Glencore Says 19 People Were Killed in Congo Mine Collapse

(Bloomberg) -- Glencore Plc said at least 19 illegal miners were killed when part of a mine collapsed in the Democratic Republic of Congo.

The workers entered the mine without permission and put their own lives at risk by digging at the Kamoto industrial site, one of the world’s biggest cobalt mines, Glencore said in a statement on Thursday. There are possibly more unconfirmed fatalities, and a search and rescue operation is ongoing.

“Preventative action will likely be needed and it could impact Glencore’s social license to operate,” said Edward Sterck, an analyst at BMO Capital Markets. “If this event is related to illegal mining activity, then the impact to production may be relatively short term."

The shares closed down 4.9% at 263.90 pence on Thursday. The company said the accident won’t affect production or its other operations in the area.

Still, the deaths highlight the growing problem of illegal mining. Congo and other African countries face a constant struggle to stop their impoverished citizens from breaking into mines and extracting ore by hand. The open-pit mines are vast and have perimeters that stretch for miles, making them difficult to police. Glencore said on average 2,000 illegal miners enter its land each day.

Glencore operates the sprawling Kamoto mine through its Katanga Mining Ltd. subsidiary in southeastern Congo, home to some of the world’s richest reserves of cobalt and copper, as well as the poorest people. Glencore halted sales of cobalt from the mine last year due to low levels of radioactivity, but has since restarted some shipments.

Reuters reported earlier that at least 39 people were killed in the collapse, citing Richard Muyej, the governor of Lualaba province. Eric Tshisola, chief of staff to Lualaba Mining Minister Jean-Marie Tshizainga, put the death toll at 23 so far.

Workers will go to extreme lengths to break into mine sites, sometimes tunneling underneath walls, and put themselves in dangerous situations. Congo deployed troops to protect China Molybdenum Co.’s Tenke Fungurume mine from illegal miners, Reuters reported earlier this month.

It’s a problem that’s affected several companies in the industry. A gold mine owned by AngloGold Ashanti Ltd. in Ghana was forced to evacuate employees when it was overrun by thousands of illegal miners in 2016. In South Africa, more than 30 illegal miners died in an explosion at an unused gold mine shaft in 2017.

Glencore has taken a more active role at Katanga since directors at its Toronto-listed subsidiary were fined and banned last year after the company misstated how much copper and cobalt it mined. Jeff Gerard, a senior executive at Glencore’s coal unit, became chief executive officer of Katanga in May.

To contact the reporters on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net;William Clowes in Kinshasa at wclowes@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Paul Richardson

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