Chinese construction giants Sinohydro Corp and China Railway Group Limited have announced a massive $7 billion investment in infrastructure projects in the Democratic Republic of Congo. This move is part of an agreement over their Sicomines copper and cobalt joint venture, a significant step for the nation’s mining sector.
The investment deal, solidified in an agreement to maintain the current shareholding structure, includes the Chinese partners paying 1.2% of royalties annually to the Congo government. This development follows a review by President Felix Tshisekedi’s government of the initial deal established by his predecessor, Joseph Kabila.
Under the initial agreement, the Chinese investors, in exchange for a 68% stake in the joint venture with Congo’s state mining company Gecamines, committed to investing $3 billion in infrastructure projects. However, the state auditor, Inspection Generale des Finances (IGF), last year called for this commitment to be increased to $20 billion.
Ahead of President Tshisekedi’s visit to China in May 2023, he instructed his government to renegotiate the terms, aiming to increase Congo’s stake in the joint venture from 32% to 70%. “It is a win-win deal,” stated IGF head Jules Alingete, acknowledging the complexity of the negotiations.
Ernest Mpararo, head of the Congolese Anti-Corruption League, welcomed the announcement but expressed concerns over Sicomines’ tax exemption and the discrepancies in the actual expenditure under the last agreement. An IGF report from 2023 revealed that only $822 million of the initially promised $3 billion for infrastructure investments had been spent.
Congo, the world’s largest producer of cobalt and the third-largest copper producer, has a mining sector dominated by Chinese companies. These investments are crucial, given the critical role of cobalt in manufacturing batteries for electric vehicles and mobile phones.
President Tshisekedi, who secured a second mandate in December, had hinted at this agreement in his inauguration speech on January 20. This deal marks a significant stride in the DRC’s efforts to leverage its vast mineral resources for infrastructural development and economic growth.
