The Democratic Republic of Congo should renegotiate its $6 billion infrastructure-for-minerals deal with Chinese investors, according to the draft of a report commissioned by the Extractive Industries Transparency Initiative (EITI), which tracks revenue flows in the oil and mining sectors and counts more than 50 countries, including Congo, as members and is a global anti-corruption body of governments, companies and activists.
The draft describes the deal that was first signed in 2008 as "unconscionable" and urges Congo's government to cancel an amendment signed secretly in 2017 that sped up payments to Chinese mining investors and slowed reimbursements of investment in infrastructure.
Under the 2008 deal struck with the government of former President Joseph Kabila, Chinese state-owned firms Sinohydro Corp and China Railway Group Limited agreed to build roads and hospitals financed by profits from Congo's Sicomines cobalt and copper joint venture. Critics say few of those projects have been realised.
The draft says the Chinese companies' 68% stake in Sicomines is too high since the Congolese contributed all the mining assets and 32% of the initial capital.
Under the 2008 contract, all of Sicomines' profits would initially go to reimbursing investments in Congo's most urgent infrastructure projects. It was on that basis that parliament agreed to exempt Sicomines from all taxes, the draft says.
It condemns the previously undisclosed 2017 amendment. Under the amendment, only 65% of Sicomines' profits must initially go toward reimbursing the investments while 35% goes to shareholders.
The change could further slow the pace of the infrastructure projects, the draft says. To date, less than $1 billion of the expected $3 billion has been invested, about $1 billion less than projected at this stage, it says.
President Felix Tshisekedi's government is reviewing the 2008 contract and the reserve levels at China Molybdenum's Tenke Fungurume mine after saying Congo was not getting a fair deal.
Prime Minister Sama Lukonde Kyenge told a mining conference on Thursday: "There has to be some adjustment."
The moves represent rare pushback by Congo, the world's leading producer of the battery metal cobalt and Africa's top copper miner, against the Chinese investors who control most of its mining industry.
Congo's $6 billion China mining deal 'unconscionable', says draft report (yahoo.com)
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