However, Reuters also reported that six major companies had walked away from the talks, including USbased Freeport McMoran, which is developing the Tenke Fungurume project, due to come on line in late 2009. Several firms denied this, stating that they were waiting to be invited back to the talks. Kasongo announced that the talks would be extended by 45 days to allow the remaining six contracts to be addressed. In December 2008, DRC's central bank governor cited the dragging process as a factor contributing to the acute downturn of the mining sector.

During the review, Kasongo had announced that the government would seek to privatise some of the state-owned mining companies. He indicated that the first flotation would take place within 12 months. At the time of going to press, it is unclear whether these plans have been affected by economic developments.

BMI launched coverage of DRC's tin mining sector in Q408. Congo is Africa's largest producer of tin and the east of the country is host to extensive cassiterite reserves. Over the long term, tin could play an increasingly important role in DRC's wider mining industry.

Though the long-term outlook appears sanguine, the outlook for the sector in the near term remains clouded. Armed groups continue to dominate illegal tin mining in the still war-ravaged east of DRC. This is preventing legitimate mining concerns from exploiting this resource successfully. In the most recent example, Kivu Resources announced in early October 2008 that it was declaring force majeure at its Mpama Bisiye mine in Kivu province, having failed to reach an accommodation with the Congolese soldiers who have occupied the site since December 2004.

Global Overview
It is not just DRC in which China is actively purchasing mining assets. On page 7 of the Researchandmarkets.com report, the analyst examines the phenomenon of increased Chinese activity in the global mining sector and what this means for the industry moving forward,  

Industry Forecast.
The DRC is ranked third in the world in the production of diamonds in volume terms. However, whereas this area was seen as a strong growth prospect for the country, the current slump in demand for diamonds is forcing producers to cut back on production and exploration. For example, in November 2008, Gem Diamonds announced the immediate suspension of all alluvial and dredging exploration in the DRC. Meanwhile, copper and cobalt mining has also been severely dented by a massive decline in demand particularly from China - and plummeting prices. Consequently, numerous operations have been suspended and projected copper production for 2009 has been halved. The analyst believes that growth, in real terms, will be negative over our forecast period, although the nominal value of the industry will climb, the Researchandmarkets.com report added. (Courtesy: Businesswire)

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook