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Thursday, May 30, 2024

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Congo Demands Share In Copper, Cobalt Venture With China

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The cobalt and copper joint venture deal leaves the Democratic Republic of Congo with very little profit but gives away an excessive amount of Congo’s resources, and so the country wants to increase its stake in the venture deal with Chinese companies from 32% to 70%.

Congo, in a detailed document put forth its objectives to boost its stake and have more managing power over Sicomines venture, which is mostly controlled by Chinese corporations. The demands in the document comes ahead of discussions to renegotiate a $6 billion infrastructure-for-minerals pact

The negotiations should proceed after Congolese parties “consolidated their position” on the 2008 agreement, said Congolese President Felix Tshisekedi, who is scheduled to visit China, on May 19.

According to Congo, it is an unfair agreement that gives it leverage to monitor the venture’s operations, along with the resources and money that are going out of the nation.

In order to reconcile the negotiation stances of the Congolese institutions in charge of overseeing the deal’s execution, he ordered the formation of an ad hoc commission in March.

The General Inspection of Finance (IGF), the Agency for Supervision, Coordination and Monitoring of Collaboration Agreements signed between the Democratic Republic of the Congo and Private Partners, the state miner Gecamines, the presidency, the government, and civil society were all represented on the commission.

The legitimacy of the paper and the unreported conclusions was attested to by two commission members.

According to the sources, Congo’s discussions with the Chinese enterprises would be based on these conclusions.

According to British news agency Reuters, the commission recommended that Congo pursue a larger stake in Sicomines because the 2008 agreement failed to account for the estimated $90.9 billion in reserves that Gecamines brought to the table.

In return for a 68% ownership in Sicomines, the cobalt and copper joint venture with the government-owned mining corporation of the Democratic Republic of the Congo, Sinohydro Corp. and China Railway Group Limited pledged to construct roads and hospitals.

The cobalt used in batteries is most commonly produced in Congo, which is also a significant copper producer.

To make the joint venture agreement more equitable for Congo, the panel recommended that Congo seek a 60% ownership in Sicomines for Gecamines and its affiliate, with a non-dilutable 10% stake for the state, and 30% for the Chinese enterprises.

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