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Chinese in US$4 billion DRC venture

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Shanghai, China — MININGREVIEW.COM — 23 April 2008 – Asia’s biggest construction group – China Railway Group Limited – has reached agreement with another Chinese company – Sinohydro Corporation – on a US$4 billion (R32 billion) venture to build a mine, roads and power plants in the Democratic Republic of Congo (DRC).

Reuters report that in a submission to  the Shanghai and Hong Kong Stock Exchanges, China Railway revealed that in terms of the investment – which is still subject to approvals from authorities in China and the DRC – it would be responsible for providing loans and other financing amounting to US$1.8 billion (R14 billion)

“China Railway will own 43 percent of the venture and Sinohydro 25 percent,” the report said. “Congo Mining and Congolese national Gilbert Kalamba Banika will hold the other 32 percent,” it added.

Under the agreement, Congo Mining, which is owned by the DRC government, will transfer at least 10 million metric tonnes of copper and cobalt reserves to the new venture, while the Chinese companies will help build roads, hospitals and power plants.

China is looking increasingly to Africa to meet its growing need for basic metals and minerals. The Congo, which has the world’s largest cobalt deposits and Africa’s biggest copper reserves, is encouraging investment in its mining industry to help rebuild an economy shattered by years of civil war.

The proposed project has a proven copper reserve of 6.8 Mt and cobalt reserve of 420 000 t.

“Congo is waiting for President Joseph Kabila to sign a decree before the venture is formed,” Mines Ministry chief of staff Alexis Mikandji told Bloomberg News by telephone from Kinshasa. “Apart from that, all the conditions have been met and there is nothing in the way of it going ahead,” he added.

Congo will provide "attractive tax relief,” China Railway said.