The Democratic Republic of the Congo (the “DRC”) is poised for a significant infrastructure boost, securing a $7 billion financing package as part of a renegotiated minerals-for-infrastructure contract with China. This revised deal signals a shift in concession practices for the DRC. These moves are made possible in large part to increased interest from American and European investors to invest in the DRC as part of strategies to secure energy transition metal sources.
The renegotiated agreement pertains to the Sicomines copper-cobalt venture, a joint operation between the DRC’s state-owned miner Gecamines and Chinese companies. The Chinese shareholding remains untouched and includes China Railway Group Ltd. as the largest shareholder, followed by Power Construction Corp. of China, known as PowerChina, with Zhejiang Huayou Cobalt Co. holding 1%. The DRC state miner Gecamines has a 32% stake.
Under the new agreement, Gecamines will receive a 1.2% royalty on Sicomines’ proceeds, along with the right to market 32% of its output. It will also acquire a 40% stake in the Busanga hydropower plant, which powers the Sicomines operation. President Felix Tshisekedi has long advocated for revising the original 2008 agreement, claiming it provided scant benefit to the DRC. The initial deal promised $3 billion in infrastructure projects, funded by Sicomines revenues, but less than a third of this investment ever materialized.
The new $7 billion of infrastructure financing is primarily earmarked for constructing national roads. Africa’s second-largest country by landmass, much of the DRC remains inaccessible, hindering development and economic growth. Timelines for disbursing the funds remain unclear. By securing improved terms, royalties, and infrastructure investments, the country is paving the way for fairer resource exploitation and sustainable development. This renegotiation sets a precedent for other resource-rich nations seeking to maximize the benefits of their mineral wealth.
The Sicomines company operates across nineteen mines in the DRC, extracting mainly cobalt and copper. It ranks as the top copper producer in the DRC, and high in cobalt production although its cobalt is lower grade than what is found in other deposits in the rest of the DRC, Australia and Canada. The Chinese miner entered the DRC in 2008 with a pledge to invest $6.2 billion in a minerals-for-infrastructure deal. Mining operations began in 2014 and by 2016 only a third of the promised infrastructure spending materialized.
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