Roughly the size of Western Europe, the Congo is Africa's second-largest country. It is one of the world's leading producers of copper and cobalt and is a sizable producer of diamonds, gold and rare earth minerals. Mining is the country's biggest contributor to total export revenue and to government revenue via taxes on those exports and on industry income. Total industry revenue from annual exports is estimated to be $4.4 billion, of which copper and cobalt exports account for roughly $3.4 billion. Annual crude oil production generates approximately $500 million worth of exports and diamonds generate about $220 million.
The government's share of total revenue similarly depends on mineral exports. Taxes on copper and cobalt mining alone have contributed roughly $450 million of the estimated $800 million generated in annual mining income taxes. Taxes on crude oil production, which total approximately $327 million, are the next largest contributor in the extractive industry to annual government revenue.
The resources are concentrated in a country beset by a decadeslong competition over sovereignty. Prior to Belgian colonialism, the territory largely comprised independent city-states and ethnic groups with no national unification. The Belgians stitched the landmass together to secure natural resource interests and to address their goals for territorial expansion. Following independence, authorities in the colonial capital, Kinshasa, took over colonial infrastructure and assumed the mantle of national sovereignty — but that sovereignty did not go unchallenged for long. Within two weeks of the Congo's independence in June 1960, the province of Katanga declared its own independence, a bid defeated in 1963 through the deployment of U.N. peacekeepers.
The Congo has rarely experienced a period free of internal strife. More than 19,000 U.N. peacekeepers remain deployed in the Congo, tasked with maintaining the country's territorial integrity. Their presence does not guarantee peace, however, and Kinshasa must tread carefully in the face of internal rivals who could attempt to exert sovereignty over the natural resources that the central government depends on.
The concentrations of copper and cobalt found in Katanga make for a tenuous relationship between Kinshasa and provincial authorities roughly 1,600 kilometers (1,000 miles) away in Lubumbashi. Katanga province does not see itself as inherently subservient to Kinshasa; indeed, the province fought unsuccessfully for independence in the 1960s. Attacks continue by independence-oriented militias in Katanga province — for example, militants launched an attack on army and police in Lubumbashi on March 23 that left 35 civilians dead.
To Lubumbashi officials, Kinshasa provides little value. Supply chain routes in Lubumbashi are integrated into southern Africa rather than central Africa. The province's inputs and outputs travel by road (and to a lesser extent, by rail) from the Congo through Zambia to South Africa and international markets. The Congo has alternative input-output routes through Angola and Tanzania, but Angola's Benguela railway is unproven, and Tanzania's Tazara line is unreliable.
Kinshasa must make sure it retains an upper hand in Katanga province so that the mineral-rich region does not renew its bid for independence. The provincial government is permitted a degree of autonomy, including assigning its own taxes on the mining sector, which have generated annual revenues of an estimated $25 million for provincial coffers. However, the province is not permitted to have a police force or other security units that are not under the control of the national government or the U.N. peacekeeping force that is stationed there.
While Katanga is the province with the highest concentrations of minerals, other provinces generate meaningful revenues that Kinshasa cannot ignore. The central government struggles with persistent rebel and armed groups in eastern Congo, including militias backed by Rwanda and Uganda. Rare earth minerals, including tin, tantalum and tungsten, are mined in the province of North Kivu, which is home to the Rwandan-backed M23 rebel group.
An estimated $85 million per year is earned through informal mining in North Kivu. While the M23 rebel group is a persistent threat, the province is not under the control of any one group. Therefore, what revenues are extracted there are likely broken up among competing authorities, including central government officials as well as rebel leaders and their patrons in Kigali. In Orientale province's Ituri district, informal gold mining generates an estimated $50 million in annual revenue. As with North Kivu province, no single authority controls the territory, and what revenues are generated there are also likely controlled by various interest groups, such as government authorities and Ugandan officials whose armed forces provide security in the area. Although the government cannot ignore these mining regions or abandon these revenues to rebel or rival hands — such revenues have long sustained rebel and armed group activity in the Congo — Kinshasa lacks the capability to unilaterally impose order in a region that is even farther from its seat than Katanga is.
Imposing a restriction on the exports of unrefined copper and cobalt is not necessarily a new policy. Kinshasa introduced a tax of $60 per ton on unrefined ore exports in 2010, which increased local refining capacity so that more than 60 percent of copper ore is now refined locally before being exported. While Kinshasa has made some gains in imposing a greater local value-added component to the country's mining sector — an economic principle common across many mining jurisdictions — the government must work to ensure it extracts greater relative revenues from the sector. This is crucial not only to the national economy but to provincial and local district economies as well.
