SARWatch launches ground-breaking research on the DRC gold trade: Congo's Golden Web

Hundreds of millions of dollars worth of Congolese raw gold -- mined, processed and exported -- circulates in the shadow economy operated by criminal, corrupt and often violent elites. At the same time, other gold resources that could provide important funding for the development of the Eastern Congo and the country at large, or create urgently needed jobs for Congolese, remain locked underground, unexploited.


Nande’s alternative economy

Due to their relative isolation and their poor integration into Belgian-Congolese colonial structures as well as their resistance to mass recruitment into the colonial industrial or military-security projects, the Nande had retained a degree of social and economic independence.22 They excelled early on as traders of salt and as diligent cultivators – even after the colonial authorities intruded with new cash crops, such as coffee and tea, and non-indigenous variations of grains and vegetables.

Artisanal gold mining in a legal vacuum

During these tumultuous times, the gold price on world markets suddenly soared. Until 1970, the price for one troy ounce of gold had held steady between US$30-40 (see Table 1) but then it started to rise dramatically, peaking at US$615 in 1980. This spike in value meant that anybody in a position to extract gold – legally or not – saw their income rise twenty-fold.

Corruption and conflict

One of the Belgian legacies that the Congolese had to overcome was the lack of évolués,14 which resulted in a shortage of Congolese with professional training, managerial experience, higher-level financial skills and, most importantly, ownership of well-capitalised and sizeable businesses. Colonial monopolies imposed by the Belgians to maximize the profitability of their investments had barred Congolese from acquiring these skills. They had also reserved all exploration, exploitation and commercialiation of gold for non-Congolese.

Lack of transparent and accountable ownership of gold mining companies

When the Congolese finally achieved independence in 1960, they may have gained a measure of political freedom, but economically the umbilical cord through which Belgium and Belgian investors had sucked the Congo dry for decades was not severed. It took another six years and very drastic measures by Mobutu to finally gain economic control over the major mining companies, including the gold mines at Kilo-Moto. Even then, whether ownership was truly unencumbered remains unclear and part of an opaque history.

Forced labour in gold mining

The net profits realised from the mines in 1920 were 22 million Belgian Francs. According to contemporaneous US estimates for gold discovered in the Kilo region, the annual take was around 10,000 kilogram at Kilo and around 4,000 kilogram at Moto. However, the most revealing data in the US report was that only 10 percent of these profits were “expended on road construction and general development”. Spending money on building road infrastructure that could support vehicular traffic was more expensive than operating long columns of unpaid Congolese porters and workers.

Brief history of the exploitation of Congolese gold: From the colonial period to the end of the second republic

The lessons from the ‘Who is Who’ chapter (see below) are that the Congolese economy suffers from three major shortcomings in relation to the exploitation of gold:
  • Companies with legal title to explore or exploit gold deposits are not deploying capital and expertise with the desirable effectiveness and speed to maximize salaries, taxes, and royalties, and to enhance local economies; Congo’s Golden Web

Who is benefitting from Congo’s gold?

Establishing the legal claims to Congo’s gold only sets the stage for the ultimate issue the SARW was attempting to discover – who is benefitting from Congo’s gold? As the two previous SARW reports demonstrated, the question is complex because benefitsfrom gold come in many different forms beyond the most direct exchange of rawgold nuggets for cash.


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