The Democratic Republic of Congo (DRC) has sealed a crucial partnership with Chinese construction giants, marking a significant milestone in the mining sector’s development.
Under the agreement, Sinohydro Corp and China Railway Group Limited will invest $7 billion in infrastructure projects within the DRC as part of the Sicomines copper and cobalt joint venture. The deal maintains current shareholding structures and ensures 1.2% of royalties are paid annually to the Congolese government.
Negotiations revisited terms set by former President Joseph Kabila, responding to calls from the state auditor, Inspection Generale des Finances (IGF), to increase the commitment from $3 billion to $20 billion. President Felix Tshisekedi’s administration navigated these discussions, aiming to strengthen Congo’s stake in the venture.
Despite being heralded as progress, concerns persist over tax exemptions for Sicomines and delays in fulfilling infrastructure investment promises. Ernest Mpararo of the Congolese Anti-Corruption League highlighted discrepancies in previous agreements, emphasizing the need for transparency.
The partnership underscores the DRC’s importance in global cobalt and copper markets, solidifying China’s footprint in the Congolese mining sector. President Tshisekedi sees this agreement as a key driver of economic growth, signaling a new phase of cooperation between the two nations.
As the DRC seeks to leverage its mineral wealth for sustainable development, this partnership holds promise for both parties, offering a pathway to mutual prosperity in the years ahead.
By: Montel Kamau
Serrari Financial Analyst
31st January, 2024
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