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AMERICAN MINERAL FIELDS AND THE COPPER AND COBALT OF CONGO: EXCLUSIVE INTERVIEW
>Behind the aggression by the Anglo-American-Rwandan-Ugandan-Burundian facilitated by Congolese rebel puppets - under which the Democratic Republic of Congo (DRC) has been subjected to -since 1998, there is an important stake for transnational mining companies and corporations, as a report by a UN panel of experts on the plundering and exploitation of Congo's mineral and natural resources - the first that was issued on 12 april 2001- indicated. Contested by the United Kingdom and the US who back the Rwandan-Ugandan-Burundian coalition, the UN Security Council had to commission another report which has just been published on 22 October 2002. The second one is a typical white wash, putting the legitimate government of Kinshasa and its allies on the same box as looter together with the invaders who are illegally looting Congo's riches.
Congo remains an attraction for giant multinational mining companies, such as American Mineral Field, given the fact that mining resources in other countries of the world have already been heavily exploited, not to say exhausted, and those, which are being exploited, are associated with tremendous costs.
I interviewed Tim Read, AMZ's Chief Executive based in London. Mr Read said 'he was very optimistic about the new political developments in the Democratic Republic of Congo and consequently, our two projects in that country, Kolwezi and Kipushi'.
Here is the integrality of the interview:
ARL: The honeymoon between the new leadership in Kinshasa and AMZ was short-lived and relations soured almost immediately as soon as President Laurent Désiré Kabila settled in Kinshasa. What went wrong between your company and the regime of the late President Kabila?
TR: I think there were probably misunderstandings on both sides. It was a very different management group to the management group that we have at America Mineral Fields now. The management of AMZ changed radically at the end of 1998 but before that time, there had been some degree of dispute (…) between the government and AMZ. But in the middle of 1998, AMZ established a joint venture with Anglo-American. And then in November 1998, they concluded a convention, and they concluded a contract of association with the government and with Gecamines and an agreement on the project was then effectively reached. The problem of course, was first of all that, at the time the joint venture between Anglo-American and AMZ was put in place, and the original approach to government made - and that would be about July 1998 -the war started, an invasion took place. That made it extremely difficult to finance a major scale project in Congo because of the war and concerns by the banks.
ARL: You refer to some degree of dispute between the government of President Laurent Désiré Kabila and AMZ. Was President Kabila to blame as we read it in the media here?
TM: No, I don't think that President Kabila was to blame. Once the joint venture was structured between Anglo American and AMZ, I don't think President Kabila was responsible for holding down the project or having it delayed. The issue for me I would say was the fact of a much more fundamental problem which was caused by first of all the invasion. Secondly, the fact that there was not a good relationship between the government of Congo and the multilateral agencies, I mean the IMF and the World Bank. There was a combination of raisons there, and I wouldn't wish to blame the government of Congo. It was a very difficult situation. But I think I would prefer to look forward rather than review some of the history of the situation. What we have at the moment in the Congo is a new president with a new cabinet and a new set of policies, all of which give potential investments a great deal more confidence into the country.
ARL: So what sort of new agreements have you reached with Gecamines and the new government of President Joseph Kabila regarding the project?
TR: Over the course of the last years, we have worked closely with Gecamines, that is Anglo American and ourselves, in trying to find a very sensible and practical way of moving the project forward. And that meant a number of things. On the one hand, we scaled down the size of the project. On the other hand, there has been a re-negotiation of some of the commercial terms of the project and that has required a degree of give and take on both sides between ourselves and Gecamines and the government. Under the new terms of agreement, both AMZ and Anglo American will hold 60% of the joint venture company called Congo Mineral Developments (CMD) and Gecamines earning 40% of it. But we are also agreeing to make payment to Gecamines over the life of the project in addition to their 40% interest exceeding $200 million. Those payment were agreed between ourselves and Anglo American and Gecamines. Having agreed all these terms with Gecamines, we are now going through the process of completing the convention, getting the council of the ministers to sign the convention and then we will wait for a series of either constitutional or presidential decrees to put in place a number of things. The first thing is that there will be a very small modification of the mining code. In order for us to complete this transaction very quickly, the government has agreed to make an interim amendment to the mining code which provides us with protection and allows us to achieve security of tenure on the project which is very important, notwithstanding the government's fundamental revision of the mining code in about six months'time.
ARL: How do you feel about the political and security risks which are still there, namely that the invading troops have not pulled out completely and the intercongolese dialogue has not taken place yet?
TR: We are aware of all these political risks. We are in contact with the government and a lot of the players. We met with the new prime minister and former governor of Katanga Augustin Katumba Mwake in January this year and we have a close relationship with a lot of the politicians there. And one of our senior executive is currently in Kinshasa in discussion with the government. So we are following the situation closely. I met with President Joseph Kabila in February and I was very impressed with the young man. I thought he had a great deal of understanding of the issues and he was obviously very strong about the need for disengagement by all the belligerent nations. And yet he gave us a very strong reassurance that he was looking to pursue a policy of first of all good governance for the Congo but also to create an environment which will be attractive for foreign investors. And I strongly believe that this project will be the first major project to be started and to be financed in the Congo.
ARL: How long do you think this government will last?
TR: I think we have to deal with the government and take it completely at its face value. I think that this government is very well supported by the United States, France, Belgium and Great Britain on the basis of the policies and the actions that has been taken by President Joseph Kabila which have also impressed the IMF and the World Bank. To be honest this government is much more open than the previous one. So we are very hopeful that we will not be disappointed. Progress is being made. Congo will recover its territorial integrity national sovereignty because that is what the people really want. It is amazing that they have never fudged about it despite all the troubles since the 60's.
ARL: A commission formed last year by the UN Security Council to verify the extent and methods used by the invading armies present in Congo in exploiting Congolese natural resources. Do you feel concerned?
TR: No, we are not concerned. I have not seen the report but I would be surprised if we were mentioned because our involvement has really been one of monitoring what has been taking place so far. We have been in a phase of negotiation. We haven't produced any metal over that time since the war broke out. Most important of all, we have absolutely no dealings with the invaders or any of the rebels. We have taken an absolutely consistent approach. We have dealt with the government of President Laurent Désiré Kabila and after his murder, we are dealing consistently with the government of Joseph Kabila. And we haven't dealt with any other parties. We have been approached by people. We have a number of contacts that have been made with us by some of these parties but every time we repeated the same thing to them that we can only continue with our involvement - as a mining company not involved in politics - with the legitimate government that is in power. And that legitimate government at the moment is the government of Joseph Kabila. But I think the report has clarified what the motivations were behind what has taken place over the last two and half years in Congo.
ARL: Can you tell us how long this project is likely to last and when you are actually going to start?
TR: We have probably a matter of a month to resolve all outstanding documentary issues and paper work but we know there is a great pool of good will in government to see this done very quickly. We will then put in place a feasibility study which will take about six months. We have done a great deal of work over the study already. We have had a small pilot plant running in Johannesburg treating this material. So we fully understand what the process chemistry is. We know the reserves. They are fully substantial and the project can take up to 30 years. We are completely confident about the geological and mining aspects.
If feasibility study is completed by the end of this year, then it will probably take up to a year to organise the finance of this project. And you have to remember that this project will be the largest project in mining and metals undertaken outside of South Africa in the whole of sub-Saharan Africa. It is a very major project. It will not be easy given the political risks in the country to get this financed quickly. It is going to be a challenging process. The way it will be financed will be partly by our shareholders and those of Anglo American. But it will also be financed by the lending banks and you have to satisfy the lending banks that their money is not at risk. That will depend to a great deal on President Joseph Kabila being able to deliver peace and a stable economic regime to the country.
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