Mine Congo

China Railway will own 43 percent of the venture and Sinohydro 25 percent, China Railway said in a statement to the Hong Kong stock exchange today. Congo Mining and Congolese national Gilbert Kalamba Banika will hold 32 percent, it added.

China is looking increasingly to Africa to meet its growing need for basic metals and minerals. The Congo, which has the world's largest cobalt deposits and Africa's biggest copper reserves, is encouraging investment in its mining industry to help rebuild an economy shattered by a civil war that ended in 2003 leaving 4 million dead.

``This is part of a broader trend that we've seen for several years now,'' said Philippe de Pontet, an Africa analyst at the Eurasia Group, a political risk firm, in Washington. ``What is striking is the scale of this particular deal.''

Under the agreement, Congo Mining, which is owned by the African country, will transfer at least 10 million metric tons of copper and cobalt reserves to the new venture, while the Chinese companies will help build roads, hospitals and power plants.

China Railway and Sinohydro will provide loans and financing of about $2.9 billion for the construction of mining facilities, China Railway said. The two Chinese companies will pay a $350 million ``entry fee'' as part of the agreement, it said.

Presidential Decree

Congo is waiting for President Joseph Kabila to sign a decree before the venture is formed, Alexis Mikandji, chief of staff at the mines ministry, said today by phone from the capital, Kinshasa.

``Apart from that, all the conditions have been met and there is nothing in the way of it going ahead,'' Mikandji said.

Congo will provide ``attractive tax relief,'' China Railway said.

The Chinese companies will lend $32 million to the Congolese partners in the venture to facilitate their participation, China Railway said. The Chinese companies will also provide a $50 million interest-free loan to Congo Mining ``for the purchase of certain equipment and facilities.''

Victor Kasongo, Congo's deputy mines minister, and Deputy Finance Minister Cesar Lubamba didn't answer calls to their mobile phones. The phone of Infrastructure Minister Pierre Lumbi was switched off while the offices of Mines Minister Martin Kabwelulu and Information Minister Emile Bongeli said they weren't immediately available.

Copper Rises

The price of copper, used in wire and piping, has jumped fourfold in the past five years as demand has surged for metals to feed China's booming economy. Cobalt prices have surged almost sixfold in that period.

China's economy grew 12.2 percent in the first nine months of 2007, the government statistics bureau said last week.

``China clearly sees an opportunity in a country which has tremendous mineral wealth, but also clearly has tremendous basic infrastructure needs,'' said De Pontet.