Democratic Republic of Congo

EITI Status Yet to be assessed against the 2016 Standard
EITI Member Since 2008
Latest Data From 2014

Overview

At the height of the commodity boom in 2007, when the DRC began implementing the EITI, decades of conflict, political instability, corruption, looting and mineral smuggling had decimated the mining sector, which used to be DRC’s engine of growth, and left the government with large liabilities for its state-owned enterprises (SOEs) that had become practically insolvent. Despite the country’s vast natural resources, 63% of the 75 million Congolese citizens were living below the poverty line of less than one dollar per day in 2012, according to the World Bank.

In this context, the government of the DRC committed to implement the EITI to attract foreign direct investment to revive the mining sector and ensure that revenues are well managed for the benefit of all citizens. Apart from a slight decrease in 2009 due to low commodity prices, EITI Reports have covered eight financial years (2007-2015) and shown a steady increase in government revenues. Revenues collected in the mining sector surpassed that of the oil and gas sector in 2010, when 63% of the USD 875 million came from mining companies. In 2015, the extractive sector generated USD 1,7 billion, 82% of which came from the mining sector.

Beyond reporting companies payments, the EITI DRC has adopted innovative approaches to beneficial ownership, expanding EITI reporting to the artisanal and small-scale mining and forestry sectors, and automating online reporting by companies and government entities. EITI reporting has also allowed to shed light on thematic issues, such as the barter agreement put in place by the SICOMINES project.  

Contribution of the extractive industry to the economy

  • 95 %
    to exports
  • 22 %
    to GDP
  • 28 %
    to government revenue
  • 11 %
    to employment

Beneficial ownership disclosure

The 2015 EITI Report shows that more than half of the privately held mining companies disclosed their beneficial owners. Information was not disclosed for three companies operating in the oil and gas sector, including PERENCO, the country’s largest tax payer of that sector. The disclosures often include details about the identity of the owners, such as the date of birth or residential address. Previous reports have revealed beneficial owners that were both politically exposed persons and owners whose birth date is more recent than the year covered by the EITI Report.

The evaluation report from DRC's participation in the beneficial ownership pilot notes that the major challenge in obtaining beneficial ownership disclosures was the lack of legal requirements for extractive companies to report their beneficial owners. According to the report, “the absence of a law on the beneficial ownership contributed to suspicion amongst the companies, who questioned the concept of beneficial ownership and the relevance of beneficial ownership disclosures. Despite the tremendous efforts undertaken by the MSG and the secretariat to improve the perception of the concept of beneficial ownership, some companies preferring to limit their disclosures to the legal owners, which, according to them, is what they are required to disclose in accordance with Congolese law and company Statutes". The government is now working on the legal and institutional framework for further beneficial ownership transparency.

La publication des rapports ITIE revêt une grande importance pour la République Démocratique du Congo parce qu’ils font état des progrès réalisés en matière de gouvernance des industries extractives et des finances publiques dans le pays. Ces Rapports confortent la position de la RDC dans le rating des organisations et agences de notation.
Prime Minister Matata Ponyo

Production

New investments in the mining sector led to a significant increase in production from 2010 to 2014, while oil production remained relatively stable. Based on EITI reporting, cobalt, coltan and gold production increased significantly from 2014 to 2015. However, the mining sector in general experienced a slowdown of production and exportation in 2015.

Industrial production is concentrated mainly in the Katanga, South-Kivu, Maniema and Oriental Provinces. The Kipoi and Kamoto mines, which contain exceptionally high grades of copper (five times the industry average), were producing at full capacity in 2014. KCC's production tripled from 52,000 tonnes of refined copper in 2010 to 151,000 tonnes in 2014. Production of cobalt and copper began at Tenke Funkurume (TFM) in the second quarter of 2009 and increased rapidly from 120,000 tonnes of refined copper in 2010 to 192,000 tonnes in 2014. Diamond, gold, coltan and casserite are also artisanally-mined, especially in the Eastern regions of the territory, with ASM accounting for approximately 89% of national diamond production. Meanwhile, oil production remains marginal given the important reserves available, reaching approximately 8,3 billion barrels in 2015.

Natural resources

DRC is the world's largest producer of cobalt, which is used in the production of batteries for cell phones and other consumer electronics. The country holds more than half of the world’s cobalt reserves according to the US Geological Survey. In addition to cobalt, DRC produces large quantities of copper, diamonds, gold, oil, tin, tantalum, tungsten and zinc. 

CommodityProductionReservesUnitSignificance
Cobalt3.456,000Million tonsDRC was the world's largest producer of cobalt in 2015. According to the USGS, identified world terrestrial cobalt resources are about 25 million tons. “The vast majority of these resources are in sediment-hosted stratiform copper deposits in Congo” Source: USGS Mineral Commodity Summaries 2015.
Copper1.120Million tonsProduction of copper in the DRC reached 1.1 million tons in 2014 according to the EITI report. Identified reserves are estimated at 20 million tons according to the USGS Mineral Commodity Summaries Report, 2015.
Diamond18150Million caratsDRC was the world's largest producer of diamond in 2014, and holds the second largest reserves after Australia. Sources: EITI 2014 Report and USGS Mineral Commodity Summaries Report, 2015.
Gold24 Thousand kilogramGold production quadrupled in 2014

Source: Production figures are from the 2014 DRC EITI Report. Identified reserves are from the U.S. Geological Survey, Mineral Commodity Summaries, January 2015.

Initializing chart.

Revenue collection

The 2015 EITI Report shows a resilient mining sector, characterised by increased production of certain commodities, such as cobalt and gold, and revenues amounting to USD 1,72 billion. USD 1,17 billion or 82,2% of collected revenues went to the Treasury, of which 20,6% were withheld by SOEs and other government agencies collecting taxes on behalf of the government.

Initializing chart.

Revenue allocation

Article 175 of the Constitution stipulates that 40% of the national revenue should be allocated to the province. Article 242 of the Mining Code provides for a sharing mechanism of mining royalties paid to the Treasury by holders of mining exploitation titles. The sharing arrangements are as follows:

  • 60% of the revenue of income kept by Central Government.
  • 25% of the revenue should be paid to an account designated by the Administration of the Province where the project is located and 15% of the revenue should be paid to an account designated by the City or the Territory within which operation takes place.

 

Innovations

​The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

  • The EITI DRC launched a pilot project to disclose beneficial ownership and establish a public register of beneficial owners.
  • Two scoping studies were conducted in 2015 to expand EITI reporting to artisanal and small-scale mining (ASM) and forestry.
  • To facilitate the collection of data from over 200 companies, the EITI DRC launched an online software to automate reporting by companies and government entities and reconciliation of data.

Implementation

Governance

Oversight of EITI is ensured by a multi-stakeholder group, the "Comité executif"/Executive Committee, chaired by the Minister of Planning. Prime Ministerial Decree 09/27 of 16 July 2009 regulates EITI implementation in the DRC. Executive Committee members and the National Coordinator are nominated by decree. Ministerial Decree 0186 of 23 March 2012 obliges companies to disclose under the EITI. The day-to-day implementation is ensured by a technical secretariat in Kinshasa and Lubumbashi. Minutes of MSG meetings are published on the EITI DRC website here

Validation

The DRC's Validation against the Standard will commence on 1 July 2018. The country is compliant under the 2011 Rules.

Timeline