Waiting for DRC mining review

Investors and onlookers alike will have to hold their collective breath a little longer as the completion of the mining contract review in the Democratic Republic of Congo has been delayed.

The government now says it will announce the finding of the review which will likely entail the renegotiation of several mining contracts — on Oct. 15, two weeks after it was originally slated to be released.

On Sept. 25, the day before the delay was announced, 83-year-old Prime Minister Antoine Gizenga handed in his resignation. While Gizenga put the decision to his poor health, the resignation comes amidst growing clamour that the government has handled neither the economy nor continued conflicts in the eastern part of the country as well as it should have.

But the government insisted that the delay had nothing to do Gizenga’s decision. Instead it said state run Gecamines had requested more time to complete its review of some contracts.

The once mighty Gecamines sits at the heart of a review process that will likely see it gain larger stakes and more active control of some mining projects.

The company was weakened by the antics of former dictator Mobuto Sese Seko and a five year war that left some 4 million dead.

To rebuild it, the government is not only looking to the mining review, but also to the Chinese. In May of this year the government approved controversial deals with China that will see China fund massive infrastructure projects and mining investment in return for mineral rights.

The Chinese investment is said to be worth roughly US$9 billion six billion of which is earmarked for infrastructure with the remaining three billion going directly towards rebuilding the country’s mining industry.

The mines contract review began in November of last year and targets 61 contracts that had previously been signed with mining companies.

In a preliminary report, issued earlier this year, the government said many contracts needed to be re-negotiated with an eye towards securing a better deal for the government.

Firms whose contracts are not approved under the review will be able to renegotiate terms with the government.

Of the 61 contracts, 14 were deemed acceptable, 26 were said to require some form of re-negotiation, and 21 could be cancelled.