Congo ex-rebels threaten AngloGold mining project By Jonny Hogg MONGBWALU, Democratic Republic of Congo (Reuters) - AngloGold Ashanti said on Monday its Mongbwalu gold mine in Democratic Republic of Congo faces the obstacle of tens of thousands of ex-fighters already mining the area who do not want to leave. It plans to start Mongbwalu output late next year. "It's an immense challenge and we recognize that," Richard Peattie, general manager of the Mongbwalu project, told Reuters. The world's third-biggest mining firm is partnered with Congo's government to build the industrial gold mine in a vast zone deep in the hills of Ituri, a district in the central African state still recovering from a bloody ethnic conflict that ended in 2003. As many as 200,000 artisanal miners, mostly ex-combatants from the conflict, have set up operations in the 6,000 square km concession - some with well-organized teams and machinery to crush and sift through rock. Many who laid down their weapons to dig and pan for gold are now making as much $50 a day, a huge sum in a country ranked as one of the poorest and least developed in the world. "If we're moved from here we'll lose everything," said Landu Ndongo, one of the former fighters seeking his fortunes in the muddy pits outside Mongbwalu, a scruffy town which saw waves of ethnic killings during the war. It's only a few years since the war and we're trying to rebuild. This puts everything at risk," he said. When asked if there would be violence if he and his fellow miners were forced out, he nodded his head. AngloGold, no stranger to resolving tricky problems with communities around its global operations, acknowledges it will need to negotiate with artisanal miners on its sites. Civil society president in Mongbwalu, Godefroid Mpanda said that some of the former fighters who drink and dance in the town's many bars have maintained links with armed groups, adding it would be easy for them to get weapons if things turned sour. We think its going to be violent because most of the miners are formerly from armed groups, some still have links... If they rise up, its going to be brutal," he said. AngloGold has held the concession - with proven reserves of 2.5 million ounces - since 1998 and has had a presence there since 2004, but insecurity has hampered work, meaning that construction is only now getting under way. The mine is one of two projects it has in the country "We're not just going to kick them all out, there needs to be a process, something to catch them, otherwise we've got another set of social upheavals to deal with," said Peattie. "We will be moving around and building, which will bring us into conflict (with artisanal miners), and in those areas we'll need a negotiated approach to create buffer zones," he said. Congolese law forbids artisanal exploitation on the concession, but with few other alternative livelihoods, locals have for decades relied on mining. AngloGold's joint-venture, called AGK, has already established an exclusion zone around 4 km from Mongbwalu and cleared up to 3,000 miners from the site. But the company has also been targeted in recent attacks. In two separate incidents guards from AGK have been attacked by unidentified men armed with machetes and one of their vehicles was torched, sources said. Emmanuel Fwarwinyo, a community leader and the head of Adur, a local NGO, said the attacks were a sign of tensions that could explode if AGK does not tread carefully by investing more in the communities and providing alternative employment. A perceived failure by the company to bring about social benefits has fueled distrust among locals. If they don't provide alternatives, there will be a rebellion for sure... these miners are ex-fighters and have access to weapons. People will die," he said. Although a forum has been set up to improve relations between the government, AGK and the population, the authorities are not doing enough, according Jean Pierre Bikilisende Badombo, Mongbwalu's mayor. The state has got to help AGK... It's not just former fighters who can turn violent, even civilians can, if their lives are really affected." he said. Editing by Richard Valdmanis and William Hardy