Rick check out $5 Billion Deal with ChinaChina secures copper, cobalt mining rights with DRC loan deal
The DRC Mines Minister has signed a loan deal with China which could lead to the development of Gecamines’ Mashamba and Dikuluwe copper/cobat projects said to contain huge copper and cobalt reserves
Author: Joe Bavier
Posted: Tuesday , 29 Jan 2008
https://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=45375&sn=Detail
KINSHASA (Reuters) -
Chinese companies will receive mining rights to millions of tonnes of Congolese copper and cobalt under a multibillion dollar loan agreement, Congo's mines minister said on Monday after signing a deal.
The huge, war-ravaged central African country announced plans last year to borrow at least $5 billion from China to help build major road and rail construction projects and for the rehabilitation of its rich but neglected mining sector.
Under a deal signed on Monday by China's Exim Bank and the Kinshasa government, Congolese state miner Gecamines, China's Sinohydro Corp and China Railway Engineering Corp will create a joint mining venture with rights to two mining concessions.
"The mines serve as the guarantee for this agreement. We have evaluated the mines at Mashamba and Dikuluwe in tonnage of cobalt and copper. And it was on this basis that we signed the deal," Congolese Mines Minister Martin Kabwelulu told Reuters.
Together the Mashamba and Dikuluwe mines contain 10 million tonnes of copper and 2 million tonnes of cobalt, he said.
Kabwelulu said the Chinese investment would be repaid with revenues from the joint venture, called Sicomines.
Public works projects would begin soon with an initial $350 million loan, he said.
"Sicomines will reimburse both the funds we will receive for infrastructure building and all the loans we will receive to open up the mines," he said.
Since the loan deal was originally announced with a value of $5 billion, Congolese and Chinese officials have shied away from confirming the total value of loans and investment on offer.
"These are large projects and the mines are large. In my opinion it's surely in the billions. That is certain," China's ambassador to Congo, Wu Zexian told Reuters following the signing of the deal.
"But if you want an exact figure, it's the accountant for this cooperation that will calculate bit by bit as the work advances," he said.
The International Monetary Fund has warned Congo to beware of the macroeconomic effects of the huge loan on Congo's economy, still reeling from years of systematic looting and war.
Following landmark elections in 2006 won by President Joseph Kabila, foreign mining companies have intensified their scramble for stakes in Congo's mining sector, one of Africa's richest.
The former Belgian colony, previously named Zaire, has seen its once mighty mining industry decimated by a series of wars and years of corruption, mismanagement and neglect under former dictator Mobutu Sese Seko. (Editing by Alistair Thomson; Editing by Marguerita Choy)