Picture: ISTOCK
Picture: ISTOCK

Kinshasa — The Democratic Republic of Congo (DRC) has ordered Sinohydro and China Railway Construction’s local mining venture to stop exporting unprocessed copper and cobalt and to refine all its metals within the country.

The venture, called Sicomines, must ship "only high-value products" as the government looked to "ensure the prompt repayment" of the country’s $6bn minerals-for-infrastructure deal with China, Mines Minister Martin Kabwelulu said on October 2 in response to questions.

Sicomines’s profit is used to pay off the loans China provides to the DRC, which will be reimbursed quicker if the mine exports higher-value, refined metals. The $3.2bn mining project operated by Sicomines accounted for about a quarter of copper concentrate and 5% of copper cathode exports in 2016 from the DRC, Africa’s biggest copper producer.

Sicomines exported 115,000 tonnes of copper concentrate and 20,000 tonnes of copper cathodes in the first half of 2017, according to the provincial division of mines in south Katanga, where the mine is.

Sinohydro and China Railway Construction own 68% of Sicomines. The project is a key part of a 2007 deal under which Chinese companies build infrastructure, including roads and hospitals, which is financed by Chinese banks in return for metals like copper and cobalt.

In a September 11 letter to Sicomines director-general Sun Ruiwen, Kabwelulu said he disapproved of the products the company was exporting. He said the bulk of the products exported by Sicomines were unrefined copper concentrate and cobalt hydroxide, not processed copper cathodes and cobalt metal.

Local mining authorities had been instructed to "no longer authorise the export of mining products other than" processed copper and cobalt, Kabwelulu said in his letter.

Of 112 trucks ferrying exports of the metals, only 44 had been allowed to proceed because they were already at the border, he said in a text message.

In contact

Sicomines, whose Congolese shareholders include state-owned Gecamines, trucks its products to Zambia.

Sicomines deputy director-general Jean Nzeng said the firm had responded to the letter.

"We’re in contact with the ministry to unblock the situation," he said on October 4. "There are no major problems."

The April 2008 convention that established Sicomines says it must ship 200,000 tonnes of copper cathodes annually by its second year of commercial production and "a corresponding tonnage" of processed cobalt, which is obtained as a by-product of copper mining. Output should rise to 400,000 tonnes of refined copper in the third year of production.

Sicomines began production in November 2015 and produced 44,000 tonnes of copper cathodes in 2016.

"Sicomines must respect the convention," Kabwelulu said. The company did not say why it officially exported no cobalt in 2016 or the first half of 2017.

Moise Ekanga, the head of the department monitoring the project, said in October 2015 that Sicomines needed an extra 170MW of power to run at full capacity. Sinohydro and China Railway are financing a 240MW, $660m hydroelectric plant.

Bloomberg


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