AIII #14: The social minefield of gold digging in Kamituga, South-Kivu

The social minefield of gold digging in Kamituga, South-Kivu

(picture by the authors)

Nik Stoop, Janvier Kilosho Buraye, and Marijke Verpoorten


Artisanal and Small-scale Mining (ASM) is one of the most important livelihood strategies in DRC. A (gu)estimate by the World Bank puts employment in the artisanal mining sector in the range of 0.8 to 2 million. Using an average of four to five dependents for each miner, this implies that up to 10 million people, or 16% of DRC’s population, are dependent on artisanal mining for their livelihood.

The ASM-based livelihood is however under pressure. Over the past decade, mining companies have shown renewed interest in DRC – triggered first by increasing world prices for minerals, and later by a stabilization of the security situation in eastern DRC. Since ASM cannot easily be taxed, the Congolese state is eager to stimulate the development of Large Scale Mining (LSM). A new Mining Code, issued in 2002, has helped in attracting LSM companies to the sector, but may prove detrimental to the sector’s ASM segment. Although the code recognizes ASM as a valid production mode, it specifies that artisanal activities should take place in clearly demarcated Artisanal Exploitation Zones (AEZ). In practice, very few AEZ were created and the code provides the opportunity to close them down if “a new deposit which does not lend itself to artisanal mining has been discovered”. Consequently, LSM companies have the upper hand, while artisanal mining largely takes place outside the state’s regulatory framework. In 2012, the Congolese government initiated a process to revise the Mining Code. It is still unclear what the revision will exactly entail and when it will come into effect. It seems however unlikely that the power imbalance will be altered in favor of ASM. The debate is rather centered around the fiscal regime towards industrial mining and the DRC government’s plans to increase their share in new industrial mining projects.[1]

As virtually all mining concessions are granted to LSM companies, most artisanal miners are de jure invaders engaged in illegal activities. But the miners see things differently. Taking recourse to customary rules and traditional rights, they perceive their claims to the land as legitimate. In practice, the production mode is therefore characterized by a duality and tension between LSM and ASM.

In South-Kivu, for instance, the town of Kamituga and its surrounding mining sites are entirely located on three exploitation permits owned by the Canadian mining company Banro. The company is currently in the exploration phase, hoping to move to the production phase in the (near) future. More than 13,000 artisanal miners are, however (illegally) operating in its concession. These miners may only willingly leave the company’s concessions if they can access productive mining zones elsewhere, or can develop attractive alternative livelihoods outside the mining sector. Both the relocation and reorientation of artisanal miners are however problematic.

Relocation is constrained because legal access to productive artisanal mining zones is quasi non-existent. Two options to create additional space for ASM are currently being explored. First, civil society organizations lobby with the Mining Registry to force holders of “dormant titles” to either renew or renounce their exploration license. According to the Mining Code, an exploration permit is “dormant” if the holder has not started exploration activities within four years or if the license has not been renewed. When a dormant title is renewed, the holder automatically relinquishes 50% of the perimeter. The hope is to convert some of these “dormant areas” into AEZ, but so far this hope has not materialized. A second option is to create “ASM-tolerated” zones within mining concessions of LSM companies, e.g. in areas that are less suitable for industrial mining but still interesting for ASM. At the mining site of Luntukulu (located in the territory of Walungu – South-Kivu), for example, two cooperatives of artisanal tin and tungsten miners are operating in another set of Banro’s exploitation permits. As Banro focuses on industrial gold mining, both activities are not necessarily incompatible. The current Mining Code, however, does not allow LSM and ASM to take place within the same concession.[2]

A relocation of artisanal miners can further be complicated if miners are reluctant to migrate. Contrary to the image of highly mobile artisanal miners, the majority of miners we interviewed in Kamituga were not willing to migrate outside their “chefferie”. Kamituga may be an exception in this regard. In contrast with smaller artisanal mining sites, which sometimes consist of provisory camps, Kamituga is South-Kivu’s third largest town (after Bukavu and Uvira) with a population close to 200,000. Many miners have lived in Kamituga their whole life and have invested in a house which they share with their family. In case ASM would no longer be possible in Kamituga, the miners we spoke to would therefore rather reorient towards different economic activities than migrate to another mining site.

In terms of alternative activities, especially technical professions (such as mechanic and carpenter) and small trade activities were considered appealing. Most of our interviewees abandoned school at a young age, however, and have little or no professional experience outside of mining. Another frequently mentioned concern echoes that “everyone in Kamituga is a gold digger”, referring to miners’ impression that the entire economy of Kamituga depends on the money generated by the artisanal mining sector. Miners wonder who will be able to pay for their non-mining services if the gold from artisanal mining is no longer fueling the economy?

As compensation for quitting their ASM-activities, miners expect Banro to organize professional- and business training, as well as provide financial assistance during the start-up phase of a new activity. In addition, it is expected that Banro invests in public goods such as schooling, healthcare and infrastructure. These expectations may be unrealistically high: accommodating Kamituga’s population and its large number of artisanal miners largely surpasses the capacity and responsibility of a private company. Realizing this, Banro has teamed-up with a large donor (USAID) to address the challenge.

In theory, addressing the challenge could be financially supported based on mining royalties and taxes paid by LSM companies. The current Mining Code requires a retrocession of mining royalties to the local (15%), provincial (25%) and national governments (60%).[3] As mentioned above, the Congolese government is using the revision of the Mining Code as a leverage to increase its stake in industrial mining projects. If effectively paid, such royalties and taxes could imply considerable injections of cash, which – if managed properly – could provide communities with the necessary financial leverage to promote alternative livelihoods. It is currently unclear how the local, provincial and national governments will play a role in the public-private partnership that is being initiated by USAID and Banro. The Congolese government is eager to sell LSM companies the rights to exploit mining concessions. Yet, they have so-far remained largely absent from the mediation of socio-economic relationships between the companies and the artisanal miners living and operating in these concessions, thus failing to take up state-like functions, such as the negotiation of social peace and service provision. Their involvement is, however, key. Although state capacity is extremely low, the involvement of state-actors is crucial to counter the already visible “retreat of the state”.

 

Nik Stoop is pursuing a joint PhD in economics and development studies at LICOS (Centre for Institutions and Economic Performance, KU Leuven) and IOB (Institute for Development Policy and Management, University of Antwerp). He is affiliated to CEGEMI (Centre d’Expertise en Gestion Minière, Université Catholique de Bukavu). Detailed information on his research can be found at www.nikstoop.com.    

Janvier Kilosho Buraye is also pursuing a joint PhD in development studies and economics at IOB and LICOS. His current research focuses on the mining sector in East DR Congo, and specifically on the tension between artisanal and industrial modes of production. He is a junior lecturer at Université Catholique de Bukavu and a member of CEGEMI and the Laboratoire d’Economie Appliquée au Développement (LEAD–UCB).

Marijke Verpoorten is a lecturer at the IOB. She is also affiliated with CEGEMI, the African School of Economics (ASE-Benin), and LICOS. Her research focuses on the causes and consequences of armed conflict; natural resources; religion; global supply chains; and more broadly, on the economic and institutional development of Sub-Saharan Africa. Detailed information can be found on her website.

 

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[1] Over the past months civil society organizations have repeatedly denounced the lengthy revision procedure of the mining code (see here and here for more information). A proposal to increase the share from 5% to 35% was not well received by mining companies, which led the government to propose a reduced share of 15% (see here and here for more information).

[2] In April-May 2014, the Congolese Ministry of Mines and BGR conducted an audit of these artisanal mining cooperatives within the framework of CTC certification (Certified Trading Chains). One of the critical reasons not to award the cooperatives with certification was the fact that they don’t have any legal basis to operate in Banro’s concession.

[3] For precious metals, such as gold, the mining royalties are set at 2,5% of the sales value minus a number of deductible costs (DRC mining code 2002, Title 4, Chapter 3, Articles 240-242).

 

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