Saia Sop 114 Mthembu Salter 20120328

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SouthAfricanI

nstit

ute

ofI

nte

rnationalA

ffair

s

Africanperspectives.Globalin

sight

s.

China in Africa Project

O C C A S I O N A L P A P E R N O 1 1 4

Goodwill and Hard Bargains:The DRC, China and India

M a r c h 2 0 1 2

G r e g o r y M t h e m b u - S a l t e r


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A b o u t S A I I A

The South African Institute of International Affairs (SAIIA) has a long and proud record

as South Africas premier research institute on international issues. It is an independent,

non-government think-tank whose key strategic objectives are to make effective input into

public policy, and to encourage wider and more informed debate on international affairs

with particular emphasis on African issues and concerns. It is both a centre for research

excellence and a home for stimulating public engagement. SAIIAs occasional papers

present topical, incisive analyses, offering a variety of perspectives on key policy issues in

Africa and beyond. Core public policy research themes covered by SAIIA include good

governance and democracy; economic policymaking; international security and peace;

and new global challenges such as food security, global governance reform and the

environment. Please consult our website www.saiia.org.za for further information about

SAIIAs work.

A b o u t t h e C h I N A I N A F R I C A P R o J e C t

SAIIAs China in Africa research project investigates the emerging relationship between

China and Africa; analyses Chinas trade and foreign policy towards the continent; and

studies the implications of this strategic co-operation in the political, military, economic and

diplomatic fields.

The project seeks to develop an understanding of the motives, rationale and institutional

structures guiding Chinas Africa policy, and to study Chinas growing power and influence

so that they will help rather than hinder development in Africa. It further aims to assist Africanpolicymakers to recognise the opportunities presented by the Chinese commitment to the

continent, and presents a platform for broad discussion about how to facilitate closer

co-operation. The key objective is to produce policy-relevant research that will allow Africa

to reap the benefits of interaction with China, so that a collective and integrated African

response to future challenges can be devised that provides for constructive engagement

with Chinese partners.

A ChinaAfrica Toolkit has been developed to serve African policymakers as an

information database, a source of capacity building and a guide to policy formulation

SAIIA gratefully acknowledges the generous support of the main funders of the

project: The United Kingdom Department for International Development and the Swedish

International Development Cooperation Agency.

Project leader and series editor: Dr Chris Alden, [email protected]

SAIIA March 2012

All rights are reserved. No part of this publication may be reproduced or utilised in any form by any

means, electronic or mechanical, including photocopying and recording, or by any information or

storage and retrieval system, without permission in writing from the publisher. Opinions expressed are

the responsibility of the individual authors and not of SAIIA.

Please note that all currencies are in US$ unless otherwise indicated.


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A b S t R A C t

The economic and political engagement of China and India with the African continent is

growing, but the complex dynamics of this engagement, particularly at country-specific

level, remain under-researched. This study explores historical, political and economic

aspects of India and Chinas relationship with the Democratic Republic of Congo (DRC). It

first traces the historical development of China and Indias political and trade relations with

the DRC from the 1950s to the present day. There follows specific consideration of Indian

and Chinese involvement in mining, construction, finance, and telecommunications. The

study shows that while Indian and Chinese business and governments are both significant

drivers of growth in the DRC, the nature of their engagement differs substantially. Significantly,

unlike its Indian counterpart, the Chinese government facilitates access by Chinese state-

owned companies to large mining deposits in the DRC through loans from the state-owned

Export-Import Bank. In the telecommunications sector, however, the most successful Chinese

company, Huawei Technologies, receives no noticeable state assistance. Meanwhile Indias

Bharti has become the DRCs biggest telecommunications investor and operator. Politically,

China has positioned itself as a close ally of President Joseph Kabila while India, the main

troop contributor to the UN mission to the DRC, has a more strained relationship. The study

concludes that China and Indias role in delivering infrastructural development to the DRC

is welcome, but that projects required continued and careful scrutiny by civil society and

the countrys democratic institutions.

A b o u t t h e A u t h o R

Gregory Mthembu-Salter is a researcher and author on Africas political economy. He

writes for the Economist Intelligence Unit and a range of other publications, and has served

on the UN Group of Experts on the DRC. His main research interests are unrecorded trade,

and the links between conflict and natural resources.


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4

S A I I A O C C A S I O N A L PA P E R N U M B E R 11 4

C H I N A I N A F R I C A P R O J E C T

A b b R e v I A t I o N S A N d A C R o N y m S

ACGT AgenceCongolaisedesGrandsTravails (CongoleseAgencyforGreatWorks)

AFDL AlliancedesForcesDmocratiquespourlaLibrationduCongo-Zare

BCPSC BureaudeCoordinationetdeSuividuProgramme

Sino-Congolais TheofficefortheCo-ordinationandFollowUpofthe

Sino-CongoleseProgramme

CITCC ChinaInternationalTelecommunicationConstructionCorporation

CREC ChinaRailwaysConstructionCompany

CCT CongoChinaTelecommunications

DRC DemocraticRepublicofCongo

FNLA FrenteNacionaldeLibertaodeAngola

(NationalFrontfortheLiberationofAngola)

Gcamines LaGnraledesCarriresetdesMines

ITRI InternationalTinResearchInstitute

MMR MiningMineralResources

MPLA MovimentoPopulardeLibertaodeAngola

(PopularMovementfortheLiberationofAngola)

MPR MouvementPopulairedelaRvolution

NDRC NationalDevelopmentandReformCommission

NGO Non-governmentalorganisation

OCPTC OfficeCongolaisdesPostesetTlcommunications

SADC SouthernAfricanDevelopmentCommunity

SOMIKA SocietMinireduKatanga(MiningCompanyofKatanga)

UNITA UnioNacionalparaaIndependenciaTotaldeAngola (NationalUnionfortheTotalIndependenceofAngola)

USSR UnitedSovietSocialistRepublic


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G O O d w I L L A N d H A R d B A R G A I N S : T H E d R C , C H I N A A N d I N d I A

5

S A I I A O C C A S I O N A L P A P E R N U M B E R 114

I N t R o d u C t I o N

Toanoutsider,theymayseemaperfectfit.TheDRChasbountifulnaturalresourcesand a growing consumerbase,set against a desperately poor infrastructure,a

shortageofskilledlabour,ahighlychallengingbusinessenvironmentandalong-standing

lackofaccesstocapital.Ontheotherhand,thePeoplesRepublicofChinaandIndia

areundergoingrapideconomicgrowth.Theyarethenewworkshopsoftheworldbut

whilerichinhumanresources,includingskilledlabour,increasinglytheylackthenatural

resourcesandrawmaterialstofueltheirdevelopment.Inaddition,ChinaandIndiahave

eachaccumulatedsignificantcapitalreserves,towhichtheirstate-ownedbankshave

privilegedandreadyaccess;andbothshowanincreasingappetiteforrisk,specifically

inAfrica.Furthermore,althoughthereisalong-establishedIndianbusinesscommunity

intheDRC(whichhasattractedmuchcriticismovertheyearsfrommanyCongolese)

neitherIndia norChina carriesa significantmoralburdenin thecountryby wayof

colonialorpost-colonialassociations.

Finally,astheDRCstraditionalWesternalliesanddonorshavegrownmorecritical

andparsimonious,theCongolesepoliticaleliteisseekinglessjudgemental,freer-spending

foreignpartners.Chinaand(toalesserextent)Indiathusfarhavebeenwillingtoassume

thatposition.Ateverygovernment-levelmeetingbetweentheDRC,ChinaandIndia

thereismuchtalkofgoodwillandwin-win,anditistruethatthereseemsanamplitude

ofgoodwillonallsides.Atthesametimehardbargainsarebeingdriven.Indianand

ChinesebusinessinterestsseekprofitablytoengagewiththeDRCwithoutfallingvictim

toitsmultiplepoliticalandeconomicrisks;whiletheCongolesegovernmentandbusiness

sectorlooktoextractmaximumadvantage;intheshorttermforthemselvesanditisto

behopedinthelongrunfortheircountryasawhole.

Thispaperseekstounderstandthesedynamicsastheyplayoutindiplomacy,politicsandeconomicsatinternationalandnationallevel.ItwillexaminetheDRCskeyeconomic

sectorsmining,telecommunications,constructionandinfrastructureaftersettingthe

scenewithabriefanalysisofpoliticalandmilitaryrelationsbetweentheDRC,Indiaand

China.

P o L I t I C A L A N d m I L I t A R y R e L A t I o N S

Respectively under great helmsman Mao Zedong and Prime Minister Jawaharlal

Nehru,inthe1950sChinaandIndiagavevocalsupportforthethenBelgianCongos

independencemovement.Because ofits activeinterest inexportingits ownstyleof

communistrevolutionwhileblockingtheadvanceoftheSovietUnionsMoscowversion,

ChinawentfurtherthanIndiaincultivatingtieswiththeCongosindependenceactivists.

ChinesegovernmentofficialsfirstmetCongoleseindependenceleaderPatriceLumumba

inAccra,Ghana,attheFirstAll-AfricanPeoplesCongressin1958,andlateratthesecond

suchcongressthefollowingyear.1Lumumba,however,appearedlittleinterestedinChina,

andtothehorroroftheUnitedStatesgovernmentbegantodevelopclosertieswith

theUnitedSovietSocialistRepublic(USSR).

Lumumba,who12 weeks earlierhadassumedofficeas thecountrysfirstlegally

electedprime minister, wasdismissed byPresident JosephKasa-Vubuin September


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1960,butthelegalityofthatactionwasstronglycontested.Lumumbasdeputy,Antoine

Gizenga,subsequentlyestablishedarivaladministrationinStanleyville(nowKisangani).

ChinaswiftlyestablisheddiplomaticrelationswithStanleyvilleandinaletterdated12September121960,offeredtheadministrationGBP21million(itisnotclearwhether,

orto whom,the moneywasactuallydisbursed3)yetwaitedseveralmonthsbefore

actuallyopeninganembassyinthecity.AfterLumumbawasmurderedinJanuary1961

andreplacedasprimeministerbyCyrilleAdoula,Chinafinallysentanambassadorto

Stanleyville;buttheembassyoperatedforonlytwomonths.Inmid-1961theStanleyville

administrationcloseditselfdownfollowingreconciliationbetweenGizengaandAdoulas

governmentinLeopoldville(nowKinshasa).Chinaestablisheddiplomaticrelationswith

theLeopoldvillegovernmentinDecember1961,butGizengaandAdoulasamityproved

short-lived,andGizengawasarrestedinearly1962.InanycasetheChinesegovernment

hadbeenunimpressedbyGizengasrevolutionarypotential,withareportwrittenbya

visitingChineseministerin1961allegingthat:

thenationalliberationmovementofthe Congois mainlyled bycapitalistnationalist

elements.Amongthemwaveringandcompromiseprevailandsotheycannotundertake

correctandfirmleadership.4

TheUNSecurityCouncilauthorisedmilitaryinterventioninCongoinFebruary1961to

endthedeclaredsecessionofthecountrysKatangaandKasaprovinces.Amonthlater

IndiacontributedaninfantrybrigadeaspartoftheUNdeployment.Inlate1962andearly

1963thebrigadeplayedamajorroleinOperationGrandSlaminKatanga,throughwhich

UNforcesseizedcontrolofElisabethville(nowLubumbashi)andJadotville(nowLikasi)

fromthesecessionists.TheUNoperationcompleted,IndiantroopswithdrewfromCongo

inmid-1964.5PierreMulele,fromKwilu(nowBandundu)provinceinthesouth-west,spent1961as

theStanleyvillegovernmentsambassadorinCairo.In1962hemovedtoChinaandfor

severalmonthswastrainedthereinrevolutionaryguerrillawarfare.Mulelereturnedto

Congoin1963andin1964launchedaMaoistrebellioninKwiluthatlastedfiveyears.In

1965JosephMobutuseizedthepresidencyofthecountryanddirectedconsiderableenergy

tocrushingMulelesKwilurevoltandastringofotherrebelinsurgencieselsewhereinthe

country.Underintensepressurefromgovernmentforces,Mulelefledto Brazzavillein

1968,whencehewaslatertemptedbacktoCongowithapromiseofamnestybyMobutu,

whothenhadhimpubliclytorturedtodeath.6MulelesmurdercrushedChinashopesof

successfullybackingrevolutioninthecountryasMobutumusthavehopeditmight.

TheUSgovernmenthadbeeninstrumentalinMobutusassumptionofpowerandfor

atimethetwohadacloserelationship.Unsurprisingly,givenitsactivesupportforMulele

andotherrebellionsagainsthisrule,MobutuwashostiletoChina,althoughlessfervently

sothanhewastotheUSSR.In1973MobutuvisitedChinaandthefollowingyearagain

wentthere,andtoNorthKorea.HereturnedwithapromisefromChinaof$100millionin

technicalaid,ideasfornew,leftistpolicyinitiativesandvaluabletipsonhowtogenerate

apersonalitycult.

ShortlyafterhisreturnthepoliticalbureauoftherulingMouvementPopulairedela

RvolutionannouncedaMao-style,ten-pointradicalisationprogrammeinwhichthe

numberonescourgewasidentifiedaslibertybeingconfusedwithlicense.Theproposed


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remedywasdiscipline,fidelitytoMobutu,andthedesignationofplaceswhichmarked

thelifeofthepresidentassitesofpilgrimage.InJanuary1975Mobutu,whohadtakento

referringtohimselfastheHelmsman,announcedthatfoodshortageswouldbeovercomewithagriculturalbrigades.Hefurtherdeclaredthatunemploymentwouldbeliquidated

bytheendoftheyear,andthatsinceinflationwasamaladyinherentinthecapitalist

systemit would beabolishedby state-decreedpricereductions.Heralding arashof

ultimatelydisastrousnationalisationsinthecountry,Mobutufurtherstatedthatmajor

economicinitiativesshouldbetheexclusivedomainoftheState.7

Meanwhilein1974,thepost-SalazarPortuguesedictatorshipcametoanend,paving

thewayforindependenceandsubsequentcivilwarinPortugalsmainAfricancolonies,

MozambiqueandAngola.Mobutuwasfriendlywithoneofthearmedgroupscompeting

forpowerinAngola,theFrenteNacionaldeLibertaodeAngola(FNLA),which

alsoenjoyedsporadicsupportfromtheCentralIntelligenceAgency.Hewas,however,

hostiletotheMovimentoPopulardeLibertaodeAngola(MPLA),themainbackerof

whichwastheUSSR.FollowingMobutusvisitstoChinatheChinesegovernmentalso

begansupportingtheFNLAandinaddition,theUnioNacionalparaaIndependncia

TotaldeAngola(Unita);mainlyitseemsasawaytothwartSovietambitionsinAfrica. 8

Soon,ChineseweaponrywasmakingitswaytoFNLAmilitarycampsinsideZare(as

MobutuhadbythenrenamedCongo),whiletheUSSRandCubarampedupsuppliesto

theMPLA.WhilethiscollaborationdidmuchtoimproveSino-Zareanrelations,itwas

notenoughfortheFNLAtoconquerAngola.TheMPLAcapturedLuanda,proclaimed

AngolanindependenceinNovember1975,anddecisivelydefeatedtheFNLAinFebruary

1976.Unita,however,formanyyearscontinuedtocontrollargeswathesofthediamond-

richAngolanterritoryborderingZare,andfoughtonuntilthedeathofitsleaderJonas

Savimbiin2002.AlthoughMobutuprovidedsupporttoUnitaandtradeddiamondswith

itsleadershipuntilhelostpowerin1996,theChinesegovernmentbrokewithSavimbiinthelate1970sandestablishedpoliticalrelationswiththeMPLAin1980.9

TheIndianbusinesscommunityinZairewasbadlyaffectedbyMobutusZareanisation

policyofthemid-1970s,whichledtotheforcibletransfertowell-connectedZareans

ofmajorityshareholdingsinIndian-ownedbusinesses.NewDelhi,however,tookno

discerniblestepstoprotectIndianbusinessesinZaireandindeed,appearedtohavelittle

politicalinterestinthecountryasawholeduringMobutusrule.RajendraRai,Indias

ambassadortoZaireduringtheearly1980s,hasrecountedthat:

TherewasnotmuchprospectforenhancedtradeaslongasZaresdifficultiesinpayingfor

itsimportscontinued.TherebeingnoPakistaniembassyinKinshasatherewasnotgoing

tobethestapleIndiandiplomaticactivityofcounteringPakistanipropagandaorstating

theIndiancaseonJammuandKashmir.

Ihadatotaloffourtte--tteswithMobutu,includingtheoneafterthepresentationofmy

credentialsandtheonefortakingleave.TherewasnotenoughcontentinIndiasrelations

withZaretowarrantmorethantheothertwomeetingsIhad.10

IndiawithdrewitsambassadorfromZarein1993,anddidnotsendanotheruntil2006. 11

In1996aRwandan-ledrebelgroup,AllianceofDemocraticForcesfortheLiberation

ofCongo-Zaire(AFDL),invadedZareandmovedswiftlythroughthecountry,easily


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crushingwhatlittleresistanceitencounteredfromZairesarmedforces.Itentered

Kinshasaon17May1997.LaurentKabila,whomtheRwandanmilitaryhadpreviously

selectedasthepublicfaceoftheAFDL,

12

declaredhimselfpresidentofthecountry,whichherenamedtheDemocraticRepublicofCongo.Mobutuhadfledthecitythedaybefore,

anddiedinexileinMoroccofourmonthslater.13

KabilawasoriginallyaLumumbist.Hiscareerasa rebelcommanderbeganwhen

LumumbasenthimtoBurundiinJanuary1964tomakecontactwithChineseofficials

thereandenlisttheirsupportforarebellionineasternKivuprovince. 14Therebellionwas

dulylaunchedwithChinesesupport.Itrumbledoninconclusivelyforyears,degenerating

attimesintounprincipledbanditry(suchaswhenKabilasforcesin1975kidnapped

severalforeignstudentsfromJaneGoodallschimpanzeeresearchcampinGombe,

westernTanzaniaanddemandeda$500,000ransom).15

Kabilahadtravelledto,andspentseveralmonthsin,Chinaduringthelate1970s

andonceinstalledaspresidentoftheDRCsoonrevivedhisChineselinks.Fromthe

starthismainconcernwasmilitaryassistance,andChinaobliged,reportedlysupplying

largequantitiesofweaponsduringthelate1990s. 16AnumberofKabilasmilitaryofficers

includingoneof hissons,JosephKabila,alsowentto Chinafortrainingduringthe

sameperiod.17AtthistimeKabilasrelationswiththeDRCsformerWesternallies

oscillatedbetweenlukewarmandfrigidlyhostile,withfewdonorswillingtoprovide

assistance onKabilas terms. Inadditionto obtainingmilitaryassistance,therefore,

KabilawaskeentoexpandeconomiclinkswithChina.Themainfruitofhisefforts

wastheformationofajointventurebetweentheDRCgovernmentandaChinesestate-

ownedtelecommunicationscompany,ZTE,in2000.ZTEtooka51%stakeinanew

mobilephoneoperatingcompanycalledCongoChineTlcoms(CCT),withtheOffice

CongolaisdesPostesetTlcommunications(OCPT)takingthebalance.

BarelyamonthafterKabilaorderedallRwandantroopsoutoftheDRCinJuly1998,anotherRwanda-backedrebelmovement,theCongoleseRallyforDemocracy,beganawar

againsthisgovernment.TheconflictswiftlydraggedinmostoftheDRCsneighbours.

UgandaalsoopposedKabilabutAngola,NamibiaandZimbabwesupportedhim.After

ayearoffighting,inJuly1999apeaceaccord(theLusakaCeasefireAgreement)was

signedinLusaka,Zambia,bythepresidentsoftheDRC,Zimbabwe,Angola,Rwanda

andUganda.InSeptemberofthatyearthe UNlaunchedamilitaryoperationin the

DRCintendedtooversee,andifnecessaryenforce,thefragileagreement.Asithadbeen

duringthe1960s,IndiaagainbecameoneofthemaintroopcontributorstotheUN

Mission(Monuc)intheDRCfromitsbeginningin2000.ParticularlyinNorthKivu,

whichbordersRwandaandisamongtheDRCsmostviolentandtroubledprovinces,

Indiadeployedthousandsoftroops,andequipmentincludingcombathelicopters.

ChinafirstcontributedtroopstoMonucin2001andin2008therewere234Chinese

militarypersonnelintheDRCoutofatotal1487postedinUNmissionsworldwide. 18

By2011,meanwhile,Indiahadmorethan4000troopsintheDRC.19

KabilawasassassinatedbyoneofhisbodyguardsinJanuary2001andwasswiftly

replacedbyhissonJoseph.Thechangeinleadershipprovidedimmediateimpetusto

thecountrysfalteringpeaceprocess.InJuly2002KabilaandRwandanpresidentPaul

KagamesignedapeaceagreementinPretoria,SouthAfrica,brokeredbySouthAfricas

PresidentThaboMbeki.MostforeigntroopsdepartedtheDRCsoonafterwards.In

December2002,alsoinPretoria,alandmarkpoliticalagreementwassignedbetween


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Kabila,theleadersofthearmedgroupsopposedtohim,andrepresentativesofthose

politicalpartieslackingprivatearmies.Thisinturnledtoanewunitygovernmentheaded

byKabila,whichwassworninon17July2003.

20

ChinacontinuedtosellmilitaryequipmenttotheDRCuntilsometimearound

2008,sincewhennomajorsaleshavebeenreported.Chineseinstructors,however,have

continuedtoprovidetrainingtotheCongolesemilitaryattheKaminabaseinManiema

province,whileeachyearanumberofCongolesemilitaryofficersaresenttoreceive

traininginChina.21AftertheDRCMinisterofDefenceCharlesMwandoNsimbavisited

ChinainOctober2009fortalkswithhisChinesecounterpartLiangGuanglie,anofficial

Chinesestatementsaidthatthetwogovernmentswerereadytoraiserelationsbetween

theirarmedforcestoahigherlevel.22

Kabilahasbeenaskeenashisfather(andastheChinesegovernment)tofoster

economiclinkswithChina.EquallyenthusiastictoextendChinaseconomicreachinthe

DRC,inSeptember2007Beijingsignedamultibilliondollarresources-for-infrastructure

dealbetweenLaGnraledesCarriresetdesMines(Gcamines),aCongolesestate-

ownedminingcompany,andtwoChinesestateconstructioncompanies.Themoneywas

tocomefromChinasstate-ownedExport-Import(Exim)Bank.

Atthesametime,Chinasgovernmenthasbeenincreasinglywillingtouseitsseat

ontheUNSecurityCounciltothebenefitoftheDRC.Forexampleandmuchtothe

irritationoftheUS,BritishandFrenchgovernmentsacandidateforaUNGroupof

ExpertsontheDRCwasvetoedbyChinaintheUNSecurityCouncilinearly2010atthe

requestoftheDRCgovernment,whichhadtakenumbrageatthecandidatesformerwork

foraUS-basedlobbygroup,HumanRightsWatch.23TheChinesegovernmenthasalso

affirmedthatshouldtheCongolesegovernmentgiveMonucssuccessororganisation,the

UNStabilisationMissionintheDRC(newlynamedMonuscoin2010),acleardeadline

toleavethecountry,itwouldsupportthatdemand.24InJuly2007,internationalnewsagenciesreportedallegationscontainedinUN

documentsthatsince2005someIndianpeacekeepersineasternDRChadbeentradingin

goldwithaRwandanrebelmilitia.AnIndianarmygeneralwasapparentlyimplicated. 25

FurtherallegationsaboutillegaltradebetweenIndianpeacekeepersandCongolesearmed

groups,whichweresaidtohavemadetheformerreluctanttoassistinMonucseffortsto

disarmthelatter,surfacedthefollowingyear.TheUNSecurityCouncilvotedtoincrease

MonucstroopdeploymentinNovember2008,butaccordingtoaUSStateDepartment

cablelaterreleasedbythewebsiteWikileaks 26theDRCgovernmentrequestedthatthis

shouldnotincludemoreIndianforces.TheIndiangovernmentthereuponthreatenedto

pullallitstroopsandhelicoptersoutoftheDRC,amovethatwouldhavesubstantially

underminedMonucsmilitarycapacity.

TherefollowedsustaineddiplomaticeffortsbyUNSecretary-GeneralBanKi-moonand

theUSgovernment,resultinginKabilaswritingpersonallytoPrimeMinisterManmohan

SinghofficiallythankinghisgovernmentforitstroopcontributionsandaskingIndia

toremainengaged inthe DRC. The initiative worked,andthe Indian government

rescindeditsthreattopullout.27ReactingtoIndiangovernmentcomplaintsaboutits

relativelackofinfluenceintheupperechelonsofMonuc,BanKi-moonappointedmore

Indianstocommandpositions,asaresultofwhichIndiasLieutenant-GeneralChander

PrakashbecameforcecommanderinJuly2010.28Yetinmid-2011whenRogerMeece,

theAmericanheadofMonusco,requestedthatIndiacontinuetoleaseitshelicoptersto


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themission,therequestwasrefused.MeececommentedthatthewithdrawalofIndias

helicopterswould significantly weaken Monuscos military capacity, but theIndian

governmentwasunrepentant,retortingthatitwasnottheonlycountryintheworldwithcombathelicopters.Indiadid,however,agreetoleaveitstroopsinplaceatleastuntilthe

conclusionofthenextDRCpresidentialandlegislativeelectioninlateNovember2011.29

TheIndiangovernmenthasnobilateralmilitaryco-operativearrangementswiththe

DRC30buthasbeguntotakemoreinterestinstimulatingtradebetweenthetwocountries.

Inthemid-2000sthestate-ownedExport-ImportBankofIndia(EximIndia)offereda$57

millioninitiallineofcreditatpreferentialinterestratestoIndiancompanieslookingto

investorexpandintheDRC.In2011,EximIndiaannouncedanotherlow-interest$267

millionlineofcreditforIndiancompanieslookingtodobusinessintheDRC.31

t R A d e

AccordingtodatacompiledbytheTradeandLawCentreforSouthernAfrica(tralac), 32

ChinastotaltradewiththeDRCincreased33-foldbetween1996and2009,from$44

millionto$1.4billion.33Themainincreasescamefrom2004onwards,withaparticularly

significantleapin2008,whentradealmostquadrupledinoneyear.Nonethelessthe2009

DRC-Chinatradetotalwasstillonly4%ofthevalueofSouthernAfricanDevelopment

Community(SADC)recordedtradewithChinathesameyear,and8.5%ofChinastrade

withAngola.ThislattertradeconsistsmainlyofAngolanoilexports,togetherwithsome

Chineseconstructionandtelecommunicationsitems.Typicallyitaccountsforabouthalf

ofSADCstradewithChina(SADCcontributed45%ofAfricastotaltradewithChinain

2008,and43%in2009).

Table 1: Chinas trade with Africa (import and export), selected indicators, 19952009

($ million)

DRC Angola SADC Africa

1996 44 272 1,920 4,031

1997 31 633 2,569 5,672

1998 52 190 2,162 5,533

1999 20 372 2,429 6,485

2000 19 1,876 4,466 10,598

2001 20 768 3,536 10,799

2002 31 1,148 4,423 12,390

2003 52 2,351 7,117 18,564

2004 136 4,911 12,240 29,456

2005 225 6,954 16,168 39,801

2006 437 11,825 24,182 55,472

2007 553 14,125 31,711 73,543

2008 1,810 25,301 48,922 38,219

2009 1,441 17,046 106,752 90,007

Source:tralac,http://www.tralac.org.za


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TheDRChasrecordedatradesurpluswithChinasince2003.Itsrecordedexportsto

Chinaarealmostexclusivelyrawmaterials,withcobaltproductsfirstfollowedbycopper

products,thentimber,tungsten,niobium,tantalum(coltan)andzinc.ChinasrecordedexportstotheDRC,bycontrast,arehighlydiversified.Telecommunicationsequipment,

thelargestsinglecategory,accountedforjust6.5%ofthe2009total.Otherrelatively

significantitemsincludedtinnedvegetables,footwear,medicines,batteries,andmotor

vehicles.

ThesestatisticsarederivedfromChinasnationaltradefigures.Iftheglobaltrend

intradefiguresappliesinthiscase,theyareprobablyfairlyaccurateasregardsChinas

importsfromtheDRC,butlesssoaboutitsexports.DisaggregatedCongolesestatistics

foritstradewithChinawouldmakeforausefulcomparisonbuthavethusfarproved

hardtofind.InanycasethereliabilityofDRCsnationaleconomicdataisnotoriously

poor,particularlyforproductionandtrade.AgricultureisallbutabsentfromCongolese

productionandtraderecordsandmineralproductionfiguresconsistentlyunder-capture

output.34Furthermore,widespreadcustomsfraudmeansthecountrysimportstatistics

arealsohighlyunreliable.

Box 1: Artisanal miners, taxis and Chinese motorbikes

Most vehicles importe from China are motorcycles, hich are popular throughout the

dRC, particularly in artisanal mining areas. In the gol-rich Ituri istrict of the north-eastern

Orientale Province, artisanal iggers ho strike it rich often invest in Chinese motorcycles,

hich they then use as taxis. Bunia, the largest Ituri ton, teems ith thousans of motorbike

taxis, churning up re ust in its unkempt an un-tarre streets. Nearly all the machinesin Bunia are Chinese an a large proportion of their rivers are associate ith artisanal

gol mining. Chinese motorcycles are popular in Bunia, an it seems elsehere in the dRC,

because they are the cheapest available.

Taxi rivers acknolege that their Chinese machines are of significant ly loer quality

compare to their Japanese counterparts, but in 2011, at just $600-$800, the former cost

roughly half of the latter. Japanese motorcycles ere referre to as bikes for the bosses

by taxi rivers but the Chinese ones ere bikes for us. In Bunia, Inian motorcycles i

not appear to be in iesprea use. Inian-manufacture bicycles are more common

nationie, though anecotal evience from Kinshasa, Lubumbashi, Bukavu, Goma an

Bunia suggests that they too are being supplante by less expensive, though poorer quality,

Chinese proucts.35

As they are in other parts of the country, taxi motorcycles in Ituri are subjecte to gruelling

treatment. They carry passengers an goos loas that are frequently enormous, for long

istances over poor roas. Taxi operators o not expect their Chinese machines to last

more than eight months. They calculate, hoever, that in their short life the motorcycles can

earn enough to pay for a replacement an generate aitional profit besies.36


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Table 2: DRCCHINA disaggregated trade data, 19972009 ($ million)

DRC

exportsto China

Of

which:

Cobalt

ores andconcentrates

Copper

ores andconcentrates

DRC

importsfromChina

Of

which:

Telecommuni-

cationsequipment

1997 2 0 0 29 0

1997 2 0 0 50 0

1997 1 0 0 19 0

2000 1 0 0 18 0

2001 7 4 0 13 0

2002 12 8 0 19 0

2003 27 24 2 25 0

2004 100 94 3 37 0

2005 176 148 20 50 0

2006 368 214 105 69 7

2007 460 243 77 93 21

2008 1,579 851 138 232 23

2009 1,119 458 124 321 21

Source:tralac,http://www.tralac.org.za

OfficialIndiantradestatisticsindicateaverylowlevelofIndianexportstotheDRC.

Indias recorded exports, whichwereworth a mere $1million in2007, peakedat

$15millionin2009,andthenfellbackto$10millionin2010.Theofficialfigures,however,aremuchtoolow.Indianpharmaceuticalimportsalonearesaidtoexceedofficial

totalsbya largedegree;thefactthatsomanyoftheseimportsallegedlyhaveexceeded

theirexpirydatesmayaccountfortheirabsencefromIndiasofficialrecord.37Evenso,at

agenerousestimatetotalIndianexportstotheDRCareunlikelytoexceed$50million

ayear,insignificantagainstIndiasexportstoAfricasmoredevelopedeconomies,such

asSouthAfricaandKenya.In2010recordedIndianexportsto SouthAfricatotalled

$2billionandtoKenya,$1.5billion:togetherthosetwocountriesconsumedone-thirdof

allthecontinentsimportsfromIndia.

Table 3: Indias exports to Africa, selected indicators, 2006-2010 (April-March) ($ million)

2006 2007 2008 2009 2010

Africa 5,441 8,407 11,539 11,391 10,308

South Africa 1,526 2,242 3,606 1,980 2,058

Kenya 577 1,309 1,585 1,362 1,452

DRC 2 1 4 15 10

Source:GovernmentofIndia,MinistryofCommerceandIndustry,DepartmentofCommerce,

Systemon Foreign TradePerformanceAnalysis.http://www.commerce.nic.in/ftpa/rgncnt.asp

accessed17July2011


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IfIndiasofficialtradestatisticsaretobebelieved,Africaasawholeexportsroughly

twiceasmuchtoIndiaasitimports.SouthAfricaisthecontinentsmainexporterto

India,responsiblein2010for27%ofrecordedtotalexports.IndiasstatisticssuggestthatIndiastartedbuyingoilfromAfricainsignificantquantitiesin2007.InthatyearNigerias

exportstoIndiaroseto$7billionfrom$72millionin2006,whileAngolasrosefrom

$3millionto$245million,increasingto$1billionin2008.TheDRC,meanwhile,hasrun

amodestrecordedtradesurpluswithIndiasince2008andin2010itsrecordedexportsto

India,at$145million,werenearly15timesthevalueofitsimports.Themainrecorded

exportsarecopperoresand concentrates,followed bycobaltoresandconcentrates.

Ifthereisanexporttradeintimber,itisallbutunrecorded.DiamondsfromtheDRCare

oftencutandpolishedinIndia,buthavegenerallybeenexportedthroughBelgium,Israel

orLebanonanddonotthereforeappearinbilateraltradestatistics.

Table 4: Indias imports from Africa, selected indicators, 20062010 (AprilMarch)

($ million)

2006 2007 2008 2009 2010

Africa 4,041 11,363 14,928 18,904 20,715

South Africa 2,472 2,470 3,605 5,514 5,675

Nigeria 72 7,009 7,612 8,900 7,288

Angola 3 245 1,024 1,386 4,243

DRC 14 17 14 117 145

Source:GovernmentofIndia,MinistryofCommerceandIndustry,DepartmentofCommerce,

System on Foreign Trade Performance Analysis. http://www.commerce.nic.in/ftpa/rgncnt.asp,accessed17July2011

RecordedIndiantradewiththeDRCisclearlyafractionofwhatitcouldbe.According

tosomeintheIndianbusinesscommunity,oneofthemainobstaclestoincreasedtradeis

thelackofabilateralinvestmentprotectionagreement(BIPA).Althoughthepotentialfor

profitabletradeintheDRCisgreat,foreigninvestorshavefacedsomeextremelydifficult

challenges;expropriation,government-sanctionedlootingbythemilitary,hyperinflation,

civil warandtheapparentlyarbitraryalterationor cancellationofcontracts.A BIPA

cannotdefendacompanyfromcivilwarorhyperinflationandwouldprobablybeoflittle

useagainstauthorisedlootingbytheDRCarmedforces,butitcouldhelpwitharbitrary

contractalterationsandcancellations.In2011,abilltoinstituteaBIPAwithIndiacame

beforetheDRCNationalAssembly,withtheIndo-CongoleseChamberofCommerceand

IndustryinKinshasacommentingthatitsadoptioncouldbethekeytoenticing3040

majorIndianinvestorstotheDRC.38

Asthenumber ofChinesecompaniesin theDRCgrows and thevalue oftheir

investmentsrises,BeijingalsowantsabilateralinvestmentagreementwiththeDRC.

TheChinesegovernmentisacutelyawarethatinNigeria,multi-billiondollaroil-for-

infrastructureagreementsnegotiatedwithPresidentOlusegunObasanjoduringthelate

1990swerearbitrarilyditchedbyhissuccessorPresidentUmaruMusaYarAdua;China


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doesnot wantthesametohappenintheDRC.OneseniorChineseembassyofficial

inKinshasaremarked:Thatiswhy weneedthisinvestmentcode.Wearecurrently

negotiatingthiscode.

39

m I N I N G

Aswithitsinformal,unrecordedcounterpart,theDRCsformal,recordedeconomyis

dominatedbymining.Inadditiontoitsindustrialminingenterprisesithasthousands,if

nottensofthousands,ofartisan-minedsitesworkedbyhundredsofthousands,perhaps

millionsofpeople.TheminesrangefromthegolddepositsofOrientaleProvincetothe

tinandcoltanminesoftheKivus,ManiemaandNorthKatanga,fromsouthernKatangas

copperandcobaltminestotherichdiamonddepositsoftheKasas.

IndianandChinesecompaniesintheDRCsminingsectoraremainlyinsouthern

Katanga,wheretheymine,processandtradecopperandcobaltoresandconcentrates.In

manyinstancestheseoresarepurchasedfromartisanaldiggers.OneIndiancompanyis

tradingandminingtinandcoltaninnorthernKatanga,andoneChinese comptoir(buying

house)alsobuysfromartisanaldiggers.OneIndianandthreeChinesecomptoirsbuytin

andcoltanfromartisanalsintheKivusandManiema.Thereappearstobenosignificant

presenceofIndianorChinesecompaniesinminingortradinggoldinOrientale,norin

miningortradingKasaandiamonds.

Copper and cobalt

Morethan100Chinesecompaniesarethoughttobeinvolvedinmining,semi-processing

andtradingcopperandcobaltoresandconcentratesinKatanga.40Inaddition,bylate2011ChinasJinchuanGroupLtdwasedgingclosertoacquiringJohannesburg-based

MetorexLtd,whichoperatestheRuashicopperandcobaltmineinKatanga,forZAR41

9.1billion($1.1billion).MetorexshareholdersvotedtoacceptthetakeoverinSeptember

2011.42Alsoinlate2011Perth-basedAnvilMiningLtd,whichoperatestheKinsevereand

MutoshicopperandcobaltminesinKatanga,agreedtoa$1.3billiontakeoverbyChinas

state-ownedMinmetalsGroup.(Gcamines,AnvilsminoritypartnerinthetwoKatanga

mines,subsequentlyinsistedthatitsconsentwasrequiredforthedeal,whichstipulation,

AnvilwarnedinlateOctober2011,mightjeopardisethesale.43)

Shouldtheysucceed,thosetwotakeoverswouldchangethefaceofChinesemining

intheDRC.Atthetimeofwriting,however,ChineseminingcompaniesinKatangaare

allsmall,low-volumeproducers,rarelyinvolvedinextraction.Instead,mostpurchase

oresfromartisanaldiggersandprocessthemintoconcentrates,orlessoften,intothe

metalsthemselves.AmongthemainChinesecompaniesprocessingcopperandcobalt

oresinKatangaareVolcanoMining,GuangAnCotaMetalCo(CotaMining),Shaanxi

JiaxinMiningCompanyLtd,Magma-Lubumbashi,operatingnear Lubumbashi,andthe

HuachincompanyinLikasi.AccordingtotheKatanganprovincialminesdivision,during

2010thesefivecompaniesbetweenthemproduced10457tonnesofblackcopper(which

containsabout95%copper)outofarecordedoutputinKatangaof53801tonnes,and

35308tonnesofcobaltconcentrate.44Thatamountedto16%oftherecordedtotalof

cobaltconcentrateand19%ofthat forblackcopper.Itshouldbenoted,however,that


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mostrecordedcopperoutputintheprovinceislistednotasblackcopperbutascopper

concentrate(withthepercentageofcontainedcoppernotdefinedintheofficialfigures),

forwhich2010totalrecordedproductionwas328779tonnes.MagmahasoperatedinKatangasince2002butbeganprocessingmineralsonlyin

2007whentheprovincialgovernmentprohibitedtheexportofmineralores.Ithasadaily

processingcapacityof70tonnesofore,broughttotheplantforsalebyartisanalminers.

Inmid-2011Magmaemployed24Chinesestaffandhadnoimmediateplanstoexpand

production.UnlikemanysmallChineseminingcompaniesinKatanga,Magmacontinued

itsoperationstherewhencommoditypricescrashedin2008.45

Some,butbynomeansalltheChinesecompaniesthatleftduring2008,have

sincereturned.Thereisoftenanairofimpermanencetotheoperationsofthesesmall

companies,withinvestmentininfrastructureatplantsitestypicallykepttoaminimum,

possiblytoenablethemtoclosedownrapidlyandwithoutgreatlossshouldtheneedarise.

Inaddition,thecompaniesChineseemployeesseemreluctanttobringtheirfamiliesto

Katanga,andalthoughthereareChinese-ownedrestaurants,casinos,clinicsandbrothels

inLubumbashi,thereisnoChineseschoolorsupermarket.46

There are several smallIndian companies in Katanga, also processing minerals

purchasedfromartisanaldiggers.TheyincludeGoldenAfricanResourcesinLubumbashi

andDelhi-basedMehulMiningLtd andCongoMinMetin Likasi.Inaddition,three

medium-sizedIndiancompanies,RubaminLtd,ChemafandSocietMinireduKatanga

(Somika),areengagedinlarger-scaleoperations.

Accordingto aninspectorin theKatanga provincialgovernments departmentof

labour:

Ihavebeenaninspectorfor11years,andhaveinspectedalotofChinesecompanies.The

conditionsarebarbaric.TheydontrespectpeopleWesternandSouthAfricancompaniesrespondtoourrecommendationswithimprovements,buttheIndiansandChineseare

terrible.Insteadofrespondingtoourrecommendations,theyprefercorruption.Wegetpaid

$50amonth,soitiseasytocorruptus.47

IntheviewofMoseKatumbi,thegovernorofKatanga:

TherearebigChinesecompaniesthatrespectourlawsandIndiancompaniestoo.But

therearemanysmallercompaniesthatdonotrespectourlawsespeciallyconcerning

pollution.48

Thegovernorclaimsthattheproblemwithhisprovincesinspectorateisnotcorruption

butcapacity.Itisalackofexpertise.Theyarenottrainedandweaskfortraining.We

havenolaboratories.49

RubaminisIndiaslargestprocessorofzincoxideandcobaltbutitssubsidiaryin

KatangaisitsonlyAfricanventure.ThecompanyarrivedintheDRCin2004andin

2008invested$25millioninaplanttoprocesscopperandcobalt.Theplantcanproduce

10000tonnesofblackcopperand15000tonnesofcobaltconcentrate(78%cobalt)a

year.Rubaminitselfactivelymineduntil2010whenitsexplorationpermitwasrescinded

andsincethenhasreliedonorepurchasedfromAnvilMiningandartisanaldiggers.

DependenceonthesesourcesalonehasmadeRubaminsaccesstocopperandcobaltores


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moredifficultbutnonethelessthecompanyplanstoincreaseitscopperandcobaltore

productionto50000tonnesayear.ItexportsitsoutputalmostexclusivelytoChina. 50

In2010RubaminrecordedproductioninKatangaof564tonnesofcopperconcentratesand348tonnesofblackcopper.Curiously,provincialstatisticsdonotshowanycobalt

output.51

ChemafisasubsidiaryofIndian-ownedShalinaResourcesLtd,whichisregisteredin

theUnitedArabEmirates.In2003ChemafacquiredfromGcaminestheEtoileopenpit

mineandUsokemineralprocessingplantnearLubumbashi.In2008,Chemafupgraded

theUsokeplanttopermitcoppercathodeproductionthroughaprocessofsolvent

extractionand electro-winning (SX-EW),which increases output andqualitywhile

reducingcosts.ShalinahassinceindicatedthatitintendstolistontheLondonMetal

Exchange.52Chemafsrecordedoutputin2010was504tonnesofcobaltconcentrate,

17055tonnesofcobaltcarbonate(CoCO3),and15196.5tonnesofcoppercathode.53

TheUsokeplantisnotoriouslocallyforallegedenvironmentalpollution.According

to onenon-governmentalorganisation(NGO)in Lubumbashi, Chemafsoperations

generatelargeamountsofdust;theplantpollutesthelocalwatersupply;pumpsout

sulphurousair;andposesaserioushazardtonearbyresidents.TheNGOfurtheralleges

thatChemafhasrefusedtodiscusstheseconcernswiththelocalcommunityandinstead

handedouttokenfinancialcompensationtoasmallselectionofthoseaffected.54In2010

theprovincialminingenvironmentalinspectorateinstructed Chemafto constructa

waterpurificationplant.Asofmid-2011theinspectoratehadnotverifiedwhetherornot

thishadtakenplace.Theinspectoratehasblamedpowercuts,notChemaf,forUsokes

sulphuremissions.55ChemafappearsreluctanttomeettheNGOorlocalcommunity

representativesbuthasvigorouslydefendeditsrecordinthelocalpress,insistingitis

notpollutingthewatersupply;isworkingonthedustissue;andisactiveinarangeof

socialinitiatives.ApersonalvisittotheUsokeplantinmid-2011confirmedthattheairwasheavywithsulphurandheavytruckactivitywasthrowingupdust.56Theclose

proximityofresidentialsettlementstoChemafsoperationsisclearlyhighlyproblematic

andifpeoplearetoremaintherethesituationneedsurgentattention.Usokeislocated

inaminingandindustrialzoneofLubumbashi,however,andthequestionofresidential

settlementappearsoneforthemunicipalityratherthanChemaftoresolve.

SomikahasbeenactiveinKatangasince2001.ItoperatesKisanfumemineinKolwezi

asajointventurewithGcamines,andaprocessingplantinLubumbashi.Commissioned

in2003,thelattergetsthebulkofitsmaterialfromKisanfume,withanother30%from

artisanaldiggersandothermines.Theplant,whichhasbeenupgradedtousetheSX-EW

process,producescoppercathodeandacobaltconcentratecontaining30%cobalt.

AccordingtoSomikasmanagementtheplantproduces300tonnesofcoppercathode

andafurther300tonnesofcobaltconcentrateeachmonth,withanincreaseto1000

tonnesofeachbytheendof2011.ItsellsitsoutputtoChina,shippingthroughDares

SalaaminTanzania.SomikadoesnotusetheraillinkbetweenKatangaandDaresSalaam

buttransportsitsproductbyroadduetotheapparentlyexcessivelogisticalproblems

involvedinrailmovement. 57KatangaMinistryofMinesstatisticsshowthatin2010

Chemafproduced24332tonnesofcobaltconcentrate,12412tonnesofcobalthydroxide

and2840tonnesofcoppercathode.58

In 2008 Gcamines, two Chinese parastatals (China Railways and Sinohydro

Corporation),andtheZhejianHuayouCobaltCompanyformedajointventurecalled


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Sicomines.SicominesintendstodeveloptheMashambaWestandDikuluwecopperand

cobaltdepositsinKatanga,forwhichithasearmarkeda$3billioninvestment.Themoney

isintheformofaloanfromChinasEximBankbutisconditionalonthecompletionofafeasibilitystudythatcanshowthatthemineshaveprovenreservesof10milliontonnes

ofcopper.59

Inmid-2011aSicominesrepresentativeinLubumbashicouldnotconfirmthatthe

companyhadbeenabletoprovetherequiredreserves,butstatedthatafeasibilitystudy

hadbeensenttoChinasNationalDevelopmentandReformCommission(NDRC).

ShouldtheNDRCacceptthestudyitappearsthatEximBankwillreleasethefunds.The

representativesaidthecompanyconsidereditfeasibletodeveloptheminingassetsand

thattheprojectwasprogressingmoreslowlythanhadbeenenvisagedbutwasdeveloping

favourably.60CompletionofthefeasibilitystudyanditssubmissiontotheNDRCwasalso

confirmedbytheDRCgovernmentsBureaudeCoordinationetdeSuividuProgramme

Sino-Congolais(BCPSC),whichisinchargeofadministrationandfinanceforthe

agreementsinfrastructuralprojects.61AseniorofficialintheChineseembassyinKinshasa,

however,commentedthattheissueofSicominesreserveswasabigquestion,which

worriesus.62TheriskisthatifMashambaWestandDikuluwereservesareinsufficient

theEximBankmaynotreleasepromisedfundsnotonlythosefordevelopingthemines

butalsoamootedfurther$3billionloantofinanceplannedinfrastructuralprojectsacross

thecountry.

Tin and coltan

In2009Somikaestablishedatinandtantalumdivision,MiningMineralResources

(MMR).MMRoperatesseveral comptoirsthatpurchaseartisan-minedtinandcoltanin

northKatanga.In2010,theprovincialgovernmentgrantedMMRexclusiveaccesstofourminesitesinthatregion,whereMMRisalsodevelopingsemi-industrialmining.In

return,MMRhasbegunaseriesofsocialprojectsinandaroundthosesites.MMRisalso

implementingamineralstaggingandtraceabilityschemedevisedbyInternationalTin

ResearchInstitute(ITRI),aUK-basedassociationworkingundertheauspicesoftheUN

SecurityCouncil.ThetraceabilityprojectispartofITRIsprogrammetoimplementdue

diligence,63asdefinedbytheOrganisationforEconomicCooperationandDevelopmentin

itsguidanceforcompaniessourcingmineralsfromconflict-affectedandhigh-riskareas.64

MMRhasappliedtotheminesministryinKinshasaforexploitationrightstoitsnorth

Katanganassets,butbyJanuary2012hadreceivedtheserightsforonlyoneofthemines.

InthesixmonthstoApril2011MMRsaiditexported1000tonnesoftinconcentrate,

containing65%tin,apparentlytoChina.65

MMRhasalsobegunconstructionofatinsmelterinLubumbashionthesiteofthe

existingSomikacopperandcobaltprocessingplant.Thiscouldhaveasignificantimpact

ontheDRCtinandtantalumminingsector.TheMMRsmelterisscheduledtobegin

operationsduring2012,andwillbringthecompanystintoahighlevelofpurity,ensuring

thatsomeofthemetalsaddedvalueremainsintheDRC.Thesmeltercouldalsoenable

MMRtoreceiveoutputfromothertinminingcompaniesinthecountryfortolltreatment.

SomeKivu-basedtinandcoltancomptoirs,taintedbytheirassociationwithso-called

conflictmineralsinthoseprovinces,havebeenexcludedfromdoingbusinessinKatanga.


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ThishasbeenacontroversialmovebutGovernorKatumbihasbeenunapologetic:

Inotherprovinces[intheDRC]peoplehaveusedmineralstokillpeople.Idontwant

thosepeoplecominginanddoingbusinessinmyprovince.Idontwanttohearthatthese

peoplearecomingtobuyinKatanga.Sowehaveinsistedontraceability.Anythingthatcant

betracedcannotbeexported.Anyway,IcantallowKivumineralsin.Thesemineralsare

blockedbyUSlaw.Also,Isaidtheotherdaybeforeeveryone,publicly,thatwhoeverdoes

thisminingmusthaveastrongsocialelement,andwehavetoknowwheretheyarebased.

Theymustbeseriouscompanies.Theirmineralsmustbetraceable.Thatishowwewillbe

abletoexport.66

KatumbisstancehaspromptedaccusationsfromaffectedKivu-based comptoirsthathe

hasanundisclosedbusinessrelationshipwithMMR,aclaimthatbothheandMMRhave

denied.

In20102011severalKivu-basedcomptoirsthathadsurreptitiousbuyingoperations

innorthKatangadisruptedchangedtheirapproachandestablishedtheirownofficially

registeredbranchesinKatanga.67TheChinese-ownedcompanyTTTMining,withitshead

officeinGoma,NorthKivu,wasoneofthoseaffected.Duringthisperioditsetupan

officialcomptoirinKalemie,northernKatanga,whereitwasreputedtopayhigherprices

thanMMR.68

Until2010theprovincesofNorthandSouthKivuandManiemaproducedand

exportedfarmoretinandcoltanthandidKatanga.Duringthatyear,however,again

inabidtocomplywiththeSecurityCouncilsrequestregardingduediligenceandUS

legislationonconflictminerals,manyofthemaininternationaltinandcoltansmelters

introducedastipulationthattheywouldbuyonlytaggedmaterialfromtheDRC.No

taggingscheme,however,hasyetbeenimplementedineithertheKivusorManiema.Thishasledtoadefactoembargoonmaterialfromthoseprovinces,exceptforminerals

smuggledoutofthecountry,orboughtby comptoirssellingtosmeltersthathavenot

introducedtheserequirements.AlmostallsuchsmeltersareinChina.

ThemaincomptoirscarryingoutthesepurchaseshavebeenTTT,HuayingTrading

andDonsonInternational,allChinese-owned.Inmid-2011AfrometbasedinGomaand

BukavuwastheonlyIndian-ownedcomptoiroperatingintheKivus.AllAfrometsoutput

issenttoIndiaforsmeltingatthefacilityofthecompanysDelhi-basedowner,MetTrade

IndiaLtd.69

I N F R A S t R u C t u R e , C o N S t R u C t I o N A N d F I N A N C e

Chinas Exim Bank committed itself in 2008 to a $3 billionloan for a variety of

infrastructuralprojects,includingroadandrailwayconstructionandrehabilitationand

thebuildingofnewuniversities,hospitalsandschools.Theseprojectsinthemainareto

beimplementedbytwoChinesestate-ownedcompanies,ChinaRailwaysConstruction

Company(CREC)andSinohydroCorporation.Thisloanisadditionaltothe$3billion

loantodevelopminingassetsheldbySicomines,inwhichChinaRailwaysandSinohydro

aremajorshareholders.ThemoneyistobereleasedasandwhentheEximBankapproves

theSicominesfeasibilitystudyreferredtoabove.


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notapublicmarket.Itiscompletelydifferent,soitisgoingtobemoreexpensivethenopen

tender.Butwehaveindependentconsultantswhoareevaluatingeverything.74

Ilungasargumentcapturesthe essenceofthe officialDRCand Chinesegovernment

position,namelythattheagreementispremisedonla bonne volonte (goodwill)andthat

forthisreasoncriticswhobecometoofocusedonspecificsaremissingthepoint.Based

onthisgoodwill,andalsointhelightofare-visitationclauseinthecontract,Congolese

governmentofficialshavearguedthatanyproblematicaspectsoftheagreementcanalways

berevisitedsothatthepositionoftheDRCgovernmentvis--visChinawillalwaysbeone

ofgagnant-gagnant (win-win).Itcouldbepointedout,however,thattoolargeaninfusion

ofgoodwillcouldeventuallyworktothedisadvantageofChina;shoulditbecometoo

closeabedfellowitmightprovevulnerabletoanyunilateralwithdrawalorunprincipled

deploymentofleveragebytheotherparty.

Chinese government officials and representatives of CREC and Sinohydro in

KinshasahavealsodisputedGlobalWitnessscontentionthattheyhavenotassumed

anycommercialrisk.TheyhavepointedtothefactthatbothCRECandSinohydrohave

alreadystarted,andinsomecasescompleted,infrastructuralprojectsintheDRC,well

beforethecompletionandapprovaloftheSicominesfeasibilitystudythatisthetrigger

forthepromisedEximBankloan.75Theseprojectsincludetherehabilitationoftheroad

fromKasumbalesaontheZambianbordertoLubumbashiandthe30JuinBoulevardand

othermajorroadsinKinshasa.EximBankisreportedtohavereleased$128millionin

2010,withplanstoreleaseafurther$622millionduring2011.Aspartofthisprocess,

inJanuary2011thebanksigneda$360millionloanagreementfortheconstructionofa

240MWdamatBusangainBas-Congoprovince.Onlyfrom2012onwards,itnowseems,

willthevalueofthefundsmadeavailablebythebankbedeterminedbytheproductivity

ofSicominesminingassets.76MoiseEkangaLushyma,headoftheBCPSC,whichcontrolsthefinancesofthe

infrastructuralprogramme,providedevenhigherfiguresfordisbursements:

Since2009theEximbankhasreleased$518millionfortheSicominesagreement.In2009

wereceived$350millionforinfrastructureconstruction,includingthe Cinquantenaire

hospital,theAvenuedeTourisme[and]theLubumbashi-KasomenoroadinKatanga

$128millionwasreleased[in2010],andthatfinancedthe30Juin[Boulevard]andthe

esplanadeforthePalaisduPeuple[inKinshasa]TheChineseareinadvanceofwhatwas

envisaged.Itistheminingthatisgoingslower.77

TheprobablereasonforEximBanksdecisiontoprovidefinancing,andforCRECand

Sinohydrotocommenceconstructionprojectsbeforebeingrequiredtodoso(which

musthavehadatleastBeijingsconsentand,perhaps,explicitinstruction)isCongolese

politics.ForhisNovember2011electioncampaign,PresidentKabilaneededtoshowthe

Congolesepeopletangibleevidenceofhisoft-promisednationalreconstruction.In2006

Kabilacampaignedonaticketof cinq chantiers(fivetasks),whichincludenewandbetter

infrastructure,butwithoutthehigh-profileeffortsofCRECandSinohydrotodatehe

wouldhavehadpreciousfewprojectswithwhichtoseektoimpresstheelectorate.There

canbenoquestionthatthegoodwilldecisionofChinesestate-ownedcompaniestolend


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moneyandstartbuildingthreeyearsbeforethepolldateprovidedinvaluableassistance

toKabilassuccessfulre-electioncampaign.

AnotherprobablereasonfortheearlystartisthatCRECandSinohydrobroughtconsiderableamountsofequipmentandlargenumbersofpersonnelintotheDRCin

anticipationoftheSicominesloan;theywouldbesittingidleifthecontractweretobe

followedtotheletter.Usingcapacityavailableonthegroundmayalsobewhy,since2009,

CRECandSinohydrohavesubmittedlowtendersfor,wonandimplementedarangeof

EU,AfricanDevelopmentBankandWorldBank-financedprojectsintheDRC. 78These

includea400-metrebridgeinBandundufinancedbytheWorldBankandconstructedby

Sinohydro.Ithasdramaticallyeasedtransportlogisticsintheprovince.79

Utilising otherwise under-active capacity is certainly important for CREC and

Sinohydro,andtheoft-toutedgoodwillseemsgenuineenough,butthereisalsoahard

bargainunderlyingthebonhomie.Chinasdomesticeconomicgrowthreliesonincreased

accesstonaturalresources,andparticularlyminerals,inaneraofrapidlyrisingcommodity

prices.TheDRCisacornucopiaofmanyitemsontheChinesegovernmentswishlist.

Beijingisthereforeseekinglong-termaccesstotheDRCsresourcesonfavourableterms

andapparentlyhasdecidedthatthesurestroutetosuccessliesinprovidingdiplomatic

andfinancialsupportandconstructioncapacity,insuchawaythatDRCscurrentpolitical

eliteremainsinplaceaslongaspossiblewhilebecomingincreasinglydependentonChina.

Inafurthersignofthetimes,inMarch2011thestate-ownedChinaDevelopment

Bank,wasreportedtohavesignedaloanagreementwiththeDRCforanundisclosed

sum.Themoneyisto financeinfrastructuraldevelopmentinthemining,oil,roadand

agriculturalsectors.Ithasnot,however,beenrevealedwhat,ifany,Congoleseassets

willstandsuretyfortheloan,norwhich(presumablyChinese)companieswilldothe

work.80Thesuspicionamongsomecriticsisthatthetermsofthedealweresufficiently

controversialtobeheldbackuntilafterthe2011presidentialelection.81TheIndiangovernmentlikestocontrastitsapparentlyfreemarketapproachwith

thegovernment-directedstrategyofChina.AccordingtooneofficialinIndiasKinshasa

embassy:

Weare not in competi tion with China, and unlike them, we do not exchangeminerals

forinfrastructure.WhenIndiancompaniescomehere,theymightseekadvicefromus,

butwedonotopenthedoorsforthem.Ourbusinessesknowhowtodotheirjob.Indian

businessmenareverysmart.82

ByallaccountstheIndianembassyisrighttobemodestaboutitseffortstoassistIndian

businessintheDRC.Historically,however,Indiasgovernmenthasnotbeenasfree-market

andnon-interventionistasitisnow.Indiangovernmentspractisedvariantsofsocialist

economicsfornearly50yearsafterindependencein1947,andthecountrysbankswere

nationalisedbyPrimeMinisterIndiraGandhiin1969.Deregulationornot,inmid-2011

state-controlledinstitutionsstillcontrolled75%ofbankdepositsinthecountryandsince

2007oneofthelargestofthem,theStateBankofIndia,isreportedtohaveembarkedon

alendingspree,allegedlywithpoliticalovertonesthathavemorethanawhiffofBeijing

aboutthem.83

In2011,EximIndiaapproveda$267millionlineofcreditforIndiancompaniesdoing

businessintheDRC,withprioritytobegiventopowerprojectsandurbanrailways.


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Althoughthereiscertainlyapoliticalaspecttotheseloanagreements,evidencesuggests

thatIndiasambitionsforitsrelationswiththeDRCaresomewhatlowerthanthoseofthe

Chinesegovernment.JudgingbytheprojectssofarfinancedbytheEximIndialoan,theIndiangovernmenthasrelativelymodesttargets,pushingforafewIndiancompaniesto

winconstructioncontractsandgainsomemarketsharewhileatthesametimeacquiring

expertiseinimplementingdevelopmentprojectsinAfrica.Asonewell-informedIndian

sourceinKinshasaputit:

WeInd ians arent going for major publici ty. Itsmore about Indian companies gaining

experience,implementingturnkeyprojectswithnothingelseaskedinreturn.Thereisno

barter.84

AmongtheprojectsfinancedwithEximIndiamoneyaretwodams,oneatKakobolaon

theLufukuRiverinBandundu,andtheotheratKatendeontheLuluaRiverinWestern

Kasai.Theformerhasadesignedoutputof9MWandhasbeencostedat$42million,and

thelatterwillproduce20MWandcost$168million.Theprojectsarebeingcarriedout

byNewDelhi-basedAngeliqueInternationalLtd.WorkonKakobolabeganinFebruary

2011.85

t e L e C o m m u N I C A t I o N S

AlsowithitsheadquartersinNewDelhi,IndiasBhartiAirtelLtdisbysomewaythelargest

investorintelecommunicationsintheDRC.BhartiboughttheDRCnetworkoftheKuwaiti

telecommunicationscompanyZainGroupinmid-2010,renameditAirtelDRC,andison

tracktoinvest$400millioninitsoperationsbymid-2012.SubscribernumbershaverisenfromfourtofivemillionsinceBhartitookover,withthecompanytargetingeightmillion

usersby2012.MobilephonenetworkcoverageisrelativelyextensiveintheDRC,butAirtel

DRChasnonethelessidentifiedsixtownswithpopulationsofmorethan100000,and238

with50000ormore,whichcurrentlyhavenonetworkcoverage.Airtelworkswitha

rangeofpartners,includingIBM,SwedensEricsson,andChinasHuaweiTechnologies.Its

parentcompany,Bharti,hasbecomethefifthlargestmobilephonecompanyintheworld.

ItbasesitsAfricanoperationsinNairobi;of15AfricadirectorsonlyoneisIndian,while

theremainderarefromAfrica.TheCEOofAirtelDRCisfromCameroun. 86

CCTis51%ownedbyChinasZTECorporationand49%bytheDRCgovernments

OCPT.Itwasformedin2000withaChinaEximBankloanof$12.5million,enablingCCT

topurchaseequipmentfromZTE.87Inmid-2011CCThadsomeonemillionsubscribers,

increasedfromabout600000in2008.CCTsnetworkcoverageisnotasextensiveasthose

ofAirteloritsmaincompetitorVodacom,butitsserviceisthecheapest. 88Competitors

haveclaimedthatthisisbecauseCCTpaystoolittletax,butthecompanyinsiststhat

itreceivesnofavoursandhasalwayspaidasubstantialtaxbill. 89ZTEdidnotinvest

significantfundsinCCTaftertheoriginalEximBankloanandinOctober2011soldits

shareinthecompanytoFranceTelecom-Orangefor$10million.FranceTelecom-Orange

alsopurchasedtheOCPTsshareofCCTforafurther$7millionandagreedtopay$71

milliontotheDRCgovernmentforanew10-yearlicence,and$185milliontosettle

CCTsdebts.90


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HuaweiTechnologiesestablisheditselfintheDRCin2004andwonitsfirstmajor

contracttherein2006.Thatcontract,tosupplyequipmentatacostofmorethan$120

milliontoTigo,amobilephoneoperatorassociatedwithLuxembourg-basedMillicomInternationalCellular,wascompletedin2009. 91 Huaweissecondmaincontractwas

agreedin2008withOCPT,toinstallcode-divisionmultipleaccesstechnologyforits

network,startinginKinshasaandextendingtotherestofthe country.Workbeganin

2010.ThefollowingyearHuaweialsobegancollaboratingwithVodacomandsupplying

equipmenttoAirtel.HuaweiacquiredsomeprimerealestateonKinshasasBoulevard

du30Juinwhereitisbuildinganoffice,atrainingcentre,asportscentreandapartment

blocksforitsstaff.Thebuildingswerescheduledforcompletionattheendof2011,ata

costofaround$20million.92

InadditiontoitsCCTinvestmentZTEhasitsownpresenceintheDRCasasupplier

ofequipmenttomobilephonenetworks,thoughonasmallerscalethanHuawei.The

companyisalsoreportedtobemakingtentativeinvestmentsincommercialagriculture.

Thegovernmentissaidtohaveapprovedinprinciplea100000hectareallocationtoZTE

in2007.93ZTEswebsite,however,statesthatitsonlylandcurrentlyinproductionisa10

hectareexperimentalfarmforplantinghigh-yieldcrops.94

ThethirdprominentChinesecompanyinvolvedinDRCtelecommunicationsisChina

InternationalTelecommunicationConstructionCorporation(CITCC).CITCChasbeenin

theDRCsince2006,providingandlayingfibreopticcables.In2008itwonacontractin

conjunctionwithFrancesAlcatel-Lucent(whichhasa50%stakeinChina-basedAlcatel

ShanghaiBell),toconnectKinshasabyfibre-opticcabletoMoandaontheAtlanticcoast.

Alcatel-LucenthadpreviouslyconnectedMoandatotheSouthAtlantic-3/WestAfrica

SubmarineCable,acommunicationscablelinkingPortugalandSpaintoSouthAfrica,

withconnectionstoseveralWestAfricancountriesenrouteandacontinuationlinkfrom

SouthAfricatoIndiaandSouthEastAsia. 95CITCCsworkwascompletedinlate2009,leavingthecompanywithlittletodobutmaintaintheMoanda-Kinshasalinewhileit

seeksothercontracts.96

C o N C L u S I o N

ThepresenceofIndianandChinesebusinessesintheDRCisincreasingandBeijing

andNewDelhiaresignificantdriversofthatgrowth.Thetwogovernmentsprofessed

bounteousgoodwilltowardstheDRCseemsgenuineenough;butatthesametimeboth

wantaccesstothecountrysrawmaterialsandcontractsfortheirconstructioncompanies.

ThekeydifferencebetweentheapproachesofChinaandIndiaasregardsstate-bank

financeisthatChinasloantotheDRCisnotsimplytofinanceinfrastructure,butalso

todevelopminingassetsjointlyheldbyChineseandCongolesestate-ownedcompanies.

EximIndia,bycontrast,hasnotlinkedanyofitsinfrastructureloanstominingorother

formsofnaturalresourceextractionbyIndiancompanies,anditdoesnotappeartobe

Indiangovernmentpolicytodosoinfuture.WhereasChinasgovernmentisfacilitating

accessbyChinesestate-ownedcompaniestolargeminingdepositsthroughitsEximBank

loan,theonlyIndianminingcompaniespresentintheDRCareprivatelyownedand

competeforaccesstoDRCresourceswithoutanysignificantgovernmentassistance.(It

shouldbesaidthatliketheirIndiancounterparts,themorethan100privatelyowned


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ChinesecompaniesinvolvedinminingintheDRCappeartoreceivelittlesignificant

assistancefromtheirgovernment.)

ChinesecompaniesarewellontheirwaytodominatingtheDRCconstructionsector,thankstoprojectslinkedtotheEximBankloan,andothersfinancedbyinternational

developmentbanksandtheDRCgovernment.Thecompaniesarehighlycompetitive

oncostbutthequalityoftheirworkishardertoassess.TheDRCgovernmenthas,

however,statedthatithasmechanismsinplace,includingexternalconsultants,toensure

thequalityofChinese-builtinfrastructure,andtheChinesecompaniesconcernedare

emphaticthattheirworkmeetsinternationalstandards.InthepasttheDRChasproveda

challengingenvironmentforinfrastructure;timewilltellhowdurabletheChinese-built

roads,buildingsandperhapsrailwaysare.Atthisstage,Indianconstructioncompanies

arealongwaybehindtheirChinesecounterpartsandlooksettoremainso,althougha

few,suchasAngeliqueInternational,arepickingupworkinthepowersector,mostly

financedbyEximIndia.

Intheminingsector,IndianandChinesecompaniesintheDRCremainminnows

comparedwiththebigUS,Canadian,AustralianandSouthAfrican-listedcompanies.Two

ofthelast,however(MetorexandAnvil),areintheprocessofbeingboughtbyChinese

companies;andwitha$3billioninvestmentonthestocksandprobablywithaccessto

morecapitalifnecessary,Sicominescouldwithinadecadebecomeoneofthetopthree

miningenterprisesinthecountry.

ThescaleofBhartiAirtelsinvestmentinCongolesetelecommunicationsdwarfsall

others,includingChinesecompanies.Huawei,however,isoneofBhartissuppliersinthe

DRC,andalsosuppliesmostothernetworksinthecountry.

InmanufacturedgoodsChinasshareofDRCtotalimportsislikelytoincrease,inline

withglobaltrends,whileIndiasseemssettoremainlow.TheDRCisthefourthmost

populouscountryinAfricawithmorethan60millionpeople,buttheirbuyingpowerislow.ThepresenceofChinesecompaniesintheretailsectorremainsmodest;noCongolese

cityhasaChinatown.Bycontrast,asinsomanyAfricancountries,Indian-ownedshops

andbusinessesproliferate,insomecasesdatingfromthecolonialperiod.Theycommand

alarge,butunrecordedproportionoftotalretailtrade.

TheDRCgovernmenthasdrawnincreasinglyclosetoChinaandvaluesbothits

bilateral military assistance, and thediplomatic support the Chinese government

providesintheUN.ThisbuysChinesestate-ownedcompaniesactiveintheDRCa

goodmeasureofprotectionfromtheCongoleseauthorities.TheirChineseemployees,

forexample,seemabletoenterandleavethecountrywithoutmuchhindrancefrom

immigrationofficials,andtheirequipmentmovesfairlyreadilyatcustomsposts.Onlyin

thetelecommunicationssectorhavestate-ownedChinesecompaniesreportedproblems

withexcessiveandarbitrarytaxation.Lifeisharder,however,forprivatelyownedChinese

companies,whicharenotprotectedbytheirgovernmentandmustfendforthemselvesin

anoftenverydifficultoperatingenvironment.

TheDRCspoliticalrelationswiththeIndiangovernmentaremuchpricklierthanthose

withChina.TheDRCgovernmentincreasinglyhasregisteredobjectionstoMonuscos

presence,withthepresidentin2010callingonittoleavebytheendof2011. 97Indiais

themissionslargestcontributoroftroops,andtheDRCgovernmenthasbeenparticularly

aggrievedthat,asnotedabove,someIndianUNtroopshaveattimesgrowntoofamiliar

withtherebelmilitiatheyaresupposedtooppose.Thiswould,perhaps,beacceptableto


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theIndiangovernmentifitreceivedmorecreditfromtheinternationalcommunityforits

effortsintheDRC.Asitstands,althoughIndiahasreceivedsomeplauditsforitswork

inMonusco,itsgovernmenthasalsobeenirritatedbyperiodic,damninginvestigationsbyWesternmediaintothebehaviourofitstroopsandbythepersistentreluctanceofUN

SecurityCouncilpermanentmembersandotherwell-resourcedcountriestosupplytroops

oftheirowninanysignificantnumbers.

Noscientificstudyoftheissuehasbeencarriedout,butitappearsa widelyheld

convictionintheDRCthatmostChineseandIndiancompaniesarepooremployers,

reportedlyoffering lowwages and hostile working conditions and providing only

parsimoniouslyforsocialupliftmentprogrammes.Therearesomeshiningexceptions,

Bhartibeingthemainone,andmanyIndianandChinesecompaniesloudlyenumerate

theirapparently generoussocial programmes. Yet negative perceptions remain,and

havebeennotedbyoppositionpoliticians.PresidentialaspirantEtienneTshisekedi,for

example,statedpubliclyseveraltimesbeforeandduringthe2011electioncampaignthat

ifelectedhewouldsuspendChineseinfrastructureandminingcontracts.Tshisekedi

professedtobeworriedaboutalackoftransparency;andindeedanecdotalevidence

suggeststhatthe oft-notedpropensityof Congolese state officials toseekkickbacks

has beenwell understood by Chinese companies implementingthe infrastructural

componentsofthecontracts.Ifbriberyhasbeenasprevalentasallegedthereisboundto

beresistancefromtheDRCauthoritiestoanyeffortstoshinealightontheprocess,for

fearofuncoveringtheirownmisdemeanours.

Thelackofaccountabilityoftheauthoritieshasbeenwidelyrecognisedasone

of themajor problems in theCongolese political system.If Chinas presence and

business practicesarefurther underminingit, thecountryspolitical developmentis

commensuratelyheldback.

WhilesomeofthepoliticalimplicationsofChinasEximBankdealareworrying,theChineseandtoalesserextentIndianroleindeliveringinfrastructuraldevelopment

intheDRCappearswhollywelcome.AtindependencetheDRCwasamongthemost

industrialisedcountries in sub-Saharan Africa(after South Africa),98buttodayits

infrastructuremostlyliesinruins.Sincethelate1990sWesternbankshaveshownsome

appetiteforriskattendingCongoleseminingventuresbut havegenerallybaulked at

thecountrysinfrastructuralbacklog,leavingthefieldtointernationaldevelopmental

institutionssuchastheWorldBankandAfricanDevelopmentBank.Theselatterstill

haveavitalroletoplayintheDRC,buttheirfundsareinsufficientanditisineveryones

interestthattheyhavebeenjoinedbyChinese,Indian,andincreasingly,othercountries

state-ownedbanks.

Thebestwaytoensurethemaintenanceofinternationalstandardsoftransparency

inallloanagreementswiththeDRCwouldbe thecreationofinstitutionalfinancial

partnershipsonprojects,andcontinuedscrutinybycivilsocietyandthecountrys

democraticinstitutions.Thatreallywouldbegagnant-gagnant.Itwouldimprovethe

prospectsforafairandopenbalanceintheDRCbetweengoodwillandhardbargains,not

simplyonthepartofChineseandIndianparticipantsbutallthecountrysinternational

partners.


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e N d N o t e S

1 LarkinB,China and Africa 19491970: The Foreign Policy of the Peoples Republic of Republic of

China. Berkeley:UniversityofCaliforniaPress,1971,p.47.

2 GBPisthethree-lettercurrencycodeforBritishPounds.

3 LarkinB, op. cit.

4 Ibid.,p.56.

5 Thememoirfromwhichthequoteistakencanbefoundat:http://www.bharat-rakshak.com/

LAND-FORCES/Army/Galleries/Wars/UN/Congo/.

6 Nzongola-NtalajaG.The Congo from Leopold to Kabila: a Peoples History. London:ZedBooks,

2002,pp.128131.

7 Youn g C & T Tur ner, The Rise and Decline of the Zairean State.Madison:Universityof

WisconsinPress,1985,pp.350353.

8 Ibid.,p.376.

9 UniversityofStellenbosch:CentreforChineseStudies.Evaluating Chinas FOCAC commitments

to Africa and mapping the way ahead.Stellenbosch,2010,p.17.

10 SeeMobutuscountryandotherplacesathttp://www.vidushaka.com/mcplaces.html.

11 InformationobtainedfromEmbassyofIndia,Kinshasa,May2011.

12 StearnsJ,Dancing in the Glory of Monsters. Philadelphia: PerseusBooks,2011,p.53.

13 Mthembu-SalterG,TheDemocraticRepublicofCongo:RecentHistory,inAfrica South of the

Sahara 2011,London:EuropaPublications,2010,pp.322323.

14 StearnsJ,op. cit.,p.83.

15 StearnsJ,op. cit.,p.85.

16 ShinD,MilitaryandSecurityRelations,inRotbergR(ed.),China into Africa: Trade, Aid and

Inuence.Baltimore:BrookingsInstitutionPress,2008,p.161.

17 StearnsJ,op. cit.,p.185.18 ShinD,op. cit.,p.177.

19 PersonalinterviewwithUNofcial,Kinshasa,May2011.

20 Mthembu-Salter,G,2010,op. cit.,p.325.

21 PersonalinterviewwithMonuscoofcial,Kinshasa,May2011.

22 EconomistIntelligenceUnit,The Political Scene.DRC Country Report December 2009,London,

2009,p.16.

23 PersonalinterviewwithUNofcial,NewYork,February2010.

24 PersonalinterviewwithYangDongju,politicalcounsellor,EmbassyofthePeoplesRepublicof

China,Kinshasa,May2011.

25 Agence France Presse,IndianpeacekeepersinCongoaccusedofgoldtrafcking,13July2007.

26 Washington Post,Urgentdemarche:ThreatenedIndianpeacekeeperswithdrawalfromthe

DRC, http://www.washingtonpost.com/wp-srv/special/world/wikileaks/cable40.html.

27 See http://www.washingtonpost.com/national/national-security/indias-withdrawal-of-

helicopters-from-congo-points-to-wider-trend/2011/06/10/AGH5loUH_story.html.

28 SeeSecretaryGeneralnamesIndiasLieutenantGeneralChanderPrakashForceCommander

forUNOrganizationStabilisationMissionintheDemocraticRepublicofCongo,http://www.

un.org/News/Press/docs/2010/sga1255.doc.htm.

29 Washington Post,IndiaswithdrawalofhelicoptersfromCongopointstowidertrend, http://

www.washingtonpost.com/national/national-security/indias-withdrawal-of-helicopters-from-

congo-points-to-wider-trend/2011/06/10/AGH5loUH_story.html.


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30 PersonalinterviewwithIndianembassyofcial,Kinshasa,May2011.

31 PersonalinterviewwithRashidPatel,PresidentoftheIndo-CongoleseChamberofIndustry,

Trade,Mining,AgricultureandServices,Kinshasa,May2011.

32 Datasourcedfromtralac(TradeandLawCentreforSouthernAfrica)http://www.tralac.org/,

accessed1June2011.

33 See http://www.tralac.org/cgibin/giga.cgi?cmd=cause_dir_news&cat=1044&cause_

id=1694#china.

34 PersonalinterviewwithPierrotMalobaKitumba,ChefdeBureauProvinicaledesMines,

MinistredesMines,DivisionProvincaleduKatanga,Lubumbashi,May2011.

35 Authorsobservations,20102011.

36 InformationinBox1principallyderivedfrompersonalinterviewsinMarch2011withWilly

Musingo,presidentofAssociationdesChauffeursduCongoSectionMotoinBunia,and

IsiadoreTamile,administrativesecretaryofAssociationdesOrpailleurspourleDeveloppement

etleReconstructiondePaixenIturi,inMongbwalu.

37 Personalinterviewwithformerpharmaceuticalmanufacturer,Kinshasa,May2011.

38 PersonalinterviewwithRashidPatel,op. cit.

39 PersonalinterviewwithChineseembassyofcial,Kinshasa,May2011.

40 PersonalinterviewwithMoseKatumbi,governorofKatanga,May2011.

41 ZARisthethree-lettercurrencycodeforSouthAfricanRands

42 Mining Weekly, Metorex shareholders approve R9.1bn Jinchuan offer Johannesburg

2 September 2011, http://www.miningweekly.com/article/metorex-shareholders-app rove-

r91bn-jinchuan-offer-2011-09-02.

43 Mining Weekly,AnvilwarnsMinmetalsdealcouldbeinjeopardyJohannesburg31October

2011, http://www.miningweekly.com/article/anvil -warns-minmetal s-deal-could -be-in-

jeopardy-2011-10-31.

44 DRCDivisionProvincialedesMines,ProvinceduKatanga.Statistiques des Notes De DebitRelatives a la Redevance Minire de Janvier Decembre 2010 (Produits Minires par Tonnes).

Kinshasa,2011.

45 PersonalinterviewwithSophieBai,MagmaMinerals,Lubumbashi,May2011.

46 Authorsobservations,andpersonalinterviewswithMagmaMineralsemployees,Lubumbashi,

May2011.

47 Personal interview withlabourinspector, Katanganprovincialdepartment of labour,

Lubumbashi,May2011.

48 PersonalinterviewwithMoseKatumbi,op. cit.


50 PersonalinterviewwithNavin Dalmia,managing director,Rubamin Ltd, Lubumbashi,

May2011.

51 DRCDivisionProvincialedesMines,ProvinceduKatanga,op. cit.

52 ChemafProductionupdate:Q42008,January2009.Sourcedfromwww.chemaf.com.

53 DRCDivisionProvincialedesMines,ProvinceduKatanga, op. cit.

54 PersonalinterviewwithJean-PierreOkenda,CarterCenter,Lubumbashi,May2011.

55 Personalinterviewwithminesenvironmentalinspectorate,Lubumbashi,May2011.

56 AuthorsvisittoUsokeplant,Lubumbashi,May2011.

57 PersonalinterviewwithManojPatil,generalmanager,Somika,Lubumbashi,May2011.

58 DRCDivisionProvincialedesMines,ProvinceduKatanga, op. cit.


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59 ChinaRailwayGroupLtd,AnnouncementofDiscloseableTransactionInvestment,in Societ

par Actions a Responsibilit Limite, HongKong,2008

60 PersonalinterviewwithZhangQiyao,generalsecretariat,vice-director,Sicominingindustry

stockcompanylimited,Lubumbashi,May2011.(Companytitletakenfrombusinesscard.)

61 PersonalinterviewwithMoiseEkangaLushyma,executivesecretary,BureaudeCoordination

etdeSuividuProgrammeSino-Congolais(BCPSC),Kinshasa,May2011.

62 Personalinterviewwithseniorofcial,Chineseembassy,Kinshasa,May2011.

63 SeeUNSecurityCouncilResolutionS/Res/1952(2010).

64 OECD(OrganisationforEconomicCooperationandDevelopment)DirectorateforFinancial

andEnterpriseAffairs:Due Diligence Guidance for Responsible Supply Chains of Minerals from

Conict-Affected and High-Risk Areas,Paris,2011,accessed9September2011http://www.oecd.

org/document/36/0,3746,en_2649_34889_44307940_1_1_1_1,00.html.

65 PersonalinterviewwithMineralMiningResourcesrepresentatives,Lubumbashi,May2011.


67 SpittaelsS&CaesensE,The Complexity of Resource Governance in a Context of State Fragility.

Antwerp:InternationalPeaceInformationService(IPIS),2010.p.21.

68 Personalinterviewwithcivilsocietyactivist,Lubumbashi,May2011.

69 PersonalinterviewwithAfrometrepresentatives,July2010.

70 EconomistIntelligenceUnit,2009,op. cit.

71 EconomistIntelligenceUnit,DRC Country Report December 2010,London2010.

72 GlobalWitness,China and Congo: Friends in Need,London:2011p.6.

73 Ibid.,p.6.

74 PersonalinterviewwithCharlesMedardIlungaMwamba,directorgeneral,AgenceCongolaise

desGrandsTravails,KinshasaMay2011.

75 PersonalinterviewswithChineseembassyofcials,CREC(ChinaRailwaysConstruction

Company)andSinohydrorepresentatives,Kinshasa,May2011.76 Surveying Sicomines,Africa-AsiaCondential4,5.March2011.

77 PersonalinterviewwithMoiseEkangaLushyma,executivesecretary,BureaudeCoordination

etdeSuividuProgrammeSino-Congolais,Kinshasa,May2011.

78 Personalinterviewwithdirectorofaninternationalbank,Kinshasa,May2011.

79 Fordetailsoftheprojectsee:http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/

AFRICAEXT/CONGODEMOCRATICEXTN/0,,contentMDK:22828886~menuPK:50003484~

pagePK:2865066~piPK:2865079~theSitePK:349466,00.html.

80 EconomistIntelligenceUnit,DRC Country Report June 2011,London,2011.

81 Personalinterviewwithmininglawyer,Lubumbashi,May2011.

82 PersonalinterviewwithIndianembassyofcial,Kinshasa,May2011.

83 The Economist,Thependulumswingsagain:Chinasbankingsystemisnotagoodmodelfor

India.,11June2011,p.67.

84 PersonalinterviewwithIndianbusinesscommunityleader,Kinshasa,May2011.

85 Africa Mining Intelligence,649,4,June2011.

86 PersonalinterviewwithAntoinePamboro,managingdirector,AirtelDRC,Kinshasa,May

2011.

87 Mthembu-SalterG,Price Power: Chinas Role in the Telecommunications Sector of the Democratic

Republic of Congo,ChinainAfricapolicyreport5,Johannesburg:SouthAfricanInstituteof

InternationalAffairs,2008p.10.

88 Ibid.,p.11.


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89 PersonalinterviewwithCCTofcial,Kinshasa,May2011.

90 FranceTelecom,FranceTelecom-Orangetoacquire100%ofCongoChineTlcom(CCT),

pressrelease,Paris, 20October2011.

91 Mthembu-SalterG,op. cit.,p.10.

92 PersonalinterviewwithGauthierKadima,Huawei,Kinshasa,May2011.

93 BrautigamD,ChinaandtheAfricanlandgrab:TheDRCoilpalmdeal,15March2010,

http://www.chinaafricarealstory.com/2010/03/china-and-african-land-grab-drc-oil.html.

94 ZTEEnergyCompanyLtd,Congo(Kinshasa)agriculturalexperimentalplot,http://www.

zte-e.com/en/prod_js.aspx?ID=738.

95 Mthembu-SalterG,2008,op. cit.,p.3.

96 PersonalinterviewwithCITCCrepresentative,Kinshasa,May2011.

97 ThedeadlinecameandwentwithnomovementfromMonusco,andthegovernmentreliedon

themissionforlogisticsduringpresidentialandlegislativeelectionsattheendofthemonth.

ButthegovernmentsrhetoricalantipathytowardsMonuscohasremained.

98 EconomistIntelligenceUnit,DRC Country Prole 2008,London,2008.p.25.


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