The mining contract between the Democratic Republic of Congo and a Chinese consortium faces criticism from NGOs for leading to significant financial losses and lack of transparency. The CNPAV coalition estimates a loss of $132 million for 2024 and calls for the DRC government to renegotiate the agreement. Concerns include dependence on fluctuating copper prices and a fixed payment structure that does not benefit the Congolese state proportionally to increased production.
A controversial mining agreement between the Democratic Republic of Congo (DRC) and a Chinese consortium is facing renewed scrutiny. Non-governmental organizations (NGOs) and civil society groups allege that a recently renegotiated version of the deal continues to disadvantage the Congolese state. The coalition known as CNPAV, urging fairness, estimates potential financial losses of $132 million (€124 million) for the DRC in 2024 alone. They are advocating for the government to reopen negotiations for a more equitable agreement.
Initially signed in 2008 under former President Joseph Kabila, the “contract of the century” allowed Chinese companies access to significant copper and cobalt mining operations in exchange for infrastructure development. The agreement was renegotiated in early 2024 with expectations of generating nearly $4 billion (€3.8 billion) in additional benefits for the DRC. Despite this, watchdogs assert that the new terms still perpetuate prior imbalances in favor of the Chinese partners.
One major concern highlighted by CNPAV is that infrastructure funding is contingent on fluctuating copper prices. The DRC is set to receive $324 million (€312 million) annually for road infrastructure over two decades, but payments are only guaranteed should copper prices remain above $8,000 (€7,700) per tonne. If prices dip below this threshold, the DRC could end up receiving significantly less or nothing at all, hindering its financial stability.
Additionally, the structure of the payments remains fixed regardless of the quantity of minerals extracted, leading to further dissatisfaction. The coordinator at the Carter Center-DRC, Baby Matabishi, pointed out that the agreement fails to account for increased production. He questioned, “How can it be understood that a company that produces 100,000 tonnes pays $324 million… while producing 200,000 tonnes or 400,000 tonnes results in the same payment?” Matabishi emphasized that this lack of a production-based scaling mechanism denies the DRC a proportional benefit from increased mining output.
CNPAV also criticizes the ongoing tax exemptions provided to Chinese companies, which reportedly cost the DRC at least $100 million annually. While the Kinshasa government contends that infrastructure developments will counterbalance any financial losses, civil society organizations argue that many promised projects remain unfinished or subpar.
In summary, the ongoing debate surrounding the mining contract between the DRC and Chinese entities underscores significant concerns regarding financial losses, transparency, and fairness. NGOs, particularly the CNPAV coalition, assert that the new renegotiated terms have not corrected historical disparities, which could lead to monumental losses for the Congolese state. They advocate for immediate negotiations to achieve a more equitable agreement and address the ongoing issues surrounding tax exemptions and incomplete infrastructure projects.
Original Source: allafrica.com
