DR Congo Revisits Mining Deal with Chinese Firms to Address Loopholes

Afaf Fahchouch
Afaf Fahchouch
3 Min Read
DR Congo Revisits Mining Deal with Chinese Firms to Address Loopholes

The Democratic Republic of Congo (DRC) has reevaluated a controversial mining agreement it previously inked with China. This revision, announced by officials this week, follows 16 years after the signing of what the Congolese authorities termed the “contract of the century.” The deal had faced criticism, especially during President Felix Tshisekedi’s administration, accusing Chinese firms of exploitation without adequate contributions to local communities.

On January 29, authorities disclosed that the contract had undergone amendments through transparent negotiations with Beijing. The revised deal, valued at $5.8 billion, imposes specific obligations on Chinese mining companies, emphasizing the improvement of local infrastructure in the DRC.

Deputy Director of Cabinet André Wameso, Inspector-General of Finance Jules Alingete, Infrastructure Minister Alexis Gisaro, and Government Spokesman Patrick Muyaya revealed that Chinese companies, which had paid $1.2 billion over 15 years, were now obligated to contribute an additional nearly $6 billion over the next two decades.

Alingete, whose investigations in 2023 revealed an imbalance between the Congolese state and Chinese companies, emphasized that these firms had committed to constructing 7,000 kilometers of roads in the DRC, valued at $7 billion, over the next 20 years. The Chinese side is set to build 650 kilometers of roads worth $624 million in 2024 alone, with an annual allocation of $324 million for road construction.

The renegotiated contract maintains a tax exemption of around $100 million for the Chinese companies, while the DRC is expected to receive $240 million in royalties on the annual turnover of Sicomines, a company managing mining dividends. Notably, the Congolese side now holds a larger stake in Sicomines, reversing the previous majority ownership by the Chinese.

The renegotiation process began two years into President Felix Tshisekedi’s term, with the government seeking scrutiny of the Chinese contract by the Extractive Industries Transparency Initiative (EITI) and the Inspectorate-General of Finances in 2021. The DRC government, under President Tshisekedi, had criticized the initial contract for its perceived favorability towards Chinese companies.

After extensive investigations, the Inspectorate-General of Finances concluded in a 2023 report that the DRC had only benefited from infrastructure worth $822 million, while the Chinese side had gained almost $11 billion. This revelation strained diplomatic relations briefly, leading to President Tshisekedi’s visit to China in May 2023.

President Tshisekedi and his government had set up a “strategic committee” before the China visit to address the contract’s flaws and imbalances. The committee, comprising experts from various entities, worked to establish a revised agreement, ultimately leading to the recent announcement of a $5.8 billion deal with revised terms.

In this updated scenario, the Congolese government aims to rectify the perceived inequities of the original mining contract with China, signaling a new chapter in Sino-Congolese relations in the crucial mining sector.


Share this Article
Leave a comment