World News | Democratic Republic of Congo to Audit Mining Deals Favouring China

Kinshasa [Democratic Republic of Congo], April 16 (ANI): The Democratic Republic of Congo (DRC) is scrutinizing the mining contract concluded in 2008 with China, which is heavily skewed in favour of Beijing following the call for an overhaul of USD 6.2 billion mining deal with China in February 2023, reported US-based publication Quartz.

National assembly speaker Christophe Mboso has sought a proper audit of mining contracts with a strict review of the government's deals with "certain partners such as the Chinese contract."

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Finance Minister Nicholas Kazadi has alleged that these contracts were skewed in favour of Beijing and wants the tax obligations on these companies increased, reported Quartz.

In February 2023, the impoverished but mineral-rich nation called for an overhaul of a USD 6.2 billion mining deal with China.

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This followed President Felix Tshisekedi's demand for a bigger share of the country's vast mineral resources than that agreed upon by his predecessor.

"It is not normal that those with whom our country has signed exploitation contracts are getting richer while our people remain poor," President Tshisekedi said in May 2021. "It is time for the country to readjust its contracts with the miners in order to seal win-win partnerships."

Sicomines is a mining company owned by both DRC (32 per cent) and China with around 6.8 million tonnes in mineral reserves. It owns most of the 19 mines in the country.

DRC holds its stake in Sicomines through the state-run mining firm Gecamines. In exchange for China's 68 per cent share, Beijing-based Sinohydro Corp and China Railway Group agreed to build roads and hospitals for the central African nation of 95 million people, reported Quartz.

At 3.5 million metric tons, DRC has 70 per cent of the world's cobalt reserves, according to the UN. Around 80 per cent of the cobalt it produces goes to China for processing today. DRC is also Africa's largest copper producer.

"Sicomines, it seems, is not keen on paying the USD 200 million that the DRC is asking for after making huge profits," Kazadi said, as quoted by the East African newspaper on April 8. "They have to pay...," said Kazadi.

Notably, copper and cobalt are critical in the global switch to clean energy, as they are used in electric vehicle batteries, solar panels, and wind turbines, a field that China wants to continue dominating.

Former DRC President Joseph Kabila (2001-2019) negotiated a deal in 2008 which saw Congolese cobalt and copper exchanged for infrastructure construction by a Chinese consortium.

The original deal was worth USD 9 billion but was then renegotiated to USD 6 billion under pressure from the International Monetary Fund (IMF), reported The Brussels Times.

Considering the demand of copper and cobalt, Kinshasa is now dissatisfied. In February 2023, the state audit office Inspection Generale des Finances (IGF) asked for an additional USD 17 billion in infrastructure investment from China, looking to make such deals fairer to DRC.

An IGF report released at the time showed that Sicomines had so far invested USD 822 million on infrastructure projects in the DRC, despite earning USD 10 billion from contracts in the project over the past 10 years, reported Quartz.

IGF now wants China to increase its investment in Sicomines from the current USD 3 billion to USD 20 billion and also hire more Congolese staff.

President Tshisekedi, who will be seeking re-election in December, will use the issue in his campaign to right the Kabila regime's wrongs, observers have said, reported Quartz. (ANI)

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