Selection procedure Abstract Lundin Holdings was selected as a private partner for Tenke Fungurume Mining after it overran its competitors in a public bidding procedure. Lundin Holdings made an offer that Gécamines could not refuse: a huge financial input to reach a high production volume and a promise to start new mining activities in other parts of DR Congo then called Zaire. The Joint Venture between Gécamines and Lundin Holdings was created against a background of privatisations in the Zairian mining sector. This policy was promoted in Africa as a whole from the 1980s and early 90s onwards. For example, Zambia started privatising in 1989, after fierce pressure from international donors, the World Bank and the International Monetary Fund.26 Zaire followed this example, although it did not go as far as its neighbor, Zambia.27 Within a few decades, Zaire’s mining industry saw a steep decline in performance and revenue. On September 20, 1990, the Kamoto mine in the copper province of Katanga was confronted with a largescale mining catastrophe with, according to some sources, up to 500 victims. Kamoto illustrates as an example, the disastrous state of the industry after some 20 years of underinvestment and diversion of funds by the Mobutist system. 28 In 1991, donors and Bretton Woods institutions broke with president Mobutu’s regime. One reason was a (supposed) bloodbath by Mobutu’s Special Forces at the University of Lubumbashi. Another reason was Mobutu’s appropriation of US $400 million from Gécamines and his refusal to allow an audit of the firm’s books.29 Prime Minister Kengo Wa Dondo, who belonged to Mobutu’s inner circle, laid the basis for a privatisation policy. In 1994, he embarked on a program of “prudent privatisations”. This meant that Gécamines ceded its management and mining rights to Joint Ventures, in which private mining companies participated and in return brought in capital and expertise.30 Kengo Wa Dondo and his Minister of Mines introduced a number of “junior mining companies” (many of them Canadian) to the Zairian mining sector. Belgian historian Erik Kennes later observed that the last Ministers of Mines under Mobutu sold many concessions to the highest bidders, which were not always the most competent ones. This only increased the chaos in the Zairian mining sector.31 The first Joint Venture agreements were signed in September 1996, with Australian Anvil Mining and with Colmet International, a company registered in the Virgin Islands.32 To form a Joint Venture for the exploitation of the deposits at Tenke and Fungurume, Zaire launched an international bidding call on December 23, 1994.33 Initially, bids were asked from a limited list of ten mining companies. The names of the selected companies became known only years later.34
For an example, see Fraser A & Lungu J, For whom the windfalls? Winners and losers in the privatisation of Zambia’s copper mines, Lusaka 2007, p. 84. 27 Apparently, there was some resistance against total privatisation within Gécamines because of “the Zambian scenario”. See: African Energy Intelligence (AEI), n° 332, October 29, 1997. 28 This system can be described as ‘predatory patrimonialism’. In such a system, the presidency functions as a receptacle for the wealth yielded by the nation, and redistributes part of this wealth to buy the political, military and commercial elites’ loyalty to the regime. For more information, see: Fatal Transactions-NIZA-IPIS, The State vs. the people. Governance, mining and the transitional regime in the Democratic Republic of Congo, Amsterdam 2006, p. 13. 29 Reno W., art. Sovereignty and personal rule in Zaïre, in: African Studies Quarterly, s.d. 30 “Sous la pression des institutions financières internationales, une prudente privatisation du secteur minier fut entamée sous le gouvernement de Kengo Wa Dondo”, Kennes E, art. Le secteur minier au Congo: “déconnexion” et descente aux enfers, in: L’Afrique des Grands Lacs. Annuaire 1999-2000, p. 312. 31 Kennes E., o.c., p. 312. 32 Ibidem. 33 The Lutundula Commission’s report, p. 146. For more information about the commission and its report, see the box on p.21 of this report. 34 In 2005, the Congolese newspaper Le Potentiel listed these names: Iscor, Lundin Holdings, Southern Copper Corporation, BHP Minerais, Gencor, Anglo-Vaal Ltd, RTZ Corp., JCI, Anglo-American Corp. and La Source. Le Potentiel, Scandale minier au Katanga. Bradage de Tenke-Fungurume, February 23, 2005. 26
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