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RUEHFR/AMEMBASSY PARIS 1207
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RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE

UNCLAS SECTION 01 OF 08 KINSHASA 000791 
 
SIPDIS 
SENSITIVE 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, EEB/ESC AND CBA 
DOE FOR SPERL AND PERSON 
 
E.O.   12958: N/A 
TAGS: EMIN ENRG EINV EIND ETRD ELAB CG ZA SF
SUBJECT: DRC COPPER BELT: DREAMS, OPPORTUNITIES, AND CHALLENGES 
 
REF: A) KINSHASA 515 
B) LUSAKA 666 
C) LUSAKA 744 
D) KINSHASA 646 
E) KINSHASA 663 
 
¶1.  (U) This cable represents the sixth and final in an innovative 
collaboration in resource reporting and commercial advocacy between 
Embassies Pretoria, Kinshasa, and Lusaka (reftels).  Embassy 
Pretoria Minerals/Energy Officer and Specialist visited six of the 
largest mines in the DRC (and four in Zambia) May 12-23, accompanied 
by Embassy Kinshasa or Lusaka Specialists. 
 
¶2.  (SBU) SUMMARY: Global copper-cobalt supply shortage and 
commodity price escalation have provided the incentive for 
international mining companies to invest in new exploration and 
mega-projects in the DRC and the Central African Copperbelt.  The 
Copperbelt straddles the DRC/Zambia border and represents the 
world's greatest source of cobalt and the second greatest resource 
of copper, after Chile.  Combined copper production from both sides 
of the border is likely to reach one million tons within the next 
five years, a figure last achieved in the 1960s and 1970s before the 
wars in the DRC and nationalization in Zambia.  Investment has 
flowed into the region, despite significant lack of skills and 
infrastructure, in combination with an uncertain power supply. 
Recent actions by the DRC government and the Governor of Katanga 
Province have caused some uncertainty in the investment environment, 
which could have negative implications for incremental investment. 
The mining licence review and measures to fight mineral export fraud 
are intended to boost the DRC's income from copper and cobalt 
mining, but red tape, corruption, and higher taxes are driving up 
costs and uncertainty for companies.  Nevertheless, companies will 
persevere with short-term commitments because of the huge 
opportunities and costs already incurred.  End Summary. 
 
Compelling and Unique Geology 
------------------------------ 
 
¶3.  (SBU) All mines visited in both the DRC and Zambia occur within 
the world-renowned Lufilian Arc.  The Arc is a geological feature 
estimated to be 1,050 million to 650 million years old, which 
stretches some 500 kilometers from Angola in the west, across the 
southern DRC and into Zambia.  Earlier interpretations of the 
geology of the "traditional" Copperbelt envisaged a simple 
sedimentary-hosted, strata-bound type of mineral deposit.  More 
recent research has shown that the geology and mineral associations 
are much more complex, particularly in newer remote mines, and that 
mineralization differs in age and characteristics from mine to mine. 
 This has opened up a whole new vista of exploration targets.  South 
American copper deposits are bigger in tonnage, but DRC and Zambian 
deposits have much higher grades and many contain cobalt.  The DRC 
deposits also have higher grades of both minerals than their Zambian 
neighbors and leads to a conclusion that the northern "limb" of the 
Arc may have a different mineral footprint than the southern "limb" 
in Zambia. 
 
Increasing Government Take 
-------------------------- 
 
¶4.  (SBU) The Democratic Republic of Congo (DRC) is one of the most 
attractive mining areas in Africa, particularly since the post civil 
war elections of 2006.  Corruption and the smuggling of ores and 
concentrates across borders have deprived the government of tax 
revenues needed to fund the budget.  As a response, the Governor of 
Katanga Province last year banned exports of ores and concentrates 
containing less than 15 percent copper, and cracked down on customs 
agents involved in fraud.  These measures, combined with an overall 
rise in production, have increased government revenues, according to 
Katanga Mines Minister Bartelemy Mumba Gama in press reports, but 
 
KINSHASA 00000791  002 OF 008 
 
 
red tape and higher local taxes are driving up costs for companies. 
 
 
Review of Mining Leases 
----------------------- 
 
¶5.  (SBU) The GDRC claims that many of the mining leases signed 
prior to 2002, a time of civil war in the DRC, were one-sided in 
favor of the mining companies.  The current high prices of copper 
and cobalt have exacerbated these perceived inequities and the 
government asserts it is not receiving an appropriate share of the 
"windfall" revenues.  The GDRC announced early this year that it 
would review 61 mining licenses and that most contracts would need 
to be renegotiated, with respect to royalty payments and government 
ownership through mining parastatal GECAMINES.  Completion of the 
review remains scheduled for September 30.  Companies like 
Freeport-McMoRan (Tenke Fungurume), Metorex (Ruashi), First Quantum 
(Kolwezi Tailings), and Anvil (Kinsevere) are particularly 
vulnerable because they had negotiated a change in the license 
convention which reduced GECAMINES' share-holding, a practice 
reportedly not permitted in the current mining code.  A principal 
concern for the companies, NGOs such as the Carter Center who have 
provided technical assistance, and the USG has been the lack of 
transparency in the process. While the GDRC did publish general 
terms of reference for the contract renegotiation process, the next 
step for these vulnerable "category B" licenses is not clear and 
transparent as companies apparently negotiate one on one with the 
GDRC.  These companies fear that the license review could serve as a 
pretext to take concessions to award to Chinese interests as part of 
China's significant and opaque infrastructure loan (Ref A). 
 
Power and Infrastructure 
------------------------ 
 
¶6.  (SBU) Power (mainly hydro-electric) is generated in the DRC by 
Socit Nationale d'Electricit (SNEL), the government-owned 
electricity company.  Shortages of power are endemic in the DRC due 
to a lack of capacity for maintenance of turbines and transmission 
lines.  The mining companies have managed to secure a reasonably 
adequate and reliable supply through a number of initiatives ranging 
from financing to rehabilitating and building power lines, 
sub-stations, generation turbines, and DC-AC converter facilities. 
Comparable shortfalls apply to the country's road system, which is 
in a state of advanced decay.  For most mines, these roads are the 
only means of moving equipment, supplies, and product to site and 
market.  Rail lines are operational, but because of their limited 
range and coverage, as well as lack of rolling stock, skills and 
parts, and poor management, the rail service is expensive, 
inadequate, and inefficient, and generally avoided by mining 
operators where roads are an option. 
 
Social Commitments - A License to Mine 
-------------------------------------- 
 
¶7.  (SBU) All mines on the DRC Copperbelt, and especially in the 
remote areas, express commitment to programs of social development 
and upliftment on the mines and in the surrounding communities.  The 
mines would lose their "social license to mine" and encounter labor 
and community unrest without such programs.  All mines visited have 
robust social programs in place, generally tailored to the 
particular needs of the local communities.  Provisions include mine 
housing, medical, educational, power, water, social infrastructure, 
nutrition schemes, recreational facilities, subsidizing salaries for 
teachers and medical staff, and support for small business projects 
by providing the facilities, materials and markets for products, 
such as brick-making, vegetables-growing, Jatropha-growing for 
bio-fuels, and briquette-making using Jatropha residues.  A major 
feature of the social programs is the great effort being allocated 
for training locals, who in most instances have limited exposure to 
 
KINSHASA 00000791  003 OF 008 
 
 
the techno-industrial world.  Companies have committed to training 
and hiring locals to fill most of their mining positions.  It is 
widely perceived that Chinese and domestic mining companies do not 
adhere to the same commitment to social development, skills 
transfer/training, and safety. 
 
Mine Visits 
----------- 
 
¶8.  (SBU) The collective Embassies' mining team visited the 
following mines and facilities in the DRC: 
-- Tenke Fungurume Mining copper/cobalt open pit mine owned by 
Freeport-McMoRan of the United States (57.75 percent), Lundin Mining 
of Canada (24.75 percent) and DRC parastatal GECAMINES (17.5 
percent); capex $1.7 billion; hosted by the Processing General 
Manager Sam Rasmussen; 
-- Kolwezi copper/cobalt tailings project owned by First Quantum of 
Canada (65 percent), State-owned Gecamines mining company (12.5 
percent), South African government-owned Industrial Development 
Corporation (10 percent), International Finance Corporation (7.5 
percent), and the GDRC (5 percent); capex $553 million; 
-- Lonshi small open pit high-grade oxide copper mine owned by First 
Quantum of Canada (100 percent); capex $25 million; 
-- Frontier open pit sulfide copper mine owned by First Quantum of 
Canada (95 percent and Gecamines (5 percent); capex $226; 
(DRC Country Manager Jeffery Ovian accompanied the team on all 
visits to First Quantum mines) 
-- Ruashi open pit oxide copper/cobalt mine owned by Metorex of 
South Africa (80 percent) and Gecamines (20%); capex $220 million; 
hosted by Mine Manager Grant Dempsey; and 
-- Kinsevere open pit oxide copper mine owned by Anvil of Australia 
(95 percent) and Mining Company of Katanga (MCK) (5 percent); capex 
$420 million; hosted by Vice President DRC Operations Toby Bradbury. 
 
 
Tenke Fungurume an Awakening Giant 
---------------------------------- 
 
¶9.  (SBU) Tenke Fungurume Mining's (TFM) copper/cobalt oxide 
deposits comprise one of the world's largest and richest known 
copper-cobalt resources, which still remains extensively 
under-explored.  TFM is being developed west of Lubumbashi in 
Katanga Province for a 40-year production life.  It is considered a 
mega-project and will be the largest mine in the region.  The 
operator is Freeport-McMoRan, which holds an effective 57.75 percent 
stake.  Latest estimates show TFM investment will reach $1.7 
billion, nearly double the previous estimate, as a result of scope 
changes and cost of additional infrastructure.  Part of the 
investment will go to funding power and transport infrastructure 
needed by the mine and the region.  Major Capital Items ($-millions) 
include: 
-- Mining fleet                               $ 40 
-- Copper/Cobalt plant                        $410 
-- Indirect costs                             $232 
-- Total                                      $682 
 
¶10.  (SBU) TFM's high-grade oxide copper-cobalt deposits lie on the 
northern edge of the Lufilian Arc.  The geology is complex and 
mineralization has taken place in a number of events over geological 
time.  Subsequent tectonic action has given rise to multiple 
mineralized dome structures of which some twenty-one occur in the 
TFM lease area.  Currently three are being developed for mining. 
The dome structures are amenable to mining using a unique $1.6 
million U.S.-built Vermeer surface miner.  The surface miner uses a 
rotating drum studded with titanium-hardened steel to rip and 
fragment surface ore and waste rock down to a depth of about 60 
centimeters.  The rock is selectively removed by front-end loaders 
and transported to respective waste and graded ore stockpiles to 
await completion of the processing plant.   Mining has begun on the 
 
KINSHASA 00000791  004 OF 008 
 
 
first such outcrop known as Kwatebala.  Copper/Cobalt Ore Reserves 
and Resources estimates are: 
 
                          Million  Copper%   Cobalt% 
                          Tons 
Reserves                  100       2.27      0.33 
Resources                 503       2.80      0.24 
Total Reserves/Resources  603       2.71      0.26 
 
¶11.  (SBU) An oxide ore processing plant is under construction and 
commissioning is planned for early 2009.  The initial annual mining 
rate will be 115,000 tons of copper and 8,000 tons of cobalt, with 
plans to expand production to 400,000 tons copper and 28,000 tons 
cobalt in the next five years.  Processing will comprise a standard 
crushing, milling, and sulfuric acid leach circuit, followed by 
solvent extraction and electro-winning (SX/EW) of the copper to 
produce cathode copper.  A separate cobalt refinery will produce 
cobalt hydroxide.  Egress is a vexing challenge.  It will require 
some 450 truckloads per year on bad roads to carry copper cathode to 
Durban port for export.  The plant will also produce sulfuric acid 
for its own use and for sale.  Tenke management claims the mine is 
committed to zero discharge from its tailings reservoir. 
 
¶12.  (SBU) Freeport has agreed to supply a loan to the state power 
utility SNEL to fund investment in regional power infrastructure, 
including expanded electrical power-generation capacity and improved 
power reliability.  Rasmussen told the team that TFM will refurbish 
two of four turbines at the Nseke hydroelectric facility, providing 
250 megawatts of power of which TFM will use only 80.  TFM has put 
in place substantial social development investment, asserts it is 
committed to the Equator Principles, and works closely with a number 
of international NGOs such as Pact and ISOS to implement a robust 
social development program.  TFM currently employs 5,000 people, 
mainly from local communities, while under construction and will 
employ 1,000 employees when in full operation. 
 
Kolwezi Oxide Tailings Project - Cleaning up the Mess 
--------------------------------------------- -------- 
 
¶13.  (SBU) The Kolwezi Tailings project will ambitiously exploit one 
of the world's largest resources of primary cobalt, and also recover 
substantial amounts of copper.  These metals are contained in two 
immense dumps of floatation tailings from the treatment of 
high-grade ore from the KOV and other nearby mines from 1952 
onwards.  The then prevailing processing technologies techniques 
failed to recover large amounts of copper and cobalt, which were 
discharged into the two tailings dams.  The project is located 
outside the town of Kolwezi and west of TFM in Katanga Province. 
The area was the center of extensive mining activity in the 1930s to 
1960s and little care was taken in disposing of mine tailings, which 
were often pumped into streams and dams.  The project operator is 
First Quantum, which holds a 65 percent stake in the project. 
Management is bitter that the GDRC labeled this project as one of 
the few "Category C" projects, a designation for the recommended 
cancellation of a contract. 
 
¶14.  (SBU) The resources consist of two tailings dams holding 40 and 
72 million tons of "ore", respectively.  The 72-million ton resource 
is about 11 kilometers long and partially lies under a dam that will 
be mined by dredge.  The above-water portion will be mined using 
hydro-mining techniques using high-pressure water to break down the 
tailings into a sludge that will be pumped to a conventional solvent 
extraction/electro-winning (SE/EW) treatment plant.  The smaller 
resource will also be mined hydraulically.  The planned SE/EW plant 
will be the biggest in Africa at four times the capacity of First 
Quantum's Bwana Mkuba plant and twice that of First Quantum's own 
Kansanshi plant, both in Zambia.  The combined resource has been 
estimated as 113 million tons grading 0.32 percent cobalt and 1.49 
percent copper. 
 
KINSHASA 00000791  005 OF 008 
 
 
 
¶15.  (SBU) Project construction is under way.  Capital expenditure 
for the base case is estimated at around $553 million.  The plant 
will initially treat 2.5 million tons of tailings per year to 
produce 35,000 tons of copper cathode and 7,000 tons of cobalt 
hydroxide (about 4,200 tons cobalt metal equivalent).  It is being 
designed and constructed so that capacity can be doubled for an 
incremental capital cost of $40 million.  Thereafter, plant 
expansions will treat 4.3 million tons per year and produce 105,000 
tons of copper and 17,400 tons of cobalt hydroxide (12,600 tons 
contained cobalt) per year over 20 to 27-year life, depending on 
markets and practical experience.  Commissioning of the project is 
scheduled for the fourth quarter of 2009, and commercial production 
for the first quarter of 2010.  Electricity will be supplied be from 
Nseki and Nzilo hydro plants via a DC-AC converter station, and 
ultimately from Inga once the stations are fully operational.  To 
date there has been little action on the proposed construction of a 
3,000 MW Inga-3 hydro-electric facility on the Congo River. 
 
Lonshi Oxide Copper Mine - End of the Road 
------------------------------------------ 
 
¶16.  (SBU) First Quantum operates two mines in the DRC's "pedicle", 
with access from and egress to Zambia.  The Lonshi mine works a very 
high-grade (8-10 percent) copper oxide deposit located in the DRC on 
the border with Zambia.  It was the first greenfields copper mine 
built on either side of the Copperbelt in 33 years and produced 
520,000 tons of ore grading 10.3 percent copper in 2006.  First 
Quantum originally conducted exploration in the area to secure 
additional feed for its Bwana Mkubwa (BM) processing plant in Zambia 
and discovered the Lonshi oxide ore deposit in 2000.  The deposit 
was originally discovered by Belgian geologists in the 1930s, but 
was never worked. 
 
¶17.  (SBU) Lonshi ore is produced by conventional open pit truck and 
excavator/shovel mining methods.  The ore was for years trucked for 
processing at BM, which is a conventional copper oxide acid/leach, 
SE/EX plant located in Zambia some 35 kilometers to the west of the 
mine.  This arrangement is a bone of contention as the Governor of 
Katanga Moise Katumbi closed the border to ore exports from Lonshi 
in November 2007, despite Central Government approval to export, 
according to the company.  At the time of the team's visit the mine 
was sitting on some 700,000 tons of stockpiled high and low grade 
ore waiting for permission to move to BM.  At the same time BM had 
only one working SX/EW circuit, was importing feed from other 
sources, and was operating at less than 50 percent of capacity.  BM 
has produced cathode copper and sulfuric acid from Lonshi ore since 
¶1998. 
 
¶18.  (SBU) Lonshi is scheduled to cease production from its open pit 
at the end of this year and is currently sinking a decline to 
evaluate the viability of underground mining of sulfide ore.  It 
will take an estimated two years to convert to underground mining if 
proved viable.  (Comment.  It is not clear why the feasibility study 
was delayed until closure of the pit.  If Lonshi does proceed with 
mining sulfide ore it will need to build a concentrator or have to 
transport ore to Frontier mine for processing.  End Comment.)  First 
Quantum owns 100% of Lonshi and acquired full rights to the mine 
under the new Congolese Mining Code in August 2003. 
 
Frontier - a Lower Grade Mine 
----------------------------- 
 
¶19.  (SBU) First Quantum's $226.4-million Frontier copper mine, also 
located in the DRC pedicle, achieved commercial production in 
November 2007 at a plant throughput of 15,000 tons (design capacity 
of 22,000 tons) of ore per day.  The mine is 95 percent-owned by 
First Quantum and is a greenfield development relatively close to 
existing mine developments in the Zambian Copperbelt, which 
 
KINSHASA 00000791  006 OF 008 
 
 
facilitates issues of access and housing.  However, all mine site 
infrastructure was developed by the mine.  The mine is located in 
south-eastern DRC, 45 kilometers north of Ndola on the Zambian 
Copperbelt.  The main railway from the Copperbelt in Zambia to 
Lubumbashi in the DRC passes within 5 kilometers of the Frontier 
site. 
 
¶20.  (SBU) Mineralization at Frontier is sediment-hosted and occurs 
higher in the stratigraphic sequence than deposits in the 
traditional Copperbelt.  The deposit occurs within veined and 
altered sediments of the Katanga Group and is located in the 
south-eastern extension of the Lufilian arc.   The copper occurs 
mainly as sulfides within shales and conglomerates that have been 
highly faulted and folded.  Measured and indicated sulfide resource 
at a 0.35 percent copper cut-off totals 182 million tons of ore 
grading 1.16 percent copper, equivalent to 2.1 million tons of 
copper.  In addition, the deposit hosts an oxide/mixed resource of 
26 million tons grading 1.19 percent copper, equivalent to 310,000 
tons of copper.  The oxide/mixed ore is stockpiled separately for 
possible processing in the future or for treatment at Bwana Mkubwa 
plant, should the GDRC's ban on ore exports be lifted. 
 
¶21.  (SBU) Frontier is a conventional sulfide ore open pit mining 
and processing operation.  It has been designed to produce 
1,000-1,200 tons of concentrate per day containing 27 percent 
copper.  It produced 8,000 tons of copper in concentrate in 2007 and 
84,000 tons in 2008.  During the estimated 19-year mine life, 
Frontier is expected to produce 1.43 million tons of copper at an 
average 75,000 tons per year.  The total concentrate will be shipped 
for smelting and refining in Zambian facilities, at least until such 
are built in the DRC. During the teams visit, the mine had a 
concentrate stockpile valued at $100 million caused by the embargo 
on exports, which has subsequently been lifted.  The mine employs 
1,100 of whom 900 were local, and requires 26-28 megawatts of power 
from DRC utility SNEL, which is wheeled in through Zambia. 
 
Ruashi - Another Mining Superlative 
----------------------------------- 
 
¶22.  (SBU) Ruashi Mining Sprl is an exceptionally high-grade oxide 
orebody grading greater than 3.5 percent copper and just less than 1 
percent cobalt.  It also had some 3 million tons of stockpiled 
tailings from defunct mines, which enabled it to generate an early 
cash flow for mine development.  The bulk of that resource has been 
processed through the Phase 1 Concentrator.  The Ruashi mine is 
located only 10 kilometers from the Katanga provincial capital of 
Lubumbashi in southern DRC.  The mine is 80 percent owned by 
Metorex, a South African middle-tier mining company, and 20 percent 
by the state-owned mining company Gecamines.  Last measured reserves 
and resources are tabled below: 
 
                    Million Tons  %Copper %Cobalt 
Mineral Reserves    24,120,000     3.78    0.79 
Mineral resources 
-- Mining Pit       35,530,000     3.74    0.46% 
-- Stockpiles        2,720,000     1.86    0.35% 
Total Resources     38,250,000     3.61    0.45% 
 
¶23.  (SBU) Production at Ruashi was planned in two phases.  Phase I 
was commissioned in July 2006 to process some 56 oxide ore 
stockpiles and tailings dumps that surround the Ruashi and Etoile 
open pits (the Etoile pit was first mined in 1911) from a number of 
old defunct operations.  Phase II comprises plans underway to build 
a new solvent extraction/electro-winning (SE/EW) plant to process 
the high-grade Ruashi orebodies.  A future Phase III would involve 
underground mining of primary sulfide ore that underlies the oxide 
cap currently being mined in the pits.  The build-up of Phase II 
overlaps with Phase I and has resulted in higher tonnages treated 
and copper and cobalt output. 
 
KINSHASA 00000791  007 OF 008 
 
 
 
¶24.  (SBU) Production for 2008 is expected to increase as more ore 
from the Ruashi pit becomes available.  The Phase I mine and the 
Zambian Sable processing facility annually produce 10,000 tons of 
copper cathode and 500  tons of cobalt in carbonate.  Phase II will 
increase output by 45,000 and 3,500 tons, respectively, plus 500 
tons per day of sulfuric acid.  Phase II involves the expansion of 
the phase I concentrator and the construction of a new acid-leaching 
section, and an SX/EW plant for the production on site of copper 
metal (99.99 percent copper) and cobalt carbonate powder (25 to 27 
percent cobalt).  Capital expenditure for the metallurgical complex 
is forecast to be $180 million to treat 120,000 tons of ore per 
month from two open pits at a headgrade of 3.5 percent copper.  Full 
production is planned for 2009, and mine life is estimated to be at 
least 30 years. 
 
¶25.  (SBU) Currently, the oxide material is treated in the Ruashi 
concentrator where it is sulfurized and floated as an oxide 
concentrate.  The concentrate is trucked to Metorex's Sable refinery 
complex north of Lusaka where copper metal and cobalt carbonate are 
produced.  Production from the Ruashi open pits began in late 2007, 
the new copper refinery was commissioned at the beginning of 2008, 
the cobalt refinery should be commissioned by the end of the year, 
and the solvent extraction plant is still under construction.  Once 
in full production in 2009, Ruashi will produce 40,000 to 45,000 
tons per year of 99.99 percent copper metal and 3,500 tons of cobalt 
in carbonate.  An additional 10,000 tons of copper and 500 tons of 
cobalt in carbonate will continue to be produced at the Sable 
facility. 
 
Kinsevere - Anvil's Biggest Investment in the DRC 
--------------------------------------------- ---- 
 
¶26.  (SBU) Kinsevere is Australia-based Anvil's biggest investment 
in the DRC and is likely to become a large tonnage, high-grade, 
oxide-copper operation.  Phase I of the project includes a major 
open pit mining operation, a heavy media separation (HMS) plant, and 
two electric-arc furnaces (EAF).  Phase II will be a conventional 
acid/leach solvent extraction/electro-winning (SE/EW) circuit under 
development.  A potential Phase III could be the development of an 
underground mine to exploit the primary sulfide ore lying below the 
oxide cap, and the possible construction of a sulfide circuit to 
process the ore.  Phase I was commissioned in June 2007 at a cost of 
$35-million to produce 25,000 tons of copper per year.  Construction 
of Phase II began in the second half of 2007 and full production is 
expected by 2010.  The capital cost of this phase has escalated to 
$380 million.  The mine is located 27 kilometers north of 
Lubumbashi. 
 
¶27.  (SBU) The Kinsevere orebody is abnormally thick because the 
20-meter thick barren unit that usually separates the upper and 
lower orebodies of the Copperbelt is absent, and the overlying unit 
is also economic to mine.  The latest reserve/resource estimates 
shows 50-million tons of ore grading 3.6 percent copper, but low in 
cobalt, and containing 1.8 million tons of copper.  The deposits are 
hosted in the Lower Roan Supergroup/Mines Group in a mixed sequence 
of silica and carbonate rocks.  The ore forms an oxide cap more than 
100 meters thick, which overlies the primary sulfide mineralization. 
 
 
¶28.  (SBU) The Kinsevere mine has three ore bodies conducive to 
open-pit extraction, two of which are being developed for production 
and the third will be opened in about 9 years.  The ore is 95 
percent free digging and the stripping ratio is low at 2.7 tons of 
waste to 1 ton of ore.  Mining on both deposits has operated at full 
capacity since January 2007.  During the last seven months of 2007, 
the mine produced 13,006 tons of copper from concentrates grading 
27% copper.  When the two electric-arc furnaces are commissioned, 
which is scheduled for later in 2008, the mine will also produce 
 
KINSHASA 00000791  008 OF 008 
 
 
90-95 percent "black copper" ingots.  Kinsevere is forecast to 
produce 28,500 tons of copper in 2008, of which some 10,000 tons 
will be "black copper".  The mine receives 39.5 megawatts of 
hydro-electric power from SNEL.  Currently the fine tailings 
(average grade of 2.9 percent copper) and HMS light fraction 
(average grade 4.3 percent copper) are stockpiled for future 
processing in the Phase II SX/EW plant.  Phase II will produce 
60,000 tons of A-grade cathode copper (99.99 percent copper) per 
year by 2010. 
 
Comment 
------- 
 
¶29.  (SBU) A calculation of the copper and cobalt production from 
only the DRC mines visited shows that if all goes as planned, the 
six mines should produce about 260,000 tons of copper and 17,000 
tons of cobalt annually in the next two to three years.  Based on 
the mines' expansion plans, this could increase to over 700,000 tons 
copper and 65,000 tons cobalt per year within the next five years. 
These calculations do not take into account new and expanded 
production from other mines in the DRC or production from Zambia. 
The cobalt consumption estimate for 2012 ranges from 97,000 to 
105,000 tons.  There is a possibility that cobalt may be in over 
supply at that time. 
 
¶30.  These DRC mines with western investors are bringing significant 
skills transfer, social development, and tax revenues to the DRC. 
They are working with NGOs and the GDRC to integrate or ameliorate 
the lot of numerous artisanal miners.  The companies are grappling 
with uncertainty related to the DRC mining review, corruption, and 
dilapidated infrastructure.  The GDRC legitimately seeks to gain 
adequate benefits to the country through the license review, but 
still needs to assure transparent oversight and transfer of these 
benefits to its people. 
GARVELINK