reference code: gdmmd005idb sep 2012congo’s diamond mining industry. chapter five provides an...

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Democratic Republic of the Congo Diamond Mining Market GDMMMD005IDB/Published SEP 2012

Overview and Forecast to 2020

© GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form

Democratic Republic of the Congo Diamond Mining Market Overview and Forecast to 2020: Trends, Fiscal Regime, Major Projects, and Competitive Landscape

Reference Code: GDMMD005IDB

Publication Date: Sep 2012

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Table of Contents




1 Table of Contents

1 Table of Contents ......................................................................................................... 2

1.1 List of Tables ....................................................................................................................................................... 4

1.2 List of Figures ..................................................................................................................................................... 4

2 Executive Summary ..................................................................................................... 5

3 Introduction .................................................................................................................. 6

3.1 GlobalData Report Guidance .......................................................................................................................... 6

4 Democratic Republic of the Congo, Diamond Mining Industry – Drivers and

Restraints ..................................................................................................................... 7

4.1 Democratic Republic of the Congo, Diamond Mining Industry – Drivers ........................................... 7

4.1.1 New Diamond Projects to Support Production ........................................................................................ 7

4.2 Democratic Republic of the Congo, Diamond Mining Industry – Restraints ..................................... 7

4.2.1 Artisanal Mining, Illegal Cross-border Trade and Corruption ................................................................ 7

4.2.2 Proposed Revision of Mining Code and Significant Capital Required for Investment ....................... 7

5 Democratic Republic of the Congo, Diamond Mining Industry – Overview and

Production ................................................................................................................... 8

5.1 Diamond Mining Industry Overview .............................................................................................................. 8

5.2 Democratic Republic of the Congo, Diamond Mining Industry – Rough Diamond Production .... 9

6 Democratic Republic of the Congo, Diamond Mining Industry – Rough

Diamonds, Export and Import Scenario .................................................................. 11

7 Democratic Republic of the Congo, Diamond Mining Industry – Major Active,

Planned and Exploration Projects ........................................................................... 13

7.1 Democratic Republic of the Congo, Diamond Mining Industry – Major Active Projects .............. 13

7.2 Democratic Republic of the Congo, Diamond Mining Industry – Mine Profile ................................ 13

7.2.1 MIBA Mine ................................................................................................................................................... 13

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7.2.2 Tshikapa Triangle Mine ............................................................................................................................. 14

7.3 Democratic Republic of the Congo, Diamond Mining Industry – Major Planned and Exploration

Projects .............................................................................................................................................................. 15

8 Democratic Republic of the Congo, Diamond Mining Industry – Fiscal Regime . 16

8.1 Democratic Republic of the Congo, Governing Bodies ......................................................................... 16

8.1.1 Ministry of Mining ....................................................................................................................................... 16

8.1.2 Directorate of Mines ................................................................................................................................... 16

8.1.3 Department in Charge of the Protection of the Mining Environment .................................................. 16

8.1.4 Technical Unit for Mining Coordination and Planning ........................................................................... 16

8.2 Democratic Republic of the Congo, Governing Law .............................................................................. 16

8.3 Democratic Republic of the Congo, Mining Licenses ............................................................................ 16

8.3.1 Mineral Exploration License ..................................................................................................................... 16

8.3.2 Exploitation License ................................................................................................................................... 17

8.4 Democratic Republic of the Congo, Rights and Obligations ............................................................... 17

8.4.1 Mining Rights .............................................................................................................................................. 17

8.4.2 Mining Obligations...................................................................................................................................... 17

8.5 Democratic Republic of the Congo, Fiscal Terms ................................................................................... 17

8.5.1 Royalty Rate ............................................................................................................................................... 17

8.5.2 Corporate Income Tax ............................................................................................................................... 17

8.5.3 Property Tax ............................................................................................................................................... 18

8.5.4 Depreciation ................................................................................................................................................ 18

8.5.5 Loss Carryforward ...................................................................................................................................... 18

8.5.6 Withholding Tax .......................................................................................................................................... 18

8.5.7 Exceptional Tax on Expatriates’ Salaries ............................................................................................... 18

9 Democratic Republic of the Congo, Diamond Mining Industry – Competitive

Landscape .................................................................................................................. 19

9.1 Democratic Republic of the Congo, Diamond Mining Industry – Key Companies, Mwana Africa

plc (Mwana Africa) ........................................................................................................................................... 19

9.1.1 Mwana Africa plc (Mwana Africa), Overview ......................................................................................... 19

9.1.2 Mwana Africa plc (Mwana Africa), Business Description ..................................................................... 19

9.1.3 Mwana Africa plc (Mwana Africa), Diamond Projects ........................................................................... 20

9.2 Democratic Republic of the Congo, Diamond Mining Industry – Key Companies, Namakwa

Diamonds Limited (Namakwa) ..................................................................................................................... 21

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9.2.1 Namakwa Diamonds Limited (Namakwa), Overview ............................................................................ 21

9.2.2 Namakwa Diamonds Limited (Namakwa), Diamond Projects ............................................................. 21

10 Appendix .................................................................................................................... 22

10.1 Abbreviations .................................................................................................................................................... 22

10.2 Bibliography ...................................................................................................................................................... 22

10.3 GlobalData’s Methodology ............................................................................................................................ 22

10.3.1 Coverage ..................................................................................................................................................... 23

10.3.2 Secondary Research ................................................................................................................................. 23

10.3.3 Primary Research ...................................................................................................................................... 23

10.3.4 Expert Panel Validation ............................................................................................................................. 24

10.4 Disclaimer .......................................................................................................................................................... 24

1.1 List of Tables

Table 1: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production (’000 Carats), 2000–2020 ................................................................................................................................................................................ 10

Table 2: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamonds, Exports/Imports (’000 Carats), 2004–2020 ..................................................................................................................................................................... 12

Table 3: Diamond Mining Industry, Democratic Republic of the Congo, Major Active Projects ............................................. 13

Table 4: Diamond Mining Industry, Democratic Republic of the Congo, MIBA Mine, Historic Production (’000 Carats), 2000–2011 ..................................................................................................................................................................... 13

Table 5: Diamond Mining Industry, Democratic Republic of the Congo, Tshikapa Triangle Mine, Historic Production (’000 Carats), 2009–2011 ...................................................................................................................................................... 14

Table 6: Diamond Mining Industry, Democratic Republic of the Congo, Major Planned and Exploration Projects ............. 15

Table 7: Diamond Mining Industry, Democratic Republic of the Congo, Withholding Tax Rates (%), 2012 ........................ 18

Table 8: Diamond Mining Industry, Democratic Republic of the Congo, Mwana Africa plc, Major Diamond Project .......... 20

Table 9: Diamond Mining Industry, Democratic Republic of the Congo, Namakwa Diamonds Limited, Major Diamond Project ............................................................................................................................................................................. 21

1.2 List of Figures

Figure 1: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production (’000 Carats), 2000–2020 ....................................................................................................................................................................... 5

Figure 2: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production (’000 Carats), 2000–2020 ....................................................................................................................................................................... 9

Figure 3: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamonds, Exports (’000 Carats), 2004–2020 ................................................................................................................................................................................ 11

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Executive Summary




2 Executive Summary

Figure 1: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production

(’000 Carats), 2000–2020

Source: GlobalData, Primary interview with an official of the Ministry of Mining, DRC; Banque Centrale du Congo, 2011

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Introduction




3 Introduction

GlobalData’s report, “Democratic Republic of the Congo Diamond Mining Market Overview and

Forecast to 2020”, provides in-depth coverage of Democratic Republic of the Congo’s diamond

mining industry. The report covers the trends in Democratic Republic of the Congo’s rough

diamond production, exports and imports in detail. It also presents the key drivers and restraints

for the diamond mining industry in Democratic Republic of the Congo, and an overview of the

fiscal regime, detailing the laws and regulations governing the industry.

The report includes sections that discuss the trends in production. The trade section provides

information on exports volume, as well as imports. The competitive landscape covers the top

players in the diamond mining industry in Democratic Republic of the Congo with major active,

planned and exploration projects, taking into consideration reserve volume and annual production.

The report provides a comprehensive coverage of Democratic Republic of the Congo’s diamond

mining industry.

3.1 GlobalData Report Guidance

The report starts with an executive summary capturing the key elements of Democratic Republic of

the Congo’s diamond mining industry.

Chapter two consists of the executive summary, detailing key points from the report.

Chapter three provides an introduction to the report and a guide to the report’s contents.

Chapter four contains the key growth factors and restraints affecting Democratic Republic of the

Congo’s diamond mining industry.

Chapter five provides an overview of Democratic Republic of the Congo’s diamond mining

industry, with detailed information about rough diamond production.

Chapter six provides an overview of Democratic Republic of the Congo’s diamond industry, with

detailed rough diamond trade.

Chapter seven provides detailed information of the major active projects and planned and

exploration projects in Democratic Republic of the Congo.

Chapter eight includes Democratic Republic of the Congo’s fiscal regime, with a section dedicated

to mining business licenses, rights and obligations of the mining companies, and lastly the fiscal

terms defined in detail.

Chapter nine provides detailed information of the competitive landscape in Democratic Republic of

the Congo diamond mining industry. The section consists of the top producers of diamond with

their detailed reports.

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Drivers and Restraints




4 Democratic Republic of the Congo, Diamond Mining Industry – Drivers and Restraints

4.1 Democratic Republic of the Congo, Diamond Mining Industry – Drivers

4.1.1 New Diamond Projects to Support Production

4.2 Democratic Republic of the Congo, Diamond Mining Industry – Restraints

4.2.1 Artisanal Mining, Illegal Cross-border Trade and Corruption

4.2.2 Proposed Revision of Mining Code and Significant Capital Required for Investment

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Overview and Production




5 Democratic Republic of the Congo, Diamond Mining Industry – Overview and Production

5.1 Diamond Mining Industry Overview

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5.2 Democratic Republic of the Congo, Diamond Mining Industry – Rough Diamond Production

Figure 2: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production

(’000 Carats), 2000–2020


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Table 1: Diamond Mining Industry, Democratic Republic of the Congo, Rough Diamond Production

(’000 Carats), 2000–2020

Year Rough Diamond Production (’000 Carats)


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Appendix



© GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form Page 22

10 Appendix

10.1 Abbreviations

CAGR: Compound Annual Growth Rate

DRC: Democratic Republic of the Congo

MIBA: Societé Minière de Bakwanga

SCIM: Société Congolaise d'Investissement Minier

10.2 Bibliography

1) Banque Centrale du Congo (2011). Bulletin de statistiques. Banque Centrale du Congo.

Available from:

http://www.bcc.cd/index.php?option=com_content&view=category&id=58:bulletin-de-

statistiques&Itemid=89&layout=default. [Accessed November, 15, 2012].

2) Kabwelulu,M (2012), via Reuters. “Congo to negotiate mining code changes, official says”,

Reuters, November 7, 2012. Available from:

http://www.reuters.com/article/2012/11/07/ozabs-congo-democratic-mining-

idAFJOE8A602420121107. [Accessed November, 15, 2012].

3) Kazadi,H (2011), via Reuters. “DR Congo diamond firms need $300 mln”, Reuters, October

5, 2011. Available from: http://www.reuters.com/article/2011/10/05/congo-democratic-

diamonds-idAFL5E7L52ZM20111005. [Accessed November 15, 2012].

4) United States Geological Survey (2010). Congo (Kinshasa) [Advance Release]. 2010

Minerals Yearbook. Diamond. United States Geological Survey. Available from:

http://minerals.usgs.gov/minerals/pubs/country/2010/myb3-2010-cg.pdf.

5) Transparency International (2011). Corruption Perceptions Index 2011. Available from:

http://cpi.transparency.org/cpi2011/results/ [Accessed November 15, 2012].

6) Kimberley Process Rough Diamond Statistics (2004–2011). Public Statistics Area. Annual

Summary Tables. Available from: https://kimberleyprocessstatistics.org/public_statistics

[Accessed November 15, 2012].

7) Tax rates.cc (2012). Democratic Republic of Congo Tax Rates. Available from:

http://www.taxrates.cc/html/congo-democratic-republic-tax.html [Accessed November 15,

2012].

10.3 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with a

pedigree in marketing, market research, consulting backgrounds in the diamond mining industry,

and advanced statistical expertise.

GlobalData adheres to the Codes of Practice of the Market Research Society (www.mrs.org.uk)

and the Strategic and Competitive Intelligence Professionals (www.scip.org).

http://www.bcc.cd/index.php?option=com_content&view=category&id=58:bulletin-de-statistiques&Itemid=89&layout=default

http://www.bcc.cd/index.php?option=com_content&view=category&id=58:bulletin-de-statistiques&Itemid=89&layout=default

http://www.reuters.com/article/2011/10/05/congo-democratic-diamonds-idAFL5E7L52ZM20111005

http://www.reuters.com/article/2011/10/05/congo-democratic-diamonds-idAFL5E7L52ZM20111005

http://minerals.usgs.gov/minerals/pubs/country/2010/myb3-2010-cg.pdf

http://cpi.transparency.org/cpi2011/results/

https://kimberleyprocessstatistics.org/public_statistics

http://www.taxrates.cc/html/congo-democratic-republic-tax.html

http://www.mrs.org.uk/

http://www.scip.org/

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Appendix




All GlobalData databases are continuously updated and revised.

10.3.1 Coverage

The objective of updating GlobalData’s coverage is to ensure that it represents the most up to date

vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company,

association and competitor sources.

Company coverage is based on three key factors: market capitalization, revenues, and media

attention/innovation/market potential.

An exhaustive search of 56 member exchanges is conducted, and companies are prioritized

on the basis of their market capitalization.

The estimated revenues of all major companies, including private and governmental, are

gathered and used to prioritize coverage.

Companies which are making the news, or which are of particular interest due to their

innovative approach, are prioritized.

GlobalData aims to cover all major news events and deals in the diamond mining industry,

updated on a daily basis.

10.3.2 Secondary Research

The research process begins with exhaustive secondary research on internal and external sources

being carried out in order to source qualitative and quantitative information relating to each market.

The secondary research sources that are typically referred to include, but are not limited to:

Company websites, annual reports, financial reports, broker reports, investor presentations

and SEC filings.

Industry trade journals and other literature.

Internal and external proprietary databases.

National government documents, statistical databases and market reports.

News articles, press releases and web-casts specific to the companies operating in the

market.

10.3.3 Primary Research

GlobalData conducts hundreds of primary interviews a year with industry participants and

commentators in order to validate its data and analysis. A typical research interview fulfills the

following functions:

It provides first-hand information on the market size, market trends, growth trends,

competitive landscape, and future outlook.

It helps in validating and strengthening the secondary research findings.

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It further develops the analysis team’s expertise and market understanding.

Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for

each market, category, segment and sub-segment across geographies.

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, business development managers, market intelligence

managers and national sales managers.

Outside experts: investment bankers, valuation experts, research analysts and key opinion

leaders specializing in diamond mining markets.

10.3.4 Expert Panel Validation

GlobalData uses a panel of experts to cross verify research and forecast methodologies and drive

its analytical content.

The GlobalData expert panel comprises marketing managers, product specialists, international

sales managers from mining companies; academics and geologists from research universities,

consultants from venture capital funds, and distributors and suppliers of diamond mining goods

and services.

10.4 Disclaimer

All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

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