Congo orders China joint venture to stop exporting raw metals
ABIDJAN (Reuters) - Congo’s mines minister has ordered a joint venture of Chinese investors to stop exporting raw copper and cobalt before processing because of their low value on international markets.
Sinohydro Corp [SINOH.UL] and China Railway Group Limited agreed to build $3 billion worth of roads, railways and other infrastructure, with the investments to be reimbursed by earnings from its majority stake in the Sicomines project.
Democratic Republic of Congo’s government presented the $6 billion deal - one of several such resources-for-infrastructure accords China has signed with African governments - as a model for mining investment.
But in a Sept. 11 letter seen by Reuters on Monday, Mines Minister Martin Kabwelulu wrote to Sicomines’ director general to complain the mine was exporting mostly unprocessed copper and cobalt instead of higher value processed metals.
The decision was “destroying the prospect” of a return on investment and was impacting Congo’s ability to repay loans, Kabwelulu said in the letter. He said he had instructed the mines services to no longer authorize exports of the unprocessed material.
A Sicomines representative could not be reached for comment. Congo has banned exports of unprocessed copper and cobalt but has provisionally exempted companies because it lacks enough electricity to process the minerals domestically.
Sinohydro and China Railway Group are also financing a $660 million hydroelectric plant to reduce the power deficit, which forces miners to rely on generators and costly imports from neighboring Zambia.