Congo: About-Face

“We will go hungry to gain our economic independence,” said the Congo’s President Joseph Mobutu when he nationalized Union Minière du Haut Katanga on Jan. 1. General Mobutu’s economically shortsighted advisers clapped their approval, scoffed at the prospect of a mass exodus of Belgian technicians. “Pay them,” one aide predicted, “and they will do anything.” It did not turn out that way. Union Minière’s management immediately chose to pull out. Shipments and, consequently, sales came to a standstill. Only five of 2,000 engineers and technicians opted to stay on under a brand-new management company—Gecomin —that was formed by Mobutu.

Mobutu searched the world for a new team of technicians, even dickered with a rival consortium about taking over the mines. In the end he found no one who would or could come to his aid.

Ten days ago, faced with a possible halt in production of the copper and cobalt that account for 50% of his country’s revenues, Mobutu swallowed his slogans, signed an agreement for continued operation of the mines with Sociètè Gènèrale des Minèrals (called S.G.M.), a Union Minière affiliate. “This is not a betrayal,” he avowed on TV last week. Nevertheless, Congolese students drummed up discontent, and one leading businessman wired Mobutu: “We have undressed Peter to dress Paul.”

The five-year agreement calls for S.G.M. to take over the Union Minière operation. S.G.M. will also recruit non-African technical personnel and market the minerals from the mines. While answerable to Gecomin, the Belgian company will handle the payment of guaranteed hard-currency wages to non-African workers. The agreement cannot be terminated until 1972, and then only if two years’ notice has been given by either party. S.G.M. will make 4.5% or some $15 million a year, plus expenses, on sales of copper for the new Congolese management.

Still to be settled: compensation of Union Minière for $800 million in seized assets, and claims by the Congo on $100 to $150 million worth of copper in shipment at the time the mines were nationalized.