Congo's Mining Contracts Still Shrouded in Secrecy

From Congo Siasa Fri Apr 15 2011, 12:40:00

This is a guest blog by Elisabeth Caesens, DRC Mining Governance Project Coordinator for the Carter Center. The views expressed here are her own and do not represent those of the Carter Center.

A few days ago, the World Bank reviewed Congo's improvements in natural resource governance and expressed its satisfaction on mining contract disclosure, something the Congo promised to do after it signed a few disquieting contracts in 2010.

The optimism stands in sharp contrast with the current state of contract transparency, as the overwhelming majority of agreements are carefully kept confidential. For copper rich Katanga, only two contracts are in the public domain. Two out of 30, or 40, or 50 - who knows.

Let's start with what is public: : the controversial Metalkol and Sodifor contracts which replaced First Quantum's cancelled KMT project (in which the World Bank's IFC had a 7.5% stake) and its revoked Frontier license. The deposits were awarded to unknown companies. This 'asset flipping' did not only affect legal security, it also implied several billions of dollars of potential new debt. "If Congo wants debt relief, don't recognize the Metalkol contract", the IMF reportedly told President Kabila on the eve of the 50th anniversary of independence celebrations. The President promised, debt relief got through, but so did the Metalkol contract a month later. Barely had the presidential endorsed the deal when the junior sold a majority stake to London-listed ENRC.

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