Sino-Congolese Relations and the Sicomines Deal: Assessing the Impact and Challenges
- DRC | 5 June 2019
Sino-Congolese relations have a longstanding history, starting in the mid-1960s when China supported the Congolese struggle against capitalism and American imperialism. However, China’s influence became more pronounced with the signing of the infrastructure-for-minerals deal in 2008. The deal, which established the Sino Congolaise des Mines (Sicomines) joint venture, aimed to develop mining projects and improve the war-torn infrastructure in the Democratic Republic of Congo (DRC). While the deal was initially seen as mutually beneficial, it has faced challenges and scrutiny. This article explores the impact of the Sicomines deal, analyzes the complexities of the Sino-DRC relationship, and highlights the need for effective governance and infrastructure development.
The Sicomines deal, labeled as the “deal of the century” at its signing, granted China mining rights to 10 million tonnes of copper and 600,000 tonnes of cobalt over a 25-year period. In exchange, China committed a $6 billion investment evenly divided between mining projects and infrastructure development. However, the deal has not fully lived up to expectations. By 2016, only $1.2 billion had been spent on infrastructure and mining credits combined. Delays, unexpected costs, and the lack of guarantees for the Congolese population undermined the fairness of the agreement. Additionally, inadequate studies on environmental and social impacts raised concerns about the execution of the deal.
One of the primary challenges of the Sicomines deal stems from the DRC’s poor institutions and infrastructure, which affect the country’s ability to fully benefit from the Chinese investment. The deal’s implementation relied heavily on financial terms, neglecting guarantees for the Congolese population. Skepticism also arises from the DRC’s growing dependence on China and concerns about Chinese ethical conduct in the extractive sector. Reports of environmental pollution, exploitation, and child labor have raised questions about China’s commitment to responsible sourcing and production.
While concerns exist, China has made strides in responsible sourcing and production. The Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains and the Responsible Cobalt Initiative demonstrate efforts to align company practices with international standards. However, the lack of comprehensive data makes it challenging to fully assess Chinese conduct in the DRC. Moreover, it is important to note that non-Chinese companies could face similar scrutiny if subjected to the same level of international scrutiny.
The Sicomines deal has stimulated Chinese investments in the Congolese mining sector, providing capital and employment opportunities. Copper and cobalt production have increased, improving the DRC’s macroeconomic performance. Chinese equipment brands have gained market share, providing cheaper options with increasing quality. However, concerns have been raised about the impact on local hiring and the transfer of skills to Congolese workers.
The success of Sino-DRC relations should be evaluated based on holistic improvements for the DRC as a country. The Sicomines deal has contributed to macroeconomic improvements and infrastructure development, including road construction, a hospital, and a hydroelectric power station. However, the DRC’s ability to consolidate these benefits and the government’s commitment to fulfilling promises are crucial for future gains.
The Sino-Congolese relationship and the Sicomines deal have had both positive and challenging aspects. While the deal has brought economic benefits and infrastructure development to the DRC, concerns about governance, ethical practices, and dependence on China persist. Effective governance, responsible sourcing, and infrastructure development are essential for the DRC to leverage its mineral wealth and build a better future. The complexity of the relationship necessitates a nuanced understanding to ensure mutually beneficial outcomes and sustainable development for the DRC.