Banro Corp. fka BAA

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From your perspective, what are the challenges confronting the mining sector in the region?

http://www.ipad-drc.com/Pages/Detail/22423

- The current review of the DRC Mining Code: Considering the current worldwide trend of national resources nationalism among politicians, their drive to maximise tax revenues in the short term, and the very high and sometimes unrealistic expectations from the various stakeholders, mining operators are facing an economic context that is more and more uncertain and difficult, characterised by a reduction in mining grades, an increase in production costs as well as low metal prices. It is important that the Congolese State, in its review of mining contracts, guarantee both the stability of benefits offered to investors, in addition to adequate tax incentives and transparency in their application, which will have the effect of attracting the much needed large investments to develop the country.

- The current deficit of electricity available for mining projects: Since the current energy deficit is enormous in the DRC, it is important that we collectively look beyond the current short term arrangements to rehabilitate existing infrastructures or buy electricity from neighbouring countries, and that we truly commit to creating new energy production infrastructures.

- The poor and insufficient basic infrastructure: In a country that is 80 times the size of Belgium, the lack of adequate infrastructures such as roads, railways, ports, airports, etc. leads to very high logistics costs, which results in high operational costs and lower profit margins for operators, and reduces our country’s competitiveness. It is crucial that the Congolese State pay particular attention to this issue and mobilise the resources necessary to develop adequate infrastructures.

- Artisanal mining challenge: Whilst the Congolese State is allowing some areas to be exploited by artisanal miners in an attempt to try and reduce unemployment and community distress, the negative impacts of these activities (landslides causing fatalities, high rates of school drop outs and low levels of education, high rates of early pregnancies, high rate of sexually transmitted diseases, high incidence of criminality and prostitution, environmental impacts, etc.) and the risk of sterilization of vast areas with high mineralogical potential (the presence of thousands of artisanal miners on a potentially rich site has the effect of stopping any large investment) should encourage all parties of the mining sector, in addition to the Congolese State and civil society, to look for alternative solutions in order to create employment and business opportunities in lieu of forfeiting long term potential grow of the economy.

- The enigmatic trilogy between the State/Government, mining companies/investors and civil society/local populations: These three parties are often stuck in fruitless talks, since their respective expectations don’t seem to be addressed. It is essential that each party clearly understands and play its own role in the first place: the State is responsible for ensuring security, stability and the transparency of laws/regulations, and for offering tax incentives to attract investments. Mining companies are responsible for bringing in capital and technology, developing projects in strict compliance with applicable laws including social and environmental requirements, paying taxes and ensuring an adequate transfer of knowledge. Local communities are responsible for taking ownership of employment and business opportunities generated by investments, engaging in a constructive way with mining operators to find solutions to various issues and acting in a responsible manner in the provision of labour and other services.

- The 2015-2016 electoral timetable and its associated measures, as well as the splitting of provinces into new ones: The available information still lacks clarity: the latest development is that the national independent electoral commission, or CENI (Commission Electorale Nationale Indépendante), indefinitely postponed the elections for the governors and deputy governors of the newly created provinces in the face of legal, logistical and other constraints. Governance of the new provinces, without a clear administration in place (governors, deputy governors, etc.), is a problem;

- Lack of security in some areas due to the presence of uncontrolled armed elements.