Congo squandering artisanal gold wealth: report

KINSHASA (Reuters) - Democratic Republic of Congo's artisanal gold trade could be worth up to $2 billion a year, but official corruption and rampant smuggling mean neither miners nor the state profit much from the wealth, a new report said on Thursday.

Most gold mining in Congo is done by hand in remote areas of the vast central African country where there are few other options to eke out a living, and where myriad rebel groups have operated since the end of a 1998-2003 war.

"Most artisanal and small-scale gold miners (...) claim they no longer face threats and looting from homicidal militias. Instead they are confronted (...) by hordes of corrupt officials who all wrest illegal taxes and fees from the miners," the report by Southern African Resource Watch said.

"In most cases the (miners) are no better off than during the chaotic reign of the militias," it said.

It added that "almost 100 percent" of Congo's artisanally mined gold was secreted out of the country, ensuring that no official export taxes are collected. Gold prices have surged in recent years, as investors seek a safe-haven from stocks and bonds hit by world financial turmoil.

SARW - an NGO that seeks to ensure mining policy in African nations benefits the poor and contributes to sustainable development - said its report was based on interviews with hundreds of miners, traders, and military and government officials conducted over several months.

It called on the government to restructure or scrap the body charged with supporting artisanal miners - known as SAESSCAM - calling it ineffective and corrupt.

Government officials were not immediately available for comment but the administration has proposed revisions of the country's mining code to improve control of the sector, including by limiting areas where artisanal mining is permitted.

Problems with Congo's gold sector are not new, and with a crackdown on the illegal trade of bulkier minerals such as tin, criminal networks are increasingly turning to easier to smuggle minerals, according to local officials.

"Gold's a catastrophe. It's clear, there's no legal trade, you just put it in your pocket," Eric Kajemba, director of Observatoire Gouvernance et Paix (OGP), a civil society NGO based the South Kivu capital of Bukavu, told Reuters.

A recent report by the US human rights group Enough said that gold from the region, was being smuggled through Uganda, Burundi and Tanzania, often ending up in Dubai, where it is melted down.

Source: http://news.yahoo.com/congo-squandering-artisanal-gold-wealth-report-055416709.html

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