ZAMBIA HAS NOT UNDERSTOOD THE STATE OF DRC…8 years ago, we were producing more copper than DRC Today, they are producing three times more than us

ZAMBIA HAS NOT UNDERSTOOD THE STATE OF DRC…

…8 years ago, we were producing more copper than DRC. Today, they are producing three times more than us….

Guest Writer

It’s indeed important that you know DRC and appreciate its industry, its potential and its shortcomings. I am sure you are also conversant with the psych and spirit of the Congolese national, esp the intellectual or professional.

They are quite well-read on geopolitical strategic issues; they are quite nationalistic and they are quite proud. If we think that DRC will have a relationship with Zambia, in which we are the brain while they are the legs, probably we don’t understand our neighbor that well.

Look at what happened just a few years ago: FQM operated two mines on the border with Zambia: Lonshi which is 25 kilometers from old Bwana Mkubwa mine and Frontier which is just 1 kilometer from the Ndola-Mufulira Road (when driving to Muf, the plant looks like it’s in Zambia).

Both mines were sending concentrates to Zambia for processing. Katanga Governor, Moise Katumbi, suddenly barred FQM from any more export of the concentrates and both mines were subsequently nationalized.

Today both are owned by Eurasian Resource Group  (ERG) of Kazakhstan, one of the largest mining groups in the world. Today, Frontier produces about 100,000 tonnes of copper per year; that’s much larger than any mine in Zambia’s [old] Copperbelt.

Why is ERG or  Frontier Mine important to mention? It’s important because ERG first came to this region to Zambia. They are the owners of Chambishi Metals, now on care and maintenance. I hope you remember what happened to Chambishi Metals? They were abruptly taken out of business when Finance Minister Margaret Mwankatwe imposed some unreasonable duty on import of concentrates from DRC.

They were treating concentrates from Boss Mining and Frontier to produce copper and cobalt here. Mwanakatwe was ill-advised and she blundered big time.

ECL realized this gaffe and replaced her with Bwalya Ng’andu, a more reasonable and exposed Minister, with mining experience (he was HRM in ZCCM). Hon Ng;andu quickly reversed the import restrictions and removed the duty. It was too little too late; DRC banned export of concentrates to Zambia. Instead, they decided to produce in DRC using solvent extraction and export some concentrates to China.

The next mining house worth mentioning is Jinchuan of China. They are the owners of Metorex Chibuluma Mine of Kalulushi, now on care and maintenance. Jinchaun is big in DRC. They own the giant Kinsenda Mine and the Ruashi copper-cobalt complex. They own two other outfits at Dilala and Lubembe. Jinchaun is one of the largest producers of copper and cobalt in DRC. They are a 100% Chinese company, with a presence in Johannesburg because the company they acquired, Metorex, has registration in RSA. In Zambia, Jinchan just owns a plot in Kalulushi and a mine that is closed.

Then comes Glencore, the Swiss-Canadian, mining giant. They owned Mopani, Nkana and Muf operations + a smelter. Here again, their model was to use as much of the extra capacity in  DRC to feed the Muf Smelter in Zambia.

Not understanding the game of mining, and probably listening to bad advice from quacks, Hon Mwankatwe blocked import of concentrates from DRC ending up causing immense problems at Muf Smelter. Mining challenges, due to depleted ore at Nkana, Mindola and Muf, made Mopani to start failing to produce adequate feed for the smelter.

The Minister did not understand that DRC was doing us a big favor by allowing export of concentrates to Zambia. DRC concentrates kept Zambian smelters running and sustained jobs. Concentrate is like maize, while a smelter is like a milling company. It’s the maize farmers that keep a milling running. What Hon Mwanakatwe inadvertently did was to shut farmers from supplying maize to the miller.

That blind move killed Mopani. When Bwalya Ng’andu decided to lift the ban on concentrate import from DRC; it was too little too late, DRC had found a way of treating copper without us. The Zambian operation became unattractive and unprofitable to Glencore.

They sold Mopani to GRZ at $1 and exited.

Today Mopani is on its knees; they are in debt to Glencore ($1.5 billion), they have no concentrates to feed the smelter and they have no working capital. That’s the cost you pay for ignorance and/or ignoring expert advice.

Meanwhile, Glencore is just about the largest mining house in DRC. They own majority stake in Katanga Mining, which runs the giant Kamoto Mining and the DRC Copper and Cobalt in Tilwezebe. They have a balance sheet as big as almost all the Zambian mines combined.

As can be seen above, ERG, Jinchuan Metorex and  Glencore were once major players in Zambia. They are no longer here. They are in DRC running big outfits and making big money selling copper and cobalt.

There may be no proper banking or insurance business in DRC, in your opinion, but still these giants are operating from there. According to you, they will be attracted to bring their cobalt to Zambia because it has better banks and insurance companies. By the way, which Zambian banks and insurers are you thinking about: Natsave and  ZSIC? These are toys that can neither manage to buy one mining shovel nor insure it.

The neo-apartheid sank (ABSA and Stannbic) and the neocolonial bank (Stanchart) are not Zambian banks. As you have seen, these are controlled banks are controlled from either JHB or Dubai. Here they just have some pageant as a PRO, but calling him or her the Managing Director.

These are just colonial habits to portray that we have Zambians in senior management, despite them not making any major decisions locally except to approve petty cash vouchers or any other little borrowings at the level of a staff car loan to purchase some reconditioned car from Japan. 

I am not too sure we fully understand DRC. One of my friends was one of the project managers for the new Ndola Airport. I asked her what the feasibility study numbers looked like  in order to justify the business case for the new international airport. She told me they were looking at Ndola being the hub to service Zambian and DRC Copperbelt, meaning Lubumbashi and the wider Haut Katanga Province of DRC. 

I bounced this argument off my Congolese friend. She laughed and reminded us that it looked like Zambians still have a problem understanding DRC. Lubumbashi has a larger and busier international airport, called Luano. Why would Congolese need to come to Ndola?

It’s even a pity that Zambia hasn’t been following progress in DRC. There are many feasibility studies and projects going on in DRC to create more mines, more factories, more farms and rehabilitate many transport routes.

Lubumbashi is connected to Lobito in Angola by air, rail and road. Major works are in progress to improve rail and road connection to Dilolo on the DRC/Angola border. The Benguela rail and highway from Dilolo to Bengueula are completely modernized. Export cargo will move from DRC without passing through Zambia.

According to my Congolese friend and former school mate, Zambia has been identified in their SWOT as a threat. Our policies are erratic and our bureaucrats, including immigration and customs, treat Congolese with disrespect and xenophobia.

On the eastern side, DRC is in the process of mending the rail, roads and modernizing their waterways. There is existing rail, which is operational in most parts, from Lubumbashi via Likasi-Kamina-Kabalo to the port of Kalemie on Lake Tanganyika. From there, wagons or trucks are carried by ferry across to Kigoma in Tanzania and then to Dar es Salaam via the Capital City, Dodoma, by fast rail or through the highway.

DRC has just joined the East Africa Community because of already existing cultural and economic links, including transport infrastructure like roads and rail. Surprisingly, Zambia is not aware of all those developments in DRC and we are still dreaming about Ndola being the hub.

My encouragement to Zambians is that we should always be reading and checking what goes on with our neighbors. DRC embarked on an ambitious economic recovery programme a decade ago.

Kinshansa is to be the agricultural zone for the country; Katanga the mining zone, while Bas-Congo is  to be the centre of cement manufacturing. There are a few facts or statistics that Zambians ought to know about our neighbors in before making claims about business, including:

1. DRC produces more food in their farms than Zambia does;
2. DRC has more manufacturing industries albeit has far larger manufacturing output or manufacturing value added (MVA) than Zambia. Kinshasa, Kisangani and Lubumbashi are major manufacturing towns 
3. DRC is now a major manufacturer of cement in our region
4. DRC manufacturers sugar

5. Kishansa metropolitan has a population equal to Zambia’s a larger economy, measured by GDP, than Zambia’s
6. Kishansa, Kisangani and Lubumbashi are home to most of the manufacturing industry in DRC
7. DRC has more rail linkages than Zambia, Zimbabwe, Botswana, Malawi and Namibia combined
8. The economy of DRC is three times larger than Zambia’s

9. DRC mines, at 2.2 million in 2022, produced three times more copper than Zambia
10. DRC mines, at 120,000 tonnes in 2021, produced 60 times more copper than Zambia
11. DRC mines, at 850,000 ounces in 2021, produced 6 times more gold than Zambia

12. DRC currently produces over 25,000 barrels of crude oil per day in the coastal area in the Atlantic Ocean. New discoveries of oil (180 billion barrels) and gas (30 billion cubic meters) in the eastern DRC put the country only second to Angola in terms of oil reserves in Central and Southern Africa.

13. DRC produces over 14 million carats of diamond per year, mostly in the areas around Mbuji-Mayi.
14. DRC has proven reserves of lithium, the major mineral in battery exploration, amounting to 400 million tonnes at 1.65% grade, translating into 4.6 million tonnes of pure lithium. Please

15. DRC is also a major exporter of the 3Ts (Tin, Tungsten, Tantalum)
16. Despite having one of the most illiterate societies, DRC also boasts some of the most educated people in the world. The country has 29 public universities, 20 private universities and many colleges and academies. Congolese are generally very skilled as they learn crafts such as welding and carpentry vocational in secondary school. In general DRC has some of the most educated and qualified engineers, doctors and scientists in Africa.

17. DRC has more tourists than Zambia. Kinshansa is serviced by 13 international airlines. It has a larger and more modern airport than anything we have hre

Before dreaming to lecture DRC and think you can attract them to start manufacturing electric batteries in Zambia, it’s important to understand that country and begin to respect it. It will always help to plan in real time and realistic terms. It’s nice to dream, but a bit dangerous to hallucinate! Most of the talk about electric vehicle battery manufacturing in Zambia is actually hallucination. Congolese are richer, better exposed, better educated and more strategic. They are playing very calculated chess.

Exactly 8 years ago, we were producing more copper than DRC. Today, they are producing three times more than us.

Just thinking loudly …