Congo Hopes for $6 Billion Mining Contract Renegotiation with China

Congo Hopes for $6 Billion Mining Contract Renegotiation with China (News Central TV)
Lights illuminate a mining truck moving through an underground tunnel at the South Deep gold mine, operated by Gold Fields Ltd., in Westonaria, South Africa, on Thursday, March 9, 2017. South Deep is the world’s largest gold deposit after Grasberg in Indonesia, makes up 60 percent of the company’s reserves and the miner says it’s capable of producing for 70 years. Photographer: Waldo Swiegers/Bloomberg

The Democratic Republic of the Congo intends to achieve an agreement with Chinese investors this year to revamp a $6 billion infrastructure-for-minerals mining contract, according to Finance Minister Nicolas Kazadi.

Kazadi said that the government is in active talks with representatives of Sicomines, a cobalt and copper joint venture with Chinese state-owned firms, as well as China’s CMOC Group Ltd massive Tenke Fungurume (TFM) copper and cobalt mine.

Congo Hopes for $6 Billion Mining Contract Renegotiation with China (News Central TV)
(Pascaline Kavuo Mwasi Saambili, GPJ Democratic Republic of Congo)

The government of President Felix Tshisekedi has been revisiting a 2007 mining contract agreement struck by his predecessor, Joseph Kabila, in which Sinohydro Corp and China Railway Group Limited agreed to build roads and hospitals in exchange for a 68% stake in the Sicomines venture and a 2008 contract with CMOC.

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On the issues facing Congo’s enormous small-scale mining sector, Kazadi said a newly announced joint venture with the United Arab Emirates aimed at ending the illicit transportation of precious metals from the nation was a game changer.

The countries around Congo’s eastern border have long been conduits for gold worth billions of dollars produced by miners using primitive methods. Fighting between the Congolese army and the M23 rebel group surged in the east of the country late last year, prompting a diplomatic gap between the two countries, with Congo accusing neighbouring Rwanda of supporting the M23, which Kigali denies.

The conflict has also had an impact on Congo’s budget, with emergency spending in 2022 accounting for up to 12% of overall government spending, breaking the 10% mark for the first time in years, according to Kazadi.

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The government also intends to obtain an agreement by April on IMF Resilience and Sustainability Trust financing of up to $1 billion (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 is also in discussions with its financial advisers about tapping foreign debt markets, specifically issuing loans tied to rainforest preservation efforts.

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