Investment

Chinese firms agree to raise investment in DRC copper-cobalt mining deal

Published

9 months ago

February 4, 2024

The Chinese companies had previously agreed to invest US$3 billion in infrastructure, funded from the mine’s revenue, and another US$3 billion to develop a copper and cobalt mine, in exchange for a 68 per cent stake in the joint venture with the state-owned Congolese company Gecamines.

But in February last year, the DRC’s General Inspectorate of Finance released a report saying the country had not been adequately compensated for the copper and cobalt reserves it contributed to the deal.

The report said Chinese firms had exploited mineral resources worth US$10 billion, but had only built infrastructure estimated to be worth US$822 million.

Under the new deal, the companies have agreed to increase their spending on infrastructure from US$3 billion to US$7 billion.

Sicomines said the deal would promote the achievement of win-win cooperation and “constitute a significant step to promote new development in cooperation between China and the DRC”.

The Chinese companies remain the majority shareholders in the Sicomines project. Photo: Sicomines

The DRC supplies more than 60 per cent of China’s cobalt, a key component in batteries for electric vehicles and electronics, making it a key player in China’s transition to green energy.

Christian-Geraud Neema, a Congolese mining and policy analyst, described the revised deal as “an important political victory” for Tshisekedi, who in 2021 criticised the Sicomines contract as unequal and called for its renegotiation.

However, Neema, who is also the francophone editor at the China Africa Project, noted that the DRC had initially wanted US$17 billion in infrastructure investment and remained the minority shareholder in Sicomines despite calls to increase its stake from 32 per cent to 70 per cent.

Sicomines has already invested US$1.5 billion in infrastructure and the remaining US$5.5 billion will be funded from its profits.

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China-funded infrastructure across Africa force difficult decisions for its leaders

Neema said that since “Gécamines holds a 32 per cent stake [in Sicomines] the DRC will finance 32 per cent of the total remaining US$5.5 billion. The Chinese party is not the only one to bear the burden”.

The initial Sicomines contract that agreed to invest US$3 billion in infrastructure had itself been scaled back under pressure from the World Bank and the International Monetary Fund, which forced the DRC to reduce its demands as a precondition for debt relief.

“Forcing the Congolese government to cut back on infrastructure investment was clearly tantamount to the international financial institutions preventing the country’s sovereign will to build the roads, railways and hydroelectric dams its people needed,” Isabelle Minnon, an independent researcher on Chinese-Congolese relations, said.

“Today, this US$4 billion increase in infrastructure investment appears to be a success in the face of the country’s immense needs.”

Other deals signed between the Congolese government and foreign companies have also come under scrutiny.

China’s cobalt mines in spotlight as DRC seeks to renegotiate deals

One such case is Katanga Mining and Mutanda Mining, which are both 100 per cent owned by Glencore – sparking calls for the government to renegotiate the deal to end the Anglo-Swiss company’s monopoly and allow the state to share in the profits and revenues.

Sicomines also said last month that the DRC’s stake in the US$660 million Chinese-built Busanga Hydropower Station had increased from less than 10 per cent to 40 per cent.

“This increased stake ensures that the Congolese government does not allow private companies to take too large a stake in a key sector, such as the production of electricity from a dam,” Minnon said.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

7 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

1 month ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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