Discussions Underway Between Authorities and Kibali Gold Mine in DRC

Soukaina Sghir
Soukaina Sghir
3 Min Read
Kibali

In the Democratic Republic of the Congo (DRC), South African mining giant Barrick and its subsidiary, Kibali Gold Mine, find themselves embroiled in a crisis. The mining group faces the looming threat of closure due to fraudulent activities related to subcontracting.

According to Congolese authorities, the world’s second-largest gold producer had outsourced 90% of its subcontracting contracts to a Belgian-Indian company, which, in turn, demanded commissions from Congolese subcontracting firms. Congolese law stipulates that at least 51% of shares in subcontracting companies must be held by Congolese entities, with foreigners limited to 49%. Faced with the choice between losing its mines and severing ties with a partner, the South African company had little option.

Miguel Katemb Kashal, the regulatory authority overseeing subcontracting in the DRC, revealed that Kibali Gold Mine had not only engaged in subcontracting its activities to ineligible firms but had also enlisted a Belgian-Indian company named TCFF to manage 90% of its contracts. This arrangement facilitated the diversion of millions of dollars away from the Congolese financial system.

The bleeding stopped

For Miguel Katemb Kashal, the Director-General of the Subcontracting Regulatory Authority, the recent actions represent a crucial halt to a severe hemorrhage: “These are grave offenses. We have instructed Kibali Gold Mine to terminate its relationship with this company, and 90% of contracts centralized by this foreign entity have now been released for the benefit of Congolese entrepreneurs. This is in line with the President’s commitment. TCFF had consolidated all contracts, with payments being made overseas. Here at the ARSP, we will revoke the certificate, rendering this company ineligible nationwide.”

Visible tip of the iceberg

Following extensive discussions, the multinational corporation has committed to increasing the share of contracts allocated to Congolese capital companies. However, to disassociate from the undesirable service provider, Nicolas Marques, a high-ranking executive from the Barrick group, of which Kibali Gold Mine is a part, obtained a brief moratorium from the authorities: “Abruptly revoking a company we have been working with for twelve years could pose significant issues for the mine, potentially impacting tax payments and gold production.”

The case of this firm is merely the visible tip of the iceberg. Kinshasa aims to reclaim over $8 billion annually that had been escaping its finances in this sector.

Soukaina Sghir

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