EU Involvement in DRC Mining Project Draws Protest

LONDON - The involvement of the
European Union in a mining project in the Democratic Republic of Congo
(DRC) has drawn a chorus of protest from local and international human
rights advocates. They say the project is rife with problems relating
to transparency and accountability.

Located some 175 km
north-west of the DRC city of Lubumbashi in Katanga province, the Tenke
Fungurume vein is thought to be one of the largest unexploited seams of
copper and cobalt in the world.

It has proven alluring to mining companies in recent years as the DRC
attempts to extract itself from a civil war during which some six
million people have died.

Mining of this resource has fallen to Tenke Fungurume Mining SARL
(TFM), a joint concern combining Gecamines, Congo's state mining
concern, with Lundin, a Swedish mining company, and the U.S.-based
mining concern Phelps Dodge.

The latter merged with gold-and-copper giant Freeport-McMoran in 2007
and has since become Freeport-McMoran Copper & Gold Inc.

After construction on the Tenke mining facility commenced in 2007, the
European Investment Bank (EIB), the investment arm of the European
Union, agreed that same year to help finance the project with a loan of
100 million euros.

It regarded the project as ''highly significant from an
economic and developmental point of view'' and that ''environmental and
social issues (connected with the project) have been subjected to
careful in-depth analysis...''

However, the EIB's move has been criticised both by international
bodies, such as the Paris-based Les Amis de la Terre (Friends of the
Earth), as well as local organisations in the DRC, such as Action
Contre l'Impunite pour les Droits Humains (Action against impunity
towards human rights).

''The EIB seems totally unaware of what was going on during the signing
of the (Tenke) contract and their assessment seems purely financial,''
says Anne-Sophie Simpere, a campaigner for the reform of international
financial institutions working with Les Amis de la Terre.

''We feel that they shouldn't finance that kind of extractive industry
project in Africa until they have experienced staff to assess it.''
Objections to the project have ranged from what groups say was an
inadequate consultative process (the use of French language documents
to explain the Tenke endeavour to a largely-illiterate,
Swahili-speaking population) to the displacement of local residents
from towns such as Mulumbu to make way for mining activities before
replacement housing had been built for them, rendering them essentially
homeless.

Perhaps even more controversial, in June 2005 the Lutundula Commission
concluded that Lundin Holdings made its first payment towards the Tenke
concession - totalling nearly 50 million dollars - in 1997. This was a
year after it had gained the concession in what was viewed as a largely
non-competitive bidding process.

The Lutundula commission consists of Congolese parliamentarians charged
with investigating business contracts signed during DRC's civil war.

The deposit, the commission discovered, was paid into the account of
Rwanda-based Comiex Limited, a company partly owned by Laurent-Desire
Kabila, the Congolese rebel leader who had just seized power in the DRC
after ousting long-time dictator Mobutu Sese Seko.

Kabila was assassinated by one of his own bodyguards in 2001 and his
son, Joseph Kabila, the DRC's current president, assumed the office
that he holds today.

Recently, the Congolese government completed a further
year-long review of 61 mining contracts in the country, the results of
which have not yet been officially announced. Lubin and
Freeport-McMoran are among those whose contracts are being reassessed.

Requests for comment by Lundin Holdings went unanswered. The
EIB, for its part, takes a more circumspect view of the situation, and
points to the fact that the disbursement of the loan has been put on
hold pending the outcome of the mining review.

''The EIB is aware that a review of the mining projects in the DRC has
been published, and an independent commission established to
renegotiate the mining contracts,'' says Una Clifford, a press officer
with the EIB.

''The EIB's discussions with the project sponsor have been suspended
pending clarity on the final outcome of the work undertaken by the
independent commission.

''The EIB has conditionally approved a loan of 100 million euros for
Tenke (but) this loan will not be signed until the bank receives the
final go-ahead from the DRC government.''

The Tenke controversy is illustrative of the discomforting ways that
commerce and political patronage frequently intersect in foreign
companies' involvement in the DRC.

South Africa's AngloGold Ashanti mining company has come under
fire for links with and payments made to the Front Nationaliste et
Integrationniste (FNI), one of several ethnically-based militias that
helped turn the eastern Congolese region of Ituri into a killing field
earlier this decade in a conflict that claimed at least 60,000 lives.

One former leader of the FNI, Mathieu Ngudjolo, is currently awaiting
trial at the International Criminal Court in The Hague for war crimes
and crimes against humanity. Another, Floribert Njabu, is currently in
detention in the DRC's capital of Kinshasa.

For its part, the Australian company Anvil Mining, the leading copper
producer in the DRC, has been accused by human rights organisations and
investigators for the United Nations peacekeeping mission of having
provided logistical support to the Congolese army during their siege of
the town of Kilwa. At least 73 people were killed in that town, which
is in Katanga province.