Chinese construction companies will invest up to $7 billion in infrastructure projects as part of an agreement between the two sides to set up a Sicomines copper-cobalt joint venture in the Democratic Republic of Congo, the company said on Saturday.
According to a statement, the two sides agreed to maintain the current shareholding structure, while the Chinese partners, Sinohydro and China Railway Group, will pay 1.2 percent per year in royalties to Congo.
Congolese President Felix Tshisekedi's government has been reviewing the agreement reached by his predecessor Joseph Kabila. Under the deal, the Chinese partners agreed to build roads and hospitals in exchange for a 68 percent stake in a joint venture with Gecamines, the Congolese state mining company.
Under the agreement, Chinese investors pledged to spend $3 billion on infrastructure projects, but the state auditor General Administration of Fiscal Supervision (IGF) last year requested that the commitment be increased to $20 billion.
Tshisekedi directed his government to hold talks with investors ahead of a visit to China in May 2023. His goal is to increase Congo's stake in the joint venture from 32 percent to 70 percent.
"This is a win-win agreement," Jules Arlingert, president of the Internet Governance Forum, told a news conference. He added that the negotiations were not easy.
Ernest Mpararo, president of the congo Anti-Corruption League, said the announcement was a step forward but said Sicomines would still be tax-free.
He also mentioned money owed under the last agreement. A 2023 report by the Intergovernmental Governance Forum found that only $822 million of the promised $3 billion in infrastructure investment had been implemented.
Congo is the world's largest producer of cobalt, a key ingredient in batteries for electric cars and mobile phones. It is also the world's third largest copper producer. The country's mining industry is largely dominated by Chinese companies.
Tshisekedi, who won re-election in December, signed the agreement in his inaugural speech on Jan. 20.
