The BCC’s January digest shows mining volumes racing ahead of an economy that grew 6.6 per cent.

By Kanisa Magazine · January 2023

The Banque Centrale du Congo’s January digest puts Congolese copper output for 2022 at 2,359,824 tonnes, up 30.9 per cent on 2021. The same document estimates that the economy grew 6.6 per cent to US$62.9 billion. Volumes in the mines rose almost five times as fast as output across the country, and the gap between those two numbers is where the real economy sits.

The mining headline is real and large, but it describes a handful of operators, a few metals and a state that owns little of the tonnage. A supplier, lender or investor reading it as a proxy for demand across the country is measuring the wrong thing.

A boom with little state output in it

Gécamines made 0.2 per cent of the copper; its partners made the rest.

The BCC splits national output between Gécamines, the state miner, and what it calls partners and others. For copper, Gécamines accounts for 4,562 tonnes, against 2,355,263 tonnes from the rest. For cobalt, the state firm made 19,907 tonnes of the national 111,309, about 18 per cent, up from 15,419 tonnes in 2021.

Behind the partner figure sit large, privately financed projects. Ivanhoe Mines reported on 9 January that its Kamoa-Kakula complex produced 333,497 tonnes of copper in concentrate in 2022 and guided to 390,000 to 430,000 tonnes for 2023. The BCC counts output on a different basis, so the figures are not additive, but a single complex accounts for roughly one-seventh of the national tonnage. The value chain is capital from abroad, ore from Congo and a smelting or refining step that mostly happens elsewhere.

Not every mineral rose

Zinc and gold fell, oil stood still and diamonds jumped.

Zinc production fell 23.4 per cent to 12,309 tonnes. Provisional gold output was 27,798 kilograms, down 12.9 per cent on the 31,903 kilograms of 2021. Crude oil was flat at 8.43 million barrels, a fall of 0.3 per cent. Diamonds rose 45.7 per cent to 17.7 million carats, of which 7.2 million came from industrial producers and 10.5 million from artisanal diggers.

Two points follow. Volume growth is concentrated in copper and cobalt, the metals tied to electric vehicles and grids, so a downturn in either would reach national accounts quickly. And artisanal producers still supply about 59 per cent of diamond carats, which sits outside the corporate tax base and shows how much activity the official numbers measure through estimates.

Price against volume

Cobalt tonnage rose 19.5 per cent while its price fell 40 per cent.

The BCC’s price table puts LME copper at US$9,393 a tonne on 20 January, 12 per cent above the US$8,379 of 30 December. LME cobalt stood at US$48,575 a tonne, compared with US$81,840 on 31 March 2022, a fall of 41 per cent. A country that mined 19.5 per cent more cobalt in 2022 therefore ended the year selling it for far less per tonne than it fetched in spring. Zinc shows the same squeeze at a smaller scale: output fell 23.4 per cent while LME zinc closed 2022 at US$2,975 a tonne, against US$4,230 at the end of April. Brent stood at US$87.66 a barrel on 20 January, well under the US$117.24 of 31 May.

Dollars from mining feed the state through taxes and royalties, and they feed the central bank’s reserves. The IMF Board completed the third review of its Extended Credit Facility on 20 December, releasing about US$203 million to support the balance of payments. Mining dollars reach reserves only after passing through the Treasury, so volume growth and reserve-building can part company.

Where the growth leaves the table

The average of US$662 per head hides most of the country from the mining story.

Output per person was US$661.6 across a population of about 95 million on the BCC’s estimate. A 31 per cent jump in copper tonnage does not move a market trader’s customer base in Kananga or a farmer’s cooperative in Kisangani. It shows up through procurement by the mining operators, through taxes the state chooses to spend, and through dollars that circulate in Kolwezi, Lubumbashi and Kinshasa.

For suppliers the useful reading is local. Target the operators’ procurement lists, not the national growth figure. For lenders, size exposure to copper-linked receivables and discount cobalt. For anyone selling to households, assume the real market is smaller and slower than the 6.6 per cent headline suggests until the monthly series prove otherwise.