News / Africa

Congo-China Mines Deal Hits Rough Patch

One of few remaining miners digs out soil which will later be filtered for traces of cassiterite, the major ore of tin, at Nyabibwe mine, in eastern Congo, Aug. 7, 2012.
One of few remaining miners digs out soil which will later be filtered for traces of cassiterite, the major ore of tin, at Nyabibwe mine, in eastern Congo, Aug. 7, 2012.
Nick Long
Congolese media say a mines-for-infrastructure barter agreement between the Democratic Republic of Congo and a consortium of Chinese companies may be at risk because China's Exim Bank has reportedly withdrawn its support.

When the deal was announced five years ago it involved the Democratic Republic of Congo agreeing to give the Chinese consortium majority stakes in two of the biggest mines in the country, in exchange for $9 billion worth of infrastructure, including roads and a railway.

Under pressure from western donors, who objected to the DRC government’s offer of a state guarantee for the $9 billion when the Congo was asking them for massive debt relief, the deal was whittled down to $6 billion.

Five years on, people have been asking why there are still hardly any minerals coming out of the two mines and the infrastructure work has stalled. Media in Kinshasa have said it is because the bank that was supposed to finance the work, China Exim Bank, has pulled out.

Well kept secret

Those media reports drew on an academic article last month by Johanna Jansson, a Swedish academic.

"What happened was that Exim Bank wanted certain securities, which the Congolese and Chinese parties did not find reasonable, so Exim Bank pulled out. But the Chinese companies have remained committed," Jansson said.

China Exim bank withdrew its support from the project last year, Jansson said, but this seems to have been a fairly well kept secret.

Last week when Congo's prime minister, Matata Ponyo, was asked if Exim Bank had withdrawn from the project he said there was a problem to be discussed in depth with the Chinese partners.

Project status

On Monday, a government official said there was no problem between the DRC and China Exim Bank, but he stressed that it is up to the companies to find the finances.

"They have restarted work, so there is a financing arrangement, but I have not had time to confirm which bank is now in and what it looks like," Jansson explained when asked where the effort stands. "They were negotiating throughout 2012 with China Development Bank, and Bank of China and China Exim Bank, and when I was in Kinshasa up to end 2012 those negotiations were quite intense so I would think they have reached a financing arrangement with one of the banks by now."

Other observers do not agree that the mining company in the consortium, called Sinohydro, has restarted work on the project.  

Jean Pierre Muteba, spokesman for the civil society association of Katanga, where the two mines are located, said Sinohydro has done no work at the two mines since it finished a feasibility study two years ago. He said there is another company, CDM, which is doing some work there.

Muteba said CDM is a Chinese company that has started processing copper from the two mines and this might account for some people thinking the Sicomines project is back on track.

According to Muteba, the consortium has not done any work on the roads recently either.

Transparency

Another local activist, Jean Pierre Okenda, who works for the Extractive Industries Transparency Initiative, an international effort, said there needs to be more openness about the whole project.

He said there is no transparency in the infrastructure development program in Congo. The Congolese public, he says, does not know what infrastructure the Chinese companies are supposed to be building, nor do they know within what time frame.
 
But Jansson said there was never a time frame in the agreement and the figure of $3 billion to be spent on social infrastructure like roads is a maximum, not a firm commitment. This is not an aid project, said Jansson, it is a commercial deal.

"The contract provisions are such that the infrastructure will be constructed following the profitability of the mines," Jansson explained. "But the Chinese companies have advanced money, have been paying for infrastructure - quite significant amounts - before the mines started to produce, for goodwill basically."

The government announced recently that out of the potential $3 billion, the Chinese partners have so far spent $468 million on infrastructure, consisting of one hospital and two roads in the capital Kinshasa, one 90 kilometer road in Katanga, and another road of similar length in North Kivu.

The Sicomines contract also includes signature bonuses. Observers say it is not clear from government statements whether the second tranche of this bonus, $175 million, is supposed to go to the state mining company or to the national treasury.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Study: Insecticide Damaging Wild Bee Populationsi
X
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs