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.
He said he had instructed the mines services to no longer authorise exports of the unprocessed material.
A Sicomines representative could not be reached by Reuters for comment.
Congo has banned exports of unprocessed copper and cobalt but has provisionally exempted companies because it lacks enough electricity to process the minerals domestically.
Sinohydro and China Railway Group are also financing a US$660 million hydroelectric plant to reduce the power deficit, which forces miners to rely on generators and costly imports from neighbouring Zambia.