With three awards for social performance under its belt, Banro has cemented its reputation as a leader in ethical mining practices in the Democratic Republic of Congo (DRC).
The Banro Corporation is a Canadian gold company which is listed on the Toronto Stock Exchange and the NYSE MKT exchange. The Company has two gold mines and two gold exploration projects in the DRC, which are wholly owned. Banro is the largest gold mining company in the DRC and they control the largest gold exploration land package in the DRC along the 210 km north east to south west trending Twangiza-Namoya gold belt. In 2011, they opened the first commercial gold mining company in the DRC in 50 years.
The Company takes their responsibility of working with local communities and their leaders very seriously and have contributed to the social and economic growth of the region. President and CEO John Clarke said it was important to ensure that the benefits of mining are shared amongst indigenous communities in the DRC. Banro’s mission is to unlock shareholder value by increasing and developing the Company’s significant gold assets in a socially and environmentally responsible manner. This will be achieved through:
• Building supportive relationships with local companies
• Creating capacity-building jobs for Congolese citizens
• Adopting high standards of environmental management
• Nurturing local supply chains
• Building local infrastructure
• Forging of partnerships with local and international NGO’s.
Twangiza-Namoya gold belt
The DRC is reported to have the 10th highest gold reserves in the world. According to KPMG, the mining sector is expected to remain the main foreign direct investment (FDI) draw card over the short to medium term in the DRC.
Banro has mining licenses which cover a total of 2,613 square kilometres. The Twangiza-Namoya gold belt is 210 km long and is situated in the Kivu province southwest of Bukavu City. Twangiza is located at the northern tip of the gold belt and is Banro’s first producing mine, commencing commercial production in September 2012. It is an open pit, oxide operation which has a Proven &Probable Mineral Reserve of 4.69 million ounces of gold. The Inferred Mineral Resource is 0.37 million ounces of gold. In 2015, Twangiza produced 135,500 ounces of gold, increasing production by 38% from 2014.
Namoya is Banro’s second gold mine which is located at the southern end of the gold belt. Commercial production at Namoya commenced in January 2016. It is also an open pit, oxide operation which has a Proven &Probable Mineral Reserve of 1.36 million ounces of gold. The Measured and Indicated Mineral Resource is 1.62 million ounces and the Inferred Mineral Resource is 0.26 million ounces of gold. The total production for both mines is expected to be between 210 00 – 230 000 ounces of gold annually.
Banro has two other key exploration projects located on the gold belt:
• Exploration is underway at Lugushwa and preliminary economic assessment will be completed in 2016. Lugushwa has an Indicated Mineral Resource of 0.73 million ounces of gold and an Inferred Mineral Resource of 3.53 million ounces of gold. Banro is considering the prospects of building a third mine at Lugushwa and is accelerating exploration at the site.
• Exploration has also commenced at Kamituga, which has an inferred mineral reserve of 0.92 million ounces of gold. A feasibility study is likely to commence within two to three years.
Investing in people
The DRC has improved its Human Development Index (HDI) from the lowest rank in 2013 to 176 out of 188 countries in 2015. The HDI represents a summary measurement of the average performance of the country in key areas of human development.
Banro has contributed significantly to increasing the knowledge, skills and the standard of living for their staff and surrounding communities. It is one of the largest private sector employers in the eastern DRC, employing 2,700 Congolese people either directly or indirectly. The Company’s training and development goal is to support employees to attain their maximum potential, while linking personal development to current and long-term business goals. The target is to have 95% of all management, professional, skilled and administrative jobs in Banro’s operations occupied by Congolese nationals. They have come very close to achieving this target which is currently over 91%.
In 2015 Banro won Best Employer Award for job creation and the quality of wages and benefits paid to staff.
The Banro Foundation is a registered DRC charity which was founded in 2005 with the objective to increase the long-term economic and social development in the communities near its operations. The Foundation invests mainly in education, health care, social infrastructure development and sustainable agriculture. To date the Foundation has completed 70 projects valued at $5.5million.
Banro has formal agreements in place with communities in the areas in which the mines are situated. The agreements are reached after community consultation and set out the projects that will be implemented by Banro to achieve the community aspirations of improved education, health, infrastructure, sustainable economic development and employment.
Clarke highlighted Banro’s commitment to hiring people from the local communities where their mining operations were located. He said that currently 35% of their Congolese staff compliment comes from local communities and that there are plans to increase local employment to 50%. Some of the skills development projects that Banro have implemented are:
• 13 Top candidates from the local high school in the capital Kindu were recruited into a two year professional training program at the mine.
• 19 candidates from the community near the Twangiza mine completed a six- month apprenticeship training program.
• 31 candidates completed the Banro Community Apprenticeship Program which provides industry training for unemployed youth. Once completed, the graduates are given preference when there are vacancies at Banro.
Building local supply chains
Both Banro and the Banro Foundation have prioritised the development of local supply chains to enhance economic development and sustainability.
The Twangiza mine supports three agro-pastoral cooperatives, two road building cooperatives and one carpentry workshop. The Cinjira Agricultural Cooperative which has 106 members partners with Banro’s caterers, ATS, to supply potatoes to the mine and the Lubanda Agricultural Cooperative which operates three farms, produces and supplies vegetables. They employ 27 community members. The Luhwindja’s Breeders Cooperative acts as a channel for local cattle and goat farmers who wish to sell their products to the Twangiza mine through ATS. The cooperative provides 27 permanent jobs and earned revenue in the region of $200,000 in 2015.
Banro provided $87 000 in operating funds to the ASSODEC Cooperative which focuses on road maintenance projects and $240 000 in operating funds and equipment to UTRALU cooperative which works on road construction projects. These two cooperatives provide employment to over 200 local people.
According to a KPMG study, mining in the DRC is still fraught with risk due too poor working conditions of mine workers, exposure to landslide hazards especially in the monsoon season, and exposure to heavy metals through dust inhalation and water contamination.
Banro embraces a robust and comprehensive risk management approach, recognising that risk is an unavoidable consequence of mining operations. The Company’s goal is to create a work environment that is free of uncontrolled hazards and safe for its employees and contractors. In 2015 the Twangiza mine operated for 5.3 million hours with no lost time injuries and Namoya reported 3.6 million hours with 1 loss time injury.
Promoting conflict-free artisanal gold mining
Although forbidden by Congolese law, child labour is common in artisanal gold mining. A World Vision study shows that about 40% of artisanal miners are children. Children as young as eight years old are being forced to mine. Artisanal miners continue to work with mercury which is illegal. In addition they are exposed to strenuous working conditions and extreme hazards like digging collapses etc.
Globally there is a concern that minerals exported from the DRC originates at artisanal sites which are illegally operated and where workers are subjected to human rights atrocities by armed groups. Banro supports efforts to end the illegal trade in minerals and complies with internationally accepted standards and guidelines to certify that the gold is conflict free. The company also provides assurance that the gold exported by their mines to the Rand Refinery in South Africa, was produced in compliance with the Conflict Free Gold Standard as established by the World Gold Council.
The Company holds 14 exploration permits which cover 2,638 square kilometres and which are located on highly prospective ground between its Twangiza and Lugushwa projects. In addition, they have several pending applications for additional exploration permits.
Banro have indicated that they will maintain their portfolio of high rate of return projects by increasing production or lowering costs including potential underground mine expansions or low capital cost hydro power projects. The costs associated with diesel power generation will be reduced by two hydro power projects which are planned in the vicinity of the mines, and which are expected to deliver 10MW hydro power. This will reduce energy costs significantly and bodes well for Banro’s growth plans in the DRC.
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30 April 2015
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