12 Sep DRC jungle mine builds wealth above ground
AFRICA is an endless source of compelling tales, many of which are not widely told as the action takes place in faraway, isolated places.
I heard one such story last week from Boris Kamstra, the head of Canadian-funded mining company Alphamin Resources Corporation, who spoke at an event on doing business in Africa.
He spoke with passion about the company’s experiences in opening up a mine in the remote — and beautiful — area of Bisie in the eastern Democratic Republic of the Congo (DRC).
Bisie has one of the largest tin deposits in the world. But it is little more than a makeshift settlement deep in the jungle, about 60km from the nearest town, Walikale, and a long bad road away from the nearest border crossing, Goma.
This presents formidable challenges, but also opportunities to bring development to an area that has been held hostage by its remoteness and become a target for armed gangs seeking to bully residents.
The presence of hundreds of artisanal miners digging into the hillsides of Bisie was a lure for warlords to extract illegal taxes and protection money.
However, many of the original fortune seekers have left Bisie as basic mining tools are inadequate for deeper mining and the market has been hit by the introduction of Dodd-Frank legislation in the US that aims to ensure conflict-free mineral trade through the supply chain for US-based companies.
Alphamin has been on site in Bisie for a few years and has already made a difference. For example, the company persuaded Vodacom in the central African to erect a cellphone mast at the mine. Overnight, locals were able to communicate with other parts of the country.
In a few days, a new business started booming — airtime sales.
Similarly, it built a 35km road through the jungle to link the site to the nearest transport artery, simultaneously opening up options for local commerce. It is also rehabilitating the road to Goma to enable it to carry trucks.
Seven hundred jobs have been created in the first $130m construction and clearance phase, many of them taken up by former artisanal miners.
Kamstra says the company found a strong work ethic and many skills in the local population, highlighting the example of a sturdy viaduct built by locals with timber.
However, as employment demand is far larger than what the mine can absorb, it is building up a local supply network for catering, workwear and even basic mining equipment. A school has been built and staffed and the company is working with 44 outlying communities to identify projects for funding.
It is still a jungle out there, literally and figuratively. Security is still an issue. But Kamstra says opening up the area via new and rehabilitated transport and services infrastructure makes communities a lot less vulnerable. And financial benefits mean greater buy-in to the mine from beneficiaries, both local governments and communities.
The examples Kamstra mentions are being replicated at other resources sites across Africa, highlighting the developmental role being played by private investors. This role generally gets little recognition or credit from governments, which usually do little or nothing for such communities, or from professional critics such as international nongovernmental organisations.
Of course the company will make profits, that is its raison d’être. In fact, the quality of the ore and the high prices being attained makes it confident of an investment payback of less than two years.
Inevitably, there will be questions asked about a “fair” balance between what is repatriated and what local communities get. That is a debate that must be had.
But this does not negate the important role foreign investment plays as a catalyst for growth in severely underdeveloped parts of Africa, which is highlighted by stories such as that of Alphamin in the heart of the Congo.
• Games is CEO of business advisory Africa @ Work
Publication: Business Day
Author: Dianna Games