KAMBOVE, Democratic Republic of Congo Feb 22 (Reuters) - At the heart of the Democratic Republic of Congo's southern mining belt, Kambove once churned out tonne upon tonne of copper for Gecamines, a sprawling conglomerate that used to make up 60 percent and more of the country's exports.
Now, inside the rust-streaked corrugated iron walls of the Kambove copper plant, the conveyor belts run erratically and the corroded walkways have holes so large that visitors can see through to the workers milling below.
Today, like much of state-owned Gecamines, the processing operations are working at a fraction of their capacity, slowly crumbling in the searing African heat.
Kambove, however, is part of an ambitious government plan to put state-owned Gecamines back on the map as a miner and producer and reverse decades of underinvestment, war and kleptocracy presided over by the late dictator Mobutu Sese Seko.
Under technocrat managers appointed in 2010 and a plan laid out last year, Gecamines would no longer just hold minority shares in mines across Congo's south, but aim to triple its own production by 2015, thanks to investment in new machinery and a push into exploration. The group last month took its first minority stake in an asset outside Congo - cobalt refinery assets in Finland - a move it says will help raise and improve its bruised international profile.
"Gecamines has a great story," Chief Executive Officer Ahmed Kalej Nkand, a former central bank official, told a room of mining investors in Cape Town. "It is the story of a mining giant that is awakening from its slumber."
The ambition, Gecamines executives say, is to be an African Codelco, which is Chile's state copper miner and the world's largest producer of the metal, producing just under 1.7 million tonnes last year. That ambition is, at best, a very long way off. In its 1980s heyday, Gecamines made nearly 500,000 tonnes, but it reported only 35,000 tonnes in 2012, and its target of 100,000 tonnes in 2015 looks tough enough.
Financing is a major hurdle, at a time when the International Monetary Fund has halted its Congolese loan programme over mining transparency concerns, prompting questions over Gecamines' more ambitious plans, including a 500 million euro ($670 million) power plant fuelled by coal from deposits at Luena, just north of the copper belt.
Kalej Nkand says the plant will help meet its own energy needs and those of a broader industry currently suffering constant power cuts due to a 200 megawatt shortfall. But he is vague on where the cash would come from; Gecamines, he said, could finance a feasibility study but would then bring in as-yet-unnamed international partners.
Mining analysts and executives, though, say debt-laden Gecamines will struggle to raise money in a tough environment where investors are only too aware of Congo's poor reputation.
Despite potentially lucrative concessions, mismanagement has left Gecamines with little to show for it but acres of rusting, archaic equipment.
To make matters worse, the average age of Gecamines' swollen workforce of 12,000 - three times what it says it needs - is 56.
In a 2006 U.S. embassy cable from Kinshasa published by Wikileaks and dating back to previous management under Canadian lawyer Paul Fortin, even U.S. diplomats suggested Gecamines should throw in the towel.
"Rather than trying to remake Gecamines, the region and the country may be better served if Fortin eliminates the company's mining operations and focuses only on its role as a holding company," the cable said. "Political and economic conditions do not suggest that Gecamines should do otherwise."
Fortin, who was managing director as part of a World Bank programme, resigned in 2009.
Gecamines holds minority stakes in virtually all key projects in the copperbelt region of Katanga, but its efforts to get a bigger piece of the pie and to review stagnant contracts has revived memories of the country's painful 2008-2010 "revisitation" of mining contracts that irked investors.
One industry source described as "messy" the scuffle last year over the Deziwa copper project, held in partnership with British Virgin Islands-registered Copperbelt Minerals but which Gecamines sought to control.
Gecamines finally settled with Copperbelt last month and bought them out after the state miner scrambled to block a potential sale to a Chinese company, sparking months of intense negotiations. Gecamines now plans a $1.5 billion, 200,000 tonne a year plant to process output from the two copper projects, from 2015.
Financing is again unclear, even for a plant projected at the low end of the current cost curve.
"The deposits are there, but whether (Gecamines) can raise $1.5 billion remains to be seen," said Bolade Olu-Adeyanju, metals analyst at Wood Mackenzie.
"Financing is the biggest impediment to Gecamines. Foreign investors are wary of the high political risk in Congo."
Industry sources had spoken of a potential sale of a stake in Deziwa to trader and veteran Congo investor Glencore , which owns the nearby Mutanda operation. But that now looks unlikely, given Gecamines' demand to keep a majority stake and its stated desire to use Deziwa as a test for its new partnership strategy.
"We can envisage several possibilities, but where we go into partnership, it is clear that we want to be majority owners," says Kalej Nkand, speaking behind copper doors in his corner office on the fifth floor of Gecamines' headquarters in the region's mining hub of Lubumbashi.
A NATION'S COPPER BACKBONE
At its peak, Gecamines was almost a state within a state. It directly employed more than 30,000 people and ran schools, hospitals, flour mills and vast swathes of arable land, much of which it still maintains, further draining its stretched finances.
Its roots are in the mining company set up at the turn of the last century by statesman Cecil Rhodes and Belgian King Leopold II, which later became Union Miniere du Haut Katanga, and then Gecamines.
In the boom, Gecamines accounted for about 7 percent of global copper production and more than 60 percent of cobalt.
But tumbling copper prices in the 1980s took its toll, as did the compounded effect of the Mobutu government's system of patronage, which pillaged the company over decades.
The group hit a low point with the collapse of the central portion of the Kamoto underground mine in 1990 after years of underinvestment. At the time, Kamoto's cobalt was Gecamines' most profitable export.
Added to that, ethnic unrest in the 1990s drove out many of the workers from neighbouring Kasai that staffed Gecamines' mines and offices. Like the country crumbling around it, Gecamines hit a nadir from which it is still recovering.
And yet a short distance from the Kambove plant, there are undeniable signs of Gecamines' investment drive. South African contractors are overseeing the construction of a new processing plant that will boost the operational hub's capacity to digest towering stockpiles of rich ore from the nearby Kamfundwa mine.
At Congo's border with Zambia, to the south, some 100 excavators and other machines were clearing customs.
But Kambove - like other parts of an empire that was once at technology's cutting edge - is testament to the challenge ahead for Gecamines' bosses.
"The concentrator has a capacity of 4,000 tonnes (of ore) ... but we struggle to make 3,000 tonnes. We have a lot of power cuts and limits on production, so sometimes it is closer to 2,000 tonnes," says Louis Okuka, Kambove's veteran director, wearing a blue hardhat and a weary expression.
"Back in 1961, the plant was all automated."
Down the road towards the town of Likasi, the Shituru copper refinery is another rusting behemoth dating back to 1929, operating at roughly 10 or 20 percent of its nameplate capacity.
Its nerve centre - far removed from the flat-screen computers of modern automated operations rooms - boasts two chalk boards and technology reminiscent of a 1950s science fiction show. Workers in the nearby offices sit in front of plastic-covered computers amid mountains of lever-arch files.
"Since 1929, generations have passed through here - not just of men, but of equipment. Iron in this climate, when it has worked 40 or 50 years, has outlived its useful life," says Joel Tshinyama Pau, director of the Shituru operation, who says progressive investment can revive the plant.
Yet many still question whether Congo's politicians and business leaders are really prepared to develop the assets.
Albert Yuma, the head of the Gecamines board, is close to Congolese president Joseph Kabila and has faced questions over secret asset sales to another Kabila associate, Israeli businessman Dan Gertler.
Despite falling foul of the IMF for the company's failure to meet transparency requirements, Yuma has launched stinging attacks on Congo's poor business climate in his role as head of the country's business federation and has publicly championed the Gecamines re-launch.
A return to former glory will be a gruelling slog and won't be popular with everyone. Recent skirmishes with artisanal miners working illegally on Gecamines concessions have left new diggers with smashed windows and flat tyres.
But a rebirth would also be a boost to national pride and, particularly, the pride of the copper producing region of Katanga that it once sustained.
"We can't accept to see Gecamines disappear," said B.H. Ntambwe Ngoy, head of Gecamines' central operations.
"We have Gecamines in the blood."