Who said the investment climate in the Congo is poor?
A few months ago, Kabila's government took away several lucrative concessions from multinational corporations - a copper/cobalt concession from First Quantum in Katanga (after they had sunk $750 million into the project) and two oil blocks from in (they had paid a $500,000 signing bonus). It then granted these same concessions to three new, unknown companies incorporated in the British Virgin Islands: Foxwhelp, Caprikat and Highwind Properties, respectively. The first two deals were signed by Khulubuse Zuma (Caprikat), the nephew of the South African president, and Michael Hulley (Foxwhelp) , 's lawyer.
However, the companies shareholder structure is veiled in mystery. A trust based in Switzerland owns the two companies, but according to Reuters, a spokesperson has declined the reveal who is behind the trust. Congolese civil society groups have complained that the new deals leave the state with a smaller share in the venture and its profits.
Some foreign diplomats in Kinshasa speculate that Kabila might be using these new businesses to raise much-needed funds ahead of next year's elections. He allegedly resorted to a similar ploy in 2004-5 in the run-up to elections by granting lucrative mining concessions to businessmen such as Dan Gertler and George Forrest in return for financing for his presidential campaign - according to some of Kabila's advisors, those deals provided him somewhere between $20-60 million. According to unconfirmed sources, Gertler is also linked to Caprikat, although he has denied this.
Kabila is short on cash, but there may be big fish on the horizon. Italian oil giant ENI has indicated for some time that they are interested in coming into the in a major way, and some believe that it will buy large shares of Capirkat and Foxwhelp. As for the First Quantum copper/cobalt concession, word on the street suggests that Kazakh company ENRC - which recently bought the copper miner CAMEC - might be buying a controlling stake.
All of this cause a stir in diplomatic circles. The alleged expropriation of First Quantum's concession was one of the reasons that the Canadian government questioned giving debt relief to the Congo - they said these kinds of action could lead to poor investor confidence.
I guess the Congo doesn't have many troubles convincing investors to come after all.