Over the past decades, China has become the largest foreign investor in many African countries, with the Democratic Republic of Congo being the epicenter of its investments on the continent. The African country is the largest producer of cobalt on the planet, by far compared to others, and the second largest producer of copper, two key metals for the electrification of the energy grid taking place around the world. China entered this African country, as well as other neighbors on the continent, with the aim of securing the supply of raw materials essential to its future, but now The Congolese government wants to regain control of its mineral resources and is moving closer to the rival Chinese bloc. The country’s Minister of Mines acknowledges that it is looking for new partners and wants to get closer to the American and European markets.
In recent years, China has adopted a strategy to strengthen its ties with African countries. The idea of the Asian country was to compete with the Western bloc, led by the United States, to gain a presence in Africa, ensure the production of important raw materials for its economic development and adhere to the Silk Road project which was in progress. launched in 2013.
“China’s activity in Africa began with Beijing’s support for liberation movements fighting against colonial control. Since 1990, China’s trade efforts have intensified and were formalized in 2013 with the Belt and Road Initiative, an effort aimed at gaining political influence and improving trade relations with developing countries. world,” says Thomas Sheehy, a fellow at the U.S. Institute of Peace and a member of the International Advisory Board of Afrobarometer, a think tank focused on African studies.
“China’s activities include lending money for infrastructure development built by Chinese companies and for mining of basic resources by Chinese companies,” says Sheehy, highlighting how “Chinese presence has increased in almost all African countries, and its influence in Africa since the Cold War has increased significantly.while the American one is stagnating,” he warns.
Already in 2018, the director of Pimco warned against the loss of influence of the Western bloc in Africa through the International Monetary Fund (IMF) and the danger that this represented for the sustainability of the debt of these countries, knowing that “they have unsustainable debt again after borrowing from China and the markets.
China’s entry into the African continent has not put an end to the conflicts that are shaking it. In the Democratic Republic of Congo itself, a conflict has erupted since last December in the east of the country, between rebel groups supported by the governments of Uganda and Rwanda, as well as militias linked to the Islamic State and more a hundred other armed groups.
China-Congo: a relationship based on copper and cobalt
In the Democratic Republic of Congo, China’s interest has particularly focused on two of the most important raw materials for the energy transition towards renewable sources and the electrification of the automobile fleet: copper and cobalt. The African country is the world’s leading producer of cobalt, a key component of electric car batteries, and recently overtook Peru as the world’s second-largest producer of copper, the metal most used to transport electrical power.
According to trade data from the Observatory of Economic Complexity, in 2022, Congo’s main exports to China were refined copper, for $6.72 billion, cobalt, for $5.74 billion, and raw copper, for $1.37 billion. China’s control over the country’s mineral resources has reached an excessive point, in the eyes of the Congolese government, which has just made a significant shift in its mining policy to approach new business partners in this industry.
This week, Congolese Mines Minister Kizito Pakabomba said the country wanted to attract “better investors, more investors and diversified investors”, a message that comes just days after the government vetoed the purchase of rights to exploit the country’s copper and ore. cobalt mine to a Chinese company. The mining company Chemaf, controlled by the Singaporean group Trafigura, holds the operating contract for the Mutoshi project and announced in June that it would sell the rights to the Chinese group Norin. However, Gécamines, Congo’s state-owned mining company, vetoed the deal, saying it had the right to approve changes to the country’s key assets.
The government’s veto of the change of hands of the mining project hides an uncomfortable reality for Beijing: Congo wants to diversify its trading partners, which threatens the Asian country’s domination of the African republic’s resources. The deposit is estimated to be capable of producing 16,000 tonnes of cobalt and 50,000 tonnes of copper per year, representing almost $400 million and $500 million in annual revenue, respectively, at current market prices. Minister Pakabomba recognized that they were evaluating other “strategic options” regarding the exploitation of the country’s mines and did not hesitate to present the example of this veto: “We have paralyzed this transaction and we will consider the different options we might have,” he said. .
In a country that accounts for three-quarters of global cobalt production, the government wants to have tighter control over the basic resource, especially as production increases at the country’s mines by Chinese companies have caused prices of raw materials in the country. markets. If in 2022 a ton of cobalt was paid for $81,800, prices have since fallen to around $24,000 today, a dizzying drop.
Approach in the United States and Europe
The Congolese government’s new strategy is based on the search for new commercial partners. Last August, the country reached a deal with the United Arab Emirates worth $1.9 billion. build at least four new mines in the South Kivu and Maniema regions, concessions to extract tin, tantalum (a metal used for the electronic components industry), tungsten and gold.
But not only that: the country is promoting the improvement of railway infrastructure that connects the mining basin of Kolwezi to the Angolan border, thus uniting the productive region with the Angolan port of Lobito, on the Atlantic Ocean. The United States stepped up to the plate with an investment of $553 million, as Bloomberg explains, to reform the Angolan part of the railway route. This will bring Congo’s mining production closer to the American and European markets, assured Pakabomba. “This will allow us to diversify export routes so that they do not only turn towards the East,” underlined the minister. China will have to improve its relations with this country if it wants to maintain its domination over the industrial “gold” that is the Congo.
