Roads, Copper, and Cobalt: DRC and China Strike New Mega Deal

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In early February, China’s Sinohydro Corp and China Railway Group inked a $7 billion deal in infrastructure projects in the DRC. Beyond setting the stage for the construction of 7,000 kilometers of roads in the coming two decades, the agreement was related to their Sicomines copper and cobalt joint venture. Both parties have agreed to maintain the existing shareholding structure, with the Chinese partners committing to pay 1.2% of royalties annually to the DRC, as outlined in a recent statement.

The agreement stems from a deal struck by the previous DRC government under President Joseph Kabila, whereby Chinese partners agreed to build infrastructure such as roads and hospitals in exchange for a 68% stake in the joint venture with the DRC’s state mining company, Gecamines. President Felix Tshisekedi’s government had been reviewing this agreement, and the Chinese partners initially committed to spending $3 billion on infrastructure projects. However, the state auditor, Inspection Generale des Finances (IGF), demanded an increase in this commitment to $20 billion.

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