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Congo-UAE gold export deal sparks ‘great concern’

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June 2 (Reuters) – The Congolese government unveiled a 25-year deal this week that gave a little-known Emirati company exclusive rights to export artisanal gold at discounted prices, drawing criticism that it cannot Solve whatever problem it was meant to solve.

Authorities in the Democratic Republic of Congo touted the deal, signed in late 2022 and unveiled Monday, as a way to clean up the country’s informal or artisanal mining sector, where smuggling has cost millions of dollars in lost tax revenue each year and Help finance armed groups destabilizing Congo’s mineral-rich eastern provinces.

The new contract is renewable and gives Primera Group a majority stake in the two joint ventures and exclusive rights to export artisanal mined gold at an “exclusive rate” of 0.25%. It also grants them exclusive rights to export artisan coltan and tin, tantalum and tungsten (3T) at an exclusive rate of 3.5%.

Analysts and regulators Le Congo n’est pas a vendre (Congo Not For Sale), a group of 14 Congolese and international organizations that promote transparency in the mining and financial sectors, said the duration of the contracts and the favorable The tax rate is disturbing.

“The export monopoly of all artisanally mined gold and 3T minerals, for 25 years … raises great concerns about fairness,” said regulator spokesman Jean-Claude Muptou.

The UAE foreign ministry and Primera Group, which describes itself on its website as a diversified conglomerate based in the UAE capital Abu Dhabi, did not immediately respond to requests for comment.

The Congolese government did not comment when the contract was released, under pressure from the International Monetary Fund for transparency.

However, in February, Finance Minister Nicolas Kazadi said smuggling had declined. He cited data showing that Primera exported six times as much artisanal gold from an eastern province in 45 days as the same amount the province exported in all of 2022, but did not explain how this was evidence that smuggling had decreased.

Mputu and two former U.N. analysts said the deal’s favorable tax terms for exporting raw ore were also at odds with the government’s avowed desire to build processing capacity in Congo to earn more from its vast mineral wealth.

The contract only calls for Primera to set up a gold refinery in Congo when the amount of refined gold exceeds 60 tons per year.

This threshold is still far away. Primera said it exported 650kg of artisanal gold from South Kivu province between January and April.

Meanwhile, Gregory Mthembu-Salter, a former UN analyst and head of Phuzumoya Consulting, which tracks natural resource governance, said its raw gold export tax rate was 40 times higher than the 10% rate offered to fledgling local refiners.

“This looks like a deal that will benefit a few people for a long time,” said an analyst who works for the U.N. in Congo, speaking on condition of anonymity.

Additional reporting by Justin Makangara in Kinshasa and Lisa Barrington in Abu Dhabi Editing by Alessandra Prentice and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.

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