Monday, June 24, 2024

Chinese companies to pour $7 billion into mining infrastructure in Congo

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Under the agreement, the Democratic Republic of Congo’s state miner, Gecamines, will be entitled to a 1.2% royalty on the proceeds of the copper-cobalt venture named Sicomines.

Additionally, Gecamines gains the right to market 32% of the venture’s output. It’s “a significant step in promoting new development in cooperation between China and the DRC,” Sicomines said in a post on X.

Officials from the office of Congolese President Felix Tshisekedi confirmed the statement on Saturday but refrained from providing further comments, Bloomberg reported.

Tshisekedi has been pushing for a restructuring of a 2008 $6.2 billion contract between the countries, which he said provided little benefit to the DRC — an important producer of green-energy metals. The original deal promised $3 billion for infrastructure projects funded by the proceeds from Sicomines.

However, the DRC government reports that less than a third of the allocated development funds were ever disbursed.

Throughout the renegotiations, Sicomines affirmed that its shareholding remained unchanged. China Railway Group Ltd. stands as the largest shareholder, followed by Power Construction Corp. of China (PowerChina) and Zhejiang Huayou Cobalt Co. Gecamines maintains a 32% stake in the venture.

Congo holds the title of the world’s largest producer of cobalt, a vital element in batteries for electric vehicles and mobile phones. Over 200,000 people are reported to be employed in informal cobalt mines in the Democratic Republic of the Congo. The country also ranks as the third-largest global producer of copper, and its mining landscape is largely dominated by Chinese companies.

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