DRC: When transparency in the renegotiation of mining contracts pays off

The recent $7 billion agreement between China and the Democratic Republic of Congo (DRC) signed in mid-March 2024 shines a light on the critical importance of transparency and openness in mining contracts. This move has garnered praise from the Extractive Industries Transparency Initiative (EITI), which notes that these measures have boosted the expected revenue from this partnership focusing on copper and cobalt exploitation by an impressive $4 billion.

Initially established in 2008, the agreement outlined a $3 billion investment in infrastructure across the DRC.

However, its disclosure triggered criticism from the Congolese civil society, particularly from the local EITI committee in the DRC.

In December 2021, a report by this committee highlighted an «unprecedented harm in the history of the DRC», pointing out the imbalance in the contract terms between the Congolese and Chinese parties.

The report revealed that essential infrastructure projects such as roads and hospitals, as promised in the initial agreement, had not been carried out.

Additionally, the valuation of the copper reserves on which the investment was based was found to be underestimated.

These findings were corroborated by a subsequent report from the General Inspectorate of Finance, underscoring that the DRC had received only $822 million since the agreement’s inception, while Chinese companies had profited nearly $10 billion.

In response to these revelations, criticisms, and public debates, Congolese authorities pressed for a renegotiation of the agreement.

It is worth noting that without the initial transparency and the subsequent criticisms, it is unlikely that the Congolese state would have entered into this new agreement with China, which resulted in an additional $4 billion.

These additional funds will be primarily directed towards the construction of nearly 5,000 kilometers of vital roads, crucial for the country’s development and connectivity.

This narrative highlights the transformative impact of transparency in mining contracts.

By shedding light on unfair terms, it paved the way for a reassessment of the original agreement, ultimately leading to a more beneficial outcome for the DRC.

It also underscores the vital importance of transparent and equitable governance in the natural resources sector to ensure that African nations truly reap the benefits of their resource wealth.

See also: DRC: Conflict in North Kivu/ Félix Tsisékédi calls for general mobilisation

Jean-Robert TCHANDY

Posts Grid

Football/Transfer Rumors: Juventus pursues David, United eyes Branthwaite, and Liverpool targets Tchouameni

As the January transfer window approaches, European clubs are strategizing to bolster their squads with emerging talents and seasoned players. From Liverpool’s pursuit of Aurelien...

Europa League:  Osimhen shines with a brace as Galatasaray hands Spurs first loss in the competition

Victor Osimhen delivered a decisive performance in Istanbul, scoring twice as Galatasaray defeated Tottenham 3-2, handing the Premier League side their first Europa League loss...

Champions League/ Arsenal falls short against resilient Inter Miami

Inter Milan secured their third win in four Champions League matches, defeating Arsenal 1-0 in a tightly contested game thanks to Hakan Calhanoglu’s decisive penalty....

Foot/ Champions League: Barcelona’s Pau Cubarsi leaves the field with injury in 5-2 win over Red Star

Barcelona's young defender Pau Cubarsi suffered a brutal facial injury during the Champions League clash against Red Star Belgrade, which Barça won 5-2. In the...

Champions League: Manchester City’s crisis deepens with stunning Champions League defeat in Lisbon

Pep Guardiola's Manchester City hit a new low on Tuesday night, suffering a humiliating 4-1 defeat against Sporting CP in Lisbon. The Premier League champions...

Real Madrid’s Champions League Fortress falls to AC Milan in stunning Defeat

In a shocking turn of events at the Santiago Bernabéu, Real Madrid's Champions League campaign hit an unexpected roadblock as AC Milan secured a convincing...

Leave a Reply

Your email address will not be published. Required fields are marked *