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Good for China - $5 billion for the DRC
China’s dramatic $5bn plan for the Congo shows up Africa, and its Western buddies, as a bunch of simpering wimps.
Author: Barry Sergeant, Mineweb
Posted: Thursday , 20 Sep 2007
Every man and his dog and chicken has lots to say about how China appears to be overrunning Africa, seemingly at will. This week China, epicentre of global economic growth, announced a draft accord with the Democratic Republic of the Congo (DRC), with a bundled deal of $5bn mentioned. While the draft accord is referred to as a "borrowing" by the DRC, Congolese public works minister Pierre Lumbi made it clear that other kinds of repayment terms were provided for as well.
These terms include, intriguingly, but not surprisingly, mining concessions in the DRC, and toll revenue deals for Chinese firms. There is no question that Chinese interests have seen further than any of the multitude of parties who purport to hold African interests dear and at heart, including Africa itself. Of the $5bn mentioned, $3bn will go towards a 3,200km railway running from Sakania, in the deep south of the minerals rich southern Katanga Province, near the Zambian border, to Matadi, right up in the west near the Congo river and just ahead of the Atlantic Ocean.
The eye-popping fact is that Lubumbashi, capital of Katanga Province and smack in the heart of one of the richest copper-cobalt provinces in the world, has been linked by rail to Johannesburg and points south for decades. The line has long been collectively inoperable, given the lack of imagination and leadership in sub-Saharan Africa. Nowhere is there even a hint that the line is to be rehabilitated, in order to open up a southern passage for copper and cobalt, and a northern passage for construction materials and the numerous other goods associated with development.
Lubumbashi is also connected by rail to the west to the port of Lobito in Angola. For many months now, a Chinese consortium, supported by the DRC government, has been in the process of rehabilitating the Benguela rail network in Angola. The Benguela rail system was traditionally used to transport the riches of Katanga Province to the coasts of Africa. It is via the Katanga link that the Benguela system connects through exchanges in Zambia to connections to Mozambique's port of Beira, and Tanzania's Dar es Salaam, also on the Indian Ocean.
In order to accommodate the realities of being on this continent, the new $3bn Chinese line proposed for the DRC will be exclusively on Congolese soil. Part of the $5bn proposed is earmarked for a road link of 3,500km linking Kisangani in the northeast to Lubumbashi, and running through to Kasumbalesa, a major customs point on the border with Zambia. The balance of Beijing's $5bn is to fund some 31 hospitals, 145 health centres, two large international-standard universities, and 5,000 government housing units.
There will still be hundreds of millions of dollars available to rehabilitate Katanga Province's crumbling mining infrastructure, and establishing joint ventures in the resources sector, as envisaged in the draft accord. If the $5bn loan is fully disbursed, it would be one of China's biggest commitments in Africa. In recent years China, the world's biggest user of raw materials, has happily invested billions of dollars across the continent, in projects that include energy, mining and infrastructure, from Algeria to Angola.
Some small howls of protest have already been heard from the likes of the International Monetary Fund, which oversees $8bn worth of DRC debt inherited from decades of dictatorial rule under Mobutu Sese Seko. There will be more howls of protest, to be sure, but one day the rolling stock will thunder through the rain forests as the Chinese look on as Lubumbashi once again becomes one of the world's richest small cities, as it was in colonial times.
Lithium has been removed due to my involvement in the acquisition of lithium prospects in Africa. Contact Carel van der Merwe at email@example.com or +27 62 538 7750 if interested.
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