China firms to fund Congo hydro power plant to lift mining output

GOMA, Democratic Republic of Congo, June 14 (Reuters) - C hina’s Sinohydro and China Railway Group will finance a $660 million hydroelectric plant in southeastern Democratic Republic of Congo which is being built to reduce the copper-mining region’s power deficit.

Congo is Africa’s largest miner of copper and the 240 megawatt dam in the town of Busanga will power Sicomines, a nearby copper and cobalt mining joint venture between the Chinese companies and Congolese state miner Gecamines.

Sicomines is the mining side of a $6 billion minerals-for-infrastructure deal signed in 2007, under which Sinohydro and China Railway Group pledged to build $3 billion worth of infrastructure in return for a 68 percent stake in the mine.

Moïse Ekanga, executive secretary of the Congolese government office charged with overseeing the deal, said on Tuesday that Sicomines would require 170 MW from the Busanga dam to run at full capacity, while the remaining 70 MW would feed the national grid.

Congo’s southeastern mining region has an electricity deficit of about 900 MW, the statement said.

“This agreement will help jumpstart energy development in the DRC after the recent slowdown due to falling commodity prices,” Ekanga said, adding Mauritian firm Mag Energy International will also be a partner in the project.

The statement did not say how long construction would last. Sicomines officials have previously estimated that it would take four to five years.

It also did not say whether the Chinese firms’ funding would be counted toward their infrastructure or mining obligations under the original contract.

Campaign groups have expressed concerns that the money will be considered as infrastructure investments, reducing the amount available for roads, schools and hospitals.

Sicomines, which began operations last November, is already Congo’s third largest producer of copper, according to the country’s chamber of mines. (Reporting by Aaron Ross; Editing by Alexander Smith)