Congo reviewing US$ 6 billion mining deal with Chinese investors

 Congo reviewing US$ 6 billion mining deal with Chinese investors

Congo reviewing US$ 6 billion mining deal with Chinese investors.

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Democratic Republic of Congo’s government is currently proceeding with the process of reviewing its $6 billion “infrastructure-for-minerals” deal with Chinese investors as part of a broader examination of mining contracts.

President Felix Tshisekedi announced sometimes 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.

Finance Minister Nicolas Kazadi said the government had formed a commission to reassess the reserves and resources at China Molybdenum’s massive Tenke Fungurume copper and cobalt mine in order to “fairly lay claim to (its) rights”.

 Kazadi said in an interview that the 2007 deal agreed with Chinese state-owned firms Sinohydro Corp and China Railway Group Limited was also being reviewed to ensure it is “fair” and “effective”.

Sinohydro and China Railway did not immediately respond to a request for comment. Elie Tshinguli, deputy director-general of the Sicomines copper and cobalt joint venture in Congo, majority-owned by Sinohydro and China Railway, did not respond to a request for comment.

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.

“We saw that there were some governance issues in the past,”

“We needed more clarity on the contract, the kind of finance that is behind (the) investment.” said Kazadi.

He said the reviews were not a matter of threatening any investors and that the government was conducting the review in close partnership with the Chinese themselves.

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”.

Asked at an online briefing about the formation of a government commission to reassess reserves, 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.

Tafadzwa William Mutsika

Tafadzwa Mutsika is an award-winning print, broadcast, and online journalist with more than 10 years of experience in the field. Tafadzwa has experience in financial reporting and Public relations since 2010. He is also a part-time lecturer in journalism and media studies. Possess excellent communication and presentation skills. Areas of Interest: Mining, energy, tax law, insurance, and corporate governance. Hobbies include -painting and sculpture.

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