A 2008 infrastructure-for-minerals agreement with Chinese investors is currently being renegotiated, and the state auditor of the Democratic Republic of the Congo has asked for an additional $17 billion in investments.
The British news agency Reuters provided the information for this report.
The state auditor’s report was “full of bias,” according to the Chinese embassy in Congo, and did not reflect the situation.
The DRC’s current government has reviewed the agreement made by his predecessor, Joseph Kabila, in which Sinohydro Corp (SINOH.UL) and China Railway Group Limited agreed to construct roads and hospitals in exchange for a 68% stake in Sicomines, a cobalt and copper joint venture with the DRC’s state mining company Gecamines.
Under the terms of the Sicomines agreement, the Chinese investors agreed to invest $3 billion in infrastructure projects; however, the state auditor, Inspection Generale des Finances (IGF), insisted that the commitment be increased to $20 billion to take into account the value of the mining concessions.
A Sicomines spokesperson did not immediately respond to a request for comment. He had previously defended the deal, saying that Sicomines would increase their spending as output increased and that it had fueled growth in Congo.
The IGF report states that Sicomines has already spent $822 million on infrastructure projects. Additionally, the auditor demanded that Sicomines make a “urgent” $1 billion investment and make a commitment to employing Congolese for 50% of infrastructure projects.
Among a list of 16 demands, the IGF requested that the Convention be renegotiated “to adjust and balance the obligations and benefits of both parties and bring them into line with the value of their respective contributions.”
The auditor also requested that Gecamines be given a bigger stake in Sicomines. Now, it owns 32% of the business.
Nicolas Kazadi, the Congo’s finance minister, told Reuters last month that the government anticipated reaching an agreement on the Sicomines acquisition this year.
Sicomines was exempt from paying import tariffs until September, when Congo terminated the tax exemption. Two officials claim that the suspension is still in place.
