DR Congo to Review Infrastructure-for-Minerals Deal with China
- January 19, 2023
- Posted by: Quatro Strategies
- Category: Politics
Democratic Republic of Congo expects to reach an agreement to revisit the $6 billion infrastructure-for-minerals deal with Chinese investors this year, the sub-Saharan African nation’s finance minister Kazadi said. The government is in discussions with representatives from Sicomines, a cobalt and copper joint venture of Chinese state-owned companies, as well as as well as Chinese miner CMOC Group’s massive Tenke Fungurume (TFM) copper and cobalt mine, Kazadi added.
“It’s important for us to have clear agreement because this is what we have now to finance our development,” he said.
President Tshisekedi’s government has been reviewing a 2007 deal signed by his predecessor Kabila under which Chinese construction company Sinohydro Corp and China Railway Group agreed to build roads and hospitals in exchange for a 68% stake in the Sicomines venture as well as a 2008 contract with CMOC.
“We have already a framework, we have some key elements of change that we want to bring in that agreement,” Kazadi said of Sicomines.
Kazadi also stated that a recently announced joint venture with the UAE that is designed to end the illegal movement of precious metals from the country was a “game changer”.
“In only five days they have managed to burn and export 27 kilograms,” Kazadi said, speaking of the joint venture that is owned 55% by the UAE with the remainder owned by the government of the DR Congo.
The countries along Congo’s eastern border have long been conduits for gold worth billions of dollars mined using rudimentary means by so-called “artisanal” miners. Kazadi said it would change the situation in Rwanda, which he argues makes the Rwandan government angry.
Late last year, fighting intensified in Congo’s east between the Congolese army and the M23 rebel group, causing a diplomatic rift between the two nations with Congo accusing Rwanda of backing the rebels, which Rwandan government denies.
The conflict has also hit Congo’s finances, with emergency spending in 2022 making up as much as 12% of total government spending and breaching the threshold of 10% for the first time in years.
The Kinshasa government expects to reach an agreement by April on financing of up to $1 billion from the IMF’s Resilience and Sustainability Trust (RST).
“We are working with the IMF to find a good programme with good objectives,” Kazadi said, adding that the lending facility for climate and pandemic preparedness should target rainforest, water, and energy.
Congo, he said, is also exploring the possibility of applying to the IMF’s food shock window, an emergency funding programme it launched last year to help countries facing food price shocks after Russia’s invasion in Ukraine. Kinshasa aims to get access to $200-300 million.
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