By David Lewis

Kinshasa - Rampant corruption and smuggling in the Democratic Republic Congo (DRC) means the impoverished country loses millions of dollars in revenue from copper and cobalt mining each month, a natural resource watchdog said on Tuesday.

In a report on mining in the DRC's southern province of Katanga, Global Witness said that during a boom in the price of cobalt, neither the country's economy nor the local population was benefiting.

"Ongoing corruption and smuggling in southern DRC are leading to the loss of millions of dollars in revenue every month for the country," it said in a statement.

"DRC is missing a crucial opportunity to benefit from the current boom in world cobalt prices, as so much of its ore is being smuggled out of the country and the vast majority is leaving unprocessed," the report concluded.

Cobalt prices have tripled since May 2003 and now stand at a record $55 100 (about R353 000) per ton, largely driven by China's massive demand for the metal for use in cellphone batteries.

The watchdog said official figures showed China imported 10 707 tons of cobalt concentrate from the DRC in March 2004, but the African country's central bank recorded cobalt production of just 783 tons.

Customs records showed the central African country had exported 13 365 tons of cobalt metal during the month, but Global Witness said the majority of the minerals left Katanga in their raw form.

"This discrepancy raises serious questions about where mining revenues are going and how trade and production is being recorded," Global Witness said.

"Customs officers are currently colluding with companies to allow the transport of unprocessed heterogenite (mix of copper and cobalt ore) across the border," it said.

Rather than profiting from its vast mineral wealth, the DRC has been torn apart by years of war - often over its natural resources - and the country remains one of the world's poorest.

The DRC government is struggling to lead the country to elections after the official end to a five-year war that sucked in six neighbouring countries and killed three million people, mostly from hunger and disease.

The DRC drew up a mining code in 2002 to control and provide clarity for a sector that is notoriously unregulated. It also issued a decree in January 2003 banning the export of unprocessed copper or cobalt ore.

Global Witness called on the international community to support attempts by Congo's fragile transitional government to implement the mining code.

"Without the active support of the international donor community, this situation is unlikely to change but as yet, the donor community have shown little willingness to tackle issues of corruption and transparency in the DRC," the watchdog said.