china

Here's some news i found on the web. Its good background knowledge of whats happening in the Congo. Im just trying to drum up more interesting talk on TGS other than reading responses to The Storm's incessant crap!



China to invest $5bn in Congo

By William Wallis in London

Published: September 19 2007 03:51 | Last updated: September 19 2007 03:51

China plans to plough at least $5bn (£2.5bn, €3.6bn) into rehabilitating infrastructure and mines in the Democratic Republic of Congo in what would be one of its most ambitious ventures in sub-Saharan Africa, Congolese officials on Tuesday said.

In an initial phase, the Chinese would be repaid in copper and cobalt, Viktor Kasongo, Congo’s deputy mines minister told the Financial Times. But the deal, a draft of which was signed on Monday, also envisages concessions in nickel and gold, and repayment from tolls on railways and roads yet to be built.

Existing mining contracts and concessions held by foreign groups would not be affected, Mr Kasongo said. Many of Congo’s most lucrative concessions were hived-off during the civil war and are under review.

If the funds are disbursed, they would make Congo one of the top recipients of Chinese investment in Africa as Beijing drives to secure mineral and other commodities to fuel its booming domestic economy.

Congo was hoping to enter similar agreements with ­Brazil and India, Mr Kasongo said. “We are not putting all our future in the hands of the Chinese. Other parts of the world have been partners with us for many years. But we inherited Congo in a very bad situation. It makes sense that those minerals are used for present and future generations and not only for the profit of companies.”

Congo is without the most basic infrastructure. The country was ruled for 32 years, until his death in 1997, by Mobutu Sese Seko, a dictator who was reluctant to build roads for fear they would carry enemies to his doorstep. It was subsequently ravaged by a civil war in which millions died.

The government of Joseph Kabila, who won the presidency in the country’s first real elections last year, has struggled to re-establish central authority, build infrastructure and address a social crisis.

Concerns over corruption and the implementation of economic reforms have held up some of the billions of dollars earmarked for reconstruction by traditional donors.

According to Reuters, the accord envisages the construction of a 3,400km highway between the north-east of Congo and the southern border with Zambia.

It will also cover construction of a 3,200km railway to link the southern mining heartland to the port of Matadi. A further $2bn is earmarked for revitalising mines held by the state.

Copyright The Financial Times Limited 2007

Alarm over China’s Congo deal

By William Wallis and Rebecca Bream in London

Published: September 19 2007 19:15 | Last updated: September 19 2007 19:15

Mining companies, the International Monetary Fund and other donors were scrambling on Wednesday for clarification of a planned deal between China and the Democratic Republic of Congo.

The deal would tie up mineral resources in exchange for $5bn (€3.6bn, £2.5bn) in infrastructure projects and loans. A preliminary agreement was signed this week just as an IMF mission landed in Kinshasa to review progress towards the resumption of budget support for Congo.

IMF, World Bank and African Development Bank officials seem to have been caught offguard by the scale and timing of China’s plans.

These come at a delicate stage in Congo’s negotiations towards forgiveness of debt accumulated under the dictator Mobutu Sese Seko, who died in 1997, totalling about $8bn, or equal to 800 per cent of current national exports.

Western mining groups, awaiting the results of a government review of about 60 contracts signed during the recent civil war, were also seeking more details from the Kinshasa government.

The Katanga region of Congo has some of the world’s best deposits of copper and cobalt. Other areas host rich sources of minerals including diamonds, gold, iron and uranium.

After years of war, dictatorship and turmoil, however, the country’s infrastructure is either non-existent or in ruins, and extraction operations are producing at a fraction of their potential.

IMF and World Bank officials have acknowledged the scale of Congo’s infrastructure needs. But they are seeking to ascertain whether the Chinese loans are in line with Kinshasa’s commitment under the financial institutions’ heavily indebted poor countries debt reduction initiative not to contract new debt on anything but concessional terms.

In a best-case scenario, the IMF would restart a lending programme – the last one stalled in 2006 because of poor implementation – and Congo would stand to benefit from an 80 per cent write-off of its external debt in mid-2008 at the earliest.

“If the terms of the deal do not meet the concessionality issue, that would be a concern,” said an IMF official.

Most of the mining activity in the country is being carried out by smaller, more entrepreneurial companies. Large western mining groups are keen to gain access to these resources to replace their dwindling deposits but have largely held back from investing in the country – put off by continuing unrest, widespread corruption and the lack of infrastructure.

Alex Gorbansky, managing director of Frontier Strategy Group, a political risk consultancy, said China’s $5bn draft agreement with Kinshasa would put pressure on both the large mining companies looking to get in and the small miners already there.

“It will give China a distinct advantage in the Congolese copper belt,” he pointed out.

He said large western mining groups, such as Anglo American and Rio Tinto, were spending increasing amounts of time and money weighing opportunities in Congo. But China’s move might mean they had left it too late to secure the best assets.

Mr Gorbansky added that there was a risk that some of the mining licences held by smaller companies could be transferred to Chinese investors but Victor Kasongo, the country’s deputy mines minister, insisted this would not be the case.

Copyright The Financial Times Limited 2007

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.

This is the largest single loan to any African country of the $20bn that China has pledged to finance trade and investment in the continent over the next few years.

A first phase of $3bn will finance big transport infrastructure projects in the DR Congo, including a 3,400km (2,125 mile) highway between the northeast city of Kisangani and Kasumbalesa on the border with Zambia.

There will also be a 3,200 km (2,000 mile) railway to link the country’s southern mining heartland to the main Atlantic port of Matadi in the west.

Additional plans provide for the construction of some 30 hospitals, more than 100 health centres and two universities.

A further $2bn is earmarked for rehabilitating the crumbling mining infrastructure and setting up joint ventures in the mines sector.

The state mining conglomerate Gecamines went bankrupt in 1990 and since then there has been a free-for-all that sees hundreds of giant 36-wheel trucks plying the roads each day, carrying mineral-rich ores across the border to Zambia.

But some analysts argue that the return on China’s apparently-generous loan is likely to cost DR Congo dear.

New partnership with Africa

The official Xinhua press agency recently estimated there are at least 750,000 Chinese working or living for extended periods on the continent, a reflection of burgeoning economic ties that reached $55bn in trade in 2006.

Chinese trade and investment has galvanised mineral production from South Africa (manganese) to Niger (uranium), and from Sudan to Angola (oil).

Much of that activity reflects an intense appetite for the African resources needed to fuel China’s manufacturing sector, but big Chinese companies have quickly become formidable competitors in other sectors as well, particularly for big-ticket public works contracts, like the ones now proposed for DR Congo.

China is building major new railroad lines in Nigeria and Angola, large dams in Sudan, airports in several countries, and new roads almost everywhere.

One of the largest road builders, China Road and Bridge Construction, owned by the Chinese government, has 29 projects in Africa (many financed by the World Bank or other lenders) and offices in 22 African countries.

So China’s money may be going to Chinese companies to provide these big projects.

Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/africa/7000925.stm

Published: 2007/09/18 16:16:13 GMT