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Banro halts gold mine in Congo as access road blocked

Congo’s new mining law raises royalties on minerals across the board and removes a clause that protected miners from changes to the fiscal and customs regime for 10 years. (Image courtesy of Banro.)

Shares in Canadian gold miner Banro Corporation (TSX, NYSE:BAA) were down Monday after the company said it had temporarily suspended operations at its Namoya gold mine in eastern Democratic Republic of Congo as the access road was blocked.

The Toronto-based miner said the measure was taken after violent groups blocked the access road to the mine, preventing essentials from reaching the operation. Banro added it has taken steps to ensure the safety of its personnel and the integrity of the Namoya mine.

The incident is the latest in a string of direct and indirect violent acts against Banro’s operations in eastern Congo.

Operations at the company’s Twangiza mine in South Kivu province have not been impacted, Banro said.

The incident is the latest in a string of direct and indirect violent acts against Banro’s operations in eastern Congo.

In February an armed attack on the Twanziga gold mine, another Banro property, left four dead, including three policemen.

Only a month later, five workers including a French national, three Congolese men and a Tanzanian worker were kidnapped from Banro’s Namoya mine. And while the Tanzanian hostage was released shortly after, the other four remained captive until late May.

In July, the company also had to suspend operations at Namoya and temporarily evacuate employees after learning that 23 trucks belonging to a contractor were caught in crossfire between soldiers and a local self-defence militia near the town of Lulimba.

Banro operates in a particularly violent area of the Congo, were militia groups are still active despite a peace deal with internal rebel groups signed in 2002 and the official end in 2003 to a regional war that killed five million people.

These groups repeatedly complain against Banro for what they consider displacement and a lack of jobs for area workers, particularly the miners who had been working on the area before the company started operating there.

Shares in the company, which also announced today that Peter Cowley was leaving its board of directors, were down 1.55% to 37.4 cents in New York at 9:49 AM. Year-to-date they have fallen a more than painful 98%.