Huge Congo-China Mining Deal Questioned

By Ricci Shryock

Dakar

15 May 2008

　



A huge mining deal between the Democratic Republic of Congo and China is getting extra scrutiny as critics say it does not provide enough benefits for ordinary Congolese. But the government says it is crucial to the country's development. Ricci Shryock has more from VOA's West, Central Africa Bureau in Dakar.

　

The $9 billion deals call for China to loan $6 billion for infrastructure development and $3 billion for helping revamp the mining sector in exchange for access to mining interests, including cobalt and copper fields.

Opposition leaders from the Movement for the Liberation of the Congo say the Congolese government's contract with China is not a good deal.

The secretary-general for the opposition-party lawmaker Francois Mwamba says his party wants a mining deal with China, but it thinks the current revenue split that gives 32 percent to Congo's national mining company Gecamines and 68 percent to the China Railway Group is unacceptable. Mwamba says the government must re-negotiate with China to receive more revenue.

After opposition leaders called for a re-negotiation, the Congolese government agreed to review the contracts after one year and make possible adjustments.

Congo's Deputy Minister of Mines Victor Kasongo says the opposition is not looking at the whole picture. Kasongo says that figure just takes into account dividends and Congo will actually receive more than 60 percent of total money made.

"The state of Congo will get money from taxation and royalties and so on," he said. "If you add all these things, and you see that in total it is 63 [percent] for Congo and 37 [percent] on China side."

Kasongo adds the infrastructure and jobs that the Congolese people will get in exchange for giving China access to millions of tons of Congolese copper and hundreds of thousands of tons of cobalt is part of what he calls a second phase of development.

"The European Union has helped the Congo," he said. "That was phase one. The second phase has to build the country. The Western world did not have all that level of money to do that, so now we got the assistance coming from the Asian country.

Deals like these are common in developing countries says Tim Armitage, a London-based economist with Global Insight who specializes in Sub-Saharan Africa.

"It is potentially a very promising idea, because it secures, 'A', the loans that are necessary to develop the Congolese infrastructure, and 'B', provides a method of repayment," he said. "However, the risks lie in the current government's ability to control the deal."

Armitage says the only reason the deal would not benefit the Congolese is if the African government does not follow through with its on-the-ground tasks, such as making sure Congolese are employed in the mines and infrastructure runs smoothly.