The DRC’s mining deal with China faces criticism from NGOs over financial losses, lack of transparency, and a skewed agreement that reportedly disadvantages the Congolese state, potentially leading to a $132 million loss in 2024. The agreement’s reliance on volatile copper prices and a fixed payment structure raises further concerns. Activists demand a re-negotiation for equity in the agreement.
A controversial mining agreement between the Democratic Republic of Congo (DRC) and China is under intense scrutiny as several civil society groups express concerns regarding financial losses and a lack of transparency. One year after the renegotiation of the deal, these organizations assert that the updated contract continues to disadvantage the Congolese state. The coalition known as CNPAV, or “Le Congo n’est pas à vendre,” argues that the new terms favor Chinese companies, potentially incurring a loss of $132 million (€124 million) for the DRC in 2024.
The so-called “contract of the century,” originally signed in 2008 during Joseph Kabila’s presidency, provided Chinese firms extensive access to copper and cobalt mines in exchange for infrastructure development. The renegotiation in early 2024 was intended to generate significant additional benefits for the Congolese economy, estimated at nearly $4 billion (€3.8 billion). However, critics maintain that the adjustments did not address existing inequalities within the agreement.
CNPAV’s apprehensions focus on the reliance of infrastructure funding on the volatile copper market. Under the new terms, the DRC is set to receive $324 million (€312 million) annually for infrastructure development over a 20-year span. This payment, however, is contingent on copper prices remaining above $8,000 (€7,700) per tonne, creating a significant risk for the state. If prices dip below this limit, the DRC could potentially receive nothing. Conversely, if prices rise to $12,000 per tonne, the payment remains fixed, denying the DRC additional benefits from favorable market conditions.
Critics also highlight a problematic aspect of the agreement related to its rigid payment structure. Baby Matabishi, coordinator at the Carter Center-DRC and a CNPAV member, pointed out to RFI that the current model links payments solely to copper prices rather than production levels. He remarked, “How can it be understood that a company that produces 100,000 tonnes of copper pays $324 million – and on the day it produces 200,000 tonnes or 400,000 tonnes – and then pays the same amount?” This lack of a scaling mechanism denies the DRC a fair share from increased production.
Furthermore, CNPAV has criticized the ongoing tax exemptions for Chinese firms, which reportedly cost the DRC around $100 million annually. While the Kinshasa government suggests that these exemptions will be counterbalanced by infrastructure development, civil society groups contend that many of the promised projects remain incomplete or inferior in quality.
In summary, the recent renegotiation of the DRC-China mining agreement has sparked significant controversy, with NGOs asserting that the terms remain skewed against the Congolese state. Key concerns include the dependency of funding on copper market fluctuations, a rigid payment structure that does not scale with production, and tax exemptions for Chinese companies that disadvantage the DRC economically. The situation calls for urgent reevaluation and negotiation to achieve a fairer agreement that benefits the Congolese people.
Original Source: allafrica.com
