The project is being led by the China Railway Group, which would hold 43% of the planned JV, Sino-Congo Mining (Socomin), with 25% owned by Sinohydro, and the remaining 32% split between DRC State-owned miner Gecamines and a Congolese citizen named Gilbert Kalamba Banika.

The China Railway Group will provide loans and other financing amounting to $1,833-billion, including $550-million in zero-interest loans; the company also intends to fund more than 40% of the first phase of the infrastructure construction related to the project.

The company will provide its investment out of its own funds. The two Chinese companies will also pay the DRC a $530-million ‘entry fee’ to gain access to the metals, a $50-million interest-free loan to Socomin to buy equipment, and a $32-million loan to the Congolese partners, to facilitate their participation in the project. In return, the DRC will offer tax holidays. These investments must still be approved by the authorities in Beijing and Kinshasa.

The JV, Socomin, will invest mainly in new mines, near Likasi, in the south-east of the country. The project, the exact location of which has not yet been revealed, is reported to have proven copper reserves of 6,8-million tons, plus 420 000 t of cobalt.

However, it seems that the JV will, in due course, be able to gain access to about three-million extra tons of copper, as well as the associated cobalt, perhaps, in second phase development or in another, later, project. Interestingly, the Chinese companies have agreed to limit the Chinese workforce on the project to only 20% of the total workforce.

Earlier this year, China undertook to invest $9-billion in the DRC’s infrastructure and mines, which will include the refurbishment of roads, power plants and hospitals. And late last year, Chinese banks assented to supply substantial loans to the DRC for mining-related infrastructure, with the African country reportedly granting the Asian power rights to copper and cobalt reserves believed to be worth $14-billion. China is the world’s top metals consumer, and is seeking to secure stable minerals, metals and energy supplies for its industries.

The China Railway Group is a Chinese State-owned construction group, reportedly the biggest in Asia and one of the biggest in the world, and describes itself as the tenth-largest industrial group in China. It is listed on both the Shanghai and Hong Kong stock exchanges.

The company does much more than just build railway lines. Its core business areas are infrastructure construction, engineering equipment manufacturing, survey consulting services and property development. According to the China Daily newspaper, the Group already owns some 50 mines. China Railway Group chairperson Shi Dahua has identified mining as a new growth area for the company.

“Some of the mines have been under development and we will gradually step up investment in the area,” he recently told the newspaper, in Hong Kong.

Sinohydro’s full name is the China Hydraulic and Hydroelectric Construction Group Corportion, and, like the China Railway Group, has expanded and diversified far beyond its original specialist function which, for Sinohydro, was being a builder of hydroelectric power plants.

Today, in addition to its original business, it also provides project financing, manufactures and installs electrical and mechanical plant, builds roads, railways, harbours, airports and coal-fired power stations, and recently further diversified into wind power and real estate.

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