Kinshasa, DRC — MININGREVIEW.COM — 05 March 2009 – China plans to spend US$9 billion (almost R95 billion) on mining and infrastructure in the Democratic Republic of Congo (DRC), and won’t bow to a demand from the International Monetary Fund to alter the accord.
Revealing this here, Chinese Ambassador Wu Zexian said China’s biggest single investment in Africa would give the DRC roads, railways, hospitals and schools in return for metals worth US$50 billion (R525 billion) at current prices.
The IMF has said the DRC would not qualify for more than US$6 billion (R63 billion) of debt relief unless the agreement was changed so that the country would not be the guarantor of the deal and add to its debt. “The IMF’s demands are blackmail,” said the Ambassador. “The contract will not change.”
China – the world’s largest user of industrial metals, agreed in January 2008 to help rebuild the war-torn central African country in return for control of 10 million metric tons of copper and
600 000 tons of cobalt. Since then, commodity prices have plunged, closing mines and smelters, and leaving the DRC seeking US$667 million (R7 billion) to help fund its budget. The country has US$11.5 billion (R120 billion) of foreign debt.
The DRC has one-tenth of the world’s known copper reserves and a third of all cobalt, but mines and smelters in the southern Katanga region have closed after commodity prices tumbled.
Bloomberg News reports that under the terms of the Chinese investment, US$6 billion (R63 billion) will be spent on infrastructure. And the remaining US$3 billion (R31.5 billion) will fund Sicomines Sarl – a mining joint venture between the Chinese companies and the DRC’s state- owned metals producer, Gecamines.
President Joseph Kabila pledged to rebuild the mining industry before winning elections in 2006.
Sicomines, which is due to start operating in 2011, will produce as much as 400 000 tons of copper and 19 000 tons of cobalt a year.