NGOs Criticize DR Congo-China Mining Agreement for Financial Disparities

The DRC’s mining agreement with a Chinese consortium is criticized by NGOs for financial losses and a lack of transparency. The coalition CNPAV claims the renegotiated deal favors Chinese companies, predicting a $132 million loss for the DRC in 2024. Key issues include dependency on fluctuating copper prices for funding, rigid payment structures, and tax exemptions. Civil society groups demand fairer negotiations to rectify these imbalances.

The Democratic Republic of Congo (DRC) finds itself in the midst of controversy surrounding a significant mining agreement with a Chinese consortium. Following a one-year update of what has been termed the ‘contract of the century’, non-governmental organizations (NGOs) and civil groups express concerns regarding financial losses and a lack of transparency within the deal. The coalition named CNPAV – or “Le Congo n’est pas à vendre” – argues that the renegotiated contract continues to favor Chinese corporations, predicting a potential $132 million (€124 million) loss for the DRC in the forthcoming year.

Originally signed in 2008 under then-President Joseph Kabila, this mining agreement allowed Chinese firms access to substantial copper and cobalt deposits in exchange for infrastructure improvements. Although revised terms in early 2024 promised nearly $4 billion (€3.8 billion) in benefits for the DRC, watchdogs insist that these adjustments fail to address earlier imbalances in favor of Chinese interests.

A focal point of concern for CNPAV is the reliance of infrastructure funding on the volatile copper market. The DRC is expected to receive $324 million (€312 million) annually for a duration of twenty years, contingent upon copper prices remaining above $8,000 (€7,700) per tonne. If prices dip below this threshold, the coalition warns that the state will receive reduced or no payments at all. Notably, even if prices surge to $12,000 per tonne, the DRC’s earnings will remain unchanged at $324 million.

The payment structure’s rigidity has also drawn serious criticism. Baby Matabishi, coordinator at the Carter Center-DRC and a member of CNPAV, noted the challenges associated with linking payments to copper prices rather than production volume. Matabishi stated, “Everything depends on the price of copper… which does not guarantee that the $324 million is secured,” pointing out the inconsistency of production levels yielding the same payment amounts. Thus, this disconnection prevents the DRC from equitably benefiting from increased mining output.

CNPAV raised additional alarm regarding ongoing tax exemptions awarded to Chinese firms, which purportedly cost the DRC approximately $100 million annually. While the government in Kinshasa contends that infrastructure development will compensate for these losses, civil society organizations maintain that many promised projects are either incomplete or subpar.

In summary, the mining deal between the DRC and China faces significant criticism from NGOs, primarily due to perceived financial losses and an unfair advantage for Chinese companies. Concerns surrounding payment structures, contractual dependencies on volatile copper prices, and tax exemptions have prompted calls for renegotiations to achieve a fairer agreement. Ensuring transparency and equitable benefits remains crucial for the DRC amidst this contentious arrangement.

Original Source: allafrica.com