Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
In a scathing new BBC documentary airing on Monday in the UK, commodities trader Glencore, is accused of allowing dumping of acid into streams, child labour and deadly underground working conditions at its copper and cobalt mine in the Democratic Republic of Congo.
The Guardian reports that the Panorama program titled “Billionaires Behaving Badly?” is also the first interview granted by the secretive head of Switzerland-based Glencore, Ivan Glasenberg.
The documentary makers working under cover found children “as young as 10” toiling at the Tilwezembe mine “who climbed down hand-dug mineshafts 150ft deep without safety or breathing equipment.”
Glencore, which currently has a proposal for a $90 billion merger with miner Xstrata before shareholders, closed down the copper and cobalt mine in in 2008, but in the interview Glasenberg said the company’s land was “raided” in 2010: “We are pleading with the government to remove the artisanal miners from our concession,” he said.
The Guardian quotes from the show saying “the number of accidents at Tilwezembe is extraordinarily high: Panorama was told that 60 miners died there last year, making the mine one of the most dangerous in the world.”
The Tilwezembe mine is located in the Katanga province in the south of the country close to the Zambian border. Glencore in partnership with Gecamines, the DRC’s state-owned mining firm, has plans to restart mining and says that the acid drainage has been contained.
The DRC’s mining industry has been in flux since the death in February of Augustin Katumba Mwanke, widely believed to be power behind the throne in the war-torn country. It was said that “every major player in the mining sector has negotiated with him or through him.”
The DRC is home to the world’s largest cobalt resource and second globally in terms of copper deposits.
It also not the first time Glencore has come under fire in Central Africa. In March health and environment officials over the border in Zambia ordered the closure of part of Glencore’s Mopani copper operations over complaints from residents of a nearby town over pollution. The processing plant should re-open at the end of the month.
Thisismoney, a UK business blog, says the fact that “NGOs are crawling over Glencore’s environmental behaviour” in Zambia and the DRC is another obstacle in the proposed merger already facing opposition from Xstrata shareholders who say Glencore is not paying enough for the coal giant.
Image is of DRC refugees in Uganda in 2008 – Sam DCruz | Shutterstock.com
6 Comments
Geosteff
Sounds like Glencore should hire Rc1928lubum! I worked at Tilwezembe in 2007 and know it well. When KCC stopped mining there end 2007/2008, I understood Gecamines took it back and gave some rights to a small crowd (Lebanese??)who used the artisanals to do much of the high-grading for them…..do Glencore still own the property? Some legal due diligence needed here. However, there are millions of tonnes of low grade material in Katanga that could be crushed and hand sorted in organised safe conditions if the mining companies, government responsible NGO’s were to cooperate. However, when all parties are only interested in living to take, selfishness will ensure these diabolical conditions continue.
James First
Geosteff, when you talk of low grade you probably mean exceptionally good grades for the slightly organised as the 12% grade Glencore is achieving is …welll…..beyond the realms of incredible!!!!….CORRECT.
Rc1928lubum
If I understand well, the Tilwezembe deposit has been taken over by artisanal miners after Glencore stopped working in it. This was the case for every Congolese deposit once the Gecamines stopped functioning. Glencore is now considered responsible of what happens in that deposit. And, in some way, rightly so. Glencore should have understood that, given the number of unemployed people in that country, the Tilwezembe deposit would have been taken over as soon as it stopped working in it.
Instead of reasoning in term of dollars, it should have taken into account the situation of the population and organized the diggers in such a way to limit the casualties. Help them with some heavy material and buy back their production. Sure enough it would not have been a very profitable proposition. And not an easy one at that. It would have made Glencore respectable and respected. But it takes dedicated people to undertake such a behavior. Not people whose eyes have dollar printed in them.
DRC Expat
This is definately not the way forward, helping locals to continue their illegal mining won’t help. I currently work at one of the mines in the DRC in the Katanga Province. The locals don’t want to accept help or accept the transfer of skills that we expats bring to their country. They have their own way of doing things not necessarily the safest practice but they get the months take and are content. Glencore should not have to help in these practices when they are already trying to develop the skills of the locals. It isn’t all about the Dollars but rather the upliftment of a Rich Natural Resource Country. Yes there has to be profit made but won’t the Globe benefit from the Extracts of the mine?
Mark Harder
In a way, making a profit is what Glencore and other capitalist corporations are *supposed* to do. They are the organizers of the world’s economy. Greed, if you will, is the nature of the beast. Taming that beast and harnessing some of its power for the popular good is what the politicians, of a democracy at least, are *supposed* to do. And that includes politicians of the democracies in Europe and N. America, by the way. Too often they serve narrow and short-sighted corporate interests by propping up the corruptible leaders in places like Africa. The politicians are where the powers of money, power, and national interests meet, the nexus of all these forces. When they are weak and irresponsible, the beasts have their way.
Rc1928lubum
I suspect that, in this case, Glencore got caught with its pants down. It did not realize that it could not leave the pit without supervision. And there was no help to expect from either the government or the Gecamines. To expect the government to send out the diggers was a dream. If anything, government people were extorting money from the diggers.
But the Glencore guy in charge was a total incompetent. He had not the slightest idea on how to deal with the Congolese.