China and Democratic Republic of Congo to Complete Massive Mining for Infrastructure Deal
2008-05-12
On Monday 14th April it was reported by Newsnight, the UK current affairs television programme, that the single biggest deal that China has brokered in Africa, worth $9 billion, is shortly due to be completed with the Democratic Republic of Congo (DRC).
The deal is being financed by China’s state owned Exim Bank, and the two Chinese companies signing the deal are the state-owned China Railway Engineering Corporation (CREC) and Sinohydro. Together they will provide DRC with $6 billion of infrastructure estimated to include 2,400 miles of road, 2,000 miles of railway, 32 hospitals, 145 health centres and two universities.
In return China will receive 10m tonnes of copper and 400,00 tonnes of cobalt from an unused mine in Kolwezi in the Southern copper belt province of Katanga. After 10 years of production it is envisaged that a joint venture, one third DRC and two thirds Chinese will continue to exploit the mine.
DRC’s Deputy Mining Minister Victor Kasongo sees the deal as an opportunity to provide much needed infrastructure and services which two centuries of mining has to date failed to achieve; and Paul Fortin a Corporate Lawyer who currently runs DRC’s state owned copper and cobalt mining company, Gecamines, believes that the deal “… will jump start the economy of a region depressed after years of war”.
However, Human Rights groups and other critics of the deal have highlighted that the Chinese will be awarded fiscal privileges, such as exoneration from all taxes and customs, throughout the building work phase and that the Chinese will also benefit a great deal more overall than the Congolese, with an estimated profit of $42 billion
Georges Kapiamba a Human Rights Lawyer with Association Africaine de Défense des Droits de l’Homme – Katanga (ASADHO/Katanga) stated “we can’t understand why they’re singing under these circumstances” and “We need a commission of jurists to consider whether it’s in the interests of the Congolese”.
Source Article: China to Seal $9bn DR Congo Deal
