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Tuesday, February 19, 2008

China to pump $9bn into DRC economy

China to pump $9bn into DRC economy
By: Reuters
Published: 15 Feb 08 - 18:02

China will pump $9 billion into Congo's war-ravaged mines and infrastructure in a newly-signed partnership that could propel the African country's growth into double digits, a government minister said on Friday.
The value given by Planning Minister Olivier Kamitatu for an accord signed on January 28 by China and Democratic Republic of Congo was much higher than the $5 billion price tag originally announced last year in Congo.
"Three billion (dollars) will go towards improving the mines to a point where they can produce. Six billion will be for infrastructure," Kamitatu told Reuters in an interview.
Under last month's deal, Exim Bank of China pledged financing for major road and rail construction projects in Congo and for the rehabilitation of its strategic mining sector, badly damaged by years of war, corruption and neglect.
In return, China's Sinohydro Corp and China Railway Engineering Corp received a 68 percent stake in a joint venture with Congolese state copper miner Gecamines, with rights to two large copper and cobalt concessions.Kamitatu said the deal perfectly suited the strategic needs of his country, which is still recovering from decades of corruption and neglect and a 1998-2003 war that left infrastructure in ruins.
"We want to hit double-digit growth in 2010-2011. We are now at 6.3 percent," he said.
"We have identified the principal obstacles to that growth, among them a lack of infrastructure, a very poorly exploited energy potential, and an industrial deficit especially in the area of construction. So we are keen to pursue this partnership," Kamitatu said.
Chinese investment channelled through the mining joint venture Sicomines created by the deal would rehabilitate the Mashamba and Dikuluwe copper and cobalt mines.
Kamitatu said the aim was to revitalise Congo's once mighty mining sector, a treasure trove of largely unexploited concessions attracting the interest of major foreign companies.
"In the next five years, (Sicomines) wants to reach 400,000 tonnes per year (of copper). This will help Congo eclipse by far the production capacity of the end of the 1980s," he said.
State miner Gecamines says copper production for 2007 was 23,030 tonnes, but a number of big mining projects are under way as the former Belgian colony seeks to reap the benefits of its huge mineral resources.
At the height of production in 1989, Congo produced around 500,000 tonnes of copper annually.
Kamitatu said the China-Congo venture had rights to 10 million tonnes of copper reserves, expected to last 25 years.
From Sudan to Angola and South Africa, China has been pumping billions of dollars of loans, investments and aid into Africa in the last two years, looking to lock up oil and mineral supplies for its hungry, fast-growing economy.
African governments generally welcome China's investments as coming unfettered by Western demands for good governance and transparency. Some analysts are already portraying the Chinese as Africa's "new colonialists" as they scramble for the rich resources coveted in the past by European powers.

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