The Democratic Republic of Congo wants a mining deal it signed with China more than a decade ago to be reworked, with a view to securing all promised funding for infrastructure projects and a share of windfall profits.
A review of the 2008 minerals-for-infrastructure contract which includes the Sicomines copper-cobalt mining project should ideally be concluded by the end of the year, Congolese Prime Minister Tean-Michel Sama Lukonde said in an interview. in Sharm el-Sheikh, Egypt, during the COP27 climate summit. Additional payments were justified because the project was making super-profits due to soaring commodity prices, he said.
Sicomines produced 155,630 tonnes of copper and 886 tonnes of cobalt in 2020, according to government data. China has so far spent about $900 million on infrastructure, well below what was required in the deal, according to Lukonde.
“When we look at the balance sheet, it looks like they took more minerals than what was built in terms of infrastructure,” he said. “We must quickly signal new projects on our side in terms of infrastructure so that this balance can be reduced. »
Congo has another dispute with a Chinese company over the giant copper and cobalt mine, Tenke Fungurume Mining. The disputes have a global connotation as Congo’s large reserves of cobalt, copper and lithium make it a key supplier of minerals needed for the transition to cleaner forms of energy.
The 2008 agreement was signed at a time when Congo was emerging from decades of instability and newly elected President Joseph Kabila was in desperate need of funding. It predicted that China would invest $3.2 billion in a copper-cobalt mine and another $3 billion in transportation links and other projects that would be funded by revenue generated from the mine.
The deal gave Chinese companies a stake in Congolese resources – including the world’s largest cobalt deposits and Africa’s second-largest copper reserves – in return for helping to fill a massive gold shortfall. infrastructure in a country the size of Western Europe. The administration of President Felix Tshisekedi, which took office in 2019, however, criticized the mandates as being strongly pro-Chinese.
Sicomines officials and the Chinese Embassy and Ambassador to Congo did not respond to emails and text messages seeking comment. China Railway Group, which owns a majority stake in Sicomines, did not respond to emails and faxed questions.
Lukonde said Congo wants its share of the windfall tax in cash rather than in the form of additional infrastructure investment – a proposal that has yet to be decided – to enable it to weather the challenges. economic and security issues in the east of the country.
“In terms of infrastructure, they are very open,” he said. “We really need to quickly sort out all the projects that need to be done, and it will be done. In terms of benefits, they suggest we might be able to add it to the infrastructure.
The Congolese government is also aiming to resolve a standoff at Tenke, a copper and cobalt joint venture between Chinese group CMOC and Congolese state-controlled Gécamines, by the end of the year. Exports from the mine were blocked in July by a court-appointed provisional administrator tasked with resolving disputes between its shareholders.
Recent audits of Tenke’s reserves have shown the project has greater potential than expected and additional payments may be due to Gécamines, Lukonde said, citing correspondence with the state-owned company. Gécamines wants CMOC to revalue the assets, but that issue and disputes over a contract that determines the revenue owed to the Congolese company have yet to be resolved, he said.
Vincent Zhou, a CMOC spokesman, said production continued at the mine and the company filed a complaint with the Congolese customs agency and finance ministry. CMOC will make royalty payments in accordance with its contract and based on feasibility studies of economically viable reserves approved by the Congolese mines ministry, it said in an email response to questions last week.
While CMOC is aware that Congo may need to raise additional funds and the company is prepared to discuss payments based on “potential additional reserves in the future”, it would not accept “any wild surcharges that are without merit in legal or contractual terms,” the spokesperson added.
As well as having vast reserves of minerals needed to shift to cleaner forms of energy, Congo also has the largest tropical peatlands in the world, which store three years of annual global carbon emissions, and is home to the most largest tropical rainforest in the world after the Amazon. While the government is committed to playing its part in the fight against global warming, it has also reserved the right to develop its resources to serve its own interests.
Congo is aware that its potential for carbon sinks, hydropower generation and the production of key minerals offer solutions to global problems, but the countries responsible for the current climate crisis must also play their part, Lukonde said.
Source: mines.cd
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