Congo, China Partners Near Deal for $660 Million Power Plant

  • Venture is between state-owned Gecamines, Chinese companies
  • 240-megawatt Busanga hydropower plant to start in four years

Sicomines, a joint venture between a group of Chinese companies and Democratic Republic of Congo’s Gecamines SA, is close to agreeing terms for the development of a 240-megawatt, $660 million hydropower plant that will meet the mining project’s electricity requirements within four years.

“We have discussed the project for a long time and we are now aligned,” Moise Ekanga, executive secretary of the Office for the Coordination and Monitoring of the Sino-Congolese Program, said in an interview in Kinshasa, the capital. “We are in the process of establishing the company that will own the concession to develop the project.”

The Busanga plant and the 6.8 million metric-ton copper concession that Sicomines plans to develop are in the southeastern Katanga region, where electricity is increasingly scarce. Congo, Africa’s biggest producer of the metal, loses about 50,000 tons a year due to inadequate power supply, and many mines have been forced to buy from neighboring Zambia or purchase diesel generators that raise output costs by as much as $1,000 a ton, according to the Chamber of Mines at the Federation des Entreprises du Congo.

The venture is part of a $6 billion minerals-for-infrastructure deal between China and Congo signed in 2007 through which the Sicomines partners finance infrastructure projects in the country in return for mineral rights.

By June, Chinese partners had disbursed approximately $1.5 billion for Sicomines and infrastructure projects including road construction and hospitals, but funding and implementation have been more difficult than expected, Ekanga said, with projects having faced long delays.

The Sicomines copper project will require 170 megawatts from Busanga to run at full capacity and the rest will be sold to the national grid, Ekanga said. Sicomines won’t get priority access to the stretched national electricity company while Busanga is under construction and will import power, he said. “Sicomines will not run at full capacity until Busanga is ready; it will have priority access to Busanga but not to the grid."

Busanga’s operating company, Sicohydro, will be a joint venture between the Sicomines partners -- China Railway Group Ltd. and Sinohydro Corp. -- and Congo, represented by Gecamines and the state-owned electricity company, Societe Nationale d’Electricite.

The Chinese partners will provide 50 percent of the financing, while the rest will come from the state infrastructure budget via the minerals-for-infrastructure contract and will be repaid by Sicohdyro once Busanga is operational, Ekanga said.

First production of copper cathode at Sicomines is now planned for the end of the month, he said.

Congo is the world’s largest producer of cobalt, used to make rechargeable batteries. It’s also Africa’s biggest tin miner, and is a key source of minerals including gold and tantalum, which is used in smartphone and laptop batteries.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE