In March 2024, Sino-Congolaise des Mines (Sicomines), a joint venture between the state-owned Gecamines and a group of Chinese companies, signed a new contract with the Democratic Republic of Congo (DRC). Under this agreement, Sicomines will donate $324 million a year—about 32% of its profits—to fund infrastructure projects. This information was shared by the International Monetary Fund (IMF) in its report following the sixth review of its program with the DRC, published in July 2024.
Under the contract, around $5.5 billion should be spent on infrastructure development from 2024 to 2040, when Sicomines’ concession ends. Adding previous loans, total financing for the concession would thus exceed $7 billion. This amount far exceeds the $3.5 billion needed for the three-year public investment plan for 2025-2027. Additionally, it covers more than a third of the funding required for the first phase of the Inga 3 project (4.8 gigawatts), as outlined by President Félix Tshisekedi in his speech on December 13, 2019. This financing could significantly reduce the debt needed to complete this ambitious energy project.
Given that copper prices averaged $9,215.84 per ton in the first half of 2024, funding from the Sicomines contract for infrastructure could increase. The IMF notes that the annual donation of $324 million is based on an international copper price of $8,000 per ton. "The contract states that the subsidy will be adjusted: it will drop to zero if prices fall to $5,200 per ton and will increase by 30% if prices reach $12,000 per ton," the Fund said.
However, managing this financial boost is crucial to maximizing benefits. "Transparency and accountability mechanisms regarding the use of funds generated by the new contract need to be strengthened," says the IMF. To address this, they recommend that authorities include Sicomines' income and expenses in the budget and regularly publish financial reports on funded projects. A meeting was held at the Ministry of Finance last July to discuss how to implement these IMF recommendations.
In 2023, the DRC's mining sector generated $5.4 billion in revenue for the state from royalties, taxes, and other payments made by mining companies. This sector remains a key driver of the Congolese economy, and the revised contract with Sicomines could further enhance this dynamic. Along with funding for infrastructure projects, the revised contract includes royalties of 1.2% on Sicomines' annual sales and gives Gecamines control over marketing 32% of annual production. "This reduces opportunities for transferring profits from the DRC to Chinese buyers through transfer pricing," indicates the IMF.
Pierre Mukoko
