Friday, April 1, 2011

An analysis of China’s $9 billion deal with the DRC

Global Witness, which campaigns to prevent natural resource-related conflict, corruption and human rights abuses, published in March 2011 an analysis of the controversial $9 billion deal between China and the Democratic Republic of the Congo.

The Chinese partners promised to provide $9 billion to finance the nationwide construction of roads, railways, hospitals, schools and dams, as well as mine development.

In exchange, the Congolese government pledged to provide the Chinese companies with up to 10 million tons of copper and hundreds of thousands of tons of cobalt from mines in the southeastern province of Katanga.

The project has created a controversy because very little information is available publicly about the financial aspects of the deal. There is no information about the sales prices of minerals and a lack of information on what infrastructure is to be built and at what cost. The project promises a 19 percent internal rate of return, but does not explain how this will be calculated.

1 comment:

  1. I find the China Congo deal interesting. As a kid I used to think of the Congo was a place of potential. The Congo is in a position of lose lose or win ,"kinda win". I don't think the Congo has a choice but to give its resources especially after Mobuto.