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Congo and Central Africa

Diamonds were first discovered in what is today the Democratic Republic of Congo (DRC) in 1918, at Bakwanga. The Bakwanga Hill deposits, a grouping of diamondiferous kimberlite pipes in the south-central section of what was then the Belgian Congo dumbfounded geologists by the extraordinary size and richness of their diamonds - more than a hundred times richer than the South African mines. The problem was that nearly all the diamonds - between 85 and 98 per cent - were industrials. World War II, however, offered new uses for industrial diamonds, and the Belgians, working in partnership with De Beers, commenced large-scale production. By 1954, Congo was producing close to three-quarters of the world's output of diamonds, selling its goods at a then impressive $20 per carat. In the early 1960s, Congolese mines provided 80 per cent of America's supply of industrials, for the manufacture of grinding wheels, mining drills, and other abrasives utilized by the mining, construction, electronics and aircraft industries. Congo's annual output in the early 1970s was 17 million carats, more than a third of the world's output.

The instability and massive corruption that accompanied independence, however, ensured that most of Congo's diamonds were sold illegally by national and international entrepreneurs through Congo-Brazzaville. With no diamond mines of its own, Congo-Brazzaville actually became, for a time, the world's largest diamond exporter. This problem was matched by a fall in the price of industrials. In 1978, Société Minière de Bakwanga (MIBA) based in Mbuji-Mayi (Kasai), which produced 10.5 million of the country's 17 million carats, received only $81.6 million for its output - or, for its entire production of gems and industrials - $7.77 per carat. 1978 was MIBA's best year in over a decade. President Mobutu nationalized a one-half interest in MIBA in 1969, and in 1973 he expropriated the other half. In 1978, facing failure, he invited the Europeans back. By the time Mobutu was overthrown, however, almost every industry in Congo, including its diamond mines - operated largely as an informal sector enterprise - had collapsed.

Today, almost all of the nation's valuable gemstones are mined from the alluvial sites on the Kasai river and its network of tributaries in the province of West Kasai, centred at Tshikapa, some 350 kilometres west of the kimberlite pipes of Bakwanga. Most of these areas have been occupied in recent years by the Zimbabwean army and Congolese Government forces. In mid-2000, the Congolese government reached an agreement with an Israeli diamond company, Dan Gertler Diamonds, giving the company exclusive rights to buy Congo's production. The contract, giving Dan Gertler Diamonds rights to a potential diamond flow of 600 million dollars a year, has led to a significant decrease in official diamond exports. At the beginning of 2001, the Congolese government announced that it would liberalize the diamond industry.

In Kisangani, more than half the population makes a living in one form or another from diamonds. In a region where government services, including the police and army, are largely non-existent, the borders are more porous than ever, making diamond exporters of all of Congo's neighbouring countries: Uganda, Rwanda and Burundi. Observers also see a possible overlap between the economy in eastern Congo and UNITA's ongoing trade in diamonds. UNITA, the Angolan rebel movement, has been forced by several successful government offenses to move its bases north, where it has struck an alliance with the rebel movements in Congo.

Strategic, Political and Economic

The current Congo crisis, which has drawn in the armies of at least eight African countries fighting alongside three local factional armies, is marked by complex strategic and political interests. Rwanda and Uganda, the two countries which instigated the recent conflict and which remain crucial players, were both allies of Laurent Kabila in his successful fight to oust Mobutu Sese Seko. Subsequently, both were dismayed by the incompetence and corruption of Kabila's regime. Uganda in particular was disappointed by Kabila's failure to stop the operations of the anti-Museveni (Sudan-backed) Alliance of Democratic Forces, a brutal if largely ineffective force. Uganda was also disappointed by Kabila's failure to regenerate the region's economy by revamping Congo's huge but mismanaged mineral and agricultural wealth.

In June 1998, convinced that Rwandan soldiers in Kinshasa were planning a coup against him, Kabila expelled them. In the ensuing crisis, the Rwandans instigated a mutiny of Kabila's forces in Kitoma. Anti_Kabila forces soon established control over much of eastern Congo, capturing towns such as Bukavu, Goma and Uvira in Kivu provinces. Things came to a head after the rebels opened another front in the west. In Katoomba, soldiers of the former Mobutu army who were being retrained to be integrated in the new Congolese army, joined the rebels. They then occupied the cities of Matadi and Boma and rapidly advanced to southwest Kinshasa to occupy the Inga Dam, the city's main source of power.

But Kabila made new alliances. Zimbabwe's Robert Mugabe persuaded Angola - fearful that Congo's instability would help UNITA - and Namibia, a longtime ally, to send troops to beat back anti-Kabila forces. The Sudan, long a bitter enemy of Uganda, also gave support to Kabila. The involvement of Chad and the Central African Republic on the side of Kabila can be seen in terms of simple solidarity in the francophone world. The presence of Libyan troops on the side of Kabila can be seen as a reaction to Museveni's backing of the Sudanese SPLA guerrillas.

After the middle of 1998, the war was largely stalemated, with the country fragmented into several occupied zones. Two are of interest here: the historic diamond and gold producing Kisangani area, controlled by Rwanda and Ugandan troops (the Rwandans however recently expelled the Ugandans: such is the fragmented nature of the anti-Kabila forces), and Mbuji-Mayi, the diamond capital of Congo, which is controlled by the Zimbabwean army. Namibia also has troops involved in Congo. In early 2001, Namibian Government officials were forced to acknowledge in parliament that a Namibian holding company had a diamond mine in the Tsjikapa area of Congo.

It is remarkable how much the Congo conflict, even with its undoubted political salience, has been driven by economic interests and greed. Kabila's own campaign against Mobutu was notable for its focus on economic considerations and deals with foreign business interests. For example Kabila's forces launched their operations by first seizing the gold mining areas in the northeast, the diamond centre of Mbuji-Mayi, and the copper capital of Lubumbashi, before advancing to Kinshasa. As soon as Kabila captured Kisangani, he began signing mineral deals with North American companies. America's Mineral Fields (AMF) signed a contract with Kabila worth US$1 billion to mine diamonds and gold. While fighting was still going on in Kinshasa, Kabila's minister of finance, Mwanpanga Mwana, held a seminar for 30 businessmen at a hotel in Lubumbashi. In attendance were Goldman Sachs, the First Bank of Boston, Morgan Grenfell and other fund managers from North America. A few months after Kabila took power, his backers were clearly reaping the economic benefits.

The biggest winner was Uganda, whose national bank recorded a US$ 40 million increase in gold exports (a commodity very rare in Uganda) in October 1997. This was mostly looted from Congo. But the prevalence of economic motives has been more marked in the 'Second Congo War'. Here Uganda has again won significantly. Its strong, coherent army and their RCD allies control the customs post of Kasindi in North Kivu, the newly created province of Kibali-Ituri in the Oriental province, which includes the gold and coffee producing towns of Isiro, Bunia and Butembo and Watsa, and until recently the diamond town of Kisangani. The Kisangani mines however are small, producing about $34 million worth of diamonds a year. The bigger diamond mines are controlled by the Zimbabwean army. Zimbabwe has kept as many as 13,000 soldiers in Congo, many of them guarding the strategic diamond region of Mbuji-Mayi against anti-Kabila forces. Rwanda, although officially exporting smaller quantities of rough diamonds, is deeply involved in the trade in colombo-tantalite or coltan, a strategic metal produced in the areas occupied by its troops in Congo. The price for coltan on the world metal exchanges rose sharply in 2000 and Rwanda's coltan exports - although largely unaccounted for - are thought to be worth tens of millions of dollars a month.

To the extent that diamonds are fuelling much of the Congolese conflict - and there is no doubt that they are - the focus is on Kisangani and Mbuji-Mayi. The Mbuji-Mayi area is inhabited by 1.2 million Luba Kasai, and is home of career anti-Kabila opposionist Etienne Tshisekedi. In 1995, the Minière de Bakwanga at Mbuji Mayi, Kasai Oriental, an extraordinarily rich kimberlite pipe (but also some alluvial fields), produced 6.5 million carats out of Zaire's recorded exports of 21.3 million carats (worth some $600 million). This was a drop from 10 million carats in the mid-1980s. Mbuji-Mayi is now singularly important because the alluvial deposits in Banalia and Bengamisa, mostly of industrials gems, cannot be commercially exploited at the moment (the area is controlled by the Rwandans). The reserves at Mbuju Mayi are believed to be worth $1 billion.

Recent events, including failed attempts to float Oryx Diamonds Ltd. (a company with connections to the Zimbabwean army) on the London stock exchange, revelations of Namibian army diamond mining interests in Congo (see the April 2001 issue of Other Facets), the assassination of Laurent Kabila, and the negotiated pullback of various warring factions, have combined to create a host of new dynamics.

Although a small part of Congo's mineral resource base, diamonds currently represent an extremely important part of the national economy, and continue to be a source of interest for, and conflict among, many of the competing political interests in the country and the region. During the coming months, the project will produce information and analysis on the formal and informal diamond mining sectors in the Democratic Republic of Congo, on connections with other countries in the region and with the wider global diamond industry.

Further reports will be posted in the RESOURCES section of this site. Search Resources using key words such as "diamond".

April 2001

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