Despite the start of the European summer, relations between Brussels and Kinshasa seem to be cooling. While these relations have been progressively worsening for a while, the current impasse recently hit a new low with the visit in May of 3 Belgian Ministers to the Democratic Republic of Congo for a 4 day mission.

After what has been described as a difficult visit between the Belgian Ministers of Defence, Development and Foreign Affairs with President Joseph Kabila, Belgian Minister of Foreign Affairs, Karel De Gucht, opened the usual diplomatic evening cocktail with a very critical speech. Focussing on "good governance", the Minister pointed out the need for a campaign against corruption, transparency in public tenders, improvement of financial management and the fight against sexual violence in Eastern Congo. In front of Congolese diplomats and officials, he completed his lecture on "good governance" by saying: "Good governance means contesting the privileges of high-ranking persons. One must expect fierce resistance from those who are sacrificing the well-being of the Congolese people for their own interest. Good governance can only be materialised with the full support of the Congolese government and this support must now be stated in words but also in acts."

Earlier this year Zimbabwe’s President Robert Mugabe announced a widespread empowerment, or indigenisation programme which - ostensibly - is aimed at shifting commercial ownership from foreign to local hands. While the concept of economic redistribution is a completely understandable and necessary one, the manner in which this has been approached has done little to help either Zimbabwe or its people, and threatens one of the country’s sectors with the biggest potential - mining.

Across a wide number of sectors foreign-owned companies have been told that they must be prepared to willingly sell 51% of their shares or face expulsion and/or a revoke of operating licences. The move was condemned from a range of interest groups as highly irrational.

However, in the mining sector, only months after the process was revealed, the redistribution bid has dismally failed to attract the kind of attention Mugabe and the ruling Zanu-PF expected.

FOOD vs. SHARES

While official inflationary figures for Zimbabwe are becoming increasingly sporadic, the latest understood number (released for March 2008) stands at over 300,000%. Understanding this, quite simply, Zimbabweans can barely afford basic necessities let alone shares in mining contracts. Furthermore, the structure of the empowerment approach is understood to award Zanu-PF supporting members for their loyalty i.e. excluding the comparatively wealthy - and largely opposition supporting - diaspora with accessible funds in places like the UK.

As stated in his electoral programme, French President Nicolas Sarkozy has officially announced the review of the defence agreements between France and Africa. The review announced whilst in South Africa in February 2008 is part of the new African policy that is intended to replace the "Françafrique system". With the announcement comes anticipated changes and what many hope will result in a more open and less clandestine approach to defence policy dealings with Africa.

THE RELATIONSHIP SO FAR…

France has defence agreements in place with eight African countries, namely: the Comoros, Cote d’Ivoire, Senegal, Togo, Djibouti, Gabon, Cameroon and the Central African Republic. In Chad, while there is no specific defence agreement, a cooperation that enables the French forces to provide logistical support (such as transport, healthcare, and oil) and intelligence to that country’s army is in place.

As the global rush for commodities surges ahead, so too do the number of African countries contemplating reviews of their mining agreements in place. Increasingly mineral producing countries are realising the potential, and indeed the need, to benefit from record profits derived from their resources. This month’s CAI Mining & Energy newsletter looks at the rising trend of contract reviews, and specifically discusses the most recent case of Guinea.

SETTING THE TREND

On 1 April 2008 Zambia launched its new mining taxation code in a move which is anticipated to earn the country a further US$ 650 million this year. This will largely be earned from Zambia’s extensive copper belt and is set to benefit from the continued climb in the metal. In a similar move, the Minerals Commission of Ghana announced that mining companies will soon be mandated to pay more royalties through a new regulatory framework. The Democratic Republic of Congo (DRC) has also just concluded their mining review process – re-working a total of 61 contracts which were signed between 1998 and 2003 during the country’s civil war. Following suit, Tanzania has begun discussions to include royalty levies on its 2 most lucrative minerals – gold and diamonds. Under new legislation, mining houses are to be taxed the current 30% corporate tax as well as a 3% royalty tax for gold and 5% for diamonds. Lastly, Sierra Leone has stated that it will complete a review of all mining contracts by latest end-June 2008. While this is aimed at resolving disputes over licenses that were awarded to mining groups by the previous government, the move is undoubtedly also aimed at boosting the coffers and generating much needed funds for development.

South Africa’s power crisis has had a negative impact on all facets of life in the country. From the general public and small-scale business, to corporate operations, no-one has been immune to the power cuts which have been hitting South Africa since late-2007. Economically, the situation has had serious ramifications. From a mining perspective, the industry has been severely affected with electricity availability from state power utility Eskom being capped at 90% of usual demand for at least the next 4 years until the first major new power plant comes online. This is however seen as the best case scenarios, with previous announcements that the situation as a whole will be in place for at least the next 7 to 8 years. With this in mind, the mining sector, and indeed labour, have been presented with some serious challenges.

The discussion of the current political catastrophe (no longer to be considered just a mere crisis) in Zimbabwe by African states at one of the highest decision-making bodies at the United Nations - the UN Security Council - was applauded when member states of the African Union, under the stewardship of South Africa as current President of the Security Council adopted a resolution calling upon both President Robert Mugabe and MDC leader Morgan Tsvangirai to resolve the political crisis within 30 days, cease all forms of political violence and intimidation targeting Zimbabwean citizens, and abide by the outcome of the 2008 election results.

The Security Council-African Union Summit on 16 April 2008 did not translate into any concrete resolutions and strong political resolve to address one of Southern Africa’s gravest crises, arguably the worst since the heyday of Apartheid South Africa’s rule and the subsequent violence, political repression and anarchy that nearly ruined that country.

Instead this vital summit chose to regurgitate the same stale rhetoric on ways in which the African Union and UN Security Council could work together. In this regard yet another opportunity has been missed to translate the usual rhetoric echoed in the hallowed halls of world peace into concrete means and action through which these bodies could have shown actual progress in jointly addressing an actual political apocalypse in the making! While this assessment appears to be melodramatic, one only needs to mention Darfur, Ivory Coast, Somalia, Chad and of course the Democratic Republic of Congo and now also Kenya to illustrate the perils of inaction and of acting too late to avert major political crises.

Niger is presently the world’s third largest producer of uranium, after Canada and Australia, who hold 29% and 22% of the market share respectably. However, in Africa, Niger is the premier producer, accounting for 45.5% of the continents share, followed by Namibia (44%) and South Africa (9%). Niger’s large share of this geological treasure goes a long way in explaining why, in its desperate attempt to justify the Iraqi invasion, the Bush administration spread the rumour that Saddam Hussein secretly managed to obtain "yellow cake" from the weak State of Niger. However, this said, even if there were no secret deals between Niger and Iraqi, uranium has certainly been the cause of tension between Paris and Niamey this past July.

Only 8 months after the end of the political transition, there are new rumours of war in the Democratic Republic of Congo (DRC). Emanating from the very troubled provinces of the Kivus, the two provinces (north and south Kivus) are the epicentre of the Congolese conflict. It is in this area bordering Rwanda, where the rebellion started in 1996, and ethnic tensions between the Congolese Tutsis and other tribes remain a permanent feature. For three months, the tension has consistently increased due to actions of armed groups in the region. On the one hand, there have been repeated village attacks by the Forces Démocratiques pour la Libération du Rwanda (FDLR)1. In addition, the dissident and pro-Tutsi colonel, Laurent Nkunda2, has increased his military capacity in his stronghold in Masisi; and lastly, on a far more worrying level, targeted assassinations of local well-known characters are re-starting.