Is Chinese-controlled copper and cobalt mining joint venture being turned into a political pawn in Congo?
- DRC President Felix Tshisekedi, a critic of previous deals, will be seeking re-election in December
- Report from DRC state auditor calls for infrastructure investment to be increased by US$17 billion
Politics could be at play in the latest falling-out between the Democratic Republic of the Congo and Chinese companies over a US$6 billion minerals-for-infrastructure deal signed more than a decade ago that Kinshasa says was poorly negotiated and favoured the Chinese side.
The DRC’s General Inspectorate of Finance released a report last week that said the DRC was yet to benefit from the deal.
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State-owned Congolese commodity trading and mining company Gecamines formed the joint venture with a consortium of Chinese companies led by Sinohydro and China Railway Group to trade infrastructure such as roads and hospitals for copper and cobalt, with the Chinese side taking a 68 per cent stake in Sicomines.
The Chinese companies agreed to invest US$3 billion in DRC infrastructure, funded from the mine’s revenue, and another US$3 billion to develop a copper and cobalt mine.
But the state auditor said the amount invested in infrastructure should be increased to US$20 billion – reflecting the value of the mineral resources that Gecamines contributed to the deal. The report said Gecamines had made available mineral deposits estimated to be worth more than US$90 billion.
It said Kinshasa had not been adequately compensated for the copper and cobalt reserves it contributed to the deal, which was signed when Joseph Kabila, Tshisekedi’s predecessor, was president. The report said Chinese companies had exploited mineral resources worth US$10 billion but had only built infrastructure estimated to be worth US$822 million, and demanded that projects worth US$17 billion be added to Sicomines’ infrastructure investment in the DRC.