Chinese firms agree to raise investment in Democratic Republic of Congo copper-cobalt mining deal

The Chinese companies had previously agreed to invest US$3 billion in infrastructure, funded from the mine’s revenue, and another US$3 billion to develop a copper and cobalt mine, in exchange for a 68 per cent stake in the joint venture with the state-owned Congolese company Gecamines.

But in February last year, the DRC’s General Inspectorate of Finance released a report saying the ­country had not been adequately compensated for the copper and cobalt reserves it contributed to the deal.

The report said Chinese firms had exploited mineral resources worth US$10 billion, but had only built infrastructure estimated to be worth US$822 million.

Under the new deal, the companies have agreed to increase their spending on infrastructure from US$3 billion to US$7 billion.

Sicomines said the deal would promote the achievement of win-win cooperation and “constitute a significant step to promote new development in cooperation between China and the DRC”.

The DRC supplies more than 60 per cent of China’s cobalt, a key component in batteries for electric vehicles and electronics, making it a key player in China’s transition to green energy.

Christian-Geraud Neema, a Congolese mining and policy analyst, described the revised deal as “an important political victory” for Tshisekedi, who in 2021 criticised the Sicomines contract as unequal and called for its renegotiation.

However, Neema, who is also the francophone editor at the China Africa Project, noted that the DRC had initially wanted US$17 billion in infrastructure investment and remained the minority shareholder in Sicomines despite calls to increase its stake from 32 per cent to 70 per cent.

Sicomines has already invested US$1.5 billion in infrastructure and the remaining US$5.5 billion will be funded from its profits.

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China-funded infrastructure across Africa force difficult decisions for its leaders

China-funded infrastructure across Africa force difficult decisions for its leaders

Neema said that since “Gécamines holds a 32 per cent stake [in Sicomines] the DRC will finance 32 per cent of the total remaining US$5.5 billion. The Chinese party is not the only one to bear the burden”.

The initial Sicomines contract that agreed to invest US$3 billion in infrastructure had itself been scaled back under pressure from the World Bank and the International Monetary Fund, which forced the DRC to reduce its demands as a precondition for debt relief.

“Forcing the Congolese government to cut back on infrastructure investment was clearly tantamount to the international financial institutions preventing the country’s sovereign will to build the roads, railways and hydroelectric dams its people needed,” Isabelle Minnon, an independent researcher on Chinese-Congolese relations, said.

“Today, this US$4 billion increase in infrastructure investment appears to be a success in the face of the country’s immense needs.”

Other deals signed between the Congolese government and foreign companies have also come under scrutiny.

China’s cobalt mines in spotlight as DRC seeks to renegotiate deals

One such case is Katanga Mining and Mutanda Mining, which are both 100 per cent owned by Glencore – sparking calls for the government to renegotiate the deal to end the Anglo-Swiss company’s monopoly and allow the state to share in the profits and revenues.

Sicomines also said last month that the DRC’s stake in the US$660 million Chinese-built Busanga Hydropower Station had increased from less than 10 per cent to 40 per cent.

“This increased stake ensures that the Congolese government does not allow private companies to take too large a stake in a key sector, such as the production of electricity from a dam,” Minnon said.