The Democratic Republic of the Congo owns 70% of the world’s cobalt reserves and is the largest copper producer in Africa, yet 80% of its mining exports go exclusively to China. Now the DRC wants to audit old contracts with the Asian country that, according to the government, unfairly favor Chinese companies.
The contracts were made by the previous president Joseph Kabila in 2007 and 2008 and were set to exchange DRC’s minerals for infrastructure works of roads, railways, and hospitals to be done by Chinese companies. But the exchange was deemed unfairly balanced by a February state audit of the Inspection General des Finances (IGF), which asked for an additional $17 billion on top of the $3 billion that was initially agreed upon.
As reported by ACP, National Assembly speaker Christophe Mboso stated that “this contract does not benefit the Republic. It is unfair and must be revisited.” Finance Minister Nicholas Kazadi also expressed the necessity to review and increase taxes on Chinese mining companies, after stating that the company with a Chinese majority was refusing to pay a $200 million tax which was not included in the agreed exemptions.
A History Of Unbalanced Mining Exploitation
Correcting unfair mining deals with international companies has been one of the political banners of current DRC president Felix Tshisekedi, who in 2021 said that “It is not normal that those with whom our country has signed exploitation contracts are getting richer while our people remain poor.” The president has constantly called for readjustments of international mining deals so they can become win-win partnerships.
The Chinese contract that was to give infrastructure to the DRC was made by giving 68% participation to China, while the DRC kept 32% of a company named Sicomines: a mining giant with majoritarian ownership of the mines in the country.
But the partnership has been deemed unfair by several institutions at different times, including the NGO Extractive Industries Transparent Initiative, which in 2020 published a report calling for the venture to be dissolved.
China’s response has not been positive. Following the February IGF audit, the Chinese embassy called it “full of prejudice” and “not corresponding to reality.”
Unequal international exploitation of minerals in the DRC can be traced back to Belgian colonial powers in the 19th c., continuing during the 20th and 21st c. by British, Canadian, US-American, and Australian companies, and have been linked to violence, impoverishment, and modern slavery in the DRC. China is the biggest importer of DRC minerals today.
Feeding The World’s Hunger For Transition Minerals
Minerals like cobalt are essential in the manufacturing of batteries and solar panels, which are in turn fundamental to power the world’s transition from fossil fuels to cleaner energy. But at the same time, its mining causes massive pollution of air, water, and soil.
This poses a dilemma for the clean energy transition, and consequently, unfair consequences for mining exploitation countries, especially those in the global south. Aside from being a country rich in minerals, the DRC is one of the most biodiverse areas in the world.
Global demand for cobalt used in batteries is expected to quadruple by 2030. And China is at the forefront of the battery industry, especially as it is the leader in the electric car manufacturing market.
As global demand for minerals increases, the balance between rich countries benefiting and poor countries sourcing the materials has to become more proportionally adjusted in order to be truly sustainable.