The DRC and Chinese construction companies have reached an updated agreement on their Sicomines copper and cobalt JV, Reuters reported.
The new agreement includes a commitment of up to $7bn in infrastructure projects in the DRC.
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This development follows a review of the initial arrangement with DRC President Felix Tshisekedi’s government.
Under the revised agreement, the shareholding structure will remain unchanged.
However, China’s Sinohydro and China Railway Group have agreed to pay 1.2% of annual royalties to the DRC.
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The original deal, established by former President Joseph Kabila, involved the Chinese companies receiving a 68% stake in the JV in exchange for building roads and hospitals.
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By GlobalDataThe state auditor, Inspection Generale des Finances (IGF), last year called for an increase in the Chinese investors’ infrastructure spending commitment from $3bn (21.54bn yuan) to $20bn.
President Tshisekedi, ahead of his planned visit to China in May 2023, had instructed his government to renegotiate the terms, aiming to increase Congo’s stake in the JV from 32% to 70% and address the shortfall in infrastructure spending.
According to a 2023 IGF report, only $822m of the initially promised $3bn for infrastructure investments had been spent.
The DRC is the leading global producer of cobalt and ranks third in copper production. The mining sector in Congo is predominantly influenced by Chinese companies.
In April last year, the National Assembly of DRC called for a review of the country’s mining agreements with China.
The central African nation sought to expand its share of the revenue from the foreign-backed mining that takes place there.
At that time, Christophe Mboso, speaker of the DRC national assembly, pointed to “certain partners such as the Chinese contract,” which it says is not paying its fair share.
Sicomines, a Chinese majority JV operating in the country, was singled out as a significant target for a tax rate increase.
