MACIG Connect Series
Kazadi Kaninda (KK): AEL’s first foray into the DRC came in the 1990s when we established distribution sites at several mines across Katanga, which were supplied by our plants in Zambia and South Africa. We opened our first permanent office in the DRC in Lubumbashi in 2006. As demand increased we realized that it made sense to build a manufacturing base here. In October 2013 we completed our plant at Kansuki, next to Mutanda Mining. The facility can produce enough bulk emulsion to supply the entire province. We are proud to supply the mine in the DRC a “Made In Congo” products. Primers and detonators are brought in from South Africa and Zambia and stored in magazines we rent from Socidex, (state owned company). After eight years of operations in the Katanga Province, we are now looking to expand outside the province and create a larger footprint across the country: the first step of this expansion will be to open an office in Kinshasa, the capital city of the DRC, early this year. I am currently located in Kinshasha.
AEL Group has always believed in this country and was involved here before the current mining boom. For many years, despite difficulties, we were the only international company who remained in the DRC and accompanied the mining houses from the day one of their projects. The business risk was high at that time but we took it, recruited Congolese on permanent contracts and trained them, and invested in state of the art equipment to deliver production at the mine site. Following the boom in the mining industry, market dynamics have shifted and other providers have moved in. Nevertheless, we are still leading the DRC explosives market.
Explosives providers around the world are beginning to focus on adding value beyond simply product supply. What kind of extra services does AEL offer in the DRC?
KK: AEL is not a commodity trader. We do not simply sell explosives. We offer full blasting services to our clients in order to ensure that blasting operations are conducted safely, efficiently and cost effectively. We offer a vast range of products, solutions, equipment and technical resources that have made the company an acknowledged leader.
We start by assisting our clients complying to the country rules and regulations and continue in sending our personnel to pits and underground where they work together with our customers’ mining teams to deliver the optimal blasting pattern that will meet mines requirements.
AEL deploys blasting services that includes down the hole (DTH), prime load tie and/or shot (PLTS). We have a department called mining optimization that promotes consistently good blasts, for improved productivity, sustainability and added value. The division is composed of highly skilled engineers who assist mines to insure that their blasting operations are conducted efficiently and cost effectively. They do it using multiple tools and methodology: blasting monitoring, data collection and benchmarking, blast and timing design, high speed videography, rock mass motion and muck profile studies, fragmentation analysis, blasting consultancy services, etc.
We also have AEL Equipment Services that designs and supplies original equipment to suit any blast envi-ronment: underground and surface mining.
Well established in Katanga, AEL is now looking to move out of the province. Where do you see the most potential in the rest of the DRC?
KK: In the west, there is a lot of activity in cement production, while in the central Kasai Provinces there is a concerted effort to exploit the rich diamond deposits there. At the same time, several major gold producers have been carrying out exploration campaigns for some years and now want to start developing projects. A couple of gold producers have already started production in the eastern provinces. AEL is already supplying its services to some clients in the Kivus, the Oriental Province, and the Kinshasa region. Katanga is not the DRC and so much is happening in the other provinces. Just like we had ‘faith’ in the development of the copper cobalt sector, we deeply believe that the other sectors of the DRC mining industry will see rapid growth. We have already opened an office in Kinshasa and have capital in place to invest in the rest of the DRC.
As activity regarding the new mining code remains shrouded in uncertainty, how is the current state of legislation relating to explosives?
KK: The current legislation dates back to 1955, when miners were still using nitro glycerin and dynamite, which are fairly primitive technologies by today’s standards. The main concern was security and the correct storage of charges. Now, in keeping with the predominance of safer bulk emulsion products, the authorities have stated that it is the time to update the old laws. By the end of 2015 there should be a special parliamentary hearing with representatives from the mining sector to discuss potential changes. The new regulations will have a greater focus on safety and environmental stewardship.
How have you seen investor appetite for projects in the DRC evolve over the past decade?
KK: The past 10 years have borne witness to a boom in the DRC’s mining industry. Since 2005, Kolwezi has been transformed beyond recognition. What was once a ghost town is now full of life and activity. Investor appetite has exploded since 2006. In 1986, Gécamines record copper production was 476,000 metric tons per year (mt/y); in 2014 the total production from the private sector was nearly 1 million mt/y. There is still a lot of room for growth. Many mines are still producing concentrate and are yet to upgrade their facilities to produce cathodes. Aside from copper, investors are also starting to take note of the country’s potential for gold, tin, other minerals and cement. There are still notable problems in the shape of inadequate power supply and poor quality transport infrastructure, but other provinces are following Katanga’s lead and investing in new roads and airports. In the early 2000s, there were maximum six banks really operating in DRC but today there are approximately 20. This is emblematic of the growing level of trust between the Congolese people and the financial sector.
How do you hope to see AEL’s operation in the DRC five years from now?
KK: We want to increase our “Congolese roots” and be a key player in the social and economic development of this country through employment and training of locals on one hand and in-country investment and industrialization on the other hand.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at firstname.lastname@example.org or +243(0)826300684.