Mineral Wealth of the Congo

A simple stroll down the streets of Kinshasa reveals how precarious life has become in the Democratic Republic of the Congo. This city of ugly half-finished buildings radiates both the optimism and the paranoia of a gold-rush town. Government banners strung across main avenues urge the citizens to stay cool: no more violence, no more hatred, no more manipulation and change your mentality. On the sidewalks below, the Congolese look sharp in their colorful dresses and short, wide ties (this was a Belgian colony, after all), but that only makes it sadder to watch them disappear down Kinshasa's muddy lanes and into its scrofulous shantytowns. In the city's center, traffic is so implacable that drivers are pushed relentlessly forward, sometimes peeling the doors off of parked cars when their owners try to squeeze inside. As I walk along a sidewalk near the headquarters of Congo's mining ministry, hands reach out of nowhere to unzip my attaché case. Sitting for a moment on a bench outside a major supermarket, I'm greeted by the shop's friendly security guards, who sit beside me and, within moments, rub their fingers together in a request for money.

White UN trucks and aid-group vehicles are everywhere. "Ninety percent of the NGOs appeared here when the World Bank, IMF, and European Union decided to give Congo money," says A.L. Kitenge, a local businessman and publisher of Entreprendre, a well-regarded investigative magazine. "We call them 'sucking pumps.' This is the common feeling of the Congolese about these NGOs." That may be, but experts say that the only real commercial drivers of the economy in recent years have been the NGO and UN communities. Pull them out, and the economy does a nosedive.

Outside of the fortified U.S. Embassy -- the State Department warns Americans not to come to Congo at all -- lies a swirl of beggars, barbed wire, homemade tin shacks, and one-legged soldiers limping on crutches. Hawkers materialize at the sight of me, shoving one item after another into my face -- counterfeit Chinese watches, leather cases, towels, jeans, muffins, peanuts, eggs, even the live chickens that lay them. At night, I accompany a French businessman to a stylish club filled with wealthy and welcoming Congolese, only to be confronted upon leaving by a cop demanding the inevitable payoff. "Whites are not allowed in that bar," he claims.

At Kinshasa's airport, doctors stand beside immigration officials; travelers arriving without proof of yellow-fever vaccination get jabbed on the spot. It's understandable: Congo has perhaps the most extensive collection of known and emerging infectious diseases in the world. And the State Department warns that "outbreaks of deadly viruses and other diseases can occur without warning and many times are not rapidly reported by local health authorities." Plague, malaria, tuberculosis, sleeping sickness, river blindness, Eh, hookworm, typhoid. I showed up in the middle of one of the worst Ebola outbreaks in years and left just before a cholera epidemic arrived. The few studies that have been done indicate that many citizens in the sub-Sahara are polyparasitic, or harboring two or more parasites, which, if not fatal, appears to affect cognitive function and wage-earning capacity. Intestinal parasites alone cause an "incalculable loss in human productivity," says the World Bank.

At Kinshasa's public general hospital, which hasn't received government funds for 25 years and where the yellowing walls are covered with cobwebs, it's commonly believed that citizens aren't allowed inside unless they can pay. "The situation is getting worse every day," says its longtime deputy director, Jean Marie Buana Ali. While he insists that doctors will dip into their own pockets to pay for medicines, many locals claim that patients die alongside their doctors if the cash isn't there. Meanwhile, private Chinese hospitals are springing up. "They're very expensive," Buana Ali says, "and use medicines we never learned about in school."

Chinese shops are abundant in the city, most selling counterfeit brands and employing the Congolese to do the peddling. "They pay them monkey-money," says Billy Mbudi Butshianga, who works as a consultant for Western companies. "How can you pay someone $50 a month when they have a family to feed? So employees steal without them noticing."

Inside the corridors of the mining ministry, federal police officers sit barefoot at desks by the elevators, eating meals brought to them in unsanitary pots. While driving his car out of the parking garage, a senior ministry official waves at an attendant who -- while nonchalantly pissing into a bucket -- waves back with his free hand. Just another day in the Congo.

"If we can take the Congo," Mao said in 1964, "we can have all of Africa." While Mao had revolution on his mind, today's party leaders understand that Congo's soil has every mineral known to man: 10% of the planet's known copper; 30% of its cobalt; 80% of its coltan (used in everything from PlayStations and iPods to magnets, cutting tools, and jet engines); and untold quantities of bauxite and zinc, cadmium and uranium, gold and diamonds. "Geologists just go into raptures about Congo," says Tara O'Connor, founder of Johannesburg's Africa Risk Consulting, one of the continent's leading corporate intelligence agencies. "The copper just bursts through the earth, and geologists wander around in a haze of ecstasy."

Congo should be one of the world's richest countries. Joseph Conrad's 1899 classic, Heart of Darkness, was inspired by the discovery of its fabled mineral wealth -- and the horror unleashed as those reserves were plundered. What the novelist couldn't know was that the looting would continue for another century and beyond. Always a troubled state, Congo has been systematically stripped by a succession of slave traders, Belgium's brutal King Leopold II (who made Congo his personal possession and a showcase for "civilizing the Negroes"), and a homegrown dictator, Mobutu Sese Seko, who presided over three decades of kleptocracy, using the state's mining monopoly as his personal kitty.

Today, the death toll in Congo -- "the world's forgotten crisis" -- stands at more than 10 times that in Darfur, according to the International Rescue Committee. Nearly 5.5 million Congolese have died since 1998 in the country's two civil wars and their aftermath, mainly from starvation and epidemics. Ongoing, rampant smuggling and corruption continues at all stages of the mining process, resulting in direct benefits to the state of a paltry $32 million in 2006. Of Congo's 65 million inhabitants, 80% live on 50 cents a day.

To understand how things got this bad, one must go back to when Congo was known as Zaire -- back to the reign of Mobutu, the leopard-skin-fez-wearing strongman who styled himself "the cock who leaves no hen untouched." Mobutu almost single-handedly destroyed an economy that was one of Africa's best in the 1960s. Then, while his starving people looked on, he bragged to 60 Minutes in 1984 that he was the world's second-richest man. Two years later, at the White House, President Reagan praised Mobutu (a useful Cold War ally) as "a voice of good sense and goodwill." Many Congolese will never forget those words.

Mobutu essentially replaced the country's formal, mineral-based economy with an utterly corrupt machine. "The parallel economy was not a simple substitute for the official economy," concludes Koen Vlassenroot, a Belgium-based professor and an expert on Congo's wars. "The official economy stopped functioning almost completely." When Mobutu was forced into exile, the network of graft he left behind was transformed into a minerals-based war economy run by invaders, rebels, and warlords -- and abetted by Western companies. Neighboring nations were willingly used as transshipment points for the contraband minerals.

Mobutu's replacement, Laurent Kabila (father of Joseph, the current president), canceled the contracts Mobutu struck with mining houses and dished them out to new companies to finance his war chest. As Laurent marched across Congo in 1997, so the story goes, he used a satellite phone to drum up $500 million in deals. When Laurent faced his own rebellion the following year, the Zimbabwean government stepped in, demanding access to minerals in exchange for saving him. Laurent was assassinated in 2001.

Between 1998 and 2001, coltan was the most desired mineral in the warring Congo and the United States was the world's No. 1 importer -- until China overtook it in 2002. Since then, cassiterite, a derivative of tin that is also used by the electronics and computer industries, has become the most coveted Congolese mineral (its use, ironically, makes devices more eco-friendly). Those booms have sustained a rebel occupation of two entire eastern provinces, where the bulk of those minerals are mined (in some cases by locals held at gunpoint by the rebels). Last June, after a decade of delay, the UN Security Council declared that its global peacekeeping operation should consider widening its mandate to prevent the illegal exploitation of resources from fueling violence. The Congolese representative pointed out that while "blood diamonds" might be better known, there was also "blood copper," "blood gold," "blood coltan," and "blood cobalt."

One UN report after another has laid out the wreckage from Congo's mineral-centric scrum: the looting of $5 billion of the state's mineral assets by an "elite network" of Congolese, Zimbabweans, and Belgian businessmen and politicians; rogue investors and their overseas bagmen, stretching from a company in Cleveland to tax-haven shells in the Caymans; and evidence of Rwanda, Uganda, and Zimbabwe "systematically exploiting" Congolese resources. As a Zimbabwean defense minister mildly noted of Congo, "A number of Zimbabwean businesses are taking advantage of the goodwill there. If they don't, others will."

"Put the Chinese in the bush," Victor Kasongo tells me, "and they survive with a bowl of rice. Europeans cost us too much. They need a satellite dish to watch rugby, casinos for the weekend. The Chinese just work, like soldiers."

I am sitting with Kasongo, Congo's most powerful mining official, in his office, which overlooks a squalid, windowless government building. An intensely focused technocrat in a square-cut suit, Kasongo was fresh from a trip to Beijing; scattered on the desk in front of him lay a dozen Chinese business cards. "Americans are focused on oil, but they're not focused on Africa for business," he tells me. "Americans are dormant economically."

I had arrived at a turning point for Congo. Kasongo and his colleagues were in the throes of a decision that will define the country's future for decades to come. The Chinese had recently offered up a then-secret multibillion-dollar mining-and-infrastructure package; Joseph Kabila's government was trying to decide whether to accept. If it did, the deal would mark China's largest single commitment in Africa up to that point, and in essence remake the economic map of the continent. If it didn't, Congo had the option of an alternative route devised by a Canadian mining lawyer who was installed by the World Bank in 2005 to rehabilitate the country's now-bankrupt mining monopoly. That plan envisioned a debt-clearing scheme leading to an eventual IPO on a Western stock exchange; it presumed major steps forward on transparency, as well as a two-year time frame to pull off. The Congo didn't have that kind of time.

By all accounts, Kasongo is a sharp and honest reformer. He alchemized a middle-class Congolese background into an engineering degree in Brussels and a job with Ernst & Young in South Africa before returning to rise in Congo's government. He knows how coveted Congo's minerals have become. "Rio Tinto is knocking on our door," he boasts to me, referring to the world's second-biggest mining giant. "But China sees those big companies -- Tinto, Billiton, all of them formed in colonial times -- and asks, 'Why make Tinto bigger?' "

"If China wants to dominate the world, it's not our business to stop them," Kasongo continues. "Who are we to close the door to them when we don't have water or electricity? If China doesn't come [to Congo], we're in big shit."

If Kasongo ever felt tenderness for China's competitors from the West, it has cooled considerably. On the day I arrived in Kinshasa, I watched a team of exhausted Congolese investigators holed up inside the mining industry until late at night. Stacks of yellowing contracts were piled high on the floor, representing 60 joint ventures the country had signed since 1997, mainly with operators from America, Australia, Britain, Canada, and Israel. With occasional help from Ernst & Young, Rothschild of Paris, and the U.S.-based (Jimmy) Carter Center, Kasongo's deputies were reviewing every detail, a process that has now taken a year. "Every contract is significantly flawed," a British adviser to Kasongo tells me. "Many of the deals were corrupt, and patently so."

Kasongo explains that only 5 of the 60 deals were producing minerals, while 6 projects were still in the feasibility-study stage. "And 49 are sitting there waiting for ... what, I don't know," he fumes. "Expertise? Financing? Investors? A better time to market?" Congo urgently needs those mines to come on line, he says, in order to keep the economy moving, however slowly. But 22 of these "partners" aren't actively mining at all -- they're riding the spike in raw-material prices, "making a fortune with rising share prices" on stock exchanges from Vancouver to New York to London to Johannesburg. "They are mining the stock exchanges, not the mines!" Kasongo exclaims. "We can demonstrate that $17 billion of [stock-market value] is built on a lie to the world. People make their bucks and forget about us. We need water and electricity. The Chinese say, 'We need minerals for growing, and you need infrastructure.' So we have the same interests."

Kasongo despises the old-style patronage deals in Congo, but he's also a realist; and everyone knows there are protectors inside the government. "His political position is delicate," says one insider. "Half the mining world wants him dead. There is a limit to how far Victor can talk about corruption on his side. But he can change the deals."

After I returned to the United States, Congo announced that it had accepted China's $6 billion offer (later upped to $9 billion), creating not only an enormous new source of cash and support inside the country but also a serious challenge to the Western companies that had operated there with little or no competition. Since February, Kasongo has been trying to renegotiate the most egregious of the old contracts in the ministry's portfolio. He's besieged by the old guard on one side, which still has plenty at stake in the existing deals, and the World Bank on the other, which is expressing concern that the China deal is corruption-prone and may saddle Congo with still more unsustainable debt on top of the $14 billion already owed to the West. As Kasongo explains, "We asked the World Bank for roads," but it wanted to attach too many conditions. "Obviously, we want human rights," he goes on, "and we have a mechanism in place, thanks to the Europeans. But Asians listen more to our concerns without being patronizing."

The Chinese, in other words, are long on cash and short on rules. One can't help wondering if Westerners ever really had a chance to compete in Congo. After all, what Western nation (or company) could take on such gargantuan risk -- especially in a country the World Bank ranks as the very worst place in the world to do business? As China's ambassador to Congo, Wu Zexian, has said, China won the contract because its no- strings offer was all upside for the Congolese government: "Unbeatable, one could say. Unbeatable by far. There won't be any competitors."

The 37-year-old Kabila, the first democratically elected leader since Congo's independence from Belgium in 1960, has staked his future -- political and possibly physical -- on the Chinese deal panning out. China's next trick will be to find a way to rip the treasure from the ground and move it out of a country the size of Western Europe but with scarcely 1,200 miles of decent roads, a decaying or nonexistent infrastructure, and an annual government budget of only $3.6 billion. But just as China has a coherent strategy for locking up raw materials, it now seems to be revealing a master plan for taking those materials back home. Of the $9 billion, one-third will be pumped into the Congo's war-ravaged mines. The other $6 billion will take the form of a soft loan (backed by some of the country's best mineral deposits) for new infrastructure, to be built by Chinese construction companies, primarily with Chinese labor. Indeed, when you study the outlines of the Sino-Congolese deal -- it features roughly 4,500 miles of rail lines and roads -- China's decision to launch its first "special economic zone," including a giant smelter, in adjacent Zambia makes perfect sense. The zone will serve as the hub of an industrial-distribution system linking Congo by rail and highway to Chinese-built networks in Zambia and Angola, and ultimately to ports on either coast.

China seems to be developing an extraction master plan for the sub-Sahara, linking Congo to Zambia and Angola.

Some critics fear the deal amounts to Congo's de facto colonization. But the package includes a mind-spinning 176 hospitals and health centers, a modernized sewer system for Kinshasa, two large universities, a new port, and 5,000 units of public housing. That kind of colonization might be worth thinking about. "What keeps me awake?" Kasongo asks. "If we fail to deliver water and electricity because we mismanaged our strong points [i.e., minerals]. Every day counts. We don't have means to deliver anything, but we can exchange what we have. If the Chinese are the solution, why not?"

In reality, China is part of the problem. Congo's official statistics show that its No. 1 export partner today is Belgium, followed by the United States. In truth, it's probably China -- thanks to that still-thriving informal economy begun under Mobutu. Kasongo estimates there are 1.5 million artisanal "diggers" in Congo -- black-market miners, many of them indentured to Chinese middlemen and financiers. These diggers currently produce about 75% of the minerals exported from Congo, he says, mostly by clawing for nuggets with pickaxes or their bare hands. The concentrate is typically loaded onto 30-ton flatbed trucks and smuggled to China on cargo ships via South African or Tanzanian ports. "Most of the Chinese are here illegally," adds Gaby Matshafu, one of Kasongo's deputies.

The government is trying to crack down on the smuggling, but policing Congo's gigantic border -- like patrolling Mozambique's coast -- is simply too big a challenge today. "We found 300 trucks lying in a queue along the border, with copper and cobalt to be processed in Zambia," fumes Kasongo. "Twenty-six smelters were waiting for it in China. We stopped it."

Kasongo seems destined to make more enemies still. One of the most controversial contracts he is examining, for example, involves a public Canadian-British entity called Katanga Mining. Congo's central bank governor sits on its board of directors and, until recently, so did the minister of portfolio. "There is no way we can run this country if people keep having conflicts of interest," says Kitenge, the local businessman and publisher. "Corruption at the top of the government is far beyond 70%. The economy is run by a mafia. And the poor are getting poorer every single day."

Like most China-Africa agreements, the fine print on the Congo megadeal has yet to be made public. But it's hard to believe that the standard pattern of corruption won't assert itself. Certainly the experience in the Congo of Frank He and Michael Huang isn't very encouraging. Before setting up their copper concession in Zambia, the Chinese brothers initially explored doing business in Congo. They left in the end, they told me, after finding the environment too chaotic and dangerous. At one point, according to Huang, Congolese immigration officials demanded a large bribe. Alarmed, the brothers called the Chinese embassy for assistance. This is the advice they received: "You came with money. Pay them."

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3 Comments

  • shar miss drc

    you cant just write that is ugly...some people will actually feel ofended with your website i dont want to cuss you yea but look for a formal way to write your shit

  • willy wacker

    I disagree with the perception Kasongo tries to create. He is in power since 4 years and to date the only thing what he has achieved is to discredit the Congo,made any project unfinancable while the country missed the biggest boom ever thanks to him.The revenues could have already started if he had not made sure that all are delayed + 3 years. The only person who benefitted financially to date was him ( as he is not as honest as he tries to portray himself)as is dealing the projects out several times. If the country could get rid of him and his cronies it would be a lot easier for the local population to benefit from the next boom at least.

  • Ann Garrison

    You say that, "In reality, China is part of the problem," and then detail the Chinese mineral smuggling that Kasongo is trying to stop. Obviously the Chinese black marketeers or whatever have more cash to throw at the smuggling than Kasongo has to throw at stopping it, but is Kasongo signing a contract with China, to exchange minerals, legally mined, for infrastructure, roads, schools, hospitals, clean water and electricity, going to affect the smuggling one way or another? Make it worse? He has to do something, so why not China? I've heard this story before; it's not great; China in Africa is anything but great, but you don't put forth another idea for the Congo, so this just seems hugely cynical. I also hear Africans and Congo friends looking at what China offers with eyes wide open and saying, "Well, it's the best deal on offer, and the only offer to build desperately needed infrastructure."