1. What is your stance on the current status of the mining industry in the DRC?
The DRC has to be if not the, then one of the, best minerally endowed countries in the world. Many of the minerals are key components of the global drive to more environmentally friendly energy solutions, Copper, cobalt, tantalum, tin and others. We have brought a new mine into production this year and there are others in construction. On the face of it, I believe the DRC mining industry is healthy and in for a good year.
2. How has the future been positively/negatively impacted by the new Mining Code?
Mining requires very large and long term investments. Mining investors have to take a view on a whole range of potential influences on an investment in the sector both in the present and often over 20 years into the future. The greater the uncertainty around any of the parameters the greater potential return will be required to offset this. Investment capital is probably the most skittish thing on the planet, if there is the slightest change in the risks it is facing, it will quickly move to a different asset, asset class or location.
The DRC is gifted with a mineral endowment that helps stir aspirations of stellar returns for mining investors, as such some are prepared to take the time and effort to do the analysis that may lead to an investment. This analysis has to take into account all the potential risks and rewards that may transpire over the life of the mine. Most of these are beyond the control of the target company, or the DRC government. I believe that it is incumbent on the custodians and participants in the sector for us to minimise the risks prospective investors need to consider. Changes to fiscal codes introduce a significant degree of uncertainty into the industry. This reduces the number of investors and increases the rate of return they require to invest, which raises the cost of capital to the country for this sector.
3. What do you think is necessary to ensure a future of growth for the DRC mining?
For as long as there is a demand for the commodities that are produced from DRC mines I think that DRC mining will continue to grow. I think this process could be accelerated and increased by frank dialogue between all the parties involved in the sector. Perceived risk requires demonstrably higher returns to warrant an investor applying their funds to a project. I do believe that there are perceived risks that can be relatively easily addressed through open dialogue between all parties. I think there are also perceptions about relative returns, actual economic splits and impediments to improving these that can be addressed. The DRC has a treasure trove of mineral wealth, with a paucity of investors and operators. Much of this gap is due to perceived risks and relative returns. These can be addressed.
4. Why do you feel it is important to attend and participate at DRC Mining Week?
The DRC Mining Week is a terrific event to be able to meet, listen to and see most of the influential parties involved in DRC mining, making it an efficient use of one’s time.
Mining Review Africa is the premier media partner of DRC Mining Week: www.miningreview.com