Copper reserves at China's Sicomines in Congo less than hoped
Copper reserves at a mine owned by Sicomines, a miner at the centre of a $6 billion resources for infrastructure deal between China and Democratic Republic of Congo, have fallen more than 30 percent short of expectations, a senior Congolese official said.
Congo agreed in 2008 to cede mining rights to Sicomines, a joint venture between China's Sinohydro, the China Railway Group Ltd and Congolese miner Gecamines, in exchange for the building of roads, schools, railways, hospitals and dams.
Of total spending of $6 billion, about $3 billion is destined for infrastructure projects with the remainder to be spent on the mine's development.
"The value of the deposits was in the beginning estimated at 10 million tonnes of copper. After certification, the proven reserves are 6.8 million tonnes," said Mo?se Ekanga, Congo's coordinator for the Sino-Congolese Cooperation Agreement.
Ekanga told reporters in the capital Kinshasa that more than $1 billion had already been spent on infrastructure projects.
The company is due to launch production at the mine in 2015, he said, under a renewable 25-year production permit.
Ekanga said there were no plans to reduce the financing for infrastructure due to the smaller than expected reserves.
"In the event that, at the end of the 25 years, the loan is not paid off by the copper production, we will sit down around the table and talk," he said.
The deal has been controversial since its announcement in 2007 with donors and campaigners voicing concern over a lack transparency in the pricing of minerals, the cost of the infrastructures and how the profits will be shared.
In 2009, the financing was reduced from an initial $9 billion under pressure from the International Monetary Fund and the World Bank, which feared it would increase Congo's external debt burden.