Congo seeks to raise stake in cobalt and copper JV with China to 70%

The Democratic Republic of Congo is planning to increase its stake in a copper and cobalt joint venture (JV) with Chinese companies for greater control over its resources, reported Reuters.

The Sino Congolaise des Mines (Sicomines) JV includes Congolese state miner Gecamines and is majority-owned by Chinese companies.

The aim is to raise the stake in the JV from 32% to 70%.

Congo’s plans to take more control of the JV’s management are driven by concerns that the current arrangement provides minimal gains to the country, according to a document seen by the news agency.

The country’s plans come soon before discussions to restructure a $6bn infrastructure-for-minerals agreement.

Congo President Felix Tshisekedi has given a directive to proceed with the discussions after several Congolese stakeholders ‘consolidated their position’ on the deal signed in 2008.

According to the country, the deal makes it difficult to have control over the venture’s operations, resultantly draining resources and revenue from the country.

In March, President Tshisekedi ordered the establishment of a commission to bring negotiating positions to Congolese institutions that oversee the deal’s implementation.

This commission comprised government representatives and state auditors.

It also consisted of the General Inspection of Finance (IGF), the Agency for Supervision, Coordination and Monitoring of Collaboration Agreements reached between Congo and private partners, Gecamines and the civil society.

Two commission members told Reuters that the conclusions arrived within the document will be the basis on which Congo will proceed with talks with the Chinese companies.

In accordance with the commission, the country is seeking a greater share in Sicomines because it had not considered the $90bn reserves that Gecamines brought to the deal.

In addition, Congo should consider a 60% holding in Sicomines and a 10% non-dilutable stake for the state.

The remaining 30% will be held by Chinese companies, the commission noted.

Sinohydro and China Railway Group agreed to construct roads and hospitals in lieu of a 68% interest in JV.

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