Congo’s Cobalt Key to PRC’s Grasp for EV Dominance

(Caption for photo at top of the post: “Artisanal miners work at the Tilwizembe, a former industrial copper-cobalt mine, outside of Kolwezi, the capital city of Lualaba Province in the south of the Democratic Republic of the Congo..Kenny-Katombe Butunka/Reuters”.)

Further to this post,

Electric Vehicles and the PRC’s “near stranglehold” on Cobalt, Congo Section

Yet another front on the supply chains file involving China, as the West tries to get off hydrocarbons in the GHG war…

now from a major article at the Globe and Mail on the Dragon’s push to keep its claws sunk in Congolese mining industry:

China wants to dominate the global electric vehicle market – and it’s using Congolese minerals to do it

James Griffiths Asia correspondent [mainly China]

Geoffrey York Africa Bureau Chief

The video flashed around WhatsApp groups, Twitter and Facebook. Shot at a Chinese-owned copper mine in the Democratic Republic of the Congo, it showed two men screaming and writhing on the dusty ground as soldiers kicked and whipped them, while helmeted managers watched.

It was one of many videos and photos that went viral on Congolese social media in recent months – some real, some fake – all provoking outrage at the alleged mistreatment of local workers by Chinese mining companies.

The backlash against the Chinese miners has been rising this year, even as they face another threat: a decision by the DRC government to review some of its biggest deals with Chinese mining investors. The two issues have become a major challenge to Beijing’s dominance of the Congolese copper and cobalt sectors – both of which are vital for China’s production of electric vehicles (EVs).

In a sign ofthe DRC’s growing importance to the Chinese economy, Beijing is responding to the challenge with unexpected swiftness and humility, rushing to repair its battered image in the Central African country.

*Congo’s $6-billion infrastructure-for-minerals deal with Chinese investors is ‘unconscionable’: draft report

*First Cobalt signs supply deal with Glencore, has tentative agreement with China Moly as it sources metal for new refinery

Wu Peng, China’s top diplomat for Africa, used Twitter to announce a crackdown on unlicensed and illegal mining operations in the DRC, a years-long issue that has sparked conflict with local communities but had previously been ignored by Beijing [emphasis added]. The country’s ambassador to Congo, Zhu Jing, said a special cell had been set up within his embassy to “support the Congolese government in the fight against the illegal exploitation of natural resources.”

At the same time, Congolese journalists and influencers were flown across the country for tours of Chinese mines and work sites previously closed to outsiders, generating a flurry of positive headlines.

It was a highly unusual surge of activity for China’s diplomats and companies, which traditionally avoid the spotlight. “In the past two months, I’ve seen more unprecedented behaviour from the Chinese in Africa than in 10 years,” said Eric Olander, a co-founder of the China Africa Project who previously worked as a journalist in Kinshasa, the DRC’s capital.

“It all comes back to cobalt,” he added.

A hard silver metal, created by smelting down blue-speckled blocks of mineral mined from the Earth’s crust, cobalt is vital to the production of lithium-ion batteries, preventing them from overheating or even exploding. This makes it particularly important, along with copper, of which it is often a mining byproduct, for the EV sector [emphasis added].

China is the world’s largest EV market, with more than 1.1 million vehicles sold in the first half of this year alone. Since 2015, when the government launched its “Made In China 2025″ initiative, which calls for the country to become a dominant force in the global EV industry, around RMB 100-billion ($19.4-billion) has been invested in EV manufacturers and related companies, according to business database Qichacha.

The DRC is home to some 51 per centof global cobalt reserves, at about 3.6 million tons, more than double those of Australia, which ranks next [emphasis added], according to data from the U.S. Geological Survey.

When it comes to production, the ranking isn’t even close: About 95,000 tons of cobalt were pulled out of the ground in the DRC last year, compared to 6,300 tons in Russia, the next largest producer [emphasis added].

…More than 90 per cent of the DRC’s cobalt exports in recent years have gone to China, which is also the No. 1 destination for Congolese copper.

China is the DRC’s largest trading partner by a factor of five, and is also a major provider of development grants and loans. Between 2007 and 2017, Chinese commitments to the DRC totalled around US$7.5-billion, with almost US$4-billion of that focused on the mining sector, according to a recent report from AidData.

This makes ties with China of utmost importance to Kinshasa. But the relationship is not as one-sided as might be expected. Such is the size of the DRC’s cobalt reserves – and the global appetite for them – that Beijing appears wary of taking its current position for granted, giving the African nation an unusual amount of leverage…

In September, the DRC government admitted the Chinese companies have spent just US$825-million of the promised US$3-billion on infrastructure – but it promised the remaining amount of more than US$2-billion would be spent over the next four years. Conveniently, this coincides with a national election inthe DRC in 2023, when the boost in spending could be useful to the government.

…with the DRC election just two years away, and with Congolese minerals crucial to China’s EV strategy, neither side is likely to walk away from the mining deals, Mr. Neema said. “Both sides have plenty of incentives to find common ground,” he said.

In the short term, he said, Mr. Tshisekedi has “huge leverage” over China, which cannot afford to exit from the Congolese mining sector. “There is a strong political incentive for the government to push for more infrastructure from the Chinese agreements. It’s a major political issue. We have a huge problem with the roads in DRC.”

But in the longer term, China could drag out negotiations to boost its bargaining power, knowing that Mr. Tshisekedi will be desperate to strike a new deal before the 2023 election, Mr. Neema said. “Time is not on his side.”

Follow James Griffiths on Twitter: @jgriffithsOpens in a new window
Follow Geoffrey York on Twitter: @geoffreyyork

So who’s trying to be the real modern neo-colonialist?

Mark Collins

Twitter: @Mark3ds

7 thoughts on “Congo’s Cobalt Key to PRC’s Grasp for EV Dominance”

  1. Meanwhile at Glasgow COP 26:

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    Mark Collins

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  2. Now major NY Times article Nov. 21 on PRC and Congo’s cobalt:

    “Race to the Future
    A Power Struggle Over Cobalt Rattles the Clean Energy Revolution
    The quest for Congo’s cobalt, which is vital for electric vehicles and the worldwide push against climate change, is caught in an international cycle of exploitation, greed and gamesmanship…”

    More from the article on PRC’s dominant role in rare earths and “clean energy” minerals:

    Mark Collins

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  3. More on PRC’s cobalt mining domination in Congo (DRC):

    Mark Collins

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