Sicomines: A Successful Case of Mineral Industrialization in Africa
Chinese companies’ industrialization of certain areas in Democratic Republic of Congo serves as a different mode of trading with the African Continent.
SICOMINES is proving a mineral industrialization success story on the African continent. On April 22, 2008, a groundbreaking agreement on cooperation in mining and infrastructure development, so creating the mining company Sicomines, was signed between a consortium of Chinese companies ( Sinohydro and China Railway Engineering Corporation), and the Congolese governmentowned mining company Gécamines to grant mineral concessions in exchange for infrastructure investments. The Si-
comines agreement is worth US $6.7 billion in total. The Chinese are expected to invest about US $3 billion in infrastructure and US $3.7 billion in other mining deposits in the Democratic Republic of Congo ( DRC). It is important to bear in mind that the Sicomines agreement consists of two components, mining and infrastructure, and that growth of infrastructure is a major contributor towards industrial development.
The signing of the Sicomines agreement prompted a major outcry from international institutions such as the World Bank and the International Monetary Fund (IMF). One of the key reasons for the global attention that the 2008 China-DRC agreement drew was the amount of Chinese funding involved. Another was the fact that although African countries have been exporting raw minerals for decades, the continent’s biggest challenge remains its inability to industrialize. China’s plan to industrialize certain areas of the DRC through infrastructure development acts as a different mode of trading with the continent. The effectiveness of industrialization as an engine of economic growth and development cannot be overstated.
Among the other reasons why the Sicomines agreement is so significant is that it speaks to issues such as labor, and also the imbalance of resource ex- traction between Africa and the global community. As regards labor, many articles chronicle the view that Chinese companies do not hire locals in Africa but instead bring Chinese workers to implement infrastructure projects. Mineral extraction, on the other hand, is still a controversial issue, because despite its extraordinary abundance of minerals, the continent remains poor. This is attributable to there being no appropriate use of mineral resource revenue streams in Africa through which to foster the continent’s industrialization.
However, we recently carried out a fieldtrip to Sicomines to assess its impact on the DRC, from a national and local perspective, by looking at indicators such as infrastructure development and labor. As regards infrastructure, the impact was significant. Sicomines has completed most of the more urgent infrastructure projects. These include the Boulevard du 30 juin, the esplanade in front of the People’s Palace, Boulevard Triomphale, and Tourism Avenue. Sicomines has also constructed more than 220 km of roads, provided 19 generator sets and 6626 solar panels. The impact of the roads was immense, particularly since the country was amid postconflict reconstruction and had limited infrastructure. Currently, tarred roads, such as Boulevard du 30 Juin in capital city Kinshasa, are populated with tall skyscrapers consistent with businesses that did not exist 10 years ago. Indeed, 10 years ago, one needed a 4×4 truck to motor around Kinshasa. This has since changed due to the infrastructural access. Industrial development thus promotes economic growth as it makes engaging in trade and commerce easier.
The issue of Chinese companies mainly utilizing Chinese labor is also not applicable to the Sicomines case. If anything, Kolwezi, the mining community where Sicomines is based, has reaped considerable benefits from the mining agreement. The Sicomines plants represent a critical development and capacitybuilding endeavor on the part of the DRC, employing 3,000 workers, 76 percent of whom are Congolese. According to Sicomines, the company sponsors training activities to build the capacities and skills of the local workforce. Since 2013, more than 20,000 local employees have received training in various areas such as management skills, taskspecific knowledge, and that relating to the implementation of engineering tools, security, law compliance, and codes of conduct. Interestingly, despite criticisms from the World Bank and IMF, both organizations, after visiting Sicomines in May 2015, gave positive assessments of the China-DRC joint venture.
The research trip demonstrated that the Sicomines deal has benefited Congolese citizens, as the mining company has spared no effort in fulfilling the provisions of the 2008 agreement. The Sicomines case demonstrates that the Chinese investment structure could serve as a partial solution to a continent in need of capital-intensive investment infrastructure and economic modernization. As earlier mentioned, the biggest challenge facing mineral beneficiation in 21st-century Africa is the lack of industrial development. The need for infrastructure is demonstrated in a 2013 Afrobarometer poll among 24 sub-Saharan countries. It established that Africans considered jobs or infrastructure as their most immediate needs. Suffice it to say, based on my interviews with DRC locals, the promise of an industrialization revolution through investment in infrastructure, public utilities, and services has gained great appeal among DRC nationals. In essence, the Sicomines agreement has proven a successful case of mineral industrialization. The issue for African countries now is to determine whether the 2008 China-DRC model can be better crafted to promote mineral beneficiation as espoused by the holistic strategy of African Mining Vision and the “2063 Agenda” that African Union embarked on for development and prosperity.
China’s plan to industrialize certain areas of the DRC through infrastructure development acts as a different mode of trading with the continent.