp and China Railway Engineering Corp, and deals with two under-developed mines being transferred from Katanga Mining Corp. Neither one is finalized as of this writing, but both are problematic from the standpoint of what they actually mean for the economic health of the DRC. I’ll cover the Chinese deal in a subsequent post.

Freeport began shipping copper from Tenke Fungurume this year. The company expects the mine to produce 250 million lbs. of copper and 18 million lbs. of cobalt annually during the initial phase, with more than 400,000 tons of copper per year within five to seven years. At recently posted prices for copper ($4500 per ton) and cobalt ($30,000 per ton), this will generate some $2.7 billion in annual gross revenue at full production. When prices for the commodities rise—-as they surely will from today’s depressed levels—-this operation could easily gross $5 billion per year.

That’s not all profit, of course, but the margin is very high since production costs in the DRC are extremely low. Freeport projects that the net revenue generated by cobalt—-even at prices substantially below those achieved in the current market—-will more than cover the cost of recovering and shipping copper from Tenke. In fact, at $10 per pound (two-thirds the current price level) for cobalt, a 2007 feasibility study published in the African Review of Business and Technology says Tenke operating costs are actually negative $380 per ton for copper. At current price levels, in other words, Tenke can generate a minimum annual profit of $2.2 billion once the project reaches full production.

It should be noted that not all of that will flow to Freeport’s bottom line. The company owns a 57.75% stake in Tenke it acquired in 2008 when it bought Phelps Dodge. Another 24.75% of the project is owned by Lundin Mining, which had the original concession. The remaining 17.5% is owned by Gecamines, the DRC’s state-owned mining company. Freeport and Lundin are responsible for the total $1.75 billion cost of developing the mine. Subtracting Gecamine’s share of the profits (a not-inconsiderable $400 million), however, still gives Freeport and Lundin a nifty 100% annual return on that investment.

It’s no wonder that the DRC Ministry of Mines is asking for the contract to be renegotiated. The DRC wants to increase its share of the project to 45%, the level at which the deal was struck with Lundin in 1996. It also seeks to increase the signing bonus from $100 million to $250 million. The original agreement with the DRC was amended in 2005 to the current terms. The official line is that the new terms were necessary to provide the company a return commensurate with the risk it was assuming at the time, even though the agreement ending the Second Congo War had been signed in 2003 and the country’s first national elections were scheduled for 2006. The transitional period still saw substantial unrest, however, which supposedly justified the greater return.

The Carter Center says, though, that there were other factors at work:

“There are several reports that the political officer and temporary ChargĂ© d’Affairs of the embassy was personally engaged in urging the President’s office to sign....The same official that is said to have actively lobbied for Phelps Dodge retired from the State Department in 2006. In September of that same year, she became Vice-President for Government Relations, Africa for Phelps Dodge, whose only major African interest is Tenke Fungurume. This official’s important role at the US embassy and the timing of the move have fueled suspicion on the part of DRC government officials and others regarding the interests of Western governments. At the very least it indicates obliviousness to the appearance of impropriety.”
As I mentioned earlier, Freeport acquired its stake in the project when it absorbed Phelps Dodge.

When the DRC requested a reversion to the old contract terms last year, Freeport responded with a simple “no.” In a 2008 SEC filing, it said
“The Restated Agreements were negotiated transparently and approved by the Government of the DRC following extended negotiations, and we believe they comply with Congolese law and are enforceable without modifications. We are currently working cooperatively with the Ministry of Mines to resolve these matters while continuing with our project development activities.”
The hypocrisy is glaringly obvious: a “contract is a contract” and can never be changed—-unless it is in the company’s interests to do so as it was in 2005. Subsequent statements have stuck to that position, although negotiations supposedly continue while Freeport ships copper and completes construction of the cobalt processing operation.

Also used to justify the one-sided contract are the expenditures made (mostly under terms of the 2002 Mining Code) for community support and infrastructure development in the region. There is no question that considerable economic benefit accrues to the DRC from Tenke, although nowhere near what the company claims. About 1,000 employees will be hired, with another 4,000 jobs indirectly created. Freeport is also spending on social programs for the local community as well as investing in the region's infrastructure by upgrading roads, railways and a hydropower facility—-all items needed to make the operation successful. The DRC collects royalties, taxes, and other fees, too. It should be kept in mind, though, that all these expenditures—as helpful as they may be—are required by law. They’re also considered part of the project expenses, so are already included in the calculations for net profit.

If past is prologue, the Tenke Fugurame contract will eventually be revised. The DRC will get a higher stake (although nowhere near the 45% it’s requesting, much less the 51% that is fairly standard for similar contracts in South Africa and Zambia) in the project. Don’t expect Freeport to give without receiving, however. Watch for the Ministry of Mines to grant rights to another deposit in the region, agree to reimburse the company for its capital investment, or make some other major concession to get the deal done.

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

Monday, May 4, 2009

Heart of Diamonds At Chappaqua Library

Earlier this year, the Chappaqua (NY) Library kindly invited me to speak about current events in the Congo and read from Heart of Diamonds. You can see the entire program by visiting and choosing the program labeled "Congo" in the album strip at the bottom of the page.

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

Sunday, May 3, 2009

A Visit To Congo

This account of a recent visit to the Democratic Republic of Congo caught my eye in Malu Kayi, the newsletter of Leja Bulela, an organization supporting Kasai Province, where many scenes in Heart of Diamonds took place. The author is Ilunga Kalala, a member of Leja Bulela Youth.

When I returned to the United States from the Congo, I had a difficult time finding the words to describe my experience to friends. The sentiment the journey left me with was, in many ways, lost in translation. There exists in the language of our people, however, a proverb that epitomizes my trip better than any description I can conjure up in the English language. It is Kwenda kumona malu.

I heard this expression on one of my first days in Lubumbashi. Kwenda kumona malu was the vocal refrain of a traditional Luba song I heard playing on the radio. The buzzing resonator drum, the thumb pianos, and the xylophone reminded me of the music my father once played with regularity. Recognizing my affinity for the song, my uncle took me a level deeper by describing the meaning of the refrain. Loosely translated, it means, "When you travel you see things."

I spent almost two months in the Congo and nothing could have prepared me for what I saw and experienced. A typical day was as follows: Daybreak brought an otherwise quiet neighborhood to life. The faint alarm of a distant factory announcing the start of the workday was followed by the quiet shuffling of feet towards Avenue
Mobutu. Power outages were the norm, particularly at the most inopportune times of day. Most mornings, my aunt would boil water and prepare breakfast over the same outdoor charcoal grill. A half-bucket of warm water was sufficient for me to bathe and by 8:45am I had eaten a small breakfast and was ready to begin the workday.

On our way into the city center, we would traverse man-made bridges and deteriorated roads in an imported sedan that drove like a 4x4. My work at Action Contre l’ImpunitĂ© pour les Droits Humains (ACIDH), the human rights NGO where I interned, began at 9am. Like Leja Bulela, ACIDH came into existence after the forced exodus of Kasains from the Katanga province inspired several individuals to take action. The human rights violations and impunity ACIDH took on meant the work was precarious. The office was a sanctuary of optimism in spite of this and I felt at ease conducting my research on the street children phenomenon.

I cherished the time just before dinner for this was when I gained the most insight on various aspects of our culture. It was when, in the company of family, everything from genealogy to the custom of dowry was described to me in detail. The conversation would carry on to the dinner table where I ate the best nchima I have ever had in my life. After dinner, we would relax for an hour or so and by 10pm I was ready for bed.

My trip to the Congo was no romantic journey. In fact, many of my experiences were emotionally taxing and difficult; but for every downside there was an upside. My only regret was that I was not able to make it to Kasai.

That trip is one I look forward to making with the Leja Bulela youth. When that time comes, I am certain that the maxim kwenda kumona malu will take on new meaning for us as we chart our course and carry on the torch by beginning charity at home.
Many thanks to Tania Kasongo for permission to cite this piece.

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