Sickly Congo copper giant needs huge job cuts,...

Sickly Congo copper giant needs huge job cuts, cash
--------------------------------------------------------------------------------

Congo's debt-ridden state mining company Gecamines needs to cut almost half its 12 000 workforce and find hundreds of millions of dollars to fund a rebuilding programme, its new manager said.

Paul Fortin, head of a team of experts brought in by the World Bank to restructure and relaunch the ailing giant, said Gecamines would continue to seek foreign partnerships but also aimed to develop mines on its own.

At its peak, Gecamines produced nearly 500 000 tons of copper a year but production all but ground to a halt under the rule of late dictator Mobutu Sese Seko as the company's earnings were stolen and investment in infrastructure dried up.

Today output is below 20 000 tonnes a year.

"We are lacking liquidity so we are seeking more financing, we need several hundreds of millions of dollars," Fortin told Reuters at the weekend after making a presentation to businessmen and diplomats in Lubumbashi on Gecamines' business.

"I have the responsibility to stabilise and rebuild Gecamines. It will have to be able to work as a private company," he added.

He said the company was paying $- million in salaries every month, compounding its already vast debts.

"We have 12 000 workers but need to get rid of some 4 000 to 5000 workers. But they won't leave until we have something organised for them," he said. "They won't be kicked out onto the street."

Fortin said the company was discussing alternative income projects with non-governmental organisations and had union assurances there would be no strikes.

Gecamines has also opened up to the private sector in its bid to rebuild an industry once worth up to $900-million a year.

In Congo's mineral-rich southern province of Katanga it has begun 29 copper and cobalt mining partnerships with firms offering capital and technical expertise to reprocess slag heaps and open new mining ventures.

One of the most recent and more significant of these is a deal worth $1,6-billion over ten years with US mining giant Phelps Dodge, the world's No. 2 copper producer, to revive a mine expected to yield an annual 400 000 tonnes of copper. The project had been suspended during Congo's war.

Phelps Dodge Corp. President and Chief Operating Officer Tim Snider has described Katanga's Tenke Fungurume mine project as the largest untapped copper deposit in the world.

"Gecamines will continue partnerships. And we will ensure that they are well executed," Fortin said in his presentation.

"But we still have many sites that are still rich and we will exploit these ourselves to optimise the production of Gecamines ... I want Gecamines to return to being a motor of growth for Katanga," he added.

Congo is struggling to restore investor confidence after a five-year war that sucked in six neighbouring countries and has killed nearly four million people, mostly from war-related hunger and disease.

The vast former Belgian colony is due to organise its first democratic national elections in 40 years by the middle of 2006 but the process is threatened by logistical challenges, deep divisions within the interim government and continued fighting across much of the east.