KATRINA MANSON
Brenda Bouw
Mining Reporter
The Democratic Republic of the Congo will see billions in debt wiped from its books and receive a grant to improve relations with resource firms after a conflict with a Canadian miner threatened to hold up its financial relief package.
The World Bank's decision Thursday came a day too late for Congo, which had hoped for it before celebrating its 50th independence jubilee on Wednesday, and was poor timing during 143rd birthday celebrations for Canada, which had earlier tried to block the decision.
Canada abstained from Thursday's vote held among the World Bank board of directors, according to sources familiar with the matter.
The Canadian government waded into a dispute between Vancouver-based First Quantum Minerals Ltd. and the Congolese government over mining properties in the central African nation, and brought up the issue during the recent G8 summit in Huntsville, Ont.
A Congolese court recently annulled mining rights for First Quantum's Frontier and Lonshi mines, ruling they were awarded illegally and should revert to state-owned Sodimico.
First Quantum has said the ruling was in retaliation for its decision to go to international arbitration over Congo's decision to stop construction of its Kolwezi copper-and-cobalt project last fall.
The relief package for Congo, which dates back to debt from 2003, amounts to $12.3-billion (U.S.) in today's dollars, or about $8-billion before inflation.
An additional $50-million grant was given to Congo to improve "transparency and accountability" and to promote "inclusive and sustainable" growth in the mining sector," the World Bank said.
"Good governance is essential if mining operations are to benefit the country and improve opportunities for the general public," said Obiageli Ezekwesili, the World Bank's regional vice-president for Africa.
"Future lending decisions will be influenced by actions taken on governance."
A Congolese official said Canada's actions were disruptive but that there are no hard feelings.
"Canada did something that disrupted our efforts as it took a lot for us to meet the debt relief conditions, but we have no problem with them and we will follow our relations with them as usual," Information Minister Lambert Mende told Reuters in Kinshasa.
Both First Quantum executives and Canadian government officials could not be reached for comment Thursday.
Congo is the 30th country to receive debt relief as part of the Heavily Indebted Poor Countries Initiative.