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DE RUEHKI #0330/01 0781525
ZNY CCCCC ZZH
R 191525Z MAR 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5817
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK

C O N F I D E N T I A L SECTION 01 OF 02 KINSHASA 000330 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/08/2017 
TAGS: PGOV ECON EMIN ZA CG
SUBJECT: KATANGA'S NEW GOVERNOR: MAN WITH A BOLD PLAN 
 
 
Classified By: ECONOFF WBRAFMAN FOR REASONS 1.4 b/d. 
 
¶1. (C) Summary. Katanga Governor Moise Katumbi is an 
ambitious political newcomer with bold plans for Katangan 
revival.  His stated priorities for the province include 
increasing provincial revenue and supporting social 
development, and he has indicated his tactics will not 
necessarily be orthodox. End summary. 
 
Background - Skeletons in the Closet 
------------------------------------ 
 
¶2. (C) EconOff met February 21 with new Katanga Province 
Governor Moise Katumbi.  Katumbi is a young, charismatic and 
attractive - if not very intellectual - political newcomer 
and strong supporter of President Kabila. He is keenly aware 
of his popularity and the fact that it and his donations for 
public projects were the primary reasons for his election. 
Katumbi is a successful businessman; he owns the DRC's 
best-known soccer team and was co-founder of the Mining 
Company of Katanga (MCK).  Katumbi says his father is 
Jewish-Italian and his mother Congolese, but that he has 
renounced his Italian citizenship. 
 
¶3. (C) Katumbi also makes no secret of his ties to former 
Zambian President Frederick Chiluba and his currently 
contentious relationship with the GoZ. He told EconOff 
Zambian officials expelled him about three years ago because 
he supported Chiluba, including what amounted to a gift of 
about USD 15 million. Following Katumbi's recent decision to 
suspend overland exports of unprocessed ore into Zambia, 
discussed below and septel, the Zambian Task Force on 
Corruption sent a request to the GDRC that Katumbi come to 
Zambia to give oral evidence in pending matters. Contrary to 
local and international media reports, Zambian authorities 
have neither charged Katumbi with criminal offenses nor 
requested his extradition. (Comment: It is not clear if the 
export suspension and Zambia's request are linked, but the 
timing is suspicious. End comment.) 
 
PRIORITIES - INCREASING REVENUE AND SOCIAL DEVELOPMENT 
--------------------------------------------- --------- 
 
¶4. (C) Katumbi's stated priorities are to support economic 
growth that results in social benefits for the population. 
His tactics are aggressive.  The goal he particularly 
emphasized is to increase Katanga's income, and to do so he 
intends to leverage the province's economic driver - the 
mining sector.  His two-pronged approach is to combat the 
illegal export of ore, while pressuring mining companies to 
comply with their concession agreements.  The DRC loses 
millions of USD annually in revenues from ore through theft, 
smuggling and fraud, particularly by way of the Kasumbalesa 
customs post in Katanga.  Katumbi said he considers the 
numerous small to medium-sized trading firms operating in 
Katanga to be chiefly responsible for this illegal activity, 
including, per Katumbi, about 70 Chinese companies and 
several Indian and Pakistani firms. 
 
¶5. (C) Katumbi put his words in action March 6, when he 
ordered the suspension of unprocessed ore exports from 
Katanga, following his visit to Kasumbalesa.  The Vice 
Minister of Mines told EconOff Katumbi did not have authority 
to take this action, and said the Ministry sent its Secretary 
General to investigate.  (Comment: The GDRC has not publicly 
condemned this action. End comment.) In an Official 
Communique and letter announcing this suspension, Katumbi 
says he took the action to stem customs fraud that results in 
the loss of public revenue. 
 
¶6. (C) Katumbi is targeting the higher end of the mining 
sector - large foreign mining companies - as a means to 
increase public revenue.  He expressed particular concern 
about the loss of revenue due to companies who hold but have 
not developed mining concessions.  During the meeting with 
EconOff, and recently in public, he said companies that do 
not comply with their agreements with the GDRC and Gecamines, 
the DRC's copper/cobalt mining parastatal, will face 
consequences that could include revocation of their 
concessions.  (Note: Provincial Governors do not have the 
power to annul or enforce mining agreements. End note.) 
According to the DRC Managing Director of First Quantum 
(Toronto and London AIM-listed), Katumbi privately told First 
Quantum that mining companies will do what the GDRC tells 
them or face problems. In discussion with EconOff, Katumbi 
did not seem to care greatly about pressing for the review of 
most existing joint venture contracts with Gecamines. 
 
KINSHASA 00000330  002 OF 002 
 
 
 
¶7. (C) The new Governor also told EconOff he will 
unilaterally withhold forty percent of GDRC income generated 
in the province.  The new DRC Constitution stipulates that 
the provinces are entitled to a forty percent share of 
national revenue, but it does not clarify how that process 
will work, nor does it authorize provincial governors to make 
this determination.  Parliament must pass legislation to set 
out the procedure for this revenue-sharing arrangement; it is 
expected that the law will require all provinces first to 
remit all national revenue to Kinshasa and await the 
40-percent retrocession. Katumbi made clear to EconOff he 
believes he and the province have enough political and 
economic clout to take unilateral action. 
 
¶8. (C) Katumbi spoke at length about the need to develop 
sustainable development programs in Katanga.  He said mining 
companies in particular need to take a major role in this 
socioeconomic effort. While World Bank projects might be 
useful, according to Katumbi they need greater oversight, 
transparency, and management. 
 
CONFLICTS OF INTEREST 
--------------------- 
 
¶9. (C) During his meeting with EconOff, Katumbi made several 
remarks suggesting conflicts of interest.  For example, he 
repeatedly praised Nikanor - a London AIM-listed 
copper/cobalt mining company in the DRC. Several days later 
international trade media reported a USD 30 million deal 
construction contract between Nikanor and MCK, the company 
Katumbi co-founded and from which he claims to have divested. 
(Note: Katumbi also mentioned several times he remains close 
friends with his former partner, MCK's current owner. End 
note.) By contrast, he made repeated, negative references to 
Belgian businessman George Forrest, including a comment that 
Forrest's mining company contract with Gecamines is the only 
one the GDRC should seriously consider reviewing. He denied 
his views are influenced by the fact that Forrest's mining 
and construction businesses are MCK's and Nikanor's 
competitors. 
 
COMMENT 
------- 
 
¶10. (C) Katumbi is not afraid to cut corners to fulfill his 
populist promises to Katangans of economic prosperity and 
social development.  He is willing to take unilateral action 
on issues the national government has thus far failed to 
address, such as ending customs fraud and smuggling of 
natural resources from Katanga. Whether he actually has the 
public good or his own interests in mind is, however, 
debatable.  In any case, as the hand-picked gubernatorial 
candidate of insiders close to Kabila, Katumbi will be reined 
in should he roam too far. End comment. 
MEECE