IMF halts Congo loan over mining contract concerns

KINSHASA (Reuters) - The IMF has halted $240 million in planned loans to Democratic Republic of Congo for failing to publish mining contracts as requested, the IMF's representative in Congo said on Monday.

President Joseph Kabila, grappling with a costly war in the eastern borderlands, had sought to woo investors with promises to tackle rampant corruption.

Congolese authorities last week published a note on the 2011 sale of its stake in a mine run by ENRC but the IMF, which has demanded greater transparency in the copper and cobalt-mining sector in return for cash, said it was not enough.

"IMF staff considers that the information contained in the published note falls short of the requirements for extending the agreement," Oscar Melhado told Reuters in an email.

Congo had hoped the note would convince the IMF to extend the loan programme, which will expire on December 10 with three instalments of the overall $560 million loan retained.

The Fund suspended payments last year over Kinshasa's sale of its 25 percent stake in the Comide project to a British Virgin Islands company called Straker International.

"A new program is possible if understandings can be reached on the way going forward, including further actions to strengthen governance and transparency in the extractive industries," Melhado added.

Congo's mining sector has expanded since the official end to the last war in 2003 and economic growth hit 7 percent last year.

However, Kabila's re-election last year was challenged by rivals and widely criticised by observers, and his army has failed to put down a rebellion in the eastern regions near the border with Rwanda and Uganda.

The conflict in North Kivu is far from the copper and cobalt-producing Katanga province but fighting this year has diverted resources and political attention from promised reforms.

Source: http://news.yahoo.com/imf-halts-congo-loan-due-lack-mining-transparency-151932739--sector.html

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