Transcript | Yves Ilunga

Arthur Katalayi (host): Hello, this is the first episode of The Right Advice Podcast, created by the advisory firm A2k Advisory. Today, we welcome Mr. Yves Ilunga, Chief Executive of Glencore’s Mutanda Mining. Thanks for coming!

Yves Ilunga (guest): Thank you Mr. Katalayi!

Arthur Katalayi: So! What can you tell us about yourself? When I saw your background, I noticed that it is very African focused, you have worked for world-class companies to date. What intrigued me is that most of the companies you have worked for are Africans.  Your academic background with your MBA at the University of Cape Town, one of the most important schools in the world in terms of commerce, is also based on Africa continent. Growing up, we were often told that we had to go to Europe or North America, because there are extraordinary schools there, and I was able to benefit from them myself. We (our generation) have very rarely seen people who had a thriving career in Africa and who became a source of inspiration for the rest of us. Would you like to elaborate on this?

Yves Ilunga: It’s nice, indeed I had worked mainly for African companies that were part of international groups, and my background is mainly African. I was born in Kinshasa, 43 years ago. I spent the first eleven years of my life in the DRC, and at some point, I had a short journey in Europe after leaving the country. My parents had this great idea for which I always thank them, to send me to South Africa, in a totally English-speaking environment, at the age of 13, and I had to adapt very quickly. After my arrival in South Africa, I went to boarding school, and from thereafter finishing my secondary studies, I was accepted at the University of Cape Town, in the school of finance, formerly called the school of accountancy. Why accounting? For the record, I am a Gécamines grandson. My grandfather worked in the mining industry, and that’s where my father was born. My family was a little formatted to follow engineering, and techniques. In my family, finance was not considered a man’s skill. In the history of our country, everything that was accounting and administrative was generally reserved for women, … [Laughs], and so my father was a polytechnician, and civil engineer with a military career, my older brother is an electronics engineer, and of course, I was destined to become a mechanical engineer. One day I told my father that I did not want to become an engineer. To my surprise, he took it very well, he was very logical. He inquired and spoke to some of his friends who were in the profession in South Africa, and they recommended that I should study accountancy. His friends had explained to him that when there are economic crises it is the accountants who find themselves the best, because that is when people open their accounts in Europe, and that is how I had my father’s blessing to study finance. And I applied to the University of Pretoria. My first choice was accounting, and my second choice was an internal audit. I was accepted for my first choice, and started my university studies at the age of 17 at the University of Pretoria, in January 1997. Three years later I applied for a scholarship for my final year through the Anglo American group plc, this was the only scholarship I applied for. Because at the time, Anglo American plc was considered one of the pillars of the South African economy. Everyone wanted to work at Anglo, and as a young man of 19, I decided to apply for this scholarship. I sent a fax, one afternoon from the family home in Pretoria, and a few days later they replied telling me that I had an interview. The process was clear, there were two interviews, a preliminary interview in Pretoria, and a second at the headquarters in a historic building in the South Africa because it is the headquarters of the great Anglo American plc. This is where I had my second interview. I received a Telex through the post office. For those born around the 90s, a Telex is a document printed with a metric doc printer, which was sent by post, and when you received it there was a very short message, and the message said “ You have been accepted into the Anglo-American program as a scholarship holder. I was accepted as an assistant tutor at the accounting school, for first-year students.

Arthur Katalayi: Very interesting, I am very familiar with this scholarship system. I had the opportunity to receive one through my bachelor’s degree, which I did in the United States through soccer. I spent three years in England, and my goal was to get a professional contract in the Premier League or in the Championship. And when I felt that it wasn’t coming, I thought to myself that it would be interesting to pursue soccer in the United States and continue my studies while obtaining a student-athlete scholarship. And I had a friend who was looking at scholarships in Miami, he said that he saw how to obtain a scholarship in the USA while studying, and it gave me the idea to do the same. It’s something extraordinary when you receive this letter.

Yves Ilunga: Indeed, and especially when it comes to an academic scholarship in the English-speaking world, it gives many guarantees.

Arthur Katalayi: And it’s highly valued.

Yves Ilunga: Absolutely. This reassures many employers about your skills. On Friday, November 27, 2000, I passed my last Bachelor’s exam, which was an auditing exam, and on Monday, November 30 I started at Kalenan mining as an assistant accountant. It was a diamond mine. I was deployed in the Diamond division of the Anglo-American group, which was called De Beers. It was a family business, the Oppenheimer family. They created the Anglo-American group at the end of the 19th century. A few months later, I was deployed to their Supply Chain. I spent almost 2 years there.

Arthur Katalayi: Where you the youngest?

Yves Ilunga: I was one of the youngest, and I even remain friends with one of them who is one of the senior engineers of a large South African mining company. He had an engineering scholarship. History dictated that 10 years later we could work together on a gold project in Mali, he worked as an engineering director and me as commercial director. It was the Sadiola project, the Anglo-American group’s first gold project outside South Africa. We worked on behalf of Ashanti at the time which was the Gold division of the Anglo-American group.

Yves Ilunga: Why Mali?

Yves Ilunga: I think it is the result of the forces of nature. The De Beers organization asked me to join the Training outside of the practice (TOP) chartered accountant training program of the South African Institute of Chartered Accountants. And at the end of this course, 4 years after joining De Beer, I received the opportunity to return to my native land.

Arthur Katalayi: Was that always a goal?

Yves Ilunga: No, never, it was in 2005. The last time I was in the Congo was in 1995. At the time, De Beers had the ambition of developing mines in the DRC, and it was necessary to sets up an office or representation to support activities.

Arthur Katalayi: A small parenthesis with De Beers, everyone knows that De Beers is in diamonds, and we know that in Kimberley there are a lot of diamonds too. What about Mbuji-Mayi? It is said that the Kasai region has the biggest volumes of diamonds in the world; was that the case? Is this still the case?

Yves Ilunga: De Beers had been in Congo since the 1960s-1970s but mainly in the purchase and sale of Diamonds, not in production. When I returned to the DRC, the ambition was to develop our mines as we did in Botswana, South Africa and Canada. When we talk about diamonds we must understand that it is extremely complex because the valuation of diamond is not necessarily linked to volume or quantity. It is rather based on the market, the Dollars/Carat base. It is based on the demand for a particular diamond type, grades and operating costs. Why is Botswana or Canada ahead today? Their diamond is much preferred in the market. In a diamond there are what are called the three Cs: Color, Clarity, and Carat. And in Mbuji Mayi, of course there are diamonds, except that the volumes are not as large as in Botswana. In any case, the large volumes are confirmed.

Arthur Katalayi: Are there still exploration possibilities?

Yves Ilunga: I am not an expert in exploration but I suppose so. But exploration requires a fairly large investment and you have to think about improving the business climate. You have to think about how to attract serious investors to put millions and millions just for exploration. And above all, you need patience, because exploration takes a lot of time, between the moment you decide to start exploring an area and the start of exploration, on average 7 years ago. Today we have reduced the process to more or less 4 to 5 years, thanks to supply chains which are becoming shorter and shorter, along with the logistics of construction of the mines that are shorter. I think that we must give a minimum of comfort to those who invest their capital because there is a real risk.

Arthur Katalayi: There is no guarantee? No opportunities to reduce investment risks?

Yves Ilunga: The geological risk is there. To improve the conditions of the business climate, the rules are very clear, just more taxation, more flexibility in terms of management in general, etc. There are several factors that come into play. Going back to the DRC diamond, I think there is potential, but it is the market that determines the value of the minerals. And I think as a mining country, it’s important that we understand that. As long as there is no demand for the natural diamond that justifies an investment in the DRC, we will not put money in the diamond.

Arthur Katalayi: On the other hand, the demand for copper and cobalt at the global level is certain and it will quadruple over the next 10, 15, 20 years…

Yves Ilunga: I think that this is subject to the conditions in which we live. It should be understood that the demand for a product depends on the way we live. Today I think that we have made a choice as humanity to move towards renewable economies, to move towards green energies and there is also the fact that we have an urban population which is increasing extraordinarily from year to year, and which means that, based on our scientific knowledge, we will need copper to support this energy transition. So according to the forecasts that we are going to make today, we can say that we will need copper in the future, more or less at 600,000 tonnes per year for the next 15, 20, 35 years to support this way of life we ​​chose. But if it turns out that for the next 10, 15 years there will be a copper replacement, everything will change. Don’t forget that in the 1970s the discovery of fiber optics caused the price of copper to fall.

Arthur Katalayi: It’s true that I’m very familiar with the American system, and I always look towards it because at the tremendous technological level it is at. In any cases, when we look at the west coast of the United States and particularly California we see these companies in Silicon Valley, which have a need for cobalt that is beyond comprehension according to the various viable reports. How should Congo position itself in relative to this stunning demand? The fact that on international markets there is much more liquidity than the market actually can absorb, there are possibilities to attract this capital, for many mining projects that need financing and for more future copper/cobalt productions.

Yves Ilunga: Absolutely, yes, but the first thing once again is to go back to market demands. We still need to be able to realize that the demand per renewable energy unit for cobalt is lower than 5 or 6 years ago. The reason is that there has been a movement to find an alternative to cobalt. It’s a reality. The reason for this movement is that at some point there was what is called the Congo risk, whether perceived or real in the minds of many people.

Arthur Katalayi: Is it real, or perceived, or a balance between the two?

Yves Ilunga: It’s extremely subjective. Risk is based primarily on perception. When we talk about the Congo risk, we have to get into the heads of the people who talk about it. And these people are the ones who decide how many units of cobalt one should put on a unit of energy. If they say to themselves that it is very difficult to do business in Congo, and that we have extremely aggressive taxation; if they say to themselves that it is very difficult to repatriate these dividends when investing in Congo, they will say to themselves that the mining companies which will invest in this environment will come up against enormous difficulties and may not be able to secure our cobalt, and hence they will look for an alternative. Today I would say that our primary mission must be to guaranteed that we are an investment territory. Our priority must be to project the image of a country where investment must be secure and respected, and a country that respects its legal commitments.

Arthur Katalayi: It may take time to develop, or not?

Yves Ilunga: As I told you with the mines it was 7 years on average, today it is 5 years and the alternatives are changing. In the field, for example in batteries, cobalt units are reduced. We are also reducing the percentage of cobalt needed to manufacture electric cars and that should challenge us as Congolese. And we should understand why is the world behaving like this? It’s not totally the fault of the Congolese, the risk is perceived first, it’s the image you give. There is also the fact that the mining resources are not eternal and that people ask where the next units of cobalt will come from.

Arthur Katalayi: So how is it that countries like France, the United Kingdom can make projections that by 2040 they will only have electric cars. In California it’s the same, the projection is for the next 5 years…

Yves Ilunga: It comes back to the first point, it depends on the quality of life we ​​choose. You have to know that there is an ambition in relation to the energy transition, and that this transition will not necessarily be supported by cobalt. It may be supported by other minerals. The question is how to produce clean energy? And if it’s cobalt today, it can be the sand Botswana tomorrow!

Arthur Katalayi: It is true that we often look to the West and particularly North America for the mining sector financing and we realize that there are particular countries like Qatar and Saudi Arabia that have reserves enormous amounts of cash to the extent that they don’t know what to do with, yet very rarely do we hear them in discussions of international investment in the mining sector. Yet these are people who are open and ready to diversify their economies to be less dependent on oil and gas.

Yves Ilunga: Indeed, but I think that is starting to change. I speak with caution, but I think Saudi Arabia is already thinking about its transition from oil dependence and it is starting to prepare to become a mining country. It is preparing to invest outside its borders in various mining projects.

Arthur Katalayi: Does that mean that these are partners we can have in the future in the DRC? It would aid to diversify the pool of partners and create a very interesting economic balance than having only Chinese or Europeans – this will avoid creating industry monopolies. I think that would be an advantage.

Yves Ilunga: Absolutely, it would be to the advantage of the DRC. It comes back again to the perception of risk. But we are able to have different investors and I still want to mention here that among the investors there can be Congolese too. We must get out of this paradigm where the mining sector only belongs to non-Congolese. You and I live here, we don’t think we’re going to get killed, even though we know we have parts of our country where security is questionable. Our perception of the Congo risk is different from someone who lives in California. It is only normal that we can have a base of diverse investors who will have a different perception and who will be able to invest and create wealth, tax revenues, socio-economic development etc

Arthur Katalayi: And in the same vein, I told you about California earlier, the Middle East, how about Wall Street?

Yves Ilunga: Same logic, and Wall Street has become extremely diversified in terms of investors.

Arthur Katalayi: At the investment level, they have the likes of hedge funds that are awash with cash…

Yves Ilunga: Exactly, that’s what justifies low interest rates, it’s not because there’s high demand.

Arthur Katalayi: Does that also mean that for Congolese there is an opportunity there that exists?

Yves Ilunga: Yes, especially since there are more and more investment funds that want to become green funds. They say to themselves “we want to invest because our shareholders are asking us to…” so today if the DRC is positioning itself as a solution country, it is normal that we work to attract this type of capital.

Arthur Katalayi: Afterwards, there is work that must be done upstream to have a result downstream. And it’s true that when we hear of Congolese missions leaving for the USA, it’s often Washington, almost never California or Wall Street. It is true that this is where the discussion should shift.

Yves Ilunga: Yes, and that’s a shame. As you said, the funds are available. We must work on the perception of risks. I tell myself that if a country like Israel, that is not necessarily recognized as a stable country based on the images we receive,  can attract as much capital in fintech as they do, so can the DRC. And this is because, in Israel, there is work that is done to demonstrate that the risk will be managed and that there will be a sound return on investment. What prevents us from doing it? I think that indeed if we get down to it, if we decide to guarantee the capital and above all to be a driver of return on investment on the various funds that exist throughout the world, we will have a much more substantial investment base and that will have a major impact on our country.

Arthur Katalayi: There is a strong correlation between mining and tech? We often think that everything that is advanced technology is necessarily related to what comes from outside?

Yves Ilunga: Yes, it’s true

Arthur Katalayi: What is the role of mining, copper and cobalt that the Congolese can play in relation to technology, creating batteries, factories, creating a real industry here.

Yves Ilunga: As a mining country it is natural that we can capture all the value of the production chain. For that, we have to rethink our society, that is to say that if today the technology is elsewhere, it is because there has been a societal effect so that these countries can have the necessary skills to develop these technologies. These countries are not necessarily mining countries. And I tell myself that we who are mining countries can do it too. If we continue to accept that all the best will come from elsewhere, it is normal that we only limit ourselves to production. We must rethink school, we must rethink training, we must rethink the importance of digital technology in society and that is what will allow us to go to the other extreme of the value chain. When we go from production to this extreme, there is still what is called the secondary sector of the economy which is the industrial sector. Of course, today we produce copper etc. But we need an industrialization of our economy and it necessarily involves an energy policy. And thank God for the DRC, country solution 1000 MW of hydroelectric energy, what do we do with it? The strength of our country is that we are in a position where we can launch industrialization without necessarily polluting as much China has done. We have the immense reserve of electrical energy, immense reserve of solar energy, and therefore we can industrialize properly. We have to sell this narrative. We must be serious in the way we treat all its richesl which, once again, will create wealth, the multiplier effect, taxation and can also address socio economic problems.

Arthur Katalayi: Going back to your journey, we talked about your past, your present. How do you see yourself in terms of adding value to Congolese society and the mining industry over the next 5, 10 years?

Yves Ilunga: On a personal level, I think I hope to continue to contribute my small contribution to the development of the mining sector, and of my country, of the continent as a whole, through what I do. I am a miner, even if I am a financier at the base, I would like to continue to push ustowards excellence. I want to continue to make sure that wherever I go, people can’t say “here’s a Congolese, or a few Congolese, who are doing their job well…” For me, the objective is to ensure that everywhere I go,  I can have a positive impact and that the quality of the work that we provide is among the best quality in the world in any case. It is a personal objective. As far as I am concerned, I would like to continue to pass on my knowledge, I would like to continue to share, especially with young people. This connected generation needs to be channeled. There are a lot of things on the internet, there are a lot of things on social networks, this potential, this Congolese genius, these skills should be channeled to build a great Congo, a great Africa.

Arthur Katalayi: Does that mean everyone has a role to play? Or is it a private initiative?

Yves Ilunga: We all have a role to play.

Arthur Katalayi: A parenthesis, with regard to the mining sector, seen from the outside, it is very difficult to penetrate. And then it’s a bit of a cowboy world. It is difficult for a young person to have mining ambitions either in the DRC or beyond. It is important to demystify this sector.

Yves Ilunga: Absolutely, it has to be totally demystified, it’s part of the way we are rethinking the Congo. It has always been an important sector for our country and humanity.

Arthur Katalayi: It always has been if you look at the last 100, 150 years, … in the industrial revolution, the automobile, the nuclear revolution and now the technological one…Congo has always been at the heart of major industrial revolution for the past 150/200 years or so…

Yves Ilunga: That’s true, but we don’t have the largest GDP in the world either. It means that at some point we have to say stop, and ask ourselves the question of what we are doing well and what we are doing badly to improve the living conditions of our people. And certainly this sector is mystified by some. There is nothing special in this sector, we extract minerals, of course it requires special knowledge, we take an investment and we export it. I would like this sector to be open to everyone across the entire value chain. I mean based on what you say that there is a kind of control, especially with us in the DRC, and if we rethink our country, there will be more requests for Congolese seeking mining permits. I think we will always need global expertise. The most developed countries in the world continue to receive immigrants, expatriates, to provide additional expertise. Today we cannot say that in 20, 30 years, there will only be Congolese descent people in the mining sector. It can be an ambition but in my humble opinion, you always have to make sure that you can take the best. As far as the country is concerned, the country can have the ambition to provide the vast majority of executives in the mining sector; it takes schools, by investing in new technologies, rethinking the role of digital.

Arthur Katalayi: And by the way, to come back to what you were saying, we are a mining country and we have very few mining schools, perhaps this is an axis that we will have to develop.

Yves Ilunga: Yes, but we have to capture all of this through a value chain as I said before.

Arthur Katalayi: Let’s wrap it up, the show is called The Right Advice, so what advice would you have for young entrepreneurs? I have always been inspired by people who do great things, not just in mining or finance, but in sport, tennis or football. Seeing people like Federer, like the Williams sisters, … it’s excellence in their field, and it’s people who can only be source of inspiration. And you are also a source of inspiration clearly through your background, … What tips can you give?

Yves Ilunga: The tips are very simple; knowing what you want, knowing how to get there, determination, permanent work and above all integrity. This is the only advice I could give to young people.

Arthur Katalayi: We talk a lot about networking, the importance of meeting new people, chatting with…

Yves Ilunga: It’s true that it’s extremely important, but I would like those listening to us today to think of the 19-year-old kid who sent a fax to apply for a scholarship, he had no networks but he knew what he wanted. The network is important, it’s true, but this network must be based on excellence, if you are recognized in this network, if you are a person of integrity, it will bear fruit.

Arthur Katalayi: Thank you for coming to visit us, we wish you all the best for your professional career and for the good things you have done in Congo and will do in the future.

Yves Ilunga: Thank you, I wish you lots of success with this show, which is a great platform, I hope it will contribute to make us a great nation.