Dem. Rep. of Congo: Chinese minerals-for-infrastructure Sicomines deal has failed to benefit the Congolese population according to analysts

Author: Andoni Maiza Larrarte and Gloria Claudio-Quiroga, Quartz Africa, Published on: 15 April 2019

"How to avoid flawed minerals-for-infrastructure deals like DR Congo and China's Sicomines pact", 3 April 2019.

...The Sino Congolaise des Mines (Sicomines) was the most significant Chinese investment project in Africa when it was agreed in 2007. The infrastructure agreement gave Chinese partners mining rights to cobalt and copper in the Democratic Republic of Congo (DRC). These minerals are used in electric vehicle batteries and electronics, including smartphones and laptops. In exchange, China agreed to build much-needed infrastructure projects such as urban roads, highways and hospitals. In addition to new infrastructure, the Sicomines deal was expected to provide a significant boost to the DRC’s economic growth. The view was that the agreed volumes of mineral production would contribute to higher levels of exports, tax revenue and inflow of US dollars.

More than a decade on, the Sicomines deal has not lived up to expectations...the Sicomines deal won exemption from taxes until infrastructure and mining loans were fully repaid. This means that the DRC will not receive any substantial income from the agreement in the foreseeable future. The Sicomines agreement demonstrates one of the main problems with deals of this nature. It never included any guarantee of the actual value that the Congolese population would get in exchange for the country’s main source of wealth...

The first decade of the deal shows that Chinese companies have focused their efforts on benefiting from access to valuable natural resources. But the interests of local communities have been neglected...Host countries should create committees of experts, if necessary with regional and international support. Alternatively, they could contract independent specialised consultants to guarantee that national interests are satisfied...African countries could take a more incremental approach...Any new agreements should include precise objectives and financial resources to guarantee training and upskilling for workers...

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