Congo orders Chinese joint venture to stop exporting raw metals because of low prices
Kinshasa authorities say exports of unprocessed materials under resources-for-infrastructure deal are hampering its ability to repay loans
The Democratic Republic of Congo’s mining minister has ordered a joint venture involving Chinese investors to stop exporting raw copper and cobalt before processing because of their low value on international markets.
Sinohydro Corp and China Railway Group Limited agreed to build US$3 billion worth of roads, railways and other infrastructure, with the investments to be reimbursed by earnings from its majority stake in the Sicomines project.
The government in Kinshasa presented the US$6 billion deal – one of several such resources-for-infrastructure accords China has signed with African governments – as a model for mining investment.
But in a September 11 letter seen by Reuters on Monday, mines minister Martin Kabwelulu wrote to the director general of Sicomines to complain the mine was exporting mostly unprocessed copper and cobalt instead of higher value processed metals.
The decision was “destroying the prospect” of a return on investment and was hurting Congo’s ability to repay loans, Kabwelulu said in the letter.