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Republic of Congo and a consortium of Chinese companies may be at risk because China's Exim Bank has reportedly withdrawn its support.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Last week when Congo's prime minister, Matata Ponyo, was asked if Exim Bank had withdrawn from the project he said there was a problem to be discussed in depth with the Chinese partners.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

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Crowdfunding Helps Save Neil Armstrong's Spacesuit

Smithsonian turns to Kickstarter to raise more than $700,000 to help preserve the spacesuit worn by the first man to walk on the moon More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs