increased investment in the drc

Just an article off kitcometals.com

Mining investors welcome safer Africa, but are wary of government whims
February 11, 2005

Cape Town - Mining investors are taking a fresh look at Africa as conflicts wind down in the mineral-rich continent, experts and industry sources say, but they remain wary of risks such as sudden changes in government policy.

"The overall picture is positive, but there are areas that continue to be points of concern for investors," Mike Davies of consultancy Control Risks Group said this week.

"You're seeing a shift. Companies in Africa are generally much more interested in operational risk rather than security risk."

Investors are heading back to Angola, Mozambique and the Democratic Republic of Congo (DRC), which are on the mend after devastating civil wars, although the situation in the DRC is precarious, with rebel forces still active in parts of the east.

The African Development Bank said it had returned to the DRC, opening an office last week amid more signs of stability, although landmark elections due to be held by June might be delayed.

Timothy Read, the chief executive of Adastra Minerals, which is developing a copper-cobalt project in southern DRC, said:

"Risk management is very important for us. We are about as far from the trouble spots as London is from Moscow, [but] we have other issues like crime and low-level extortion, which are part and parcel of being in central Africa."


Most investors are happy with a new mining code launched by the DRC in consultation with the World Bank.

In Eritrea, which fought a civil war to secede from Ethiopia, Canada's Northern Mining Explorations launched a project after the security situation stabilised, but was broadsided by a surprise edict from the government.

Chief executive Carlos Bertoni said that in September the government suddenly ordered all mining firms to suspend operations, giving no reason.

Later it emerged that the government wanted to review its mining policy.

It allowed mining companies to resume work with some minor changes to the law, but the initial lack of communication sent some stocks reeling and did lasting damage among investors.

"I'm not sure if we'll be able to continue to raise investment funds for Eritrea," Bertoni said.

In South Africa mining companies say they need more clarity from the government on its proposals to impose royalties.