DRC: Will Prime Minister Lukonde break the deadlock with China Moly?

By China Global South Project
Posted on Monday, 22 August 2022 10:29

Excavators and drillers at work in an open pit at Tenke Fungurume, a copper and cobalt mine 110 km northwest of Lubumbashi REUTERS/Jonny Hogg

The Tenke Fungurume mine (TFM) in the DRC, one of the country's largest cobalt and copper mines, is now at the centre of a bitter dispute among its owners. Who can break the deadlock?

Christian Géraud Neema Byamungu, the Francophone editor at the China Global South Project, worked as a project manager for a local mining company in the DRC and later as a consultant on good governance and policy advocacy. He unpicks the fight to control one of Africa’s most prized mines, key to the green industrial revolution.

What are the politics behind these talks that we’re not seeing?

Geraud Neema: There is a stalemate between the parties namely CMOC [China Molybdenum Company Limited] on one side and Gecamines executive, TFM temporary administrator, and the revision committee on the other. Through political allies, they have tried to further their claims and agendas in the dispute. And as it stands, CMOC faces increasing and unexpected difficulties in exporting its copper and cobalt. Gecamines and the court-appointed administrator still don’t have access to TFM mines.

Faced with this situation, both parties are looking for a decisive political intervention that will end the dispute…in their favour. The simple fact that there has not been any formal decision from the government to halt CMOC’s export shows that there are still political influences behind both parties that are blocking a definitive political decision.

What do both sides hope to accomplish with these talks?

Geraud: So far no parties have expressed what they wish to accomplish, but based on the recent development we can only assume that:

We know that CMOC would like this whole dispute to go away. Times and times again they have expressed their opposition to Gecamines claims and denied any wrongdoing about the royalties owed to Gecamines. But at this stage of the process, it’s very unlikely that they will get a such decision from the Prime minister who had failed (after trying) to halt the judicial process. What they can hope to achieve will be for the Gecamines to agree to settle for much less compensation (not the $7bn) and a long-term disbursement plan.

On the Gecamines side, when we see how much determination they have shown the last two months, we can fairly assume that their expectations are likely to be for CMOC to agree to pay what they’re demanding. This is the first major step for Gecamines, CMOC needs to acknowledge what it owes to Gecamines. Once it’s done, they can find a compromise on the payment plan.

From what I see, the best deal CMOC can get from that mediation would be a slight reduction of Gecamines’ demands and a more or less mid-term timetable for payment

Now that the PM is involved, do you think this will finally resolve the problems between the two sides?

Geraud: I don’t believe so. You remember, he tried before when he halted the judicial procedure and promised the involvement of an international third party to help parties to settle their dispute. He failed because not only the judicial process went on, CMOC is now facing difficulties exporting its minerals. Does he want the dispute to end? Yes, he does. Does he have enough political clout to weigh in on the dispute and impose a compromise between the two parties? No.

The real value of these talks is in the fact that all the parties will be able to communicate again after months of harsh dispute. As I said before, to solve the dispute, there’s one question that needs to be addressed: Does CMOC acknowledge Gecamines demands? So far, they are not, at least publicly.

Published in partnership with the China Global South Project

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