The DRC : Working in an Emerging Democracy

The mining sector is expected to play an important role in the recovery of the DRC from war and social disruption experienced in the late 1990s and early 2000s. The return of peace and democracy has encouraged a new stability in the country and mining companies are working to re-establish an industry with the capacity to create a sound export base for the DRC economy.
More Information (CIA World Factbook/DRC)

Anvil, as one of the first companies to take up development and production after five years of war, has highlighted the potential to establish successful mining operations in the DRC Province of Katanga. The Company has also developed a blueprint for maximising local employment and benefits from mineral production.

One of the key factors in the DRC recovery has been the strong international support for democratic and administrative processes.

Initial peace agreements brokered by South Africa led to the establishment of a transitional Government in 2003. Backed by the European Union and the United Nations, the transitional government oversaw the drafting of a new constitution, which was ultimately supported by more than 80% of parliamentarians.

Presidential and parliamentary elections, the first elections in 40 years, were held in the DRC on July 30, 2006 under the guidance of the European Union Electoral Observer Mission (“EU EOM”) and MONUC, the United Nations mission to the DRC. Throughout 2006, DRC voters went to the polls to elect parliamentary, regional and local representatives. Joseph Kabila was declared the winner of the Presidential election on November 15, 2006.

Local enthusiasm for the democratic process contributed to high voter turnouts and generally orderly conducted polling elections around the country.

During the transitional period, the World Bank and the International Monetary Fund returned to the DRC to support new business development and economic activity. This support has included the introduction of political risk insurance. At the same time, the revised modern mining legislation introduced with the help of the World Bank has provided some transparency and security for potential investors.

Such positive developments are generating renewed interest in the long recognised economic potential of the region. From 2005 to 2009, Congo projects raised over $3 billion on Canadian and UK Stock Exchanges. Anvil alone has raised more than $400 million during this period. The trend is likely to accelerate as more companies establish successful operations.

Approximately 90% of Anvil's employees are DRC nationals and local evidence shows that the multiplier effect of direct employment is approximately 10 to 1, highlighting the strong flow-on effect of major resource projects. Locally based engineering, construction and service companies have played an important role in developing new projects for Anvil and the relationships are likely to strengthen as service sector capabilities increase.

In the long-term, the DRC’s future lies in a diverse broadly based economy capable of competing on world markets. In the short-term, the mining sector in Katanga is likely to be the key factor in kick-starting the long anticipated recovery of the DRC economy.