The Multilateral Investment Guarantee Agency (Miga), a member of the World Bank Group, is to provide US$13.3mn in guarantee coverage for the Dikulushi copper and silver mine in the Democratic Republic of Congo (DRC).


 Half of the guarantee amount will be covered by Lloyd’s of London insurer Beazley and by Chubb through Miga’s Cooperative Underwriting Programme.


This is the first extractive industries project to be considered and approved by the board of the World Bank Group since conclusion of the bank-sponsored Extractive Industries Review in August 2004. The guarantee also marks Miga’s first guarantee for a project in the DRC, which became a member of the agency in 2003.


The guarantees will cover investments and loans by Anvil Mining of Canada and RMB International (Dublin) of Ireland to Anvil Mining Congo of the DRC against the risks of transfer restriction, expropriation, breach of contract, war and civil disturbance. The project involves open pit mining of copper and silver ores to produce a concentrate, which will then be trucked to smelters in South Africa and Namibia for further processing.


In coordination with Miga, Anvil has established a profit-sharing mechanism to ensure that local communities will benefit from the development of the Dikulushi deposit. The company has pledged 10% of its interest in the mine to a trust structure. Dividends will fund a community development programme administered by a local non-governmental organisation (NGO). Anvil is currently evaluating potential associations with a suitable NGO, al-ready active in the DRC, to help implement the community development programmes.


This innovative profit-sharing structure reflects lessons learned from the Extractive Industries Review. Previous models of revenue sharing in the mining sector usually involved a minority percentage payment to the central government, to be used as the authorities saw fit. This did not always trans-late into benefits for the local communities impacted by the development of mine sites. In this case, Anvil Mining held the view that investing in the community was just as important as investing in capital, and was eager to ensure local ownership in the investment.


“We believe this project offers significant and innovative development impacts,” says Miga executive vice-president Yukiko Omura. “The collaboration between Miga, government officials, the investors, and local communities has been in the works for a long time, and we look forward to seeing the people of DRC begin to derive benefits from this undertaking.”


The community development programme, which is expected to receive US$5mn-US$7mn in funds over the next five or six years, includes investments in education, health care, and micro-enterprise and infrastructure development.