AYOUB Posted September 20, 2007 Tue, 18 Sep 2007 19:40:41 GMT China to lend Congo $5 billion in latest Africa foray (Reuters) KINSHASA (Reuters) - China plans to lend the Democratic Republic of Congo $5 billion to modernize its decrepit infrastructure and rich but deteriorated mining sector in another huge Chinese investment foray in Africa. Congolese officials said the draft accord signed on Monday foresaw Chinese companies gaining copper/cobalt, gold and nickel concessions under repayment deals that would also include toll revenues from the roads and railways to be constructed. The proposed loan earmarks $3 billion for strategic highway and railroad projects that would link the country's mineral-rich but remote interior to its southern neighbors and the international shipping routes of the Atlantic. The remaining $2 billion targets the revival of the former Belgian colony's once-mighty mining sector -- a treasure trove of copper, cobalt, gold, nickel, uranium and diamonds still to be fully tapped -- whose production has been decimated by war, foreign invasions and years of graft, pilfering and neglect. "This agreement will allow us to carry out important large-scale projects," Congolese Infrastructure and Public Works Minister Pierre Lumbi told Reuters. "What we have are repayment methods in terms of mining concessions, but also others like toll revenues," he added. The draft accord signed comes with a promise of a possible additional $3.5 billion of funds still to be allocated. If fully disbursed, the loan will be one of the biggest Chinese financial commitments on the African continent. In recent years, the Asian economic giant has been sinking billions of dollars into energy, mining and infrastructure projects from Algeria to Angola. Of the initially proposed $5 billion, $3 billion will go in a first phase towards big infrastructure projects, including a 3,400-km (2,125-mile) highway between the northeast city of Kisangani and Kasumbalesa on the southern border with Zambia. It will also cover construction of a 3,200-km (2,000-mile) railway to link the country's southern mining heartland to its western port of Matadi, with access to the Atlantic. INFRASTRUCTURE IN RUINS Congo's infrastructure is in ruins following a devastating 1998-2003 war that killed around 4 million people, mostly from conflict-related hunger and disease. This came on top of years of corrupt misrule under late dictator Mobutu Sese Seko. Few paved roads exist outside Kinshasa and a few major cities. Congo's colonial-era rail system suffers daily derailments and regular fatal accidents. Much of the country is without electricity, clean drinking water, or basic healthcare. The $3 billion infrastructure segment includes plans to build 31 hospitals, 145 health centers, and two universities. The $2 billion allocated for mining will hand China a major foothold in a sector where foreign mining companies have been scrambling for stakes, especially following landmark post-war elections late last year won by President Joseph Kabila. "They (the Chinese) are getting copper and cobalt concessions in Katanga, gold near Kilomoto (in Ituri district), and nickel ... in the Kasais (provinces)," Deputy Mines Minister Victor Kasongo told Reuters. "These are concessions that have not been awarded yet," he added. Kabila's government has recently launched a review of mining contracts to weed out suspect deals and negotiate new accords potentially more beneficial to the country. web page China opens coffers for minerals China has signed a deal to loan the Democratic Republic of Congo $5bn to develop infrastructure and mining. Infrastructure Minister Pierre Lumbi said the money will be spent on building roads, hospitals, health centres, housing and universities. In exchange, China will get rights to DR Congo's extensive natural resources, including timber, cobalt and copper. A recent study concluded that China's main interest in Africa is to guarantee supplies of raw materials. full article Quote Share this post Link to post Share on other sites
