DRC reviews US $6bn mining deal with Chinese investors
The government of Democratic Republic of Congo has reviewed its US $6 billion “infrastructure-for-minerals” deal with Chinese investors as part of a broader examination of mining contracts.
President Felix Tshisekedi said in May that some mining contracts could be reviewed because of concerns they are not sufficiently benefiting Congo, which is the world’s largest producer of cobalt and Africa’s leading miner of copper.
His government announced this month it had formed a commission to reassess the reserves and resources at China Molybdenum’s (603993.SS) massive Tenke Fungurume copper and cobalt mine in order to “fairly lay claim to (its) rights”.
Development plan
Under the deal struck with the government of Tshisekedi’s predecessor, Joseph Kabila, Sinohydro and China Railway agreed to build roads and hospitals in exchange for a 68% stake in the Sicomines venture. The deal formed a key part of Kabila’s development plan for the country, but critics say few of the promised infrastructure projects have been fully realised and have complained about a lack of transparency.
Chinese investors control about 70% of Congo’s mining sector, according to Congo’s chamber of mines, after snapping up lucrative projects from Western companies in recent years. After Tshisekedi announced the reviews in May, a move attributed by some analysts to Western pressure to go after Chinese companies, China’s ambassador to Congo warned the country “must not be a battlefield between major powers”.
The chairman of China Molybdenum, Yuan Honglin, said communication between Tenke Fungurume and Congo’s state-owned mining company Gecamines, its minority partner at the mine, was going according to plan.
“Both parties are confident to properly resolve the problem within the framework agreement,” the chairman said.
