EXTRACTIVE INDUSTRIES

The main minerals are copper, cobalt, zinc, diamonds and columbo-tantalite (coltan). Cadmium, cassiterite (tin ore), gold, silver, wolframite and uranium are mined on a smaller scale. Most mining of base metals takes place in Katanga. Diamonds are mined in East and West Kasai. Smaller-scale production occurs in Equateur and Orientale province. Coltan and cassiterite have become important exports in Maniema, North and South Kivu. Orientale province and in South Kivu have large gold deposits.

Based on 2006 reports, mining accounted for 16% of GDP in the Democratic Republic of Congo. Most of the mining sector was nationalized in the 1970s. State-owned companies include:

• Générale des carrières et des mines (Gécamines): copper and cobalt mines in Katanga
• Miniere de Bakwanga (Miba):kimberlite diamond mining in Kasai
• Office des mines d'or de Kilo-Moto (Okimo): gold mines of Kilomoto

The Société minière et industrielle du Kivu (Sominki) which controls the gold and cassiterite deposits in Maniema and the Kivus remained in the private sector. The 2002 mining code) has paved the way for the return of international mining companies. However domestic and international criticism over the terms of the joint venture contracts signed between international companies and Congolese mining parastatals - particularly those signed during the period of the political transition (2003-06) has forced the government to open a complete review of existing mining contracts. The report of the Mining Contract 'Revisitation' Commission has been submitted to the government in November 2007. The next steps of the 'revisitation' process are unclear.

Recorded production by Gécamines, which averaged around 500,000 tons/year in 1980-87, reached 36,388 tons in 2006. However production from international mining companies and their joint ventures with Gécamines contributed at least another 70,000 tons during the same period, although this does not appear in the official statistics. Official cobalt production was 10,841 tons in 2006, excluding production from the parastatals joint ventures, international mining companies and artisanal mining. Artisanal diamond production increased from 19 million carats in 2003 to 29 million carats in 2005, but decreased to 26 million carats in 2006.

After a rise in output in 2003-04, Miba's industrially mined kimberlite diamond production collapsed in 2006-07. Miba entered into several joint ventures with international diamond-mining companies during 2005-06, including SouthernEra (Canada) and De Beers (South Africa).

Recorded gold production is low, although the industry is almost entirely unregulated and smuggling of artisanal production to Uganda and Burundi has been rampant for years. International companies are exploring Kilomoto gold concessions in Orientale province, including AngloGold Ashanti (South Africa) and Moto Gold (Australia), but formal production has not started yet. In South Kivu, Banro (Canada) started exploring the Twangiza gold deposits in late 2004.

Although the DRC's formal mining sector declined during the war, output from informal mining increased. Informal mining includes activities without an official government-issued concession-mainly small-scale mining-which are not systematically recorded. According to IMF estimates, informal diamond mining in 2004 reached a record 22.1 million carats, compared to 8.8 million carats produced by formal industrial miners. Other informal mining activities include production of gold, coltan, cassiterite, heterogenite, silver, cadmium, magnesium, coal and zinc. However, there are no credible statistics on production for these products.

In 2007 informal mining continued in areas under both state and rebel control. Dissident military leaders, Congolese Mai Mai and Ituri militias, and Rwandan and Ugandan rebels controlled large swaths of the mineral-rich eastern provinces and illicitly produced and traded mineral resources. Even in areas under state control, such as Katanga, Global Witness reported that a large portion of the copper and cobalt produced there was mined informally and exported illicitly, with the collusion of government officials.

Although informal mining offers income opportunities where opportunities within the formal economy are limited, it also has serious negative consequences. In the rebel-held areas, informal mining fueled violence, while in Katanga, the practice deprived the state of valuable revenue.

The DRC is a small oil producer. Output is located both onshore and offshore in the locality of the Congo River estuary. Total output reached 7.59million barrels in 2006 (20,794 barrels/day), down from 7.7million in 2005 and 10.1million in 2004. 70% of production is offshore, and half of this is owned by Muanda International Oil Company, which is in turn owned by Perenco Oil (France). The rest of the offshore concession is owned by Union Oil (USA) and Teikoku (Japan). Onshore production has is operated by Perenco since the withdrawal of Ocean Oil (Canada).