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Last Updated: Monday, 17 April 2006, 14:42 GMT 15:42 UK
Scramble for DR Congo's mineral wealth
A scramble for minerals has brought foreign money into the Democratic Republic of Congo province of Katanga - but not everyone is benefiting, reports the BBC's Michael Buchanan from Lubumbashi.

Miners examine find of copper stones
The mines have created some new jobs - but poverty remains rife
Lubumbashi has attracted the bulk of the foreign investment in DR Congo since a peace deal was signed in 2002 and it looks far better off than the capital, Kinshasa.

The traffic lights work and there are far fewer pot-holes in the roads.

Of the scores of business signs I have seen, my favourite is for the local fast food outlet, KFC - Katanga Fried Chicken.

The UN says there was almost $1bn of inward investment in 2004, the last year for which figures are available: an almost six-fold increase on the previous year.

Much of the money has come to mineral-rich Katanga, and specifically to Lubumbashi.

Ritchie Callaghan, a British businessman who has lived here for eight years, pointed out one of the new petrol stations that have recently been opened to cope with the increase in traffic, and the micro-finance bank that is helping the Congolese to take advantage of the new opportunities.

"There have been definite signs over the past two years that things are on the up", Mr Callaghan says.

Foreign money

Much of the foreign money here comes from American, Canadian, European and South African mining companies, keen to get their hands on some of DR Congo's vast mineral reserves of gold, diamonds, cobalt, copper and coltan, which is used in mobile phones.

DR CONGO MINERAL EXPORTS
Katanga province
Cobalt
Coltan
Copper
Manganese
Zinc
Ituri province
Gold
Kasai province
Diamonds
As DR Congo grapples with the logistics of organising the first multi-party elections in more than 40 years, the country's business community is looking on warily, since any instability that the elections might cause could hamper the progress that has been made.

Lubumbashi's most distinctive landmark is called Big Hill, a huge cone-shaped slag heap of copper, coltan and zinc.

It is now being processed by a joint venture between the state mining company, the George Forrest Group - a Belgian-Congolese conglomerate - and the American OM Group, which with more than $100 million invested in the project is the majority shareholder.

Jean-Pierre Zinzen, the secretary general of George Forrest, says DR Congo is an inviting location for foreign investors.

"The possibilities are so huge that it would be stupid to miss them," he says.

Scrutiny

Such joint ventures are nevertheless being closely scrutinised.

Jean-Pierre Zinzen
Jean-Pierre Zinzen denies that his company is exploiting DR Congo
In 2002, a UN panel recommended that 29 companies - including the George Forrest Group - face sanctions for their operations in DR Congo.

The panel's report accused the George Forrest Group of running its mineral operations in a way that took as much profit as possible out of the country, while bringing minimal benefit to DR Congo.

However Jean-Pierre Zinzen denies any wrongdoing.

"We are convinced that everybody here will profit from such investments, the people and the government because of all the taxes and indirect returns they will get," he says.

"If you have a look around, you will see that except for the new projects [that include] the participation of these foreign companies, there are not many other industrial activities."

Happy barber

Not everyone is sharing in the dividends. On a busy street lined with some grocery stores, a pharmacist, a small clothes shop and a hairdresser, the young pharmacist told me that he earned $4 per day.

Lwishiwishi mine
A tenth of world cobalt consumption is extracted from the Lwishiwishi mine in Katanga
"I haven't really seen the effects of this investment," he said.

"I actually studied law at university but because there isn't enough employment I had to open this pharmacy."

It was a sentiment expressed by several other shopkeepers, although further along, the barber was more optimistic.

He had cut an Indian man's hair that day, and had recently had American, Lebanese and Chinese customers - all of them working for mining companies, he said.

"I'm happy to see foreigners coming to my country. If foreign people are coming, we can move forward together. If foreign people are not coming, you can't go anywhere."




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