Exclusive-Congo-Rwanda draft deal outlines role of US, others in revamp of minerals sector

By Sonia Rolley and Daphne Psaledakis

PARIS/WASHINGTON (Reuters) -Rwanda and the Democratic Republic of Congo will commit to working with third parties, including the U.S., to revamp their mineral supply chains and develop reforms, according to a draft of an economic framework seen by Reuters, as they seek to spur investment following a peace deal reached in Washington.

The countries agreed on the draft framework, which is part of the peace deal, a source familiar with the matter said, adding that the draft was now being discussed by stakeholders, including the private sector, multilateral banks, and some donor agencies of other countries.

Congo and Rwanda will likely meet in early October to finalize the framework, the source added. It would be signed by heads of state at a later date.

The 17-page framework comes after the countries signed a peace deal in Washington in June at talks held by U.S. President Donald Trump's administration. The deal aims to end fighting that has killed thousands and attract billions of dollars of Western investment to a region rich in tantalum, gold, cobalt, copper, and lithium.

The draft builds on an outline for the framework reached in August and sets out implementation measures and coordination mechanisms. The August outline called for cooperation on energy, infrastructure, mineral supply chains, national parks, and public health.

Congo, Rwanda, and the U.S. State Department did not respond to requests for comment.

REGULATORY INITIATIVES, REFORMS

According to the draft, the parties would pledge to work with the United States and other international partners to develop additional regulatory initiatives and reforms "necessary to de-risk private sector investment in a cost-effective manner," to reduce illicit trade and increase transparency.

They would also adopt outside transparency mechanisms, including committing to implement guidance from the Organisation for Economic Co-operation and Development, among others.

The draft framework calls for third-party inspections of mine sites and working with private sector partners to develop cross-border special economic zones, according to the draft.

The framework also sets out coordination mechanisms, including timelines for an annual high-level summit on regional economic integration and meetings of a steering committee and technical working groups.

Kinshasa and Kigali, as part of the deal reached in Washington in June, had agreed to launch the regional economic integration framework within 90 days. 

In that agreement, the parties pledged to implement a 2024 deal that would see Rwandan troops withdraw from eastern Congo within 90 days. Congolese military operations targeting the Democratic Forces for the Liberation of Rwanda (FDLR), a Congo-based armed group that includes remnants of Rwanda's former army and militias that carried out the 1994 genocide, are meant to conclude over the same timeframe.

OBSTACLES

But there are concerns the timeline for implementation may be facing headwinds.

"One of the main obstacles to finalizing and signing this regional agreement is the fact that the other peace processes have stalled," a Western diplomat said, adding that Rwanda has not withdrawn its troops and that operations against the FDLR have not begun.

The diplomat said a separate effort to mediate between the Congolese government and the Rwanda-backed M23 rebels, the Doha process, is struggling to move forward. M23 rebels seized eastern Congo's two largest cities and lucrative mining areas in a lightning advance earlier this year. 

"Without progress on security, the partners ... and even the actors themselves will find it difficult to commit to economic cooperation," the diplomat, speaking on condition of anonymity, said.

A Congolese official told Reuters this month that Kinshasa "cannot consider economic cooperation with Rwanda as long as its army occupies part of our territory."

Kinshasa views the plundering of its mineral wealth as a key driver of the conflict between its forces and M23 rebels in eastern Congo.

In the outline agreed last month, Rwanda and Congo affirmed that each country has "full, sovereign control" over the exploitation, processing, and export of its natural resources and recognized the importance of developing mineral processing and transformation capacity within each country, according to a copy seen by Reuters.

The two countries also committed to ensuring that the minerals trade no longer provides funding to armed groups and to create a world-class industrial mining sector in the region, as well as to ensure better cross-border interoperability on mineral supply chains.

(Reporting by Sonia Rolley in Paris and Daphne Psaledakis in Washington; Editing by Robbie Corey-Boulet, Don Durfee and Rod Nickel)