Democratic Republic of Congo and Chinese investors review $6 billion in mining deals

Nicholas Kazadi (Nicolas Kazadi), finance minister, said the (DRC) government of the Democratic Republic of the Congo was reviewing its $6 billion "mineral infrastructure" deal with Chinese investors as part of a broader review of mining contracts.

President Felix Tshisekedi (Felix Tshisekedi) said in May that some mining contracts might be reviewed because of concerns that they did not fully benefit Congo, the world's largest cobalt producer and Africa's leading copper miner.

His government announced this month that it would set up a committee to reassess the reserves and resources of China's molybdenum industry's large Tenke Fungurume copper and cobalt mine to "fairly claim its rights".

Deals struck in 2007 with state-owned Chinese companies Sinohydro and China Railway are also under review to ensure they are "fair" and "effective", Kazadi said in an interview.

Sinohydro and China Railway did not immediately respond to requests for comment. Elie Tshinguli, deputy director-general of the Sicomines copper-cobalt joint venture of Congo (DRC), which is majority-owned by Sinohydro and China Railway, did not respond to a request for comment.

Under an agreement with Tshisekedi's predecessor, the Joseph Kabila government, Sinohydro and China Railway agreed to build roads and hospitals in exchange for a 68 per cent stake in the Sicomines joint venture.

The deal is a key part of Kabiyra's national development plan, but critics say committed infrastructure projects are rarely fully fulfilled and complain about a lack of transparency.

'We have seen some governance problems in the past and we need to be more clear about the contracts, the financing methods behind the investment, 'Mr. Kazadi said.

He said the review was "not an issue that threatens any investors" and that the government was conducting a review "in close co-operation with China".

Chinese investors control about 70 per cent of Congo's mining industry after snapping up lucrative projects from western companies in recent years, according to the Congolese mining chamber of commerce.

Kazadi also said he expected the International Monetary Fund to review the $1.5 billion three-year plan next month, which was finally approved in July to confirm that all conditions had been met. There is no doubt that the review should be successful and will lead to new spending in December, the next of which will exceed $200 million to increase foreign exchange reserves. At the same time, the government plans to use half of the 1.0217 billion SDR ($1.45 billion in) (IMF's own currency) allocated to the Congo to further support reserves. Most of the rest will be used to launch investment funds aimed at diversifying the Congolese economy. It will implement new projects in new areas such as agriculture or energy production.