Pambazuka - DRC’s magic dust: Who benefits?

Pambazuka - DRC’s magic dust: Who benefits?

Khadija Sharife looks at how commercial and political interests in the Democratic Republic of Congo’s mineral and natural resources have shaped the country’s history, with devastating consequences for its people, wildlife and environment. Will a new concession with China enable the Congolese to ‘really feel what all that copper, cobalt and nickel is good for’, as President Joseph Kabila says, or will the country continue to be seen as ‘a resource-rich bargain bin, open for business’?

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This inventory not only ‘commissioned and paid for US National Aeronautics and Space Administration (NASA) satellite studies of the country for infrared maps of its mineral potential,’ but also peeled back the skin of the forest and highlands to reveal its finite riches, chiefly coltan – the same magic dust used to develop the technologies underpinning the modernity of high-tech civilisation. Given that 80 per cent of the world’s coltan was located in Africa, and 82 per cent in the DRC, putting friends in high places remained a crucial tentacle of foreign policy.

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A report in the Inter Press Service (28 October 2009) details how exploitation, primarily from new concessions, save for portions of Katanga Mining Ltd (reimbursed), would see US$3 billion in revenues from the tax exempt Sino-Congolese joint venture, Socomins, used to repay investment, and Gecamines providing US$100 million to finance operating and employment concerns. The following phase of the contract stipulated that 66 per cent of the profit would finance China’s infrastructural works – realised through China Railway Engineering Company (CREC) and Sinohydro, a company specialising in hydroelectric and hydraulic engineering projects. The cost of the projects will be determined in-house, potentially leaving the door open to corporate mispricing. The remaining 34 per cent of profits will be divided among shareholders. In the event that the mines are not as profitable as imagined, China has secured the rights to further mineral concessions. According to the September agreement, China retains the right to extract 626,619 tons of cobalt and 10.6 million tons of copper from the Katanga region, which is part of the copperbelt extending from Angola through to the DRC and Zambia.

China Exim’s loans will pass exclusively through Chinese hands, circumventing the possibility of illicit flight on the part of the Congolese state. Congolese President Joseph Kabila, son of former DRC President Laurent Kabila, described the deal as crucial to the development of the DRC, stating: ‘The Chinese banks are prepared to finance our Five Works (water, electricity, education, health, and transport). For the first time in our history, the Congolese will really feel what all that copper, cobalt and nickel is good for.’ These works include 145 health centres, 20,000 council flats, 31 hospitals, 49 water distribution centres as well as expanded water supplies, four universities and a parliament building. China has also pledged to build 4,000 kilometres of tarred road (prior to Chinese activities, just 200 kilometres existed) in addition to 3,200 kilometres of railway systems). Approximately 50 per cent of loans from China Exim were directed toward the continent, incentivising South- South trade and investment. For this reason, in addition to the necessity of a counterweight, China’s potential as a developing-country investor levels the playing field, shifting investment goals from ‘returns’ to that of ‘access.’ (Africa’s biggest investors however – at 20 per cent – are other African nations.) How well did the DRC and ‘system d’ regions – resource-rich regions located on the peripheries – fare under the conventional system?

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For the DRC, ‘controlled’ by a fragmented and incoherent state, politically and physically distant from exploited territories, the situation – described by the 2002 UN Report as ‘the systematic and systemic exploitation of the DRC done in the name of resources’ – implies that humans born ‘rich’ in the DRC, are fast becoming as much an endangered species as the gorillas, elephants and other magnificent creatures gunned. Outside and alongside the DRC, in the contiguous world inhabited by ‘everyone else,’ accessorising life with mobile phones and computers and Sony PlayStations, we have become unwitting players in the system; spectators to a nation devoured by the terribly respectable white collar criminals, and their minions, rendering the DRC a large prison without walls, and the ‘unregulated’ free market, a religion of economic mercenaries. After half a century of prayer, the DRC has made into the desired image – a resource-rich bargain bin, open for business.