DR Congo’s Mining Contract with China Faces Criticism from NGOs:…

A contentious mineral contract between the DRC and China has faced backlash from NGOs, who cite impending financial losses and a lack of transparency. The CNPAV coalition claims the updated deal still favors Chinese firms, potentially costing the DRC $132 million in 2024 and advocates for renegotiation. Critics highlight concerns regarding payment structures and tax exemptions that undermine the country’s benefits.

The Democratic Republic of Congo (DRC) faces scrutiny over its controversial mineral contract with a Chinese consortium, which NGOs assert leads to significant financial disadvantages for the nation. The CNPAV coalition, comprising anti-corruption NGOs, claims that an updated agreement still favors Chinese firms, resulting in an anticipated loss of $132 million in 2024 alone. They are advocating for the government to renegotiate for a more equitable contract.

Originally established in 2008 under President Joseph Kabila, the so-called “contract of the century” allowed Chinese companies extensive access to Congolese copper and cobalt mines in exchange for infrastructure development. The contract was renegotiated in early 2024 to produce approximately $4 billion in benefits for the DRC. However, critics assert that the revised agreement fails to correct prior imbalances.

CNPAV’s principal concern involves the reliance of infrastructure funding on copper price fluctuations. The revised agreement guarantees $324 million annually for road infrastructure over 20 years, provided copper prices exceed $8,000 per tonne. If prices drop below this threshold, “the state will receive less, or even nothing at all,” warns the coalition. Even if prices rise significantly, the DRC would still only receive the fixed sum.

Moreover, the contract’s fixed payment structure has drawn further criticism. Baby Matabishi from the Carter Center-DRC noted the uncertainty surrounding copper prices, questioning the rationale behind fixed payments irrespective of the volume extracted. He highlighted, “How can it be understood that a company that produces 100,000 tonnes of copper pays $324 million…but pays the same amount when producing 200,000 tonnes or 400,000 tonnes?” This inconsistency indicates that the DRC does not benefit proportionately from increased mining output.

CNPAV further criticizes tax exemptions given to Chinese corporations, which cost the DRC at least $100 million each year. Although the Kinshasa government claims that infrastructure development will balance these losses, civil society groups argue that many infrastructure projects are either incomplete or of inferior quality.

The ongoing scrutiny of the DRC’s mining agreement with China highlights significant financial implications for the Congolese state. NGOs argue that the recently renegotiated terms do not adequately protect the national interest, particularly concerning revenue from fluctuating copper prices and fixed payment structures. As calls for renegotiation grow, it remains to be seen whether the DRC government will take action to rectify these issues and ensure a fairer agreement for its citizens.

Original Source: allafrica.com