The BCC’s September digest shows mining volumes leading and the non-mining record still half empty.

By Kanisa Magazine · September 2021

The Banque Centrale du Congo puts the DRC’s 2021 growth at 5.3 per cent, against 1.7 per cent in 2020, and most of that arithmetic is copper. In its digest of 29 September 2021, output for the first seven months stood at 1,039,670 tonnes, 14.2 per cent above the 910,443 tonnes of the same period a year earlier.

Cobalt grew more slowly, up 9.1 per cent to 52,246 tonnes. The rest of the production table is harder to read, because the BCC’s 2021 column is still blank for cement, beer, flour, water and most other non-mining lines. A growth rate that one sector carries and the others cannot yet confirm is the real September story, and it tells a business reader where to look and where to wait.

What the production table does show

Mining volumes are up by double digits, and the state miner is the fastest mover in the series.

Gécamines’ own copper rose from 13,612 to 21,934 tonnes, a gain of 61 per cent, yet that is barely two per cent of the national total. The partners of Gécamines and other operators account for 1,017,737 tonnes, so the national figure moves with Kolwezi and Lualaba contractors, not with the parastatal. The BCC puts 2021 GDP at US$53.4 billion, or US$579 per head, with real income per head up just 2.2 per cent because the population grows 3 per cent a year.

The next tranche of volume is already visible. Kamoa-Kakula’s first phase was declared in commercial production on 1 July 2021, with output above 500 tonnes a day towards the end of that month, close to the 550 tonnes a day the company calls steady state, or about 200,000 tonnes a year. At full rate that equals roughly an eighth of the DRC’s 2020 copper output of 1,601,208 tonnes, none of which is in the seven-month cumulative.

Price did as much as volume

Copper at US$9,251 a tonne on 24 September, against US$7,803.50 at the end of 2020, lifts every dollar of export receipt.

The same digest records the London Metal Exchange copper price up 18.5 per cent since 31 December 2020, and cathode cobalt at US$52,428 a tonne against US$34,768. A mine that ships 14 per cent more tonnes at an 18 per cent higher price earns well over a third more, before any change in costs. That is the engine behind the dollar inflows now entering the system: royalties, export duties and the foreign currency the miners must sell to pay local suppliers and wages.

The money is not idle. On 15 July the IMF board approved a US$1.52 billion Extended Credit Facility for the DRC, an anchor that lets the authorities spend commodity receipts with a programme behind them. The Banque Centrale reported record reserves of about US$3.3 billion on 17 September.

Where the non-mining economy meets the mine

Households feel mining through the exchange rate and the price of money, not through payrolls.

Mining is capital-intensive and employs relatively few people, so its gains reach the street through channels the digest does measure. The interbank rate sat at CDF 2,033.50 to the dollar on 24 September, within 0.7 per cent of its CDF 2,020 level at end-2020. Year-on-year inflation was 5.1 per cent on the INS measure the BCC uses for its real policy rate, down from 15.5 per cent in December 2020. A stable franc keeps imported food, fuel and building materials from repricing, and that is the quiet subsidy to every non-mining business.

The BCC has meanwhile cut its policy rate from 18.5 per cent at the end of 2020 to 8.5 per cent, and its seven-day bill yields 1 per cent, according to its monetary statistics. Banks therefore have little reason to park francs at the central bank. Whether they lend instead is the question the empty non-mining columns cannot yet answer.

What to do with a mining-led number

Plan on copper-linked demand being strong and everything else being unproven until the BCC fills its tables.

A supplier to mining contractors in Lualaba or Haut-Katanga can plan on volume, because the price and tonnage evidence is consistent. A consumer-goods importer or a retailer in Kinshasa should not extrapolate the 5.3 per cent headline into shop-floor demand. The test is simple: when the BCC publishes cement, beverage and flour for the autumn, a figure within a few points of mining growth means the boom is spreading; a flat line means it is staying in the pit. Until then, hold stock levels to what the franc and the inflation print justify, and put the expansion capital where the tonnes are.