Quarterly reoprt due at the end of this month.A report on...

Quarterly reoprt due at the end of this month.
A report on exploritory drilling imminent.
AND -- Congo Elections -------

Congo mining appetite not dimmed by violence fears
Fri Oct 20, 2006 8:43 AM GMT

By David Lewis

KINSHASA (Reuters) - Foreign mining companies are hungry for a share of Congo's vast mineral wealth and this appetite will remain undimmed whoever wins this month's decisive presidential election run-off, businessmen and officials say.

Only a return to all-out war in Democratic Republic of Congo would seriously deter investors, they add, and fears of violence surrounding the October 29 run-off are far outweighed by investor interest in the country's treasure trove of metals and minerals.

The announcement in August of the deciding contest between President Joseph Kabila and Vice-President Jean-Pierre Bemba triggered fighting in the capital by soldiers loyal to the two candidates. At least 30 people were killed.

This stoked fears of a potentially violent run-off after the generally peaceful July 30 first round, the first free election in more than 40 years in the vast, former Belgian colony.

Foreign and Congolese businessmen say the elections were always going to be a turbulent but they are a necessary step towards rebuilding the country after a 1998-2003 war and resulting humanitarian crisis that killed four million people.

Foreign mining companies have been lining up to invest billions of dollars in Congo's rich reserves of copper, cobalt, gold and coltan, a mineral used to make mobile phone chips.

"There has been no reason to reduce the appetite for the Congo," a senior member of the Federation of Congolese Businesses (FEC), who asked not to be named, told Reuters.

"Unless there is prolonged fighting over the results, people are not going to lose interest," the official added.

Much of the investor interest focuses on the southern province of Katanga. The copper belt which runs through Katanga into neighbouring Zambia contains an estimated 34 percent of the world's cobalt and 10 percent of the world's copper reserves.

Copper prices of more than $7,000 per tonne and new mining techniques capable of exploiting Congo's oxidated ores have helped lure investors to the province.

RISING INVESTMENT

New projects should help more than triple the region's copper output to over 1 million tonnes in five to 10 years, industry sources say.

"We don't see the elections as a problem," said a senior official from U.S. giant Phelps Dodge, which will invest more than $1 billion in a project in Katanga over the next five years.

Phelps Dodge was "in full throttle", bringing in heavy equipment and setting up transport routes for the copper and cobalt project at Tenke Fungarume, the official told Reuters.

"There is a lot of pent-up interest. So long as the elections stand, irrespective of small bumps in the road, people will keep coming in," the official added.

Kabila's influence in his native Katanga province remains strong and, having overseen many of the recent mining deals, the incumbent president, who replaced his assassinated father in 2001, is seen as the preferred candidate by the business sector.

"Business doesn't like change," the FEC official said. "Any changes in politicians bring changes in the rules of the game. They know the systems that have been established since 2001."

Playing on the failure of Congo's wealth to drag ordinary people out of their misery, Kabila's rival Bemba has raised eyebrows by accusing the president of selling the country to foreigners and vowing to review mining contracts if elected.

But, should Bemba overcome the odds to defeat Kabila, who won 45 percent versus his 20 percent in July, analysts say the former businessman is unlikely to take radical steps.

"This is just populist rhetoric for the elections," the FEC official said. "He might target a couple of businesses, maybe those particularly close to Kabila. But he knows a generalised attack on mining would be suicide."