Congo reviews $6bn mining deal with Chinese investors

Democratic Republic of Congo's government is reviewing its $6 billion "infrastructure-for-minerals" deal with Chinese investors as part of a broader examination of mining contracts, Finance Minister Nicolas Kazadi told Reuters.

President Felix Tshisekedi said in May that some mining contracts could be reviewed because of concerns they are not sufficiently benefiting the country, which is the world's largest producer of cobalt and Africa's leading miner of copper.

His government announced this month it had formed a commission to reassess the reserves and resources at China Molybdenum's Tenke Fungurume copper and cobalt mine in order to "fairly lay claim to [its] rights".

Mr Kazadi said in an interview that the 2007 deal struck with Chinese state-owned firms Sinohydro Corp and China Railway Group was being reviewed to ensure it was "fair and effective".

Sinohydro and China Railway did not immediately respond to a request for comment. Elie Tshinguli, deputy director general of the Sicomines copper and cobalt joint venture in the Democratic Republic of Congo, majority-owned by Sinohydro and China Railway, did not respond to a request for comment.

Under the deal struck with the government of Mr Tshisekedi's predecessor Joseph Kabila, Sinohydro and China Railway agreed to build roads and hospitals in exchange for a 68 per cent stake in the Sicomines venture.

The agreement formed a vital part of Mr Kabila's development plan for the country, but critics say few of the promised infrastructure projects have been fully realised and have complained about a lack of transparency in the deal.

"We saw that there were some governance issues in the past," Mr Kazadi said. "We needed more clarity on the contract, the kind of finance that is behind [the] investment."

He said the reviews were "not a matter of threatening any investors" and that the government was conducting the review "in close partnership with the Chinese themselves".

Chinese investors control about 70 per cent of the Democratic Republic of Congo's mining sector, the chamber of mines says, after snapping up lucrative projects from Western companies in recent years.

After Mr Tshisekedi announced the reviews in May, a move attributed by some analysts to Western pressure to pursue Chinese companies, China's ambassador to the Democratic Republic of Congo warned that the country "must not be a battlefield between major powers".

Mr Kazadi also said he expected the International Monetary Fund's review next month of the $1.5 billion three-year programme that received final approval in July to confirm all conditions had been met.

"There is no doubt that the review should be successful and will lead to a new disbursement in December," he said, adding the next disbursement of about $200 million would be used to bolster foreign currency reserves.

Meanwhile, the government plans to use half of the 1,021.7 million Special Drawing Rights ($1.45bn) – the IMF's own currency – allocated to the Democratic Republic of Congo to further shore up reserves, he said.

A big chunk of the remainder will be used to launch an investment fund aimed at diversifying the country's economy, he said.

"It will implement new projects in new kinds of areas, like agriculture or energy production," Mr Kazadi said.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Essentials

The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.