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New Market Research Report: Congo, Dem. Rep. Mining Report Q4 2013

Recently published research from Business Monitor International, "Congo, Dem. Rep. Mining Report Q4 2013", is now available at Fast Market Research

 

Boston, MA -- (SBWIRE) -- 10/16/2013 -- The Democratic Republic of the Congo (DRC)'s vast mineral resources will continue to attract greater international interest, given the country's huge untapped and high-grade reserves and improving, though still very poor, business environment. In terms of growth potential, the industry is one of the most attractive in Sub-Saharan Africa (SSA). We forecast the value of the sector to rise sharply from 2011 levels to US$2.5bn in 2017, mostly driven by copper and gold production. However, while we expect substantial growth in mining output, risks to investment remain numerous, with security concerns and the lack of adequate infrastructure most pressing.

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Ore To Play For

After half a century of decline and unrealised potential, the DRC's mining sector is on the verge of rapid growth, as several huge gold deposits are developed. Numerous large-scale projects are coming online in the next five years, with perhaps the most notable being Randgold Resources' Kibali gold mine, which is expected to come online in 2013. The mine has reserves of 13mn ounces (moz) and is one of the largest gold projects due to come to fruition in the next few years.

As well as gold, there are several significant copper projects due to come online. In addition to their size, the copper deposits in the DRC are attractive due to their high copper grade. The Kipoi and Kamoto mines are estimated to contain grades above 3.0%, significantly higher than the world average of 0.6%. This will be an increasingly important issue as some of the world's largest mines, including Antamina in Peru, Escondida in Chile and Grasberg in Indonesia, have experienced falling ore grades and thus higher extraction costs.

While the potential is clear, political impediments are likely to remain, as conflict continues in the east of the country, where much of the mining occurs. The potential for political ructions will continue to pose downside risks to mining sector growth.

Key Players

We expect numerous new players into the DRC's mining sector over the coming years as the country's undeveloped mineral reserves, attract further investment in the country; our forecast that metals prices will remain elevated is an additional attraction. At present, there are only a few mining companies present, mostly small or mid-tier gold and copper miners. Anvil Mining is a leading copper miner in the DRC, with facilities at Mutoshi and Kinsevere. The company was acquired by China Minmetals and is the first acquisition (of what we expect to be many) by a Chinese company of mining companies in Africa.

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