Significant benefits to DRC
One of the main challenges facing the DRC is translating its vast natural resource wealth into an improved standard of living for its people.
In almost all cases, large investments are needed to rehabilitate old mines and refineries or to build new ones. The DRC state, with limited economic resources of its own to make these investments, actively encouraged foreign participation in the sector through the promulgation of the Mining Code in 2002.
The cost of rehabilitating the KOV mine and building a very large state-of-the-art refinery, ensuring that the maximum level of beneficiation takes place within the DRC, is $1.8 billion. Nikanor is arranging 100% of this funding and in return owns 75% of the joint venture company DCP.
The direct economic benefits to the DRC of Nikanor’s involvement (in addition to arranging the funding to get the project off the ground) are significant. Independent experts, Behre Dolbear, estimate that the DRC state will receive more that 50% of the revenue generated by DCP through royalties, transaction taxes, profit taxes, profit share and withholding tax.
The indirect benefits of Nikanor’s involvement in the DRC are more difficult to quantify but equally important. DCP currently employs approximately 1,400 people, which in-turn could generate more than 5,000 jobs through a strong multiplier effect. One can already see and increase in economic activity in Kolwezi in the form of new shops and a wider variety of goods for sale. The people of Kolwezi are also benefiting from the Group’s investment in infrastructure, particularly roads, water and electricity. A number of the roads within Kolwezi, which were in a very poor state, are now being maintained by DCP, and the travel time for all users of the road from Kolwezi to Lubumbashi has been reduced from days to hours due to investment by DCP and other mining companies. DCP has restored electricity and water to the Luilu township and has restored and now maintains the water supply to the Musonoi village. The DCP Foundation is also heavily involved in projects to improve healthcare and education in and around Kolwezi.
