The Cobalt War: The Sino-American Battle for Supremacy in the Democratic Republic of Congo

By Alexander Ekemenah, Chief Analyst, NEXTMONEY

Executive Summary

1. From thestandpoint of objective and empirical evidences available to this article, Democratic Republic of Congo, like many other natural resource-rich countries such as Nigeria, suffers from the deadly disease known as Dutch Disease in its mining sector, a disease that has not only led to huge revenue loss through its poor corporate governance structures but also loss of lives and destruction of destinies especially of its youth through unregulated artisanal mining over the years. It is this Dutch Disease that is the prima facie cause of the poverty of DR Congo and other unmitigated disasters amidst its natural wealth of solid mineral resources.
2. Gecamines, the main body responsible for revenue collection on behalf of the Government of Democratic Republic of Congo and the administration of the mining sector, equally suffers revenue loss through corrupt practices by its officials in collusion with foreign corporate actors and economic assassination teams and also through its poor or weak financial management structure. Gecamines is the avenue through which the Congolese political elite and its foreign partners have been able to capture the resources of the State from one degree to another and over time and space.
3. The deal between the Government of Democratic Republic of Congo under former President Joseph Kabila who was never elected and Chinese-owned giant mining companies in which Congo literally handed over a larger percentage of its mining leases (amounting to multibillion dollars) to the Chinese-owned mining companies in exchange for infrastructure development projects has increasingly come under intense questioning for its lack of transparency and lack of visible infrastructure project dividends in the Congo.
4. The recent syndicate report by 19 international media houses and 5 non-governmental organizations called “Congo Hold-Up” coordinated by European Investigative Collaborations (EIC) on the “Platform for the Protection of Whistleblowers in Africa (PPLAAF)” including two separate reports by The Sentry titled “Embezzled Empire: How Kabila’s Brother Stashed Millions in Overseas Properties” and “The Backchannel: State Capture and Bribery in Congo’s Deal of the Century” were a mind-boggling revelation about sordid and criminal corrupt practices in the immediate past Government of Democratic Republic of Congo under former President Joseph Kabila, his family members, cronies and foreign collaborators. This has already led to the establishment of a judicial panel of investigation into the multiple allegations of criminal acts that call for the prosecution of all the accused.
5. The new government led by President Felix Antoine Tshisekedi who took over in January 2019 has embarked on a laudable review and enactment of new legal framework for mining activities in the Democratic Republic of Congo through which the government hopes to take effective control of the mining sector to the benefits of Congolese. However, the world is watching closely to see how the new mining legal code will change the hitherto unwholesome conditions in the Democratic Republic of Congo to the benefits of Congolese.
6. International manufacturing companies in the field of cell phones, power banks for recharging phones, solar panels, electric vehicles among other companies are reviewing their corporate profile as regard their supply chains in order to free themselves from negative perception or direct involvement in sustaining artisanal mining in the Democratic Republic of Congo that has led to obscene child abuse, egregious human rights violations, death tolls, environmental devastations, etc. Indeed, the international manufacturing companies cannot absolve themselves of moral and legal culpabilities for the destruction of lives and environment in the Democratic Republic of Congo through artisanal mining.
7. Even though there is no what can be described as geopolitical tension between the United States and China in the Democratic Republic of Congo, there is however evident rivalry between the two superpowers over the control of the mining sector in order to stockpile cobalt and other associated metals and minerals for strategic purposes especially for industrial and military usage on the one hand and for the control of political destiny of the Democratic Republic of Congo on the other hand.
8. It is hoped that the current relationship between the United States and Democratic Republic of Congo the latter under President Felix Tshisekedi would enable the former to recompense for the historical injustices and atrocities hitherto committed by it during the early independence years of DR Congo. It is not just about geopolitical rivalry with another superpower or superpowers within the context of selfish national security interests of “America First” variety but the opportunity for restitution for crimes against other sovereign nations within the context of brotherhood of humanity.

Introduction

On November 20, 2021, New York Times published an article on what may be regarded as a “cobalt war” going on in the Democratic Republic of Congo between corporate mining giants and between two superpowers: United States and China.¹

In the article, the authors noted that the ongoing clean energy revolution in the advanced economies is replacing oil and gas with a new global force: the minerals and metals needed in electric car batteries, cell phones, solar panels and other forms of renewable energy with particular reference to the Democratic Republic of Congo where cobalt and associated metals are mined and produced, and which produces two-thirds of the world’s supply of cobalt. These countries are now said to be stepping into the kinds of roles once played by Saudi Arabia and other oil-rich nations. But more significant is the fact that a race has opened up between China and the United States to secure supplies which could have far-reaching implications for the shared goal of protecting the planet.²

Some of the key findings from the insightful article include the fact that the United States has become vulnerable to price shocks and supply shortages as it goes the path thatembraces green energy; the American government failure to safeguard decades of diplomatic and financial investments it had made in Congo, even as China was positioning itself to dominate the new electric vehicle era.³

Furthermore, the sale, starting in 2016, of two major cobalt reserves in Congo by an American mining giant to a Chinese conglomerate marked the end of any major U.S. mining presence in cobalt in the country. Chinese battery makers have also forged agreements with the mining companies to secure steady supplies of the metal.⁴

Beijing bankrolled a buying spree of mines in Congo, locking up a key supply chain. As of last year, 15 of the 19 cobalt-producing mines in Congo were owned or financed by Chinese companies, according to a data analysis. The companies had received at least $12 billion in loans and other financing from state-backed institutions, and are likely to have drawn billions more. The five biggest Chinese mining companies in Congo that focus on cobalt and copper mining also had lines of credit from Chinese state-backed banks totaling $124 billion.⁵

One of the government-backed companies, China Molybdenum, which bought the two American-owned reserves, described itself to The Times as “a pure business entity” traded on two stock exchanges. Records show 25 percent of the company is owned by a local government in China. Separately, Chinese Molybdenum is being accused of withholding payments to the government [in Kinshasha] at its Tenke Fungurume cobalt and copper mine. The company said it had done nothing wrong, and questioned if there was an organized effort to undermine it.⁶

Congolese officials accuse Chinese mining companies of cheating the country of promised revenues and improvements. The Congolese are reviewing past mining contracts with financial help from the American government, part of a broader anti-corruption effort. They are also examining whether Chinese promises to build roads, schools, hospitals and other infrastructure were kept.⁷

The above is one side of the story. Actually New York Times did quite an impressive in-depth reports on the crisis in the Congolese mining sector from what may be regarded from a holistic pedestal but which also convey the impression that New York Times may be crying more than the bereaved or serving as a media or megaphone for the American Government in its renewed bid to tackle China over the mining of cobalt in Congo. But it also left many questions unanswered. For instance, why did America shift its focus from DR Congo, leaving the place for Chinese to become lords of the manor? How did China fail to deliver on its promise to help develop infrastructures in DR Congo in exchange for the humongous cobalt mining licenses granted to it earlier?

However, the other side of the story is perhaps more gloomier than the first. Nicolas Niarchos had on May 31, 2021 published an article in the New Yorker titled “Buried Dreams” detailing his several visits to Democratic Republic of Congo investigating artisanal mining of cobalt by young and old (with special emphasis on child labor), crude methods of mining, the deaths that have occurred from natural disasters such as cave-in of mines, the death tolls, the destruction of destinies, the ruthlessness of corporate mining companies and their accomplices in government and individual merchants, the undertones of racial discriminations and mutual recriminations between the laborers and their modern Chinese merchants, the destruction or disruptions of the natural and social ecosystem, the lamentations of the helpless citizens, the heart-breaking and soul-shattering poverty accompanied by superstitious beliefs, the almost non-existent primary and secondary education in the rural areas of Southern Congo, the corruption in government circles beginning from the local government to the state level including the federal government, and the ferocious battle for supremacy between the superpowers over the mining and supply of cobalt and other associated minerals, etc. 

Southern Congo sits atop an estimated 3.4 million metric tons of cobalt, almost half the world’s known supply. In recent decades, hundreds of thousands of Congolese have moved to the formerly remote area. Kolwezi now has more than half a million residents. Many Congolese have taken jobs at industrial mines in the region; others have become “artisanal diggers,” or creuseurs. Some creuseurs secure permits to work freelance at officially licensed pits, but many more sneak onto the sites at night or dig their own holes and tunnels, risking cave-ins and other dangers in pursuit of buried treasure.⁸

Murray Hitzman, a former U.S. Geological Survey scientist who spent more than a decade travelling to southern Congo to consult on mining projects there, and who teaches at University College Dublin, explained that the rich deposits of cobalt and copper in the area started life around eight hundred million years ago, on the bed of a shallow ancient sea. Over time, the sedimentary rocks were buried beneath rolling hills, and salty fluid containing metals seeped into the earth, mineralizing the rocks. Today, he said, the mineral deposits are “higgledy-piggledy folded, broken upside down, back-asswards, every imaginable geometry—and predicting the location of the next buried deposit is almost impossible.”⁹

Copper has been mined in Congo since at least the fourth century, and the deposits were known to Portuguese slave traders from the fifteenth century onward. Cobalt is a byproduct of copper production. In 1885, Belgium’s King Leopold II claimed the country as his private property and brutally exploited it for rubber; according to “King Leopold’s Ghost,” a 1998 book by Adam Hochschild, as many as ten million Congolese were killed. But, because of local resistance and the inaccessibility of the region, large-scale commercial mining didn’t begin in the south until the twentieth century.¹⁰

Kolwezi was founded in 1937 by the Union Minière du Haut-Katanga, a mining monopoly created by Belgian royal decree. These colonialists may not have matched the atrocities of King Leopold, but they still saw the country in starkly exploitative terms. They understood that the best way to extract Congo’s mineral wealth quickly was to create infrastructure. The company cleared the thickets of thorny acacias and miombo trees that had grown atop Kolwezi’s rich mineral deposits and built the town across the area’s rolling hills, with wide streets and bungalows for Europeans, whose neighborhoods were segregated from those where Congolese workers lived. Locals were used to create this infrastructure, and to labor in the mines, but, as Hitzman put it, “the whites ran everything.”¹¹

After independence, the southernmost province, Katanga, was viewed as a prize by Cold War powers. In the sixties, Katanga unsuccessfully tried to secede, with the support of Belgium and the Union Minière. Then, in 1978, Soviet-armed and Cuban-trained rebels seized Kolwezi and several hundred civilians were killed. Before the insurrection, the Soviet Union appeared to have been stockpiling cobalt, and, according to a report by the C.I.A., the attack set off “a round of panic buying and hoarding in the developed West.” Cobalt, the report declared, “is one of the most critical industrial metals.” Then, as now, the mineral was used in the manufacture of corrosion-resistant alloys for aircraft engines and gas turbines.¹²

The West’s solution to the market instability was to prop up the country’s dictator, Mobutu Sese Seko, who presided over an almost farcically kleptocratic regime. The country’s élite sustained themselves, in part, on the profits from the mines. Gécamines, a state-controlled mining company, ran a virtual monopoly in Katanga’s copper-and-cobalt belt, and owned swaths of the cities that had been built to house miners.¹³

By the early nineties, Mobutu and his cronies seemed to have stolen everything they could, and Congo was falling apart. As the country drifted toward civil war, the Army pillaged Gécamines, and former workers sold off minerals and machine parts in order to feed their families. In 1997, Mobutu went into exile. The disintegration of Gécamines transformed Congo’s mining landscape. Creuseurs began digging at the company’s largely abandoned sites, selling ore to foreign traders who had stayed behind after Mobutu was deposed.¹⁴

Congo became mired in a series of wars in which more people were killed than in any other conflict since the Second World War. The country’s next leader, Laurent-Désiré Kabila, was assassinated, in 2001, and his son Joseph took over. Both Kabilas funded their war efforts by selling Gécamines sites to foreigners. By the time Hitzman arrived, in the mid-two-thousands, Gécamines had become a shell. “Some of the best geologists I’ve ever met in my life were still working for Gécamines, and hadn’t been paid for three years,” Hitzman said. “It was sad as hell.”¹⁵

Of course, it is not only the New Yorker or the New York Times that have documented the sufferings of the artisanal miners in the Congo. Several other international media houses and international non-governmental organizations have come out with their various reports over the last few years displaying a panoramic or landscape view of the sufferings of miners behind the exploitation of cobalt and other resources in the Congo.

The snail-pace or gradual shift from non-renewable fossil fuels such as petrol and other fossil fuels to renewable energy largely because of the advent of new technologies in the energy field and also over the growing concern about climate change has brought the exploitation of cobalt and other associated metals and minerals into the foreground of technological development as well as media publicity. Thus behind the ubiquitous trendy mobile handsets worldwide, the laptops, solar panels, and fashionable electric vehicles, including defense and industrial products, has brought Democratic Republic of Congo into global reckoning. But mostly unknown to the end-users of these products, lies the enormous suffering of millions of people in the Democratic Republic of Congo that has the largest deposits of this strategic solid mineral resource in the world.

Unfortunately, the worst part of it is that neither Democratic Republic of Congo nor other such solid mineral resource-rich countries are ever anywhere near Saudi Arabia or other oil-producing countries in terms of economic development or growth pattern. That was the gross misconception and deficit in the analysis of New York Times article referenced above. The tragic fact is that Democratic Republic of Congo has no domesticated manufacturing based on extraction and/or production, processing and refinement of cobalt and other associated metals and minerals – except excavation sites of cobalt that have left the ecosystem devastated in terms of environmental degradation and lives and destinies of millions of artisanal miners destroyed or upended. There are no localized manufacturing bases based on these solid mineral resources to strengthen the DRC economy to, in turn, strengthen its productive and sustainable capacity in an economy of scale and value chain. There is no manufacturing base for batteries anywhere in DRC. There is no electric vehicle assembly plant; no mobile phone assembly plant or solar panel assembly plant that creates their individual value chains.

The old colonial mentality still prevail where the former colonial countries continue to supply raw materials to the metropolitan centres of the West or North including the East now upon demand who in turn continue to claim the ownership of superior technology for turning these raw materials to finished products to be resold back to the developing countries at higher prices. The prices for these raw materials are largely determined by the buyer countries through the global market forces of which they are fully in control or in charge. The advance forces of knowledge in turning these raw materials into finished products still reside with the buyer countries.

Thus despite the fact that DRC has largely conceded its sovereign rights to own, produce, process and refine these strategic metals and minerals in a manufacturing cycles, i.e. battered its sovereign rights as pot of mess to foreign countries and international mining giants on the premise and promise of infrastructure development in return for these acts of Prodigal Son, the DRC economy has not shown any sign of sustainable development and growth pattern and there is no future trajectory upon which to predicate the suicidal policy act of self-destruction. Political stability is still largely a mirage. The earth beneath the Congo is not only suffering from quakes of artisanal mining, but one can feel political earth tremors still growling or snarling at the incompetence of political leadership that has plunged the nation into unmitigated disaster with their puny brains. Indeed, in the holistic ontology of DRC, there is hardly a difference between the dictatorial regimes of Mobutu Sese Seke and the two Kabilas in their venal corruption and gross incompetence in managing natural and human resources with which DRC has been endowed.

On the other hand, despite the recent effort at re-aligning the mining sector to the maximum advantages of the Congo via the new mining legal code and framework including reforms of Gecamines and other relevant institutions, political disputes among the various contending groups have largely stalled this necessary effort. These political disputes and rivalries were succinctly captured by Africa Confidential when it reported in late April 2021 that “A new government plans to transform its finances and take on rebel groups but is reliant on a band of political godfathers Announcing hundreds of planned initiatives, Congo-Kinshasa’s new government has lofty ambitions, but its main challenge may simply be staying together. Its four vice-prime ministers, each from a different faction of the ruling coalition, have different political godfathers to serve, including the President’s main rival, his predecessor Joseph Kabila.¹⁶

Background

The world may not have been hitherto fully aware of the enormity of the crisis involved in the mining of cobalt and other associated metals and/or minerals in the Democratic Republic of Congo until the last few years. Even the news reportage emerging on DRC from international media houses may not have accurately captured the gravity of the crisis. But the global corporate miners, and the government of DRC, are no doubt fully aware but keeping largely quite about it for fear of being called to public accountability. However, they are already being called out.

First, the advent of information technology itself especially internet has inevitably helped to spread the awareness through media reportage, media and scholarly researches into the general problems associated with mining of cobalt and other mineral resources in DRC including other countries particularly in connection with problem of artisanal mining.

Second, the advent and evolution of smart technologies such as GSM and the associated mobile telephony (handsets), the energy mix producing solar energy through the solar panel techs, the emergence of electric vehicles of all varieties, not to talk of advance defense and heavy industrial requirements – all these have come to increase demand for cobalt and associated solid mineral resources wherever they may be found.

Third, the increasing outcries by international non-governmental organizations, human rights bodies and agencies including the local and international media houses against the wholesale problems presented by mind-boggling crude artisanal mining methods with the resultant loss of lives and destruction of destinies of young and old over the years, the exploitative ruthlessness of corporate mining giants, the egregious violation of human rights of the citizens including child abuses in the name of building infrastructures by governments and security services has brought the issue of cobalt mining in DRC to the foreground of international debate.

Cobalt is an essential mineral used for batteries in electric cars, computers, and cell phones. Demand for cobalt is increasing as more electric cars are sold, particularly in Europe, where governments are encouraging the sales with generous environmental bonuses.¹⁷

More than 70 percent of the world’s cobalt is produced in the Democratic Republic of the Congo (DRC), and 15 to 30 percent of the Congolese cobalt is produced by artisanal and small-scale mining (ASM). For years, human rights groups have documented severe human rights issues in mining operations. These human rights risks are particularly high in artisanal mines in the DRC, a country weakened by violent ethnic conflict, Ebola, and high levels of corruption. Child labor, fatal accidents, and violent clashes between artisanal miners and security personnel of large mining firms are recurrent.¹⁸

Cobalt is a chemical element with the symbol Co and atomic number 27. Like nickel, cobalt is found in the Earth’s crust only in a chemically combined form, save for small deposits found in alloys of natural meteoric iron. The free element, produced by reductive smelting, is a hard, lustrous, silver-grey metal.¹⁹

Cobalt-based blue pigments (cobalt blue) have been used since ancient times for jewelry and paints, and to impart a distinctive blue tint to glass, but the color was for a long time thought to be due to the known metal bismuth. Miners had long used the name kobold ore (German for goblin ore) for some of the blue-pigment-producing minerals; they were so named because they were poor in known metals, and gave poisonous arsenic-containing fumes when smelted. In 1735, such ores were found to be reducible to a new metal (the first discovered since ancient times), and this was ultimately named for the kobold.²⁰

Today, some cobalt is produced specifically from one of a number of metallic-lustered ores, such as cobaltite (CoAsS). The element is, however, more usually produced as a by-product of copper and nickel mining. The Copperbelt in the Democratic Republic of the Congo (DRC) and Zambia yields most of the global cobalt production. World production in 2016 was 116,000 tonnes (114,000 long tons; 128,000 short tons) (according to Natural Resources Canada), and the DRC alone accounted for more than 50%.²¹

Cobalt is primarily used in lithium-ion batteries, and in the manufacture of magnetic, wear-resistant and high-strength alloys. The compounds cobalt silicate and cobalt(II) aluminate (CoAl2O4, cobalt blue) give a distinctive deep blue color to glass, ceramics, inks, paints and varnishes. Cobalt occurs naturally as only one stable isotope, cobalt-59. Cobalt-60 is a commercially important radioisotope, used as a radioactive tracer and for the production of high-energy gamma rays.²²

Cobalt is the active center of a group of coenzymes called cobalamins. Vitamin B12, the best-known example of the type, is an essential vitamin for all animals. Cobalt in inorganic form is also a micronutrient for bacteria, algae, and fungi.²³

The child labor (a phenomenon largely abhorred in the advanced Western countries) involved in artisanal scale mining of cobalt in the DRC because of the extreme general poverty of the country as a whole over the decades has been a sore point in the febrile debate now unfolding over cobalt mining and the ferocious battle for supremacy between two giants: the United States and China.

According to Amnesty International, a global non-governmental organization focused on human rights, the Congolese government confirmed estimates that roughly 20% of the cobalt exported from the country was of ASM origin as recently as 2016. Other research, done by Belgian geologists, estimated that as much as 60% of the DRC’s cobalt exports were sourced through ASM in 2011. This method of mining was also linked to human rights violations, predominantly issues of child labor and worker exploitation.²⁴

The potential for negative impacts on households that relied on artisanal mining for subsistence further complicated any proposed solution to human rights issues in the supply chain. According to the report, 60% of those surveyed relied on artisanal mining for their livelihood.²⁵

While the artisanal mining of cobalt in the DRC had been linked to negative health outcomes, such as the increased risk of exposure to uranium and even death, it also provided subsistence for those struggling with access to adequate food, water, and housing. Artisanal mines could provide an environment that was ripe for exploitation by militant groups who sought to use cobalt profits to finance violence within the country. Such exploitation was well documented for other materials, like coltan, a mineral that contains tantalum; an important metal used in consumer electronics as a material for capacitors.²⁶

But the demand for cobalt is practically unstoppable. According to James Conca, “unfortunately, the demand for Co is increasing like a bacteria culture in a petri dish, and poor children are its food.”²⁷The reason this is so important is that many of the people who support the new energy technological revolution of non-fossil fuels, renewables and new nuclear SMRs, electric vehicles, conservation and efficiency, also care about the social issues that many of these technologies incorporate in their wake – corruption, environmental pollution, extreme poverty and child labor.²⁸ And the supply of Co is the perfect intersection of these two issues.²⁹

James Conca further revealed that “unfortunately, the Democratic Republic of Congo is pervaded by conflict, poverty and corruption. The country’s economy is completely dependent on mining. Many poor families are completely dependent on their children working the mines. That $9/day is hard for a child to reject. Competing jobs pay even less, and there are few of those.³⁰

Western tech giants like Tesla, Apple, GM, Samsung and BMW consciously ignored the problems surrounding child labor and corruption because consumers didn’t seem to care and just wanted the latest devices as fast as possible. Co is a preferred component in lithium-ion batteries that power laptops, cell phones, and electric vehicles, and these exploding applications are causing the use of Co to skyrocket.³¹

In 2016, Amnesty International issued a blistering report naming more than two dozen electronics and automotive companies that had failed to ensure their cobalt supply chains didn’t include child labor at these types of mines.³² [Unfortunately], just like blood diamonds and the garment industry’s child sweatshops, it takes time and the shining of light on these practices before the Western public starts to care.³³

While the majority of Congo’s cobalt comes from large mining sites where rock is dug up by trucks from the bottom of deep pits, a growing proportion is coming from an estimated 150,000 “artisanal” or informal miners who dig by hand in Kolwezi.³⁴

And last year [2018] accounted for an estimated 30 per cent of Congo’s cobalt — the country mines more than 70 per cent of the global total — according to Gecamines, Congo’s state-owned miner.  Congo’s dominance presents a growing dilemma for carmakers and those in the supply chain as they look to meet a rapid increase in demand for electric vehicles and batteries. If they try to improve conditions on the ground they face a series of additional risks, from the threat of corruption to monitoring and enforcing measures to avoid deaths from informal mining and the presence of children on these sites. And while manufacturers cannot afford to ignore Congo they must also know that untraceable metal — from these informal miners — leaks into the global supply chain via refineries in China, ending up in batteries, cars and smartphones sold in the West.³⁵

Thanks in part to high cobalt prices in 2018; a lot of this activity now takes place within the sites of the large mining groups, including Switzerland-based Glencore and Hong Kong-listed China Molybdenum, which sprawl across large areas of border villages. In June 43 informal miners died when part of a pit collapsed at Glencore’s largest mine outside Kolwezi. State authorities sent the army to the site as well as China Moly’s giant copper and cobalt mine 90km east in Tenke Fungurume to remove up to 10,000 informal miners who were trespassing. “A lot of people [buyers] realise they can no longer shut their eyes and pretend it’s not happening, which was the strategy for quite a while,” says Indigo Ellis, an Africa analyst at Verisk Maplecroft.³⁶“There are no real viable alternatives to cobalt from the DRC at the moment so they will have to start engaging with it.”³⁷

Congo Dongfang International Mining, a subsidiary of Zhejiang Huayou, a Chinese conglomerate that, among other things, has supplied materials for iPhone batteries. China is the world’s largest producer of lithium-ion batteries, and Huayou has made a huge investment in Congo. After acquiring mineral rights in the region, in 2015, it built two cobalt refineries. According to an internal presentation, by 2017 Huayou controlled twenty-one per cent of the global cobalt market.³⁸

China and Congo have a long history. During Leopold’s reign, Chinese workers were shipped to Congo to help build the national railroad. In the nineteen-seventies, Mobutu turned to Mao’s regime for technical collaboration on infrastructure projects. By the nineties, the Chinese were becoming the bosses: the Beijing government and myriad Chinese businesses began making heavy investments in Africa, particularly in resource-rich and regulation-poor countries like the Democratic Republic of the Congo. Peter Zhou, a Chinese-born financier who has worked on a few mining deals in Congo, said that in such countries “there is corruption; there is lack of the rule of law, which gives you more autonomy to be entrepreneurial.” (Zhou emphasized that he hadn’t directly witnessed or engaged in corruption.) In 2007, Joseph Kabila made a six-billion-dollar infrastructure deal with China that included a provision allowing the Chinese to extract six hundred thousand tons of cobalt.³⁹

In 2016, China Molybdenum paid the U.S. company Freeport-McMoRan $2.65 billion for a controlling stake in Tenke Fungurume, a giant copper-and-cobalt mine about two hours east of Kolwezi; three years later, China Molybdenum acquired another stake, for $1.14 billion.⁴⁰

Huge sums of money continue to change hands in the region. In December, China Molybdenum paid Freeport-McMoRan half a billion dollars to acquire a controlling stake in Kisanfu, a copper-and-cobalt concession east of Kolwezi. At a recent conference sponsored by the Financial Times, Ivan Glasenberg, the C.E.O. of Glencore, said, “China, Inc., has realized how important cobalt is.” He continued, “They’ve gone and tied up the supply.” He warned that if Chinese companies stopped exporting batteries, this could hamper the ability of non-Chinese companies to produce electric vehicles. Last month, CATL, a Chinese conglomerate that develops and manufactures lithium-ion batteries, acquired a hundred-and-thirty-seven-million-dollar stake in the Kisanfu mine. Tesla works with the company to make its car batteries, and CATL has supplied batteries to Apple. Recently, according to witnesses at Kisanfu, a cave-in killed at least four creuseurs.⁴¹

Zhou acknowledged that there was “a lot of corruption” in Congo’s mining sector, but he maintained that, with enough economic prosperity, the gray economy in Congo will fade, much as it has in China.⁴²

Multiple problems are generated as a result of unregulated artisanal mining, showing the little social control DRC has over its own population. Environmental disasters such as mining cave-ins, destruction and dislocation of villages, deaths of many children involved in artisanal mining, clashes between miners and security forces from time to time, the low prices or wages received from the mining giant companies, the imperviousness of the Government in Kinshasha and other state and local capitalsare daily stuff in media reportage.

Both the primitive and modern Shylock system of profit extraction are described by Financial Times of London published in July 2019:

After the 40-hectare area in Kasulo was cleared of houses a perimeter wall was erected around the site and a security gate introduced to check miners on arrival. A Chinese security guard points proudly to a sign that says no children or drinking are allowed on site. Tunnels still dot the roughshod land but pits have already been dug for the miners.⁴³

About 600 miners work on the site, down from around 5,000 last year, though this is partly due to the fall in cobalt prices from a 10-year high of over $40 a pound in early 2018 to $13.50 a pound, according to Fastmarkets.  The miners are organised into co-operatives which take a cut of the number of bags sold by the workers in return for assistance such as covering medical bills, helping family members in the case of death and representing the miners at political meetings. After digging the cobalt, the miners take their sacks to be crushed, weighed and graded in on-site depots, after which the material is authenticated and sold to local traders and then to Huayou.⁴⁴

The relocation of the villagers triggered protests and has been opposed by some organisations in Kolwezi.  Questions have been raised about who controls the co-operatives. The Good Shepherd charity, which helps children leave mine sites by providing free schooling, decided to end its engagement with Huayou over concerns about the relocation of the residents and their compensation packages. Emmanuel Umpula Nkum of African Resources Watch, a local non-governmental organisation, says local miners should be able to sell their cobalt to whoever they want to rather than being forced to sell all their metal to one company, Huayou.⁴⁵“We need zones where the miners should be in co-operatives created by themselves and where they can work and sell their minerals to buyers,” he says. “We need them to have the possibility to say ‘this is not a good price’ and go elsewhere to sell their minerals.”  Distrust remains high. Some miners recently broke in and damaged the platform that weighs cobalt trucks, angry at the lower prices for their metal. And no sooner had the Kasulo project begun than a new site opened up outside its walls.⁴⁶

There are around 200,000 informal copper and cobalt miners in the DRC.⁴⁷In April [2019] BMW told an OECD conference that it would source its cobalt for its electric cars from Morocco and Australia and not the DRC. Belgian-based Umicore, the largest producer of battery materials in Europe, whose predecessor company Union Minière recruited forced labour to mine copper in the region in the early 20th century, says it does not buy from informal sites in the country. Instead, in May Umicore announced a long-term deal to buy cobalt from Glencore’s mines in Kolwezi.⁴⁸

Plummeting cobalt price takes toll on Democratic Republic of Congo “We are supportive of industry efforts to engage with the mining community, despite the risk. The challenge is how to manage that risk and communicate it properly. Disengagement is not the right approach, but the threat of disengagement has to be real and combined with technical and financial support to drive improvement.” Swiss commodity trader Trafigura, which is one of the largest buyers of Congolese cobalt and copper, says artisanal-mined minerals can be a source of supply for carmakers.⁴⁹

When Trafigura signed a three-year deal to buy all the cobalt produced from DRC-based Chemaf last year, it faced the problem of how to manage the more than 5,000 informal miners working on the site near Kolwezi.  Miners were regularly dying in tunnels that went as deep as 100m into the earth, recalls James Nicholson, head of corporate responsibility at Trafigura.⁵⁰

Congo has a limited window of time to fix its informal mining problem before cobalt is replaced in electric car batteries by other minerals, he says.  “Our preference is not to ignore it, it’s to find solutions,” he adds. “If we can be a bit creative in developing controls then we could avoid the product just dripping out into the market. We can sell the product as long as our counterparties are well aware of what they are receiving.”⁵¹

Nicholas Garrett, chief executive of RCS Global, says companies and consumers are aware of issues in the electric vehicle and battery supply chain.  “Emotionally an EV is supposed to be a good deed — you’re buying an EV you’re thinking you are saving the planet — the last thing you want to hear is that the car is not clean,” he says.  “Companies who works with us are starting to understand what the risks are — and asking what do we do about it. But this is an enormous challenge as we’re starting at such a low base: if people aren’t dying and there are no children then that’s a positive.”⁵²

The companies that use lithium-ion batteries periodically respond to public pressure about the conditions in cobalt mines by promising to clean up their supply chains and innovate their way out of the problem. There is also a financial incentive to do so: cobalt is one of a battery’s most expensive elements.⁵³

Last year, Tesla pledged to use lithium-iron-phosphate batteries, which do not contain cobalt, in some of its electric cars. Huayou stock plummeted.⁵⁴ Still, Reuters noted, “it was not clear to what extent Tesla intends to use L.F.P. batteries,” and the company “has no plans to stop” using batteries that contain cobalt. (L.F.P. batteries aren’t used in cell phones: to achieve the required voltage, the batteries would have to be doubled up, adding unacceptable bulk and heft.)⁵⁵

Statement of the Problem

Ms Aileen Hantverk, the director of sustainability for Samsonic, a global technology company that manufactured, among other products, lithium-ion batteries for electric vehicles was reported to have listened to a podcast while commuting through Metro Detroit in which the following statement was noted “The fate of EVs and that of the DRC are effectively intertwined… Without the DRC, the projected global growth of EVs will not materialize. Likewise, without the sustainable deployment of EVs, the DRC may not realize a different trajectory as a nation.”⁵⁶

The Democratic Republic of Congo is the world’s leading producer of cobalt, a commodity of which the demand has tripled during the last decade. In 2010, cobalt from Katanga Province ensured half of the global cobalt primary production. During the last decade, 60 to 90% of this cobalt stemmed from artisanal mining. Refined cobalt applications include metallurgical superalloys and booming chemical applications such as batteries for electronic devices and electric cars.⁵⁷

During a decade of wars and political instability, while industrial production had collapsed, tens of thousands of artisanal miners started exploiting heterogenite (a cobalt ore) in the province of Katanga. They supplied foreign traders (mainly Chinese), and the smelting facilities of the state-owned GECAMINES. Despite very basic working conditions, locals and migrants from other provinces were able to make a living of digging in the relatively peaceful South-East of the country. In 2002,however,asithadtoraiseloansfrommultilateralandbilateraldonors, the transition government of DRC entered a privatization process of the huge copper, cobalt and other mineral reserves belonging to the GECAMINES. A new mining code was promulgated in order to attract investors. The establishment of major mining companies excluded artisanal miners from large tracks of land that they could previously exploit, as foreign investors wanted to secure their assets and were unwilling to be liable for artisanal activities under precarious working conditions. Forced evictions not only resulted in violent protests but also animosity with local authorities who are often known for despising mining communities because of their “immoral” reputation. Being aware of the threat that 100,000 unsatisfied miners represent for political stability – and under the pressure of international public opinion – the state and some private companies, together with civil society, have been making efforts in the last years to solve the social problems arising from artisanal mining, which were only partially successful. Although it does not currently possess the capacity to refine the major part of its production, the D.R. Congo remains an indispensable supplier of raw cobalt ore for the years to come.⁵⁸

Ominously, the DRC has a history of being exploited for its natural resources, first by the Belgian colonial regime, then mining corporations and foreign powers that were deeply involved in the First and Second Congo Wars.⁵⁹

The latter war (1998-2003) drew in multiple countries across the continent. The fighting mostly abated after a series of shaky peace accords but government forces and militia groups are still involved in ongoing insurgencies and conflicts with resource extraction fuelling militia violence and weapons purchases. Lack of governance capacity and issues of corruption and clientelism have led to difficulties implementing any meaningful mining regulations.⁶⁰

Most of the cobalt in the DRC is located in the former Katanga province (which was split into Tanganyika, Haut-Lomami, Lualaba and Haut-Katanga provinces in 2015) in the country’s far south. Katanga’s rich resource wealth has driven political events in the DRC for decades. For instance, Katangan secessionists were heavily involved in the 1961 killing of Patrice Lumumba, the Congolese independence leader and the DRC’s first prime minister.⁶¹

The region is still experiencing instability, with an ongoing separatist insurgency driven by discontent over the perceived lack of return on mineral wealth. Intercommunal violence and conflict between Mai Mai militants and government forces has displaced a quarter of a million people in Lualaba—where the largest cobalt mines are located—since July 2016. But cobalt does not only affect the southern DRC. Its significant worth and importance in the changing global political-economy could undermine institutions and security conditions across the DRC.⁶²

Like other African countries, the Democratic Republic of the Congo has a centuries-long history of colonization and exploitation by European and American powers. Pre-colonization, the region was known as the Kongo Kingdom. This was a successful agricultural mercantile civilization that arose during the early 1400s⁶³

But in the post-independence years, Democratic Republic of Congo (formerly Zaire) has utterly failed both at the political and corporate governance level to turn DRC into a UAE-like country. Its colossal failure has turned the country into a battle ground between rival superpowers. And as an African saying goes: where two elephants fight, it is the grass that would inevitably suffer. The failure of governance in DRC has turned the country into a pit of hell for the masses of the citizens. Artisanal miners and their sufferings are collateral damages for this failure of governance. In the over sixty years of its independence, DRC has only had five leaderships: Patrice Lumumba, Mobutu Sese Seko, Laurent-Desire Kabila, Joseph Kabila and Felix Tshisekedi. Both Lumumba and Laurent-Desire Kabila’s governments were short-lived and their governments were violently terminated by reactionary forces (both external and internal) that did not ostensibly want to see their faces.  

There has been no visible paradigm shift in national focus and policy attitude on the part of the Government of DRC since the early independence years especially after President Mobutu Sese Seko was overthrown in 1997 and was forced into exile where he finally died. Democratically elected Prime Minister Patrice Lumumba was hardly in power in the early 60s and was given no chance to showcase his national economic policy blueprint before he was brutally assassinated – assassination orchestrated by the US Government of that time in alliance with Belgian forces and internal forces. Lumumba was replaced by Mobutu Sese Seko who became one of the longest ruling and most brutal dictators Africa ever knew. Mobutu was eventually overthrown after a protracted civil war and Laurent-Desire Kabila emerged in May 1997. He was also hardly in power (less than five years) before he was brutally assassinated by his compromised bodyguards on January 16, 2001. His son, Joseph Kabila, in his late 20s emerged as the new leader and thus raising hopes to the high heavens among African youth about the possibility of leadership role it could play in changing the African political landscape and corporate governance.

To whom much is given either by Providence or historical circumstances, much is expected. But Joseph Kabila ended his tenure in office as a huge disappointment for been a resounding failure for the inability of his government to resolve fundamental problems of mining in the Congo upon which much of the economic development is predicated and dependent. The younger generations who have hitherto looked up to him as an inspirational figure in a continent heavily populated by tired and effete old men who cling to power by all means possible or available to them came away from his administration utterly disappointed. In the last twenty years, there is no indication that Congo can be turned into a Saudi Arabia or Qatar or UAE-like kingdom given the myopic worldview and convoluted mindset of the Congolese ruling elite. United Arab Emirates is already sending satellite into geostationary orbit where DR Congo is still mired in political conflicts and ethnic rivalries. The little revenue accrued from the mining sector has largely been squandered even when the government claims it is pursuing infrastructure development for the country.

For the Congolese leadership and political elite, it has been business-as-usual with no fundamental vision to change course for a new Congo. The laizzes-faire or layback attitude has been what has been responsible for the sordid of affairs in the Congo in which thousands of children have perished in the artisanal mines. There has been no serious attempts to correct historical injustices that have rendered Congo helpless or impotent in even carrying out minimum social reforms at the behest of its people – for instance, finding a social safety net to divert children and youth from going into artisanal mining which has often serve as their Waterloo.

The Congolese leadership has failed to bring about democratic dividends despite the so-called relative peaceful transition of power from one administration to another, for instance, from Joseph Kabila to Felix Tshisekedi. Congo is not the largest democracy in Africa neither has it even consolidated democratic rule despite being called a “Democratic Republic”.

On the economic front, there have been no turnarounds for the majority of the Congolese citizens. Congo is one of the poorest countries in the world. With the kind of natural resources with which Congo has been endowed by God or Nature, one would have expected Congo to have turned into an earthly Paradise, a proverbial replica of Garden of Eden. Tragically, Congo is akin to an amputee, hobbling along with begging bowl on the streets. Almost 40-year civil conflict stoked by petty rivalries among the various ethnic groups and political factions and sustained by global superpowers without moral consideration have contributed to rendering Congo paralyzed to the point of being unable to carry out independent reforms for the welfare of Congolese citizens. Congo has been stripped to the bones most especially by the global mining companies and other international economic assassination teams. Congo lives and survives by crumbs thrown pitifully at it.

The Congolese incapacity to refine its own minerals speaks volume and directly to the non-existence of a scientific and technical cadre serving as human capitalpool and in turn serving as knowledge resource base and force for such refineries. Again, this goes directly to the intellectual capacity of its overall educational system or facilities to produce such scientific and technical cadre. Thus the Congolese crisis is of composite nature, complex or multidimensional.

Congo has almost an unequaled rich human and natural heritage.

The Congo Basin makes up one of the most important wilderness areas left on Earth. At 500 million acres, it is larger than the state of Alaska and stands as the world’s second-largest tropical forest.⁶⁴

A mosaic of rivers, forests, savannas, swamps and flooded forests, the Congo Basin is teeming with life. Gorillas, elephants and buffalo all call the region home. The Congo Basin spans across six countries—Cameroon, Central African Republic, Democratic Republic of the Congo, Republic of the Congo, Equatorial Guinea and Gabon.⁶⁵There are approximately 10, 000 species of tropical plants in the Congo Basin and 30 percent are unique to the region. Endangered wildlife, including forest elephants, chimpanzees, bonobos, and lowland and mountain gorillas inhabit the lush forests. 400 other species of mammals, 1,000 species of birds and 700 species of fish can also be found here.⁶⁶

The Congo Basin has been inhabited by humans for more than 50,000 years and it provides food, fresh water and shelter to more than 75 million people. Nearly 150 distinct ethnic groups exist and the region’s Ba’Aka people are among the most well-known representatives of an ancient hunter-gatherer lifestyle. Their lives and well-being are linked intimately with the forest.⁶⁷The Congo Basin’s rivers, forests, savannas, and swamps teem with life. Many endangered species, including forest elephants, chimpanzees, bonobos and lowland and mountain gorillas live here.⁶⁸

Humans have inhabited the forests of the Congo Basin for tens of thousands of years. Today, the Congo Basin provides food, medicine, water, materials and shelter for over 75 million people. Among some 150 different ethnic groups, the Ba’Aka, BaKa, BaMbuti, Efe and other related groups—often referred to as Pygmies—are today’s most visible representatives of an ancient hunter-gatherer lifestyle. They possess an incredible knowledge of the forest, its animals and its medicinal plants.⁶⁹

Most people in the Congo Basin remain heavily dependent on the forest for subsistence and raw materials, as a complement to agricultural activities. As populations rise, pressure on forests continues to increase. Forest edges of the forest-savanna mosaic bear the brunt of the population density, along with the banks of the larger navigable rivers, including the Congo and Ubangi Rivers.⁷⁰

Construction of roads has greatly facilitated access to the interior of the forest, and many people have relocated close to roads. But logging, oil palm plantations, population growth and road development have strained the traditional resource management system.⁷¹

The Congo is the Earth’s second largest river by volume, draining an area of 3.7 million square kilometers (1.4 million square miles) known as the Congo Basin. Much of the basin is covered by rich tropical rainforests and swamps. Together these ecosystems make up the bulk of Central Africa’s rainforest, which at 178 million hectares (2005) is the world’s second largest rainforest.⁷²

While nine countries (Angola, Cameroon, Central African Republic, Democratic Republic of the Congo, Republic of the Congo, Burundi, Rwanda, Tanzania, Zambia) have part of their territory in the Congo Basin, conventionally six countries with extensive forest cover in the region are generally associated with the Congo rainforest: Cameroon, the Central African Republic, the Republic of Congo, the Democratic Republic of Congo (DRC), Equatorial Guinea and Gabon. (Technically most of Gabon and parts of the Republic of Congo are in the Ogooue River Basin, while a large chunk of Cameroon is in the Sanaga River Basin). Of these six countries, DRC contains the largest area of rainforest, with 107 million hectares, amounting to 60 percent of Central Africa’s lowland forest cover.⁷³

The Congo rainforest is known for its high levels of biodiversity, including more than 600 tree species and 10,000 animal species. Some of its most famous residents include forest elephants, gorillas, chimpanzees, okapi, leopards, hippos, and lions. Some of these species have a significant role in shaping the character of their forest home. For example, researchers have found that Central African forests generally have taller trees but lower density of small trees than forests in the Amazon or Borneo. The reason? Elephants, gorillas, and large herbivores keep the density of small trees very low through predation, reducing competition for large trees. But in areas where these animals have been depleted by hunting, forests tend to be shorter and denser with small trees. Therefore it shouldn’t be surprising that old-growth forests in Central Africa store huge volumes of carbon in their vegetation and tree trunks (39 billion tons, according to a 2012 study), serving as an important buffer against climate change.⁷⁴

Congo has turned none of the above natural environment into economic and social advantages. Congo, apart from the mining sector that attracts all manners of flies like honey, is mostly a no-go country for tourists because of ethnic conflicts and ecological devastations.

Countries, as well as corporate bodies and individuals, are largely defined by the choices and decisions they make over the arch of time and space. Congo has not shown any choice or decision made since independence that alter the economic balance of power in favor of the Congolese citizens. Its economic soul has been battered on the basis of lack of capacity by the political leadership to come up with pro-people or people-centered choices and decisions. Western or Northern powers including multinational companies, well-practiced in science and arts of governance including sophisticated knowledge of the fundamental weaknesses of political leadership in the developing countries, have been able to move in lock-steps with the various leaderships in the developing countries, manipulating them unscrupulously to the benefits of the advance countries and to the detriments of the developing countries.

Thus Congo, hard as this may sound, is a colossal strategic failure for not been able to serve its own citizens and also for not been able to protect the sovereignty of its own State against the ravages of foreign vampires. 

The Geostrategic Context

Oil has hitherto been the major driver of the Third Industrial Revolution upon which much of the current global economic development has been built. But the impacts of the Third Industrial Revolution on the ecosystem or in short global climate, the politics involved at all levels, the advancement in new science and technology has inevitably brought what is now known as the Fourth Industrial Revolution into being. And the world is catching and latching on to this new bandwagon of Fourth Industrial Revolution which has become inescapable for all.

Klaus Schwab, Founder and Executive Chairman, World Economic Forum, wrote as far back as early 2016 that “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.⁷⁵

The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.⁷⁶

There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.⁷⁷

The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.⁷⁸

Already, artificial intelligence is all around us, from self-driving cars and drones to virtual assistants and software that translate or invest. Impressive progress has been made in AI in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests. Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis. Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we inhabit.⁷⁹

It is partly due to the waning influence of oil and the advent of new technological revolution that have now brought about the increased pressure on the use of cobalt and other associated strategic minerals along with their specific individual advantages over other types of minerals.

Of course, cobalt has its own usage over the arch of time and space or history.

Ores containing cobalt have been used since antiquity as pigments to impart a blue colour to porcelain and glass. It was not until 1742, however, that a Swedish chemist, Georg Brandt, showed that the blue colour was due to previously unidentified metal, cobalt.⁸⁰

In 1874 the output of cobalt from European deposits was surpassed by production in New Caledonia, and Canadian ores assumed the leadership about 1905. Congo (Kinshasa) has been a dominant world producer since 1920. In the early 21st century, China was the leading producer of refined cobalt, most of which originated in Congo (Kinshasa). Other important producers included Russia, Australia, and the Philippines.⁸¹

Prior to World War I most of the world’s production of cobalt was consumed in the ceramic and glass industries. The cobalt, in the form of cobalt oxide, served as a colouring agent. Since that time, increasing amounts have been used in magnetic and high-temperature alloys and in other metallurgical applications; about 80 percent of the output is now employed in the metallic state.⁸²

Cobalt, a bluish-gray metal found in crustal rocks, has many uses in modern society. Cobalt is mined all over the world, but over half of the global Co supply comes from the Democratic Republic of Congo.⁸³

Besides batteries, the metal is used in magnetic steels, high-speed cutting tools, and in alloys used in jet turbines and gas turbine generators. For thousands of years Co was used as a pigment to get rich blue colors as well as violet and green, and is used in modern dyes and in electroplating because of its appearance, hardness, and resistance to corrosion. Co is also made radioactive for use in medicine, particularly to treat cancer and as a biological tracer.⁸⁴

Our tech revolution needs new battery technologies and various other physicochemical applications whose special characteristics require relatively rare metals like lithium (Li) and cobalt (Co) compared to iron, copper and aluminum. Cobalt provides a stability and high energy density that allows batteries to operate safely and for longer periods.⁸⁵

In the brave new energy world of the not-so-distant future, battery storage is thought to make possible boundless clean energy and convenient technologies like fully electric vehicles and multiple hand-held devices, even though batteries are not particularly cost-effective relative to larger storage methods such as pumped hydro or compressed air. But for small devices, and even automobiles, it is essential.⁸⁶

At present, the world’s energy-storage capacity is overwhelmingly dominated by pumped hydro, over 96%, followed distantly by electro-chemical (including batteries) at 1.5%, thermal also at 1.5% and electro-mechanical at only 0.8%. The pressure for new battery technologies is enormous.⁸⁷

Within the geopolitical context is the problem of strategic stockpiling in the US including China, Russia and global economic and military powers.

No country may probably be more aware than the United States as to the strategic importance of cobalt to its defense and industrial power. It is not just about cell phones, electric vehicles, solar panels, etc. United States is not also unaware of the strategic importance of Congo in terms of the abundance of cobalt and other solid minerals including crude oil. This awareness can be traced to shortly after the end of the Second World War which account for its involvement in the political life of Congo since its independence from the colonial Belgium. But over the years, for reasons that lie outside the scope of this article, United States has been negligent about its attitude regarding strategic stockpiling of certain mineral resources.

Congressional Budget Office noted as far back as September 1982 that “cobalt is a metal used in U.S. aerospace and defense industries. At present it is not produced in the United States. It has been one of the metals purchased for the strategic stockpile. Vulnerability of the United States to shortfalls in the supply of cobalt and other minerals and materials is a concern of both the Congress and the Administration. Hearings have been held before the Senate Committee on Banking, Housing, and Urban Affairs to consider subsidizing domestic cobalt production.”⁸⁸

The vulnerability of the United States to disruptions in the supply of imported materials considered essential to industrial production has been of concern to policymakers throughout the post-World War II era. Cobalt is a prime example of such a “strategic mineral.” Cobalt alloys are important to a number of U.S. industries, especially aerospace and defense, and short-run opportunities for substitution are limited. The bulk of the world’s supply of cobalt originates in central Africa (primarily Zaire and Zambia, which hold 64 percent of the world’s known cobalt reserves), a politically unstable region. At present, the United States produces no cobalt. Thus, aside from cobalt stockpiles and the recycling of used materials, the United States is completely dependent on imports. This gives rise to two kinds of vulnerability. The first is essentially military in nature: the possible need to wage a war in the absence of foreign supplies of cobalt. The second is economic: the effect on the economy of a disruption in foreign supply with an attendant sudden increase in price. The fourfold price increases during the late 1970s, and the worldwide scramble for cobalt supplies at that time, have given prominence to this second kind of vulnerability.⁸⁹

The strategic stockpile, created to provide sufficient quantities of metals and materials for essential production during war, is below its current goals for many materials. In March 1981, the Administration initiated the purchase of 5.2 million pounds of cobalt for the stockpile—the first major purchase in 20 years. Taking a different approach, the Department of Defense announced in early 1982 that it was exploring the possibility of offering subsidies to U.S. mining companies to initiate production from otherwise uneconomic domestic cobalt ores. Congressional concern about possible cutoffs of cobalt imports prompted hearings before the Senate Banking Committee in October of 1981 focused on whether U.S. dependence on imports would justify subsidization of domestic production.⁹⁰

During the late 1970s, cobalt prices rose from $5.50 per pound to $25.00 per pound; spot prices were recorded as high as $50.00; and cobalt was in short supply. The tight market resulted from a combination of factors: military conflict in Zaire, expanding industrial economies, and a change in U.S. stockpile policy.⁹¹

The price increases had significant effects on U.S. cobalt demand, precipitating searches for substitutes, improved conservation, and increased recycling from scrap. Over the 1977-1979 period, these adjustments accounted for an estimated 19 percent reduction in what would otherwise have been the demand for cobalt. The experience was, for consumers of cobalt, a vivid illustration of the potential for future cobalt price swings and supply shortfalls. Accordingly, many U.S. industry efforts to identify cobalt substitutes continue, in spite of recent price declines. As of May 1982, cobalt’s price had fallen to $12.50 per pound.⁹²

U.S. consumption of cobalt in 1980 totaled about 17 million pounds, divided among alloys for jet engines and stationary gas turbines, permanent magnets for electrical equipment, machinery, and nonmetallic applications.⁹³

Demand for cobalt is extremely difficult to forecast because of the mineral’s specialized applications. Year-to-year fluctuations in cobalt use are often dramatic. Given the high levels of activity expected in a number of industrial sectors that traditionally use cobalt, in particular aerospace and electronics, estimates of about 30 million pounds of cobalt use by 1990 appear reasonable, although the further development of cobalt substitutes could appreciably reduce this estimate. More importantly, the development of substitutes would reduce U.S. vulnerability to supply shortfalls.⁹⁴

U.S. involvement in a direct military conflict could conceivably result in a shutoff of cobalt supplies to the United States. Thus some contingency plan that will supply cobalt for defense purposes appears warranted.⁹⁵ Concentration ofthe world’s cobalt reserves in central Africa suggests that the threat of price increases and supply disruptions will continue throughout this decade.⁹⁶Significant adjustment to a supply disruption is possible. Private inventories and in-pipeline supplies would provide an initial buffer. Suppliers of cobalt unaffected by the political disturbance could also be expected to increase their output. Scrap recovery would also increase.⁹⁷

Substitution possibilities exist for a number of cobalt uses, and some have already been applied; the price rises attending a shortfall should accelerate their introduction. These adjustments and others appear to be sufficient to limit the effects of supply shortfalls largely to the payment of higher prices for cobalt and its substitutes. The financial costs of higher cobalt prices, although potentially devastating to particular cobalt users,appear inconsequential to the economy as a whole. Although severeshortfalls could generate tenfold price increases, these would amount to less than $2 billion in a $3 trillion economy, and the value of imports would be less than 5 percent of the costs of U.S. petroleum imports from OPEC countries in 1981.⁹⁸

The Strategic and Critical Materials Stockpiling Act of 1946 requires that stockpiling of cobalt be done in sufficient quantities to provide supplies necessary for military, industrial, and essential civilian needs for the fighting of a three-year war. Executive agencies have translated this directive into a stockpile goal for cobalt of 85.4 million pounds, about one-half of which has been stockpiled so far.⁹⁹

As previously noted, the costs of shortfalls to the United States are likely to be quite limited in peacetime. Nonetheless, the possibility of a cutoff of cobalt supplies in wartime justifies some contingency plan for defense purposes. The strategic stockpile, given current cobalt prices, is probably the least expensive solution. The government recently purchased cobalt at $15 per pound for the stockpile, a price significantly below the estimated $25 cost for domestically produced ores. Moreover, the protection afforded by stockpiled cobalt extends beyond the mandatory threeyears, since domestic ore bodies could be brought on-line within that timeand greatly extend the years of protection afforded by the stockpile.¹⁰⁰

Finally, the recent development of significant substitutes for cobalt suggests that the stockpile goal may be in need of reevaluation. Any reduction in the goal would reduce the cost of the stockpile. A number of alternatives to the present policy are conceivable:

• A separate “economic stockpile” that could be drawn upon to moderate cobalt price swings;
• Subsidies to induce domestic ore production;
• Increased federal funding for research and development to expand the supply of cobalt and its substitutes;
• Expanded access to public lands for the location and development of domestic ore; and
• Accelerated development of ocean mining to tap the vast stores of cobalt contained in marine manganese nodules.

Any of these alternatives would afford a certain degree of protection against supply hazards—but each would entail some cost.¹⁰¹

An economic stockpile, designed to moderate the impact of cobalt price increases to U.S. users of cobalt, would be an expensive form of protection in relation to the limited nature of the costs to the United States associated with such increases. The same would be true of subsidies for domestic ore production.¹⁰²

Increased research and development efforts could enable U.S. consumers of cobalt to substitute other metals, and also expand cobalt supply possibilities. Judgments about the appropriate level for research and development funding are always difficult to assess. In any event, it is noteworthy that substitution of other metals helped to mitigate the impact of the 1977-1979 price increases. It does not appear that cobalt’s strategic importance should be a major consideration in decisions relating to public lands or accelerated ocean mineral development.¹⁰³

Concern about U.S. reliance on foreign supplies of cobalt is part of a more far-reaching anxiety over several dozen minerals—including chromium, platinum, manganese, and bauxite—that are considered essential to U.S. production of goods and services but not produced domestically in quantities adequate to meet U.S. needs. They are termed “strategic and critical” minerals because of the precariousness of their availability and their critical rolein U.S. manufacturing. Because U.S. industry, in particular jet engine manufacturers, depends so heavily on imported cobalt, and because the world’s reserves are concentrated in a very few politically unstable nations, concern has arisen over possible disruptions in supply. Military strategists assume the worst case in which allair and shipping lanes would be blocked and no cobalt would reach American shores. There is also growing concern about nonmilitary cutoffs of cobaltsupplies by cartel actions or political upheavals in major producing nations. Many observers also see the possibility of episodic rises in the price of cobalt such as occurred in the late 1970s.¹⁰⁴

The above were the kind of thinking and policy considerations at that time. It is, however, interesting to note that throughout this 50-page document, nowhere was China mentioned – ostensibly because China has not yet emerged as both a global superpower and competitor for strategic and critical mineral resources of any known description.

But the situation has changed over the last two decades with the gradual emergence of China both as an economic and military superpower that now effectively rivaled the United States.

In 2019, the nickel-copper Eagle Mine in Michigan produced cobalt-bearing nickel concentrate. In Missouri, a company built a flotation plant and produced nickel-copper-cobalt concentrate from historic mine tailings. Most U.S. cobalt supply comprised imports and secondary (scrap) materials. Approximately six companies in the United States produced cobalt chemicals. About 46% of the cobalt consumed in the United States was used in super-alloys, mainly in aircraft gas turbine engines; 9% in cemented carbides for cutting and wear-resistant applications; 14% in various other metallic applications; and 31% in a variety of chemical applications. The total estimated value of cobalt consumed in 2019 was $400 million¹⁰⁵

Congo (Kinshasa) continued to be the world’s leading source of mined cobalt, supplying approximately 70% of world cobalt mine production. With the exception of production in Morocco and artisanally mined cobalt in Congo (Kinshasa), most cobalt is mined as a byproduct of copper or nickel. China was the world’s leading producer of refined cobalt, most of which it produced from partially refined cobalt imported from Congo (Kinshasa). China was the world’s leading consumer of cobalt, with more than 80% of its consumption being used by the rechargeable battery industry.¹⁰⁶

During the first 7 months of 2019, cobalt prices generally trended downward, which analysts attributed to oversupply and consumer destocking and deferral of purchases. In early August, a Switzerland-based producer and marketer of commodities announced that, owing to low cobalt prices, it planned to place its world-leading cobalt mine on care-and-maintenance status by year end 2019. Following the announcement, cobalt prices increased, then stabilized.¹⁰⁷

Reserves for multiple countries were revised based on industry reports.

Mine production                                         Reserves

2018                              2019

 United States                 490                       500                                55,000

Australia                         4,880                             5,100                                       1,200,000

Canada                           3,520                             3,000                                       230,000

China                             2,000                             2,000                             80,000

Congo (Kinshasa)                    104,000                100,000                         3,600,000

Cuba                              3,500                             3,500                                       500,000

Madagascar                     3,300                             3,300                                       120,000

Morocco                         2,100                             2,100                                       18,000

New Caledonia               2,100                             1,600                             —

Papua New Guinea         3,280                             3,100                                       56,000

Philippines                     4,600                             4,600                                       260,000

Russia                            6,100                             6,100                                       250,000

South Africa                   2,300                             2,400                                       50,000

Other countries               5,540                             5,700                                       570,000

 World total (rounded)    148,000                140,000                         7,000,000

Identified cobalt resources of the United States are estimated to be about 1 million tons. Most of these resources are in Minnesota, but other important occurrences are in Alaska, California, Idaho, Michigan, Missouri, Montana, Oregon, and Pennsylvania. With the exception of resources in Idaho and Missouri, any future cobalt production from these deposits would be as a byproduct of another metal. Identified world terrestrial cobalt resources are about 25 million tons. The vast majority of these resources are in sediment-hosted stratiform copper deposits in Congo (Kinshasa) and Zambia; nickel-bearing laterite deposits in Australia and nearby island countries and Cuba; and magmatic nickel-copper sulfide deposits hosted in mafic and ultramafic rocks in Australia, Canada, Russia, and the United States. More than 120 million tons of cobalt resources have been identified in manganese nodules and crusts on the floor of the Atlantic, Indian, and Pacific Oceans.¹⁰⁸

Substitutes: Depending on the application, substitution for cobalt could result in a loss in product performance or an increase in cost. The cobalt contents of lithium-ion batteries, the leading global use for cobalt, are expected to be reduced rather than eliminated; nickel contents of lithium-ion batteries will increase as cobalt contents decrease. Potential substitutes in other applications include barium or strontium ferrites, neodymium-iron-boron, or nickel-iron alloys in magnets; cerium, iron, lead, manganese, or vanadium in paints; cobalt-iron-copper or iron-copper in diamond tools; copper-iron-manganese for curing unsaturated polyester resins; iron, iron-cobalt-nickel, nickel, cermets, or ceramics in cutting and wear-resistant materials; nickel-based alloys or ceramics in jet engines; nickel in petroleum catalysts; rhodium in hydroformylation catalysts; and titanium-based alloys in prosthetics.¹⁰⁹

According to Magdalena Petrova, China now controls 70% of Congo’s mining sector while controlling well over 80% of cobalt refining industry for the electric vehicle manufacturing sector.

The price of cobalt has also historically been very volatile. Part of this volatility is because cobalt is usually produced as a byproduct of nickel and copper mining, and therefore tied to the demand and price fluctuations of those metals. The mining and refining of cobalt is also geographically limited. “The majority of the world’s battery-grade cobalt reserves are located in the Democratic Republic of Congo, where the mining of cobalt is associated with human rights abuses and child labor,” says Sam Adham, a senior powertrain research analyst at LMC Automotive.¹¹⁰

Chinese investors control about 70% of Congo’s mining sector. China also has over 80% control of the cobalt refining industry, where the raw material is turned into commercial-grade cobalt metal suitable for use in EVs. In light of the U.S.-China trade war, cobalt supply is in a precarious position for U.S. manufacturers.¹¹¹

LFP batteries have improved, leading more car manufactures to adopt the technology, which is far cheaper than batteries with cobalt. Tesla already uses LFP batteries in the Model 3 and Model Y vehicles it manufactures in China. And Tesla says it will now expand use of LFP batteries to all its entry-level Model 3 and Model Y vehicles .Ford and Volkswagen have also said that they would offer vehicles with LFP batteries.¹¹²

Like with cobalt, the supply chain of lithium iron phosphate, or LFP, batteries is dominated by Chinese companies like BYD and Contemporary Amperex Technology Limited, or CATL. In an effort to reduce U.S. dependence on foreign countries, the U.S. Department of Energy released a national blueprint in June to help guide investment to develop domestic lithium battery manufacturing and support further R&D. Among its goals, the blueprint calls for eliminating cobalt from lithium batteries by 2030. Two U.S.-based start-ups, Sparkz and Texpower, say that they can help, though the companies have yet to prove out their technologies in electric vehicles.¹¹³

The West has always been wary of Chinese dominance over the production of strategic solid mineral resources around the world especially in Africa. These strategic solid mineral resources include rare earth metals but not excluding cobalt, copper, etc.

In the November 20, 2021, New York Times’ report titled “Race to the Future: What to Know About the Frantic Quest for Cobalt”, some of the key takeaways include:

• Beijing bankrolled a buying spree of mines in Congo, locking up a key supply chain.
• As of last year, 15 of the 19 cobalt-producing mines in Congo were owned or financed by Chinese companies, according to a data analysis. The companies had received at least $12 billion in loans and other financing from state-backed institutions, and are likely to have drawn billions more.
• The five biggest Chinese mining companies in Congo that focus on cobalt and copper mining also had lines of credit from Chinese state-backed banks totaling $124 billion.
• Congolese officials accuse Chinese mining companies of cheating the country of promised revenues and improvements.
• The Congolese are reviewing past mining contracts with financial help from the American government, part of a broader anti-corruption effort. They are also examining whether Chinese promises to build roads, schools, hospitals and other infrastructure were kept.
• Separately, Chinese Molybdenum is being accused of withholding payments to the government at its Tenke Fungurume cobalt and copper mine. The company said it had done nothing wrong, and questioned if there was an organized effort to undermine it.
• The purchase by the Chinese of an American-owned mine was facilitated by a firm with Hunter Biden on the board.
• Tenke Fungurume, one of the biggest cobalt mines in the world, was controlled by an American company, Freeport McMoRan. Then it was sold in 2016 in a series of transactions worth $3.8 billion to China Molybdenum. The sale was aided by a Chinese private equity firm that bought out a minority owner in the mine. A founding board member of the private equity firm was Hunter Biden, son of the American president.
• Chinese ownership has increased the global supply of cobalt, but workers complain of safety lapses.
• Increased mining and refining of cobalt by Chinese companies has helped meet the growing demand worldwide. But at least a dozen employees or contractors at the Tenke Fungurume mine told The Times that Chinese ownership had led to a drastic decline in safety and an increase in injuries, many of which were not reported to management.
• The United States is behind in the race for minerals. As the world pivots to a future focused on electric vehicles, the United States is playing catch-up, though both Congress and the Biden administration are now making first steps. Legislation passed the House on Friday that would provide more than half-trillion dollars toward shifting the U.S. economy away from fossil fuels to renewable energy and electric cars.¹¹⁴

Nine months after the original brouhaha over China’s plans to decrease dramatically its exports of rare earths, the international community has called foul again on a closely related issue: China’s export curbs on other raw materials, such as magnesium and silicon. On July 5th, the World Trade Organization (WTO) ruled that China had violated WTO rules when it curbed its exports of these and other raw materials.¹¹⁵

Now China is worried that it will face a similar suit on rare earths. Whether it would fare better in such a case is uncertain, but unlikely. The WTO allows for export restrictions when a country is trying to conserve non-renewable natural resources, which China is clearly trying to do. The hitch is that this exception also demands similar restrictions on domestic production and consumption. China can’t offer more favorable policies to its own companies than to the rest of the world. That is going to be a high bar for China to meet.¹¹⁶

With regard to rare earths, just one day after the WTO ruling, Deputy Commerce Minister Zhong Shan has said that regulation of rare earths would proceed according to Chinese and WTO law, but he didn’t elaborate as to whether Chinese regulations would be modified if they conflicted with WTO rules. He stressed that “Improving the regulation of rare earth exports will help us to protect the environment and promote industrial restructuring, as well as allow the rare earth industry to develop in a healthy way.” Meanwhile such “regulation” is causing a dramatic jump in rare earth prices. Already in the first half of 2011, China cut its rare earth exports by 35 percent, precipitating a rapid rise in prices. For example, dysprosium, a metal used in hybrid cars and smartphones, has increased in price twelve-fold over the past year.¹¹⁷

But it is indeed an irony. DR Congo has been a dominant producer and supplier of cobalt to the world market since the 1920s ever before its independence in 1960. In the 1920s China was an extremely backward economy and also fighting political and civil wars. However, China has become the leading producer of refined cobalt most of which originated in DR Congo in the 21^st century. DR Congo has nothing to show for its production and supply of cobalt to the world market except political disputes, civil conflicts, diseases, poverty, deaths and low life in general. On the other hand, China has emerged an economic and technological superpower in the last two or three decades, lifted over 300 million of its citizens out of poverty.

The countries the US cannot bully are grudgingly forced to be respected. They are negotiated with because they are capable of causing a lot of headache or heartache to the US. North Korea, Cuba, Iran, not to talk of China are examples of those countries that fall into this category whom the US can no longer bully and kick around. It comes with a lot of sacrifices over a long period of time. There are also those countries that the US has mutual respect for even when the US had earlier pillaged and exploited them but later helped them to recover with its money such as Marshal Plan for Europe countries such as (West Germany of yore, Italyand Japan – all after the Allied victory during the Second World War. Today, Germany (in Europe) and Japan (in the Far East) formed the co-pillars of Western civilization and of world capitalism. These are countries at the zenith of their earthly development and power. They earned their respect by dint of hard work combined with thrift and occasional predatory activities against developing but helpless countries mostly in Africa. Germany is a notable example of this with its vast former colonial possessions and history of pillaging in Africa.

On the contrary, China has embarked upon the same predatory path using its money to buy up everywhere especially in African countries such as the DR Congo in this case study. But the reason for this might not be unconnected with the attitude of Western powers. The Western powers have largely disappointed African countries. The Western powers have ravaged and pillaged African continent through slavery, colonialism, and neo-colonialism. They have cruelly intervened, such as in Congo in this case study, where events were not in their favours. They have used and are still using the multilateral financial institutions they control such as International Monetary Fund and World Bank to destroy African economies. No country is exempted. But the recent interface between many African countries and China is caused by the frustration of African countries with Western powers through their various exploitative mechanisms including academic scholarship.

Why the US Lost out to China

For China, its activities aimed at seizing control of the cobalt mines in the Congo is understandable within the general context of its emergence as an economic, technological and military superpower in the last three or four decades – especially with regard to its nuclear arsenal and now its adventure in space. These activities lie within the aggressive imperative of maintaining or sustaining its status as a superpower without let or hindrance and will probably do whatever is required and capable of doing to have an uninterrupted access to those strategic mineral resources required for its superpower dominance or hegemony.

According to Sophia Kalantzakos, “the United States was initially the leader in producing and trading rare earths, and in finding ever advanced technological uses for them. The discovery of rare earths at Mountain Pass, California, in 1949, had been an important event for the US science community. Russia and the United States, the two world superpowers, were in the process of creating a balance of fear through the threat of nuclear weapons. To achieve this, however, both countries needed uranium. It was a radioactive signature associated with a mountain outcrop that led to the discovery of Mountain Pass. Prospectors thought they had “struck” uranium, and after analyzing the materials, laid claim to the deposit. The ore they had discovered was identified as flourocarbonate bastnaesite, and the radioactive material was thorium (in small amounts) with only very minor traces of uranium.2 By 1953, the mine had come to be owned by the Molybdenum Corporation of America, which had begun producing bastnaesite. It was initially designed for the separation of europium, which quickly became an important element in making color televisions. Molycorp, as it was known, also extracted lanthanum, cerium, neodymium, and praseodymium, and scientists quickly began to discover new uses for these additional materials. The Molycorp mine dominated rare-earth production and exports for the next few decades, until China began to discover the full potential of its own resources.¹¹⁸

Other exogenous factors also impacted the rare-earth market. New environmental legislation that reduced the lead content in gasoline dampened the demand for the elements in petroleum fluid-cracking catalysts, where rare earths were used extensively. The result was a sharp decline in prices. Production in the United States was cut to offset the price decline, which resulted in supply shortages and caused prices to rebound. Overall, rare-earth prices were volatile in the 1980s and 1990s. They became dependent on the type of rare-earth element that was in demand. High-purity products, such as neodymium and dysprosium, began to see price increases because there was a growing demand for neodymium iron boron magnets in which the two elements were used. The next impact on rare-earth prices was caused by China’s dynamic entry into the market.¹¹⁹

Ding Daoheng, a well-known Chinese geologist, discovered a wealth of rare-earth deposits in Bayan Obo, in inner Mongolia, in 1927. A few years later, it was confirmed that the deposits contained bastnaesite and monazite. The Chinese built a mine in the 1950s and began recovering rare earths in the process of producing iron and steel. In the 1960s, China also discovered bastnaesite deposits in Weishan County, Shandon, and in the 1980s, more basnaesite in Mianning County, Sichuan. The recovery of rare earths, especially from Bayan Obo, became a major priority for the Chinese, and they hired technical personnel to help develop and advance their methods of recovery. They invested heavily in the research and development of rare-earth technologies. Production levels increased with growing demand. Between 1978 and 1989, China averaged an increase of 40 percent annual production, thus becoming one of the world’s largest producers.8 During the 1990s, its exports grew rapidly, causing prices to plummet, a strategy that either put competing companies out of business or drove them to greatly curtail operations.¹²⁰

Bayan Obo is the world’s largest REE resource. It is estimated that the total reserve of iron in that region stands at 1.5 billion metric tons, with an average grade of 35 percent. The same deposit is estimated to include 48 million tons of rare-earth oxides, with an average grade of 6 percent. It contains close to one million tons of niobium, with an average grade of .13 percent. Considered the most valuable rare-earth production site in the world, in 2005, it accounted for 47 percent of the total rare-earth production of China, and 45 percent of that of the world. In addition, the rare earths in Bayan Obo occur primarily in monazite and bastnaesite, and contain very high REE content (6%) and extremely high LREE to HREE ratios.¹²¹

In 1990, the Chinese government declared rare earths a “protected and strategic mineral.” This was clearly a strategic move on the part of a state that had begun to understand the potential that the rare-earth industry had for China. Since then, China has sought effective ways to increase centralized control over the industry, create a higher market value for the elements, build supply chains inside China, develop technical knowhow, and attract high-tech companies using rare earths to manufacture final products inside the PRC.¹²²

From the moment China declared rare earths to be a “protected strategic material,” it meant that foreign investors could participate in rare-earth smelting and separation only as part of a joint venture with Chinese firms. Foreign investors were also prohibited from mining rare earths. Smelting and separation projects similarly required Chinese state approval. Joint ventures, moreover, needed the approval of the Chinese State Development and Planning Commission as well as that of the Ministry of Commerce.¹²³

With regard to the supply chain, China sought first to capture the magnet market—as samarium became a key ingredient for supermagnets made of samarium cobalt. Today, magnetic technology is perhaps one of the most important uses of rare earths both commercially and militarily. Permanent magnets that utilize rare earths not only provide greater magnetic power, but they also can be much smaller in size. The issue of size is critical in applications like computers. The samarium cobalt (SmCo) magnet and the neodymium-iron-boron (NdFeB) magnet are the two leading REE magnets on the market. They are particularly useful for military applications such as missile-guided systems because of their thermo-stability.¹²⁴

The neodymium-iron-boron (NdFeB) magnet was introduced in the 1980s. The story behind the NdFeB magnet is revealing of the Chinese modus operandi with respect to controlling the REE industry and an important indication that China attempted to corner the market for rare earths by design. When these magnets were created, two companies, General Motors and Hitachi, acquired patents. GM patented the “rapidly solidified” magnets, and Hitachi the “sintered” magnets. GM then proceeded to establish a company to produce the magnets for its vehicles. It was named Magnequench. In 1995, two Chinese groups joined forces with a US investment firm and attempted to acquire Magnequench. The US government approved the acquisition after a review, and the deal was allowed on condition that the Chinese agree to keep the company in the United States for at least five years. The day after the deal expired, the company shut down its US operations; employees were laid off, and the entire business was relocated to China.¹²⁵

The deal was a strategic mistake on the part of the United States, because when the business left, so did the technology. In 1998, 90 percent of the world’s magnet production was in the United States, Europe, and Japan. Within a decade, the bulk of the magnet industry had moved to China. Today, China continues to try to corner the magnet industry. Chinese producers have turned their attention to Japanese companies, which hold the majority of the rare-earth magnet patents when China is in fact the producer of nearly 90 percent of the global supply. In 2014, for example, seven Chinese rare-earth companies took Hitachi Metals to court in the United States, claiming that after its patent expired Hitachi was creating unfair market barriers preventing them from exporting independently and had violated international patent law. This is another indication that China seeks to add value to its economy in line with the “Made in China 2025” targets that the government has set in motion to comprehensively upgrade Chinese industry. The plan as it has been described by the State Council aims to raise domestic content of core components and materials to 40 percent by 2020 and 70 percent by 2025. It calls for an emphasis on green development and the use of innovation, emphasizing quality over quantity.¹²⁶

“The Strategic and Critical Materials Stockpiling Act of 1979, which continued policy from World War II, requires the stockpiling of certain strategic and critical materials to preclude, where possible, a dangerous and costly dependence by the United States on foreign sources for supplies of such materials in times of national emergency. The Defense National Stockpile Center (DNSC), a Defense Logistics Agency organization, manages the day-to-day operations of the current inventory of 88 stockpiled materials with an estimated market value of $5.3 billion. In 1997, more than 99 percent ofthe Defense National Stockpile was declared excess to the needs of DoD. The decreased need for stockpiling strategic and critical materials prompted Congress to authorize the sale of specific quantities of selected materials each year. As a National Performance Review High Impact Agency, DoD set a goal of disposing of $2.2 billion in excess stockpiled materials by the year 2000. DoD incorporated the goal into its Government Performance and Results Act plan.

“We recommend that the Director, Defense Logistics Agency, direct the Administrator, DNSC, to set annual goals for achieving a higher volume of sales for stockpiled materials with restricted or limited markets and approved Annual Materials Plans. To facilitate reductions in stockpiled materials, we recommend the establishment of comprehensive disposal plans that include aggressive sales strategies and the use of trend analyses and annual decision points, all geared to determining if disposal by other than sales is desirable. Further, we recommend that the Deputy Under Secretary ofDefense (Industrial Affairs and Installations) and the Director, Defense Logistics Agency, establish guidance on the preparation of the Report”¹²⁷

In an opinion written for Reuters, Andy Home stated that “When the going gets tough in industrial metal markets, the Chinese get stockpiling. The province of Yunnan has announced the creation of a fund to facilitate an 800,000-tonne stockpile of just about every industrial metal from aluminium to zinc. Gansu province is doing the same, with local media quoting a target of 436,000 tonnes of nonferrous metals. China’s Nonferrous Metals Industry Association (CNIA), representing the country’s top metals producers, has called for a national stockpile programme. The rush to stockpile at times of market stress is a recurring theme in the history of China’s metals sector.¹²⁸

The State Reserves Bureau (SRB) used stockpiling programmes to soak up unsold producer inventory during the global financial crisis of 2008-2009, the metals price weakness of 2012-2013 and the cyclical demand trough of 2015-2016. It’s possible it might do so again, given the impact on China’s metals producers of a COVID-19 demand shock that started in the city of Wuhan and has since spread around the rest of the world. Metal markets have seized on the latest stockpile plans as a bullish development. Although evidently born out of demand desperation, stockpiling means unsold inventory is withheld from the market and prices are stabilised. Everything, however, depends on who exactly is doing the stockpiling, and how they’re going about it.¹²⁹

Chinese metals stockpiling comes in at least three distinctly different varieties. (Ibid) The stockpile announcements just announced by Yunnan and Gansu fall into the first category, which is in essence a financial support mechanism for struggling local producers. “Right now demand is not so good, production is below cost. Smelters are not making any profit. So they don’t want to produce, and if they’re not producing they may cut jobs,” was how one Guangxi official justified a provincial stockpiling plan as long ago as March 2009. Guangxi had just announced it would buy 200,000 tonnes of aluminium and 200,000 tonnes of assorted other metals, including zinc, tin and indium, to stave off the demand shock caused by the global financial crisis.¹³⁰

Yunnan Province, then as now, got in early, announcing in December 2008 its intention to build a base metals stockpile of over one million tonnes. Not entirely surprisingly, the first tranche of metal was purchased exclusively from producers with links to the local government. Several other provinces and cities joined the rush to stockpile in 2009, each tailoring its purchases to help key local employers. Thus, Shaanxi province bought only zinc and lead, the Hunan city of Chenzhou prioritised silver and Ganzhou city went big on tungsten and rare earths.¹³¹

As in crises past, the new-crisis provincial stockpile schemes are more emergency balance sheet cleanses than long-term inventory planning. The provincial government sets aside funds – 1 billion yuan ($141.2 million) in the case of Yunnan – to provide interest rate relief on loans covering the cost of holding inventory. The loans are themselves collateralised by the metal being stored. It is what the Chinese like to call a win-win situation. Smelters’ unsold inventory is taken off their books and transferred to buyers who have to pay minimal costs to hold the metal in expectation of a brighter future. Such provincial or city stockpile schemes tend to come with a finite running-time. The latest one in Yunnan is valid only for one year.¹³²

Copper has for many years been deemed genuinely “strategic” by the Chinese government. It is a vital metal for critical infrastructure such as power grids and China doesn’t have enough of it, relying on imports of both refined metal and raw materials. Unlike its very public interventions in the aluminium and zinc sectors, the SRB has used discreet market channels to buy its copper. Tonnages and prices have never disclosed. At the same time as it was propping up China’s zinc and aluminium producers during the global financial crisis, the SRB was hoovering up copper, at least 300,000 tonnes of it in 2009 alone. Indeed, SRB purchases fed a constant copper market rumour-mill over the 2010-2015 period as the state agency accumulated its stockpile through imports and, once in 2014, by swooping on copper stocks held in China’s bonded warehouses. Exactly how much copper the SRB holds is a state secret but back in the early 2010s, when the Bureau was a leakier place, there were repeated references to a target of two million tonnes by the end of 2015. The conspicuous absence of any major SRB activity in the copper market since then, barring the occasional rumor of stocks rotations, suggests that it may well have hit that target.  The metal is locked away in what is truly a long-term strategic reserve, only to be released at a time of supply crisis.¹³³

Anthony Lowenstein, however, while writing in Foreign Policy, introduced another dimension into the situation in the Congo: the entrance of private companies into the mining sector in the Congo.

The founder of the military contractor Blackwater, Erik Prince, has a new project. He’s aiming to raise $500 million to invest in the discovery, exploitation, and delivery of resources required to produce electric car batteries. Minerals such as cobalt, lithium, and copper are mostly found in conflict zones such as the Democratic Republic of the Congo and Afghanistan.¹³⁴

Prince is just one player in the global rush to secure valuable minerals in the production of cell phones, electric car batteries, tablets, laptops, and other modern inventions, but he has the potential to deepen the instability that’s an inevitable part of the resource curse in distressed nations.¹³⁵

Speaking to CNBC, Prince said that he aimed to end cobalt’s status as a “conflict mineral” in Congo, and his plans included regular jobs and incomes for artisanal miners who toil in in horrific conditions, in “loincloth,” according to Prince. The Congolese Chamber of Mines estimated in 2015 that there may be 2 million artisanal miners in the country digging for gold, diamonds, and minerals such as cobalt. Prince told CNBC that he wanted to create an “ethical mine” so businesses invested in his project could trace the source of the cobalt and know that it was coming from a location without any abuses. Approximately 67 percent of global mined cobalt in 2017 came from Congo.¹³⁶

Corporations such as Apple, the electric car company Tesla, Volkswagen, Samsung, General Motors, and Renault have all pledged to source cobalt from mines in Congo. Corporations such as Apple, the electric car company Tesla, Volkswagen, Samsung, General Motors, and Renault have all pledged to source cobalt from mines in Congo and elsewhere that don’t use child labor, but human rights groups have challenged the feasibility of this project.¹³⁷

It’s an ambitious goal, because Congo has a long history of atrocious mining conditions, including for children as young as 6. In 2018, CNN found that it was still common in Congo to find minors toiling in cobalt mines. Despite companies such as Glencore claiming that it doesn’t use materials from informal cobalt mines, the broadcaster discovered that, “dealers at markets in the DRC were filmed buying cobalt without verifying its source and mining method. They then send it for processing where it is mixed with cobalt from other mines before ending up in batteries that power devices [such as cell phones and car batteries] around the world.”¹³⁸

Some employees of the Prince-founded private military contractor Blackwater committed war crimes against civilians in Afghanistan and Iraq after 9/11. Prince has helped provide foreign troops for the army of the United Arab Emirates (whose military is today committing some of the worst abuses in Yemen) and attempted to create a private air force for the repressive government of South Sudan.¹³⁹

The Trump administration reportedly considered establishing a private spy network, designed by Prince and convicted Iran-Contra scandal participant Oliver North, to circumvent the so-called deep state that U.S. President Donald Trump fears is out to get him. Prince is a staunch Republican Party supporter, and his sister, Betsy DeVos, is Trump’s education secretary. He’s facing scrutiny by Robert Mueller’s investigative team into questionable meetings in the Seychelles in January 2017, just before Trump’s inauguration, with the Russians and the UAE to reportedly discuss a back channel between Moscow and Washington.¹⁴⁰

Prince is currently the head of a Hong Kong-based company, Frontier Services Group, a logistics, aviation, and security company whose primary investors include the Chinese government-owned Citic Group. Frontier focuses on protecting Chinese enterprises in Africa and Asia when working in the most inhospitable places on earth. It has invested in a copper mine in Congo, won a security contract in war-torn southern Somalia, and invested in bauxite mine in Guinea.¹⁴¹

Prince told Foreign Policy in an email that his plans to source cobalt will involve using “geo science expertise and certainly look to other regions of Africa, South America and East Asia to diversify the supply base of key minerals.”¹⁴²

China is a key transit point for cobalt, because Chinese companies dominate the supply chain, placing Prince in prime position to capitalize, given his deep ties to Beijing. Many Chinese firms have also been found to buy cobalt mined by children in Congo. Prince told FP that although China already produces around 50 percent of the world’s electric cars, Frontier is not expected to participate in this initiative and instead remains focused on logistics and transportation support, not resource and mining development. Prince said that he anticipates a “geographically diverse set of investors joining us.”¹⁴³

It will be difficult for any company to ethically mine cobalt, copper, and other resources in a nation such as Congo that has a history of mass violence, corruption, and inequality fueled by its rich minerals. It will be difficult for any company to ethically mine cobalt, copper, and other resources in a nation such as Congo that has a history of mass violence, corruption, and inequality fueled by its rich minerals.¹⁴⁴

But these resources also exist in Afghanistan, where Washington already has a large and longstanding military footprint. Prince is never hesitant to advocate what most observers regard as mercenaries. Indeed, he recently suggested that withdrawing U.S. troops from Syria should be replaced by private contractors and has stated publicly that he believes in privatizing the entire conflict in Afghanistan. He argues that he can engineer victory against the Taliban with a relatively small number of contractors. He told CNBC earlier this month that China was worried the United States would “abandon” Afghanistan and terrorism would increase as a result.¹⁴⁵

Electric cars or not, the last thing a nation wracked by surging violence and corruption needs is a nascent mining industry without proper safeguards.¹⁴⁶

Prince’s record in conflict zones provides little reason to believe he has either the inclination or ability to mitigate violence in Congo or Afghanistan. Electric cars may well help the world lessen its carbon footprint, but this benefit seems negligible if thousands of the world’s poorest people will suffer to soothe the consciences of Westerners who want to go green.¹⁴⁷

With the above scenario based on the available fact, it is evident that the US has either inadvertently or willfully yielded ground to China. DRC can be reasonably argued to be now at the mercy of China.

But beyond this is the fact that global advancement in science and technology has consigned Congo as well as many developing countries to the fringe or edge of scientific and technological existence with the philosophical impaction that these countries are mere consumers but not producers or manufacturers of scientific and technological innovations. As a result of this unwholesome and lamentable situation, they can easily not only be bullied but can even be poisoned “philosophically” or “psychologically” because of the epochal failure of political leadership in these developing countries. The so-called developing countries have been trailing behind world events in economic and technological development. These developing countries have always trailed behind all industrial revolutionary cycles, from the First to the current Fourth Industrial Revolution.

From Truman to Biden

The idea of maintaining stocks of materials is not something recent. Ever since ancient times maintaining adequate supplies of important materials has been known. In the first book of the Old Testament, Genesis Chapter 41, we are told how nearly 4,000 years ago Egypt built a stockpile of food equal to two years of normal consumption. We all keep stocks or inventories of items (milk, bread, and so on) as a form of insurance for use in an emergency. Today’s National Defense Stockpile (NDS) has a long history. It is marked by numerous public laws, debates among military and civilian agencies, changing requirements, and changing political views.¹⁴⁸

In 1922 [after the First World War] the Army and Navy Munitions Board was established in the War Department to plan for industrial mobilization and procurement of munitions and supplies. The pre-World War II list of important materials was divided into two groups: 14 strategic materials essential to the national defense the supply of which in war must be based entirely or in substantial part on sources outside the United States and 15 critical materials essential to the national defense procurement of which in war would be less difficult (for example, more readily available domestically) than the strategic materials.¹⁴⁹

The first activity to develop an inventory of strategic and critical materials for military use was authorized in the Naval Appropriations Act of 1938, which also provided funds to buy strategic items. But today’s NDS had its beginning with the passage of the 1939 Strategic Materials Act, which authorized $100 million for the Secretaries of War and the Navy acting jointly with the Secretary of the Interior and in conjunction with the Army and Navy Munitions Board to purchase strategic raw materials for a stockpile. The Army and Navy Munitions Board had developed a list of 42 strategic and critical materials needed for wartime production. The list was based on the threatened loss of vital imports as a consequence of Japanese conquests in Asia and the possibility of war in Europe. By May 1940, small quantities of certain materials—such as chromite, manganese, rubber, and tin—were procured under the Strategic Materials Act. By October 1940, both the Army and Navy Munitions Board and the National Defense Advisory Commission, a Presidential advisory group, had recommended specific quantities of strategic minerals for stockpiling, many of which were the same as on the earlier list. Unfortunately, the acquisition of these materials was not completed before the beginning of the war, because only $70 million of the $100 million had been appropriated by Congress and only $54 million worth of materials had been acquired.¹⁵⁰

Throughout World War II, the United States relied mainly on its strong industrial base for processing and manufacturing to meet national defense needs. All segments of the industry were fully mobilized in a short time to manufacture the goods and products needed to win the war. To support this effort, numerous materials were imported in large quantities—such as ferroalloys, manganese, tin, and natural rubber. Several federal agencies—including the Reconstruction Finance Corporation and the War Production Board, which was formed in January 1942—were responsible for importing these materials, as well as arranging for the building up of government-owned reserves or stockpiles of strategic and critical materials. Major expansions of the domestic supply of materials were financed by the federal government, most notably the supply of aluminum and synthetic rubber. Of the 15 materials in the stockpile during World War II, only 3 were from domestic sources, while the rest were from foreign sources. Between 1942 and 1944, 6 materials in the national stockpile inventory were released for military needs, and a seventh material under contract but not yet in the stockpile was redirected, all by Executive Order of the President.¹⁵¹

By 1948 the Munitions Board had developed a list of 51 required strategic and critical material groups estimated to have a value of $2.1 billion. By 1950 the actual stockpile inventory had reached a market value of $1.6 billion, and an additional $500 million worth of materials were on order. Also by then, the number of required strategic and critical materials had expanded to 54 groups, representing 75 specific commodities, with an estimated objective value of $4.0 billion (Snyder, 1966). These requirements were identified based on the updated planning requirements for a 5-year conventional war and would also provide materials for essential civilian use. With the outbreak of the Korean War, Congress quickly appropriated $2.9 billion in a 6-month period for stockpiling of materials. Also, the value of the requirements jumped to $8.9 billion.¹⁵²

Materials were to be stored at secure locations close to points of use and transportation. Military and government depots were preferred primarily for reasons of security and economics. In January 1948, 70 military depots, 10 commercial warehouses, and 3 stand-by defense plants were being used as storage sites. By August 1953 the stockpile was stored at 318 locations consisting of 71 military depots, 9 GSA depots, 4 government-owned vaults, 6 commercial vaults, 165 commercial warehouses, 34 commercial tank-farms, 7 open-air commercial sites, 4 open-air government sites, and 18 industrial plants.¹⁵³

50 U.S. Code § 98b.National Defense Stockpile

(a)Determination of materials; quantities

Subject to subsection (c), the President shall determine from time to time (1) which materials are strategic and critical materials for the purposes of this subchapter, and (2) the quality and quantity of each such material to be acquired for the purposes of this subchapter and the form in which each such material shall be acquired and stored. Such materials when acquired, together with the other materials described in section 98c of this title, shall constitute and be collectively known as the National Defense Stockpile (hereinafter in this subchapter referred to as the “stockpile”).

(b)Guidelines for exercise of Presidential authority

The President shall make the determinations required to be made under subsection (a) on the basis of the principles stated in section 98a(c) of this title.

(c)Quantity change; notification to Congress

(1)The quantity of any material to be stockpiled under this subchapter, as in effect on September 30, 1987, may be changed only as provided in this subsection or as otherwise provided by law enacted after December 4, 1987.

(2)The President shall notify Congress in writing of any change proposed to be made in the quantity of any material to be stockpiled. The President may make the change after the end of the 45-day period beginning on the date of the notification. The President shall include a full explanation and justification for the proposed change with the notification.¹⁵⁴

On July 23, 1946, Harry S. Truman, the 33rd President of the United States: 1945 ‐ 1953, signed the Strategic and Critical Materials Stockpiling Act “because it is important to the national interest that this Government have the power to acquire stockpiles”¹⁵⁵

It is only because of the overriding importance of this purpose that I am able to overcome my reluctance to signing a bill which reaffirms the application to stockpile purchases of the provisions of Title III of the Act of March 3, 1933 (47 Stat. 1520), known as the Buy American Act. Those provisions will not only materially increase the cost of the proposed stockpiles but will tend to defeat the conservation and strategic objectives of the bill by further depleting our already inadequate underground reserves of strategic materials. Furthermore, there can be a serious conflict between those provisions and the foreign economic policy which this Government is actively pursuing. It also seems to me that the application of the Buy American Act may frequently hamper the effective achievement of the essential purpose of the legislation which is to enlarge the stock of vital raw materials available within our borders in time of possible emergency.¹⁵⁶

The Buy American Act requires that only articles produced or manufactured from materials originating in the United States shall be purchased for public use. However, the Act also provides that exceptions to this rule may be made when Buy American purchases are determined “to be inconsistent with the public interest or the cost to be unreasonable.” This provision clearly indicates that the stockpiling program should not be used as a means of generally subsidizing those domestic producers who otherwise could not compete successfully with other domestic or foreign producers. Furthermore, to ensure that the necessary stockpiles are accumulated as rapidly as deemed advisable and with a minimum cost to the public, this Act should not be used as a device to give domestic interests an advantage over foreign producers of strategic materials greater than that provided by the tariff laws.¹⁵⁷

It is the policy of this Government to work for international action to reduce trade barriers. We have proposed to other countries a set of principles governing trade, and look forward to the successful conclusion of broad international arrangements embodying the essential principles of these proposals. Pending the conclusion of such arrangements, it is the policy of this Government to avoid taking measures that will raise barriers to trade or prejudice the objectives of the forthcoming discussions. We are asking other countries to follow similar policies.¹⁵⁸

The United States is opposed to governmental policies fostering autarchy, for itself as well as for others. Encouragement of uneconomic domestic production and unjustified preferential treatment of domestic producers destroys trade and so undermines our national economic strength. A large volume of soundly based international trade is essential if we are to achieve prosperity in the United States, build a durable structure of world economy and attain our goal of world peace and security.¹⁵⁹

The Strategic Materials Advisory Council is a Washington, DC-based non-profit organization comprised of former U.S. Government leaders and industry experts with significant experience with strategic and critical materials through decades of service in the public and private sector. The Council was formed with the clear objective to promote policy solutions that ensure continued access of both U.S. industry and military to those materials needed to support a robust 21st century economy and military.

On March 21, 2013, the body cautioned the Department of Defense “to avoid the risky mitigation strategy of stockpiling strategic and critical materials from China. The Department of Defense recently completed its biannual “Strategic and Critical Materials 2013 Report on Stockpile Requirements,” which recommended stockpiling $120.43 million of heavy rare earth elements — materials produced only in China. “While it is encouraging that DoD acknowledges these risks, we urge DoD to move from theoretical studies to the only appropriate and permanent solution — the creation and nurturing of a U.S. based rare earth supply chain.”¹⁶⁰

“The root cause of these material shortages is our ongoing dependence on Chinese suppliers,” said Council Executive Director Jeff Green. “While it is encouraging that DoD acknowledges these risks, we urge DoD to move from theoretical studies to the only appropriate and permanent solution — the creation and nurturing of a U.S. based rare earth supply chain.”¹⁶¹

This rare earth stockpile recommendation represents over one-third of a $319.74 million stockpiling plan to mitigate a $1.2 billion shortfall of 23 strategic and critical materials. This encouraging recommendation contrasts dramatically with previous Department of Defense assessments that asserted domestic sources could meet all military requirements by 2013, except for yttrium, and that substitution would be a viable approach to risk mitigation for heavy rare earths.¹⁶²

Green added, “It is equally encouraging that the Department is acknowledging the increased acquisition cost and engineering challenges posed by substitution strategies. However the U.S. must not rely on research projects and substitution alone to close the current supply gap. Furthermore, it must not accept the status quo of material and technological dependence on China. Instead, it is incumbent upon the Department to engage the industrial base domestically, and from U.S. allies, to achieve sustainable heavy rare earth development for defense and essential civilian requirements.”¹⁶³

The Strategic Materials Advisory Council urges the Department of Defense and the Obama Administration to evaluate its current policies and to take meaningful action to develop a secure supply chain of rare earths and other critical materials. The Council will continue to raise awareness of these issues and work to promote effective policy for the defense industrial base.¹⁶⁴

In June 2021, it was reported that the Defense Department will need at least $1 billion over the next five years to strengthen its stockpile of critical materials. The recommendation comes from a report mandated by the White House that looked at supply chain issues at DoD, the Commerce Department, the Department of Health and Human Services and the Energy Department. The Pentagon concluded that many of its supply chains for rare earth minerals and other strategic resources are at risk. “These supply chains are at serious risk of disruption and are rife with political intervention and distortionary trade practices,” the authors of the report wrote. “Though the Department of Defense has requirements for strategic and critical materials, the civilian economy would bear the brunt of the harm from a supply disruption event.”¹⁶⁵

The report points out heavy reliance on countries like China, Russia and other adversarial powers. “The unprecedented growth of the Chinese economy has fueled global growth in strategic and critical material markets, posing a strong incentive to reorient supply chains,” the authors wrote. “Since the end of the Cold War, China’s strategic and critical materials industry has expanded many times over to meet some of China’s domestic demand. Even in cases where other countries conduct the initial beneficiation of a strategic and critical material, China dominates the processing of strategic and critical materials, giving it de facto control over the flow of material through the supply chain.”¹⁶⁶

The United States is expecting an increase in the use of some rare earth minerals like cobalt as it starts to increase its use of green energy sources. Cobalt is an important fixture in batteries. The report points out declines in U.S. production and processing operations for part of the decline in supply chain ownership. The United States’ reliance on market principles is partly to blame for its loss of supply chain dominance. “The Department of Commerce classifies China as a non-market economy, meaning China does not operate on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise,” the authors wrote. “This characterization reflects markedly different policy preferences in commercial markets, made particularly stark for strategic and critical materials. The dwindling U.S. production base for rare earth elements and rare earth-derived products illustrates these differences in policy choices and outcomes.”¹⁶⁷

Now the government may need to take a more hands-on approach to ensure it has the materials it needs for the future. Along with strengthening the stockpile, DoD said the government needs to develop public-private partnerships to requalify materials from old products. The U.S. Geological Survey and other agencies also need to develop a national strategy to reclaim strategic materials from mine waste sites. DoD said it will use the Defense Production Act to create incentives for sustainably-produced materials and scale research and development around them. Finally, the Pentagon said it will work with global allies to strengthen the governance and transparency around critical material supply chains and provide financial incentives to increase sustainability in overseas mining practices.¹⁶⁸

Therefore, it should not come as a surprise that President Joseph Biden on October 31, 2021, signed an executive order on the designation to exercise authority over national defence stockpile. “By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Strategic and Critical Materials Stock Piling Act, as amended (50 U.S.C. 98 et seq.), section 1413 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239), and section 301 of title 3, United States Code, it is hereby ordered as follows:

Section 1.Policy and Purpose.  The United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity, national security, and national competitiveness.  In Executive Order 14017 of February 24, 2021 (America’s Supply Chains), I directed a comprehensive review of America’s supply chains to ensure that they are resilient in the face of a range of risks.  One critical component of safeguarding supply chain resilience and industrial base health is ensuring that both the Federal Government and the private sector maintain adequate quantities of supplies, equipment, or raw materials on hand to create a buffer against potential shortages and import dependencies.  Some of the Federal Government’s key tools to maintain adequate quantities of supplies to guard against such shortages and dependencies are the United States national stockpiles, including the National Defense Stockpile.  By strengthening the National Defense Stockpile, the Federal Government will both ensure that it is keeping adequate quantities of goods on hand and provide a model for the private sector, while recognizing that private sector stockpiles and reserves can differ from government ones.  This order confers authority related to the release of strategic and critical materials from the National Defense Stockpile to improve Federal Government efforts around stockpiling for national defense purposes.

Sec. 2.Designation.  In accordance with section 98f of title 50, United States Code, the Under Secretary of Defense for Acquisition and Sustainment (Under Secretary) is designated to have authority to release strategic and critical materials from the National Defense Stockpile.

Sec. 3.Execution and Consultation.  In executing the authority conferred by this order, the Under Secretary may release strategic and critical materials from the National Defense Stockpile for use, sale, or other disposition only when required for use, manufacture, or production for purposes of national defense.  No release is authorized for economic or budgetary purposes.  Prior to ordering the release of strategic and critical materials from the National Defense Stockpile, the Under Secretary shall consult with the heads of relevant executive departments and agencies.

Sec. 4.Authority.  (a)  All previously issued orders, regulations, rulings, certificates, directives, and other actions relating to any function affected by this order shall remain in effect except to the extent that they are inconsistent with this order or are subsequently amended or revoked under proper authority.  Nothing in this order shall affect the validity or force of anything done under previous delegations or another assignment of authority under the Strategic and Critical Materials Stock Piling Act.

     (b)  Nothing in this order shall affect the authorities assigned under Executive Order 13603 of March 16, 2012 (National Defense Resources Preparedness).

Sec. 5.General Provisions.  (a)  Nothing in this order shall be construed to impair or otherwise affect:

(i)   the authority granted by law to an executive department or agency, or the head thereof; or

(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

     (b)  This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

     (c)  This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.¹⁶⁹

Even though there is no direct evidence of geopolitical tension in DR Congo between the two superpowers (United States and China) for now, there is, however, no doubt that geopolitical rivalry is unfolding not only over the mining sector but over the political destiny of DR Congo. Whoever wins in this covert battle will inevitably subdue the other in terms of wielding influence over the political leadership – or in the worst case scenario, drive out the other from Kinshasha.

There is increasing concern in the US political ruling circles and strategic quarters over China’s increasing aggressive ambition to corner and hoard strategic metal and minerals in its ultimate goal to dominate the global technological space or market. Biden’s recent executive order may thus be regarded as bridging the gap that has wittingly or unwittingly opened up over the years mainly through what may be justifiably regarded as lack of policy sustainability as regard strategic stockpiling. However, this latest effort at bridging the gap may not be unconnected with the enormous pressure and threats that China including Russia has come to represent in terms of their superpower status and their current strategic needs and/or ambitions to outpace the United States in strategic stockpiling.

Gecamines in the Modern Life of Congo

At the centre of the Congolese political and economic crisis is the unenviable role and status of Gecamines. Gecamines is the chief superintendent of the mining sector in the Congo with its successes and failures. And with this role it has kept dictators in power over arch of time because the dictators are able to pillage the coffer of Gecamines to their heart satisfaction.

The history of the Congolese mining sector dates back to the pre-independence era when Union Minière du Haut-Katanga (UMHK) was formed in late October 1906 which later transformed to Générale Congolaise des Minérais, or Gecomin under Mobutu Sese Seko in 1967 few years after independence from Belgium. Finally in 1971 it became known as Générale des Carrières et des Mines, or Gécamines.

On the 30 October 1906 the Union Minière du Haut-Katanga (UMHK) was founded by the Tanganyika Concessions and Société Générale de Belgique holding companies to mine mineral deposits in southern Katanga Province. The UMHK made its first copper extractions in 1911, totaling about 998 tons.  After a decline during the Great Depression, it rapidly grew to become a highly profitable corporation. Net earnings from 1950 to 1959 reached 31 billion Belgian francs. The economic situation of the Congo greatly rested upon the county’s relations with the UMHK, but the position of the government in the first few years after independence from Belgium was weak and the administration was unable to exercise much influence over the company’s activities.¹⁷⁰

Following Joseph-Désiré Mobutu’s seizure of power, the government refocused its efforts on “economic nationalism”, including the assertion of control over UMHK. In addition to maximising his government’s revenues, Mobutu hoped that by exerting authority over the company he could expand his power as president. Tensions between the government and the corporation rose after the former imposed a large tariff increase on exports. In late April 1966 the latter raised copper prices without consulting the Congolese government. Mobutu responded by increasing export taxes, ordering the retaining of 10% extracted minerals by the government as a strategic reserve, and announcing intentions to statutorily mandate the incorporation of the UMHK in the Congo by 1 January 1967.¹⁷¹

UMHK representatives began negotiating a compromise with Congolese officials. They proposed splitting the company into two separate corporations—one based in Belgium, the other in the Congo. The Congolese found the terms unacceptable and on 8 December declared that the UMHK would have to accede to the legislation requiring its incorporation in the Congo before the new year. Tensions reached a breaking point on 23 December when the UMHK announced that it would not relocate its headquarters to Kinshasa. Mobutu responded immediately, halting copper exports, seizing UMHK accounts, and establishing a provisional board to manage the mining operations. The government maintained that it was not nationalising the company; the UMHK had refused to comply with the law and thus forfeited its right operate. On 1 January 1967 the government declared that the UMHK in the Congo was from then on a parastatal to be known as Générale Congolaise des Minérais, or Gecomin. It was intended that the state would only hold 60% of the company, but after foreign investors showed no interest in the remaining shares it became entirely a government enterprise.¹⁷²

In 1971 the company’s name was changed to Générale des Carrières et des Mines, or Gécamines. (Ibid) La Générale des Carrières et des Mines (Gécamines) is a Congolese commodity trading and mining company headquartered in Lubumbashi, in the Katanga region of the Democratic Republic of Congo. It is a state-controlled corporation founded in 1966 and a successor to the Union Minière du Haut-Katanga. Gecamines is engaged in the exploration, research, exploitation and production of mineral deposits including copper and cobalt.¹⁷³

One of the largest mining companies in Africa, and the biggest in the Democratic Republic of Congo, Gécamines sits on the world’s greatest deposit of cobalt and has some of the world’s largest deposits of copper. Copper mines in which Gécamines has a major interests include, but are not limited to, Kambove, Kipushi, Kamfundwa and Kolwezi.¹⁷⁴

Located in the mineral-rich Katanga Province, Gécamines is currently going through a multi-year, multi-billion reorganization strategic development plan with the main objective of repositioning itself as one of the world’s top mining majors, mainly by focusing on core strategic assets in which the company has majority shares. Among others, Gécamines has forged partnerships and joint ventures with companies such as Anglo-Swiss Glencore International, American giant Freeport-McMoran and London-based Eurasian Natural Resources Corporation. Seeking to enhance profitability by creating lucrative competitive partnerships, in 2013 the Congolese firm appointed US businessman and American Jewish Congress President Jack Rosen on its Board of Directors.¹⁷⁵

In 2015, Gécamines signed a strategic copper and cobalt cooperation accord with Hong-Kong-listed China Non-Ferrous Metal Mining. In 2016, Gécamines and China Non-Ferrous Metal Mining signed a memorandum of understanding for the construction of two factories, one of which includes Gécamines flagship property project of Deziwa, projected to produce 200.000 tons of copper per year.¹⁷⁶

 In 1974 the global price of copper fell dramatically. As a result, Gécamines’ operations were devastated until the early 1980s. Once producing 500,000 tonnes of copper a year in its 1980s heyday, the company’s fortunes declined due to mismanagement and government interference. Nonetheless, the company remained crucial to Congolese finance. In 1989, Gécamines provided 85% of DR Congo’s export earnings (against 60% provided by the UMHK in 1960), and 42% of public revenues, making it by far the most important company in the country.¹⁷⁷

In the 1990s, Gécamines financial situation took a blow, adversely affected by several issues, including aging infrastructure and equipment, the closure of Kamoto Mine in 1990, and ethnic riots in Shaba. These led to a slump in production. The World Bank then provided funding, with stringent requirements, including a drastic reduction of staff through a policy of voluntary departures concerning 10655 agents and workers in all categories.¹⁷⁸

In 2002, after the Second Congo War, a Mining Code defining the rules of the mining sector was adopted. The mining sector in the country is liberalized and opens to foreign companies in 2003. Gécamines then presents itself as a public company in the process of being transformed into a commercial company of which the State remains the sole shareholder. At the end of the transformation process, its capital will be open to the private sector. In economic difficulty, Gécamines is placed by the World Bank, under the management contract with objective assigned to the French Company of realization and construction (SOFRECO)¹⁷⁹

In 2010, Gécamines becomes a commercial company under private law. Congolese businessman and financier Albert Yuma Mulimbi, who is also president of the Federation of Businesses of the Congo since 2014, is named chairman of the company’s board of directors, to give the company private management and restore the situation of society. It sets up a Gécamines development plan over five years to revive the company through the establishment of joint ventures with international partners, the modernization of production technologies to rebuild the industrial capacity of the company, the control of indebtedness and the reduction of the number of employees.¹⁸⁰

In 2016, Albert Yuma presented a recovery plan aimed at controlling Gécamines’ debt, limiting operating costs and modernizing the company by investing $717 million until 2020 thanks to the increase in production. On December 23, 2017, Gécamines General Manager Jacques Kamenga announced the start of construction work on two new copper and cobalt production plants in Lualaba in Kolwezi and Kambove in 2018 to achieve this goal.¹⁸¹

In March 2018, a revision of the Mining Code amended and supplemented the provisions of the former 2002 Code, which paved the way for the liberalization of the sector. This recasting of the mining law modifies the legal provisions applicable to prospecting and aims in particular to further control the international mining companies established in the Democratic Republic of Congo and to increase the Congolese State’s tax revenue in a context of rising share prices cobalt. He is supported by Gécamines and Albert Yuma, chairman of its board of directors, for whom the new code will allow for more egalitarian partnerships with other international companies.¹⁸²

In April 2018, Gécamines announces the signing of an agreement for the construction of two ore processing plants in Kambove and Lubumbashi to exploit the Deziwa copper deposit with the Chinese firm China Nonferrous Metal Mining Group (CNMC) for a total of $880 million. This partnership, based on the design, construction and operation of mineral processing plants fully financed by the partner company, foreshadows, according to Gécamines, the new type of partnership that Congolese society wishes to conclude in order to increase its production. In its first phase, the project aims to produce 80,000 tons of copper with the ambition to reach 200,000 tons in a second phase.¹⁸³

On April 20, 2018, Gécamines sued the Anglo-Swiss commodity brokerage firm Glencore, with which the Congolese company has a joint venture, the Kamoto Copper Company (KCC). Gecamines denounces the non-reconstitution of KCC’s own funds and the company’s debt to Glencore at rates higher than those it borrows. On June 12 and 13, both parties issued a press release announcing the signing of an agreement and a “new win-win partnership”. On June 25, 2018, Gécamines inaugurates a new stage in its modernization to adapt to the new standards of the international mining industry.¹⁸⁴

The company announces the adoption by its board of directors of a two-way internal transformation plan, developed with the financial audit and consulting firm EY, including the decentralization of the management of mining activities through the creation of business units, and the transformation of management, particularly through the rejuvenation of members of the management team. Gécamines is also modifying the management of its teams internally through the creation of an operational reserve to facilitate the redeployment of its teams on new projects. In parallel, Gécamines announces the continuation of the modernization of its infrastructures with the closure of its oldest sites, the modernization of the copper and cobalt production plants of Shituru and Kamfundwa, and the construction of a heap leaching plant in Panda, in the province of Haut-Katanga.¹⁸⁵

In September 2021, The General Inspectorate of Finance (IGF) opens an investigation into Gécamine. This survey, which has just been launched, covers a period from 2010 to date. According to our information, this control covers the conditions of sale or transfer of Gécamines’ mining assets for the benefit of private actors, the leasing contracts signed by the latter on its mining assets and, finally, its results over the last ten years.¹⁸⁶

Gécamines is still in possession of proven, probable, and possible ore reserves of copper (56 Mt contained metal), cobalt (4 Mt), and germanium (3.4 Mt), and zinc (6.4 Mt). With assistance from the World Bank, aided by partnerships with other firms and by proper governance in DR Congo, Gécamines hopes to become again one of the biggest players in copper and cobalt sector.¹⁸⁷

Mine sites owned by Gécamines include Kakanda/Kambove mines (copper and cobalt), jointly with the International Panorama Resources Corporation; Kamfundwa mine (copper) jointly with the Harambee Mining Corporation and Sogemin; Kamoto (copper); Katamanda (copper and cobalt); Kipushi mine (copper, gold and zinc) jointly with Ivanplats; Kolwezi mine (copper and cobalt); Kov (copper)¹⁸⁸

Since its privatization in 2010, Gécamines is a commercial company under private law organized by Société à responsabilité limitée (SARL). It is governed by a seven-member Board of Directors, a general meeting and a managing director. Gécamines’ reorganization plan adopted by the company’s Board of Directors on June 25, 2018 aims to modernize the internal organization of the mining company to “find the way to growth and profits, while preserving its values and the expression of the social responsibility which falls to him”. Elaborated with the cabinet EY, it rests in particular on the reorganization of the organization chart of the company, articulated around a decentralized management based on logic of productive units, empowered and autonomous in their day-to-day management and a progressive rejuvenation of the management team. The internal transformation plan also includes the creation of an operational reserve to improve the allocation of teams according to the needs of each site of the company to rationalize the management of human resources.¹⁸⁹

Gécamines set up educational facilities attended in 2013 by 41,670 students in 111 schools, ranging from kindergarten to general secondary and technical secondary education in long cycle (math-physics, electronics, general mechanics, commercial-information, biochemistry, auto mechanics, industrial chemistry, electricity) and short cycle (mechanical maintenance, metallurgy, mining and cutting and sewing). Gécamines’ education network is one of the largest after the official network in the Copper Province.¹⁹⁰

In February 2018, Gécamines was a minority partner of 12 joint-ventures. In the context of internal and regional conflicts and due to chronic underinvestment since 1995, Gécamines sold its main industrial and mining assets to international mining groups, resulting in a drop in production. In the spirit of the new Mining Code of the Democratic Republic of the Congo adopted in March 2018, Gécamines has announced that it wanted to conclude new and more egalitarian partnerships by increasing the State’s share and “the real and growing involvement of Congolese executives”.¹⁹¹

In February 2018, Gécamines’ president, Albert Yuma, presented the implementation of a new form of partnership, based on a farm-out contract, initiated as part of his joint venture with the firm China Nonferrous Metal Mining. Concluded for a limited time, these partnerships are based on the opening of the capital of the mining projects to an international partner in charge of the initial financing needs.¹⁹²Deziwa Mining Company SAS is a joint venture company based in Kolwezi, owned by Gécamines at 49% and the Chinese firm China Nonferrous Metal Mining (CNMC) at 51%, which aims to develop Deziwa’s copper and cobalt deposit.¹⁹³

This is the result of the merger between Gécamines and CNMC since the signing of a strategic cooperation agreement on June 23, 2015 in Lubumbashi.  On January 13, 2016, the two companies conclude an agreement for the construction of two modern metallurgical plants in Kambove and Kolwezi.  On June 8 of the same year, Albert Yuma, president of the national company, announced the creation of a joint venture to exploit the Deziwa copper deposit, whose reserves are estimated at 5 million tons of copper. In April 2018, CNMC confirms the US$880 million investment in the Deziwa Mining Company, operating the open mine and the two new metallurgical plants under construction. The project plans to reach a final production of 8,000 tonnes of cobalt and 80,000 tonnes of copper per year by 2020, before reaching the stage of 200,000 tonnes of copper in a second phase.¹⁹⁴

The history of the Congolese mining sector is squarely located within the history of colonization and exploitation of human and natural resources of the Congo by the Belgian colonial masters, one of the most brutal colonial masters in the history of humanity.

 Like other African countries, the Democratic Republic of the Congo has a centuries-long history of colonization and exploitation by European and American powers. Pre-colonization, the region was known as the Kongo Kingdom. This was a successful agricultural mercantile civilization that arose during the early 1400s.¹⁹⁵

This kingdom fostered international trade relationships with several European states, mainly Portugal, in addition to being exploited in the European and Atlantic slave trades. The situation changed in 1665 when Portuguese forces invaded the Kongo Kingdom in the Battle of Ambuila, in retaliation for the kingdom’s role in attacking Portugal’s colony in neighboring Angola.¹⁹⁶

Over two centuries later, the country would come under the control of Belgium’s King Leopold II. As part of an annexation, ironically and tragically presented to the international community as a humanitarian effort.  Leopold II took control of the Congo in 1885, establishing himself as king-sovereign of the territory. During King Leopold’s reign the invention of the pneumatic tire would increase global demand for rubber, leading to subsequent human rights violations and the culmination of what are now known as the “Congo Horrors” (Ibid) During this time, millions of Congolese were maimed, tortured, exploited, and sometimes killed if they could not keep up with the rubber quotas demanded by King Leopold II’s regime.¹⁹⁷

Rubber would come to represent 83% of exports from the colony by 1904, and remained significant until copper from the Katanga region came to dominate exports in the 1920s.¹⁹⁸

Since 1998, the DRC has seen the deadliest conflict since World War II. Armed conflict, including two civil wars, from 1998 to 2007 resulted in over 5 million deaths, according to a report by the International Rescue Committee, with conflict continuing after 2007. These conflicts were funded by the sale of 3TGs, mostly from the exploitation of artisanal miners in the DRC’s Kivu region, a mineral-rich area in northeastern Congo near the border of Rwanda. 3TG is an acronym standing for tin, tantalum, tungsten, and gold. Together, these four metals represent technologically important resources that are sourced from highly volatile regions in the DRC.¹⁹⁹

The second civil war has been referred to as the Playstation War because the coltan (the mineral containing tantalum) mined by exploited workers in the DRC was used to make the gaming console. According to reporting from the early 2000s, the delayed release of the Playstation 2 was due to a shortage of coltan, created by the second civil war and its skyrocketing effect on the price of the metal. The demand for that resource was enough to justify the purchasing of coltan from known militant groups who were committing war crimes, including genocide and rape. The militant groups then used the profits from the sale of coltan to fund their operations. Thus, the demand for coltan for use in gaming consoles and other electronics was helping to fuel one of the deadliest conflicts in recent memory.²⁰⁰

Over the following decade, technology companies were targeted by nongovernmental organizations (NGOs) for fueling ethnic cleansing, rape, and other atrocities by using products made from minerals that financed conflict in the DRC. These minerals would come to be known as conflict minerals. The United States Congress attempted to intervene in the bankrolling of armed militias in the DRC by passing legislation in 2010 that would ban the use and sale of any minerals that were financing conflict in the DRC. This legislation was part of the Dodd-Frank Act.²⁰¹

Gecamines is at the centre of Congolese economic life. It is its life-wire. In a binary manner, Gecamines has been the cause and effect of the fortune and misfortune of Congolese economy. But Gecamines has been at the mercy of the Congolese ruling elite including the top-echelon bureaucrats within Gecamines itself. Its coffers have been pillaged to the heart’s content of the various ruling cliques including their foreign collaborators. It is intertwined with the political intrigues of the ruling elite from one dictatorship to another from the colonial to post-colonial times.

President Felix Tshisekedi including the Gecamines boss, Albert Yuma Mulimbi, have declared publicly that their greatest ambition is to turn Congo into the greatest or largest supplier of cobalt and/or other minerals in the global market – most probably with the intention of maximizing its multiplier effects – through the reframing of the legal instruments and reorganization of the institutional framework mainly Gecamines itself. That would be their greatest glory, their greatest political and economic achievement – without realizing how degrading this could be by making and proclaiming itself as the peripheral supplier of raw materials to the metropolitan centres of global manufacture and advanced technologies. That Congo has the largest deposit of cobalt in the world is incontrovertible. But rather than being the largest supplier, Congo should aim at turning itself into a manufacturing hub for all the conglomerates that buy cobalt and other minerals and export them to their countries of origin for manufacture into finished products of batteries powering phones, laptops, solar panels, electric vehicles, etc. Or it should aim at becoming an assembly hub for these conglomerates. It is a half-way measure to aim at becoming the largest supplier of cobalt in the world. It is self-deprecating.

This disarticulation of mentality by the top-echelon commanders of the Congo political life is not peculiar to Congo alone. It is a microcosm of the larger macrocosm of African political problematique viz: the tragic inability to see beyond the immediate hill-top, to see far into the future, an ability requiring foresight and impregnable capacity to sustain such a long-range vision. While it is desirable to set a vision for oneself based on his/her political conviction, it is equally perhaps more important to be able to embrace a cosmic overview of the long-range requirement of the Nation-State. While Africa has proverbially gained “independence” from the former colonial masters, she has not been able to liberate herself from mental stultification or poisoning of the same colonial masters but who have now transformed themselves into neo-imperialists with their suitcase of devastating policy intrigues. The independence in thought or freedom of thought and will is still largely lacking in African political leadership. That is the focal point of the epochal strategic failure of African political leadership.

Moving State Money into Private PocketsWithout Conscience

The above failure is no less demonstrated than in the Congo.

Joseph Kabila became DRC President in January 2001 after the assassination of his father, Laurent-Desire Kabila. For eighteen years, Kabila ruled DR Congo without any visible fundamental change in the production relations that have always generated poverty since the independence years despite the super abundance of natural and human resources that could have been harnessed and deployed to catapult Congo into a middle-income earning country if not a wholly developed economy. Kabila squandered the opportunity of almost two decades on the altar of greed, lack of focus and socioeconomic blueprint. Congolese economy did not improve throughout his tenure of office.

Joseph Kabila has been directly or indirectly accused of abuse of office and financial malpractices. Allegations of corruption have always trailed his footsteps while in and out of power alongside other key institutions of State.

For instance, in 2017, Global Witness, an international financial watchdog, leveled an accusation of financial impropriety against Gecamines, the main institution of Congolese State responsible for managing the mining sector. It accused Gecamines, in a Press Release dated July 21, 2017, of failing to remit whooping sum of $750 million to the State treasury. This was at a time when Kabila administration was in its twilight years.

A toxic combination of corruption and mismanagement in Democratic Republic of Congo’s revenues agencies and state mining companies is leaching a fifth of all mining revenues away from the state budget, Global Witness reveals today. Its report ‘Regime Cash Machine’ shows that at least $750 million went missing over three years – money that should have been used on vital public services for the Congolese people.²⁰²

The findings come at a time of great political unrest in Congo as the embattled President Joseph Kabila clings to power. “Congo’s mining revenues should be helping to lift its people out of poverty, but instead huge sums are being siphoned away from the public purse and into unaccountable agencies headed up by people with ties to political elites,” said Pete Jones, Global Witness Senior Campaigner.²⁰³

Congo is Africa’s top copper producer and the world’s biggest supplier of cobalt, which is used in the lithium-ion batteries that power electric cars and in the midst of a price boom. Despite this, Congo remains one of the poorest countries on the planet. ‘Regime Cash Machine’ analyses the latest data from the Extractive Industries Transparency Initiative (EITI), which reveals that between 2013 and 2015 over $750 million of payments by mining companies to Congo’s tax agencies and state mining companies never reached the national treasury. That figure rises to an astonishing $1.3 billion when other state bodies and a now-defunct provincial tax body are included. “Some of the transactions we’ve looked at paint a picture of these agencies as a cash machine for Kabila’s regime”, said Jones. “If Congo is to avoid backsliding into conflict and chaos, real transparency and accountability is needed throughout the mining sector and in the tax agencies,” Jones said.²⁰⁴

The findings come as Congo slips further into political uncertainty. The country is wracked by on-going political violence and unrest, following Kabila’s refusal to step down from power despite a constitutional directive. A key cause of discontent with the regime is the chronic lack of funding by the government in basic services such as schools, hospitals and roads. “For years Global Witness and others have documented how revenues have leaked from Congo’s mining sector into offshore shell companies. Now we can see that even revenues paid to government bodies in Congo are going missing before they reach the treasury,” Jones added.²⁰⁵

A key culprit in this diversion of funds is the main state-owned mining company, Gécamines. It receives more than a hundred million dollars annually from private companies in Congo’s mining sector, but appears to pass on just a tiny percentage of that to the state coffers. Gécamines’ most important and lucrative business relationships are with major international mining companies, which often have Western investors and pensions tied up in their profits and risks.²⁰⁶

While its contributions to Congo’s public purse are small, Gécamines found enough money to pay off huge loans from Dan Gertler, a close friend of President Kabila. One of Gertler’s companies was repaid at the same time as Gécamines’ staff went unpaid and older loans remained outstanding. Congo’s tax agencies are also to blame. Current law allows them to hold back a percentage of the fines they levy, which has led to predatory rent-seeking behaviour and fabricated fines as they seek to inflate how much they can keep as their own funds. All of this amounts to a form of legalised corruption.²⁰⁷

The Congolese constitution states that every Congolese person has the right to enjoy the benefits of the country’s national wealth, and that the state has a duty to redistribute that wealth equitably and guarantee the right to development. To the vast majority of Congolese, those are empty words. Years of mismanagement and corruption within Gécamines, combined with a fragmented tax system, mean that the system is open to abuse by political elites seeking to extract cash from the mining sector.“The only way to put an end to the siphoning off of these vital funds is to reorganise the fragmented tax system and to insist on full transparency from Gécamines. We need to know how much it earns, how much it pays to the treasury, and what it spends its money on,” said Jones.²⁰⁸

The [Global Witness] report has sparked a wide debate within Congo, including a rare public response from state-owned mining company Gécamines. Commentary has focused on the $750 million figure, and on the legal framework that allows certain state bodies in Congo to hold onto significant portions of taxes and other payments. The widespread discussion of these issues prompted by the report is welcome, although in some cases the focus on the total figure of missing money means other key findings of the report have been missed.²⁰⁹

The crucial point raised in the report, and one which has been absent from some of the debate, is that an opaque and complex revenue management system means that the Congolese people, who should be benefitting from the mining revenues, are missing out.²¹⁰

Painstaking analysis of over 600 pages of EITI reports containing raw data on mining payments led to the headline figure of $750 million. Throughout its investigation Global Witness was in regular contact with EITI to ensure we were reading the reports correctly. Following the report release we continue to be involved in dialogue with EITI. We hope that by drawing on EITI’s official data, the report will allow Congolese and international civil society to push for greater transparency in the management of Congo’s natural resource wealth.²¹¹

Global Witness recognises in its report that under the current system tax agencies and Gécamines have a legal right to hold onto certain funds. We refer to it as a form of ‘legalised corruption’, open to abuse by politically-connected heads of these government bodies, and say the system should change. ‘Regime Cash Machine’ does not say that the retention of funds by the state companies and tax agencies is necessarily illegal. Instead, we show that the opaque management of these funds means there is a high risk of embezzlement.²¹²

The important question is what the agencies actually do with the taxes and royalty payments from private mining companies that they gather and hold on behalf of the Congolese people. Gécamines’ official statutes sets out the ways it should pass on money for its sole shareholder, the Congolese state. In the absence of Gécamines’ financial reports, Regime Cash Machine went to great lengths on the basis of leaked documents, interviews and public statements to understand what was happening inside the company. What we found is hundreds of millions of dollars coming into the state-owned company every year but very little being paid to the government. Its mineral production has decreased despite vaunted investment, and the company prioritised the repayment of a debt to a friend of Congo’s President over unpaid wages and pensions.²¹³

Gécamines and the tax agencies are currently frustrating transparency in Congo’s mining sector. Global Witness echoes the call from Congolese civil society for a renewed debate on how to put an end to the opacity in the management of mining revenues and to support real reform.²¹⁴

Gécamines should publish its audited, financial accounts and be held accountable by the government ministry that oversees it. Keeping the financial accounts of a state-owned company secret does nothing to improve transparency or accountability. There should be an investigation by the Congolese parliament into the finances and operations of the tax agencies.²¹⁵

To worsen it all, even two years after leaving office, Kabila is still under pressure to come to defend himself against sundry accusations of all sort of infamies especially of massive corruption along with his acolytes – for having swindled Congo of about $138 million. Kabila has not been able to discharge this albatross of accusations against him. Kabila did not leave any worthy legacy except the successful transfer of power to the next administration of Felix Tshesikedi.

A judicial investigation targeting former Democratic Republic of Congo President Joseph Kabila and his cronies has been opened in Kinshasa after revelations of alleged embezzlement of $138 million, a judicial source said Wednesday. In an investigation entitled “Congo Hold-up”, conducted by international media and NGOs, which began publication on Friday, Mr. Kabila and his family are accused of having “siphoned” at least $138 million from state coffers. These alleged embezzlements took place from 2013 to 2018, according to the authors of this investigation, which is causing a stir in the DRC.²¹⁶

Questioned by the press, government spokesman Patrick Muyaya said Monday that “the Minister of Justice wrote to the prosecutor’s office on November 20 (…), she gave an injunction for the purposes of investigation and prosecution.” “We cannot, as a government, remain insensitive to such allegations,” said Muyaya, who is also Minister of Communication. A source in the prosecutor’s office told AFP on condition of anonymity that “a judicial inquiry has been opened” by the prosecutor’s office at the Court of Cassation, following a request by the Minister of Justice.²¹⁷

According to the “Congo Hold-up” investigation, the 138 million dollars were embezzled “with the complicity of the BGFI RDC bank” (subsidiary in the DRC of the BGFIBank banking group based in Gabon), in which people close to Mr. Kabila had interests and responsibilities, “in particular through a shell company set up in a garage. According to its authors, this investigation is based on 3.5 million confidential banking documents, obtained by the French online investigative media Mediapart and the NGO “Platform for the Protection of whistleblowers in Africa (PPLAAF). These data were analyzed for six months by 19 international media and five NGOs, coordinated by the European Investigative Collaborations (EIC) network.²¹⁸

In a statement, the communication service of former President Kabila described the findings of this investigation as “Kabilabashing” and “an attempt to discredit” the former head of state.²¹⁹

According to BBC Africa Eye, companies owned by family and friends of former Democratic Republic of Congo President Joseph Kabila had millions of dollars of public funds funnelled through their bank accounts, according to Africa’s biggest data leak. The money was transferred to the companies’ accounts at the Congolese arm of the BGFI bank. Millions of dollars in cash were then taken out of the accounts.²²⁰

The leak included more than three million documents and information on millions of transactions from the BGFI (Banque Gabonaise et Française Internationale) bank, which works in several African countries and France. Online French investigative journal Mediapart and the NGO Platform to Protect Whistleblowers in Africa (PPLAAF) obtained the information. BBC Africa Eye had access to the evidence, as part of a consortium called Congo Hold-up, coordinated by the media network European Investigative Collaborations (EIC). The investigation raises questions about who benefitted from the money transfers and possible conflicts of interests.²²¹

The managing director of BGFI’s DR Congo subsidiary, BGFI Banque RDC, from 2012 to 2018 was Francis Selemani, Joseph Kabila’s foster-brother. Mr. Kabila’s sister, Gloria Mteyu, owned 40% of BGFI’s DR Congo operation, which was set up in 2010. One privately owned company, Sud Oil, was shown to have received nearly $86m in public funds from November 2013 to August 2017. These include at least $46m from the DR Congo banking regulator, BCC, $15m from the state mining company Gécamines, and $1.3m from the country’s electoral body, Ceni.²²²

Mr. Selemani’s wife, Aneth Lutale, owned 80% of Sud Oil and Mrs. Mteyu owned the remaining 20% from 2013 to 2018. Millions of dollars were transferred out of Sud Oil’s BGFI accounts to other private companies’ BGFI accounts. Some of these were owned by relatives or business associates of Mr. Kabila, who was president from 2001-2019. One of these companies, Kwanza Capital, was majority owned by Congolese businessman Pascal Kinduelo, with Sud Oil taking a minority stake. Mr. Kinduelo was chair of BGFI Bank RDC at the time. Mr. Kinduelo was also a former owner of Sud Oil, before transferring ownership.²²³

The investigation found the bank allowed many high-value cash withdrawals from Sud Oil accounts, including one for $6 million. By law a maximum of $10,000 is allowed to be withdrawn in cash per day. This limit can only be breached for specific, documented purposes, such as national emergency or defence reasons. BBC Africa Eye found no evidence in the leak that correct procedures were followed in these instances. These cash withdrawals from Sud Oil accounts totalled at least $50 million covering a four-year period. Once the money was withdrawn, it is believed to have become untraceable.²²⁴

However, BBC claimed that the only information it found from the leak concerning these payments was an invoice for just over $1m from Ceni to Sud Oil for petroleum products. The BBC found no evidence Sud Oil was trading in petroleum products at the time.²²⁵ Our investigation was only able to establish that Sud Oil, for the period 2013 to 2018, had one employee, managing director David Ezekiel, and a small office in the capital Kinshasa as its address. In October 2013 Sud Oil purchased a real estate complex in the capital for $12m, basing the company there. It also had a contract with BGFI Banque RDC to provide new vehicles to several of its senior management, including Mr. Selemani. It charged $70,000 to provide his four-wheel drive car.²²⁶

BBC Africa Eye found no evidence of any other business activities. The investigation had access to an internal BGFI audit, completed in July 2018, heavily criticising the bank’s DR Congo operation. The audit was never meant to be made public. It gave a score of “very high risk” for the DR Congo subsidiary. It also referenced a lack of integrity and transparency in the declaration of conflicts of interest and compliance in its operations with clients.²²⁷

The audit named Mr. Selemani as having at least 16 declared conflicts of interest, including links to private companies holding accounts at the bank. It also highlighted several high-value transactions by Sud Oil. Two weeks after the report was complete, Mr. Selemani was moved to a new role at BGFI’s head office in Gabon. He reportedly received $1.4m on leaving BGFI Banque RDC. He is reported to have left BGFI in November 2018. Sud Oil changed ownership in 2018 and Kwanza Capital was closed down the same year. Mrs Mteyu is understood to have given up her 40% stake in BGFI Banque RDC.²²⁸

Although President Joseph Kabila’s final term as head of the Democratic Republic of Congo (DRC) was set to end in December 2016, he clung to power and delayed elections for another two years. While the eyes of many observers were fixed on the election stalling tactics in Kinshasa, Kabila’s brother Francis Selemani purchased numerous luxury homes in the United States and South Africa, it appears at least in part using funds diverted from the Congolese government. At the time, Selemani was managing director of BGFIBank DRC, the Congolese subsidiary of Gabon-based BGFIBank Group. Selemani and the Kabila family used a network of companies and the bank they controlled to misappropriate public funds, transferring millions abroad and purchasing millions of dollars in foreign real estate. They moved substantial sums through BGFIBank DRC with little to no resistance. Among the most problematic transactions, according to an internal audit at BGFIBank DRC, were multimillion-dollar transfers involving an obscure company called Sud Oil.²²⁹

Millions of leaked bank records obtained by the Platform to Protect Whistleblowers in Africa (PPLAAF) and Mediapart and shared with The Sentry by PPLAAF and the European Investigative Collaborations (EIC) network reveal that between 2015 and 2018, Sud Oil sent more than $12 million to accounts and companies owned or controlled by Selemani. Investigations by The Sentry, Congo Research Group, and other members of the Congo Hold-up consortium, the international group of non-profit organizations and media outlets collaboratively investigating the leak, show that Sud Oil received at least $85 million in funds from a range of Congolese Government institutions, including the Central Bank of Congo, the DRC’s permanent mission to the United Nations in New York, the Congolese state-owned mining company Gécamines, and the country’s electoral commission. At the same time that the $12 million was transiting accounts held by Selemani and companies linked to him and his wife, Selemani purchased 17 properties for a total of $6.6 million in the affluent suburbs of Washington, DC, and Johannesburg, South Africa.²³⁰

The Sentry identified a range of irregularities, misrepresentations, and inconsistencies in transactions connected to bank accounts held by Selemani and his companies that are red flags for money laundering and other financial crimes. Funds received from public institutions lacked justification, and the sources of funding for some transfers were misrepresented. Selemani used corporate vehicles that obscured his identity as the owner of all but one of the 17 real estate purchases discovered by The Sentry. Selemani had originally purchased nine properties in his own name, but he then transferred ownership to a commercial company and to trusts he controlled, including by selling them to his own company, in a series of operations that is a red flag for money laundering through real estate.²³¹

The Sentry recommends that

• Open an investigation into these real estate purchases. Authorities in the United States and South Africa should investigate the source of funds used by Selemani and his relatives to buy properties in their respective countries. If appropriate, they should pursue legal mechanisms to forfeit and seize properties purchased with the proceeds of corruption or other illicit means.
• Conduct a thorough internal investigation. Any financial institution that has engaged in a correspondent banking relationship with BGFIBank DRC or processed transactions involving the bank should conduct a thorough internal investigation to ascertain whether it has participated in violations of law or contravened internal policies. The investigation should include a review of the financial institution’s internal controls around anti-money laundering (AML) and anti-corruption compliance. Appropriate remedial action should be implemented immediately.
• Ensure that the US and South African real estate sectors comply with Financial Action Task Force (FATF) customer due diligence standards. The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) should require real estate agents and other professionals involved in real estate transactions, such as lawyers, to maintain AML programs, file suspicious activity reports, and comply with other record-keeping and reporting requirements, including the identification of beneficial ownership information and source of funds. South Africa’s Financial Intelligence Centre (FIC) should vigorously enforce the 2017 additions to the Financial Intelligence Centre Act (FICA) that put these requirements in place. FinCEN and the FIC should provide training and testing to ensure compliance with established standards.
• Issue a public advisory on the money laundering risks in real estate. FinCEN should issue an updated public advisory to US financial institutions warning of the risks for money laundering through real estate, including the involvement of family members of politically exposed persons (PEPs) highlighted in this report. FinCEN should also expand and make permanent the geographic targeting order (GTO) program to cover all real estate purchases, regardless of location in the US.²³²

While this article does not indict Joseph Kabila and/or his administration, it stands reasonable to suggest that given the preponderance of evidences that have emerged so far that Joseph Kabila and/or his accused loyalists have a case to answer if only to clear their names of any criminal act involving diversion of huge sums of money over arch of time and space through unauthorized channels and without following due process of law laid down for movement of such huge sums of money from one entity to another with the recommendation that anybody found guilty through the judicial panel of investigation should be made to face the full wrath of the law and ultimately banned from holding public office for the rest of his or her life to serve as deterrence to other would-be offenders.

Meanwhile The Sentry investigations revealed that two North Korean businessmen who evaded international sanctions in the Democratic Republic of Congo won more government contracts than previously understood, according to new information reviewed by The Sentry. Their company, Congo Aconde, had wider access to US dollars through a local bank as they undertook public works projects in at least three provinces in the DRC. The findings also suggest the pair had closer connections to Pyongyang than first thought. In addition, the two men likely worked in the DRC on behalf of a little-known North Korean government design firm, Korea Paekho Trading Corporation.²³⁴

These revelations, as well as indications that Korea Paekho Trading Corporation affiliates have operated throughout West and Central Africa, raise significant questions about the enforcement of sanctions on North Korea. In particular, they demonstrate how North Korean actors exploit weak institutional controls and jurisdictions with high levels of corruption, a model other sanctions busters have followed. In the case of the DRC, due diligence shortfalls across private and public institutions may create systemic risk for an economy that relies heavily on access to US dollars through relationships with international banks.²³⁵

In order to ensure the effectiveness of institutions at the front line of sanctions enforcement in the DRC and beyond, governments, multilateral bodies, and global banks must provide relevant assistance while also acting against the type of opportunism outlined in this report. In particular, the United States, the Financial Action Task Force (FATF), and global banks should help the Congolese government and local banks improve their ability to tackle illicit finance, in addition to providing support more widely on the African continent.²³⁶

In another double-down on the Congolese mining sector with particular focus on Gecamines and its chief, Albert Yuma Mulimbi, the New York Times in an apparent media-cum-ideological campaign to help wrestle Congo mining sector from the Dragon grip of the Chinese, revealed in its new report of how Gecamines has been literally held hostage by Albert Yuma Mulimbi,  “a longtime power broker in the Democratic Republic of Congo and chairman of a government agency that works with international mining companies to tap the nation’s copper and cobalt reserves, used in the fight against global warming.”²³⁷

Mr. Yuma’s professed goal, according to the report, is to turn Congo into a reliable supplier of cobalt, a critical metal in electric vehicles, and shed its anything-goes reputation for tolerating an underworld where children are put to work and unskilled and ill-equipped diggers of all ages get injured or killed. “We have to reorganize the country and take control of the mining sector,” said Mr. Yuma, who had pulled up to the Kasulo site in a fleet of SUVs carrying a high-level delegation to observe the challenges there.²³⁸

But to many in Congo and the United States, Mr. Yuma himself is a problem. As chairman of Gécamines, Congo’s state-owned mining enterprise, he has been accused of helping to divert billions of dollars in revenues, according to confidential State Department legal filings reviewed by The New York Times and interviews with a dozen current and former officials in both countries. Top State Department officials have tried to force him out of the mining agency and pushed for him to be put on a sanctions list, arguing he has for years abused his position to enrich friends, family members and political allies.²³⁹

Mr. Yuma denies any wrongdoing and is waging an elaborate lobbying and legal campaign to clear his name in Washington and Congo’s capital of Kinshasa, all while pushing ahead with his plans to overhaul cobalt mining. Effectively operating his own foreign policy apparatus, Mr. Yuma has hired a roster of well-connected lobbyists, wired an undisclosed $1.5 million to a former White House official, offered the United States purported intelligence about Russia and critical minerals and made a visit to Trump Tower in New York, according to interviews and confidential documents.²⁴⁰

Mr. Yuma met with Donald Trump Jr. there in 2018, in a session the mining executive described as a quick meet-and-greet. Despite such high-level access during the Trump administration, he was barred just two months later from entering the United States.²⁴¹

His grip on the mining industry has complicated Congo’s effort to attract new Western investors and secure its place in the clean energy revolution, which it is already helping to fuel with its vast wealth of minerals and metals like cobalt. Batteries containing cobalt reduce overheating in electric cars and extend their range, but the metal has become known as “the blood diamond of batteries” because of its high price and the perilous conditions in Congo, the largest producer of cobalt in the world. As a result, carmakers concerned about consumer blowback are rapidly moving to find alternatives to the element in electric vehicles, and they are increasingly looking to other nations with smaller reserves as possible suppliers.²⁴²

There is a chance that Congo’s role in the emerging economy could be diminished if it fails to confront human-rights issues in its mines. And even if Mr. Yuma works to resolve those problems, as he has pledged to do, it still may not be enough for new American investors who want to be assured the country has taken steps to curb a history of mining-industry corruption.²⁴³

Congo’s president, Felix Tshisekedi, has tried to sideline Mr. Yuma by stacking Gécamines with his own appointees, but he has been unwilling to cross him further. During an interview at his hillside palace in Kinshasa, Mr. Tshisekedi said he had his own strategy for fixing the country’s dangerous mining conditions. “It is not going to be up to Mr. Yuma,” he said. “It will be the government that will decide.”²⁴⁴

The standoff between Mr. Yuma and the president echoes power struggles that have torn apart African countries rich with natural resources in the past. How this one plays out has implications that reach far beyond the continent, as the global battle against climate change calls for a stepped-up transition from gasoline-burning vehicles to battery-powered ones. For Congo, the question boils down to this: Will Mr. Yuma help the country ride the global green wave into an era of new prosperity, or will he help condemn it to more strife and turmoil?²⁴⁵

Officials in Congo have begun taking corrective steps, including creating a subsidiary of Gécamines to try to curtail the haphazard methods used by the miners, improve safety and stop child labor, which is already illegal. Under the plan, miners at sites like Kasulo will soon be issued hard hats and boots, tunneling will be forbidden and pit depths will be regulated to prevent collapses. Workers will also be paid more uniformly and electronically, rather than in cash, to prevent fraud.²⁴⁶

As chairman of the board of directors, Mr. Yuma is at the center of these reforms. That leaves Western investors and mining companies that are already in Congo little choice but to work with him as the growing demand for cobalt makes the small-scale mines — which account for as much as 30 percent of the country’s output — all the more essential.²⁴⁷

Once the cobalt is mined, a new agency will buy it from the miners and standardize pricing for diggers, ensuring the government can tax the sales. Mr. Yuma envisions a new fund to offer workers financial help if cobalt prices decline. Right now, diggers often sell the cobalt at a mile-long stretch of tin shacks where the sound of sledgehammers smashing rocks drowns out all other noise. There, international traders crudely assess the metal’s purity before buying it, and miners complain of being cheated.²⁴⁸

Seeking solutions for the artisanal mining problem is a better approach than simply turning away from Congo, argues the International Energy Agency, because that would create even more hardships for impoverished miners and their families. But activists point out that Mr. Yuma’s plans, beyond spending money on new buildings, have yet to really get underway, or to substantially improve conditions for miners. And many senior government officials in both Congo and the United States question if Mr. Yuma is the right leader for the task — openly wondering if his efforts are mainly designed to enhance his reputation and further monetize the cobalt trade while doing little to curb the child labor and work hazards.²⁴⁹

Mr. Yuma is one of Congo’s richest businessmen. He secured a prime swath of riverside real estate in Kinshasa where his family set up a textile business that holds a contract to make the nation’s military uniforms. A perpetual flashy presence, he is known for his extravagance. People still talk about his daughter’s 2019 wedding, which had the aura of a Las Vegas show, with dancers wearing light-up costumes and large white giraffe statues as table centerpieces. He has served on the board of Congo’s central bank and was re-elected this year as president of the country’s powerful trade association, the equivalent of the U.S. Chamber of Commerce. The huge mining agency where he is chairman was nationalized and renamed under President Mobutu Sese Seko after Congo gained independence from Belgium in 1960. Gécamines once had a monopoly on copper and cobalt mining and, by the 1980s, was among the top copper producers in the world. Jobs there offered a good salary, health care and schooling for employees’ families.²⁵⁰

But Mobutu, who ruled for 32 years, raided its funds to support himself and his cronies, a pattern followed by his successors, according to anti-corruption groups. By the 1990s, production from Gécamines had declined dramatically. Money wasn’t reinvested into operations, and the agency amassed debt of more than $1 billion. Eventually, half of its work force was laid off. To survive, Gécamines was restructured, turning to joint ventures with private, mostly foreign, investors in which the agency had a minority stake.²⁵¹

Mr. Yuma took over in 2010, promising to return Gécamines to its former glory. But instead, according to anti-corruption groups, mining revenues soon disappeared. The Carter Center, a nonprofit, estimated that between 2011 and 2014 alone some $750 million vanished from Gécamines’ coffers, placing the blame in part on Mr. Yuma.²⁵²

The winners of Gécamines’ partnership deals under Mr. Yuma included Dan Gertler, a billionaire diamond dealer from Israel. Mr. Gertler was later put under U.S. sanctions for “hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals,” according to the Treasury Department. A confidential investigative report that was submitted to the State Department and Treasury and obtained by The Times accuses Mr. Yuma of nepotism, holding stakes in textile and food-importing businesses that got funding from a government agency he helped oversee, and steering work to a mining contractor in which he was alleged to have shares.²⁵³

American authorities also believed that Mr. Yuma was using some of the mining-sector money to help prop up supporters of Joseph Kabila, the kleptocratic president of Congo for 18 years who had first put him in charge of Gécamines. “Suspicious financial transactions appeared to coincide with the country’s electoral cycles,” said the State Department’s 2018 annual report on human rights in Congo, crediting the Carter Center for the research.²⁵⁴

By his own tally, Mr. Yuma has been accused of cheating Congo out of some $8.8 billion, an amount he thinks is absurd, saying he has brought in billions of dollars in revenue to the country.²⁵⁵

Mr. Yuma has launched a bombastic counterattack on watchdog groups and his critics, calling them “new colonialists.” He has claimed that they somehow conspired with mining companies to stymie his efforts to revamp the industry, which, in his assessment, has left “the Congolese population in a form of modern slavery.” Mr. Yuma also sent The Times a 33-page document outlining his defense, noting the many “veritable smear campaigns that seek to sully his reputation and blur his major role in favor of the country through the reform of its mining policy.”²⁵⁶

Mr. Tshisekedi, a longtime opposition member who took office in early 2019 in a disputed election, has been fully embraced by the Biden administration, which sees him as an ally in battling global warming. He is chairman of the African Union and has repeatedly appeared with Mr. Biden at international events, including a meeting in Rome last month and then again a few days later in Glasgow at the global climate conference.²⁵⁷

Back home, Mr. Tshisekedi has announced that he intends to make Congo “the world capital for strategic minerals.” But some Congolese and American officials think that in order for that to happen, Mr. Yuma needs to be ousted. “We have continuously tried to apply pressure” to have Mr. Yuma removed, said one State Department official. Yet Mr. Yuma “retains considerable influence,” the official said, baffling the State Department.²⁵⁸

Meanwhile, Mr. Yuma is carrying on as usual, trailed by an entourage of aides who address him as President Yuma, as he is known throughout much of Congo for his business leadership. It is also a nod to his power base and ambitions.²⁵⁹

In another major report, The Sentry indicted the administration of Joseph Kabila of colluding with two Chinese companies in committing corrupt practices in the mining sector.²⁶⁰

When China Railway Group and Sinohydro, two major Chinese construction companies, pledged more than a decade ago to help rebuild and expand infrastructure in the Democratic Republic of Congo (DRC) in return for a sizeable chunk of the country’s mineral wealth, they took a giant gamble. The multibillion-dollar effort matched President Joseph Kabila’s soaring political ambitions and the nation’s pressing needs for roads, railways, and hospitals, yet its success was far from assured²⁶¹

The largest-ever leak of African financial records and data, obtained by the Platform to Protect Whistleblowers in Africa (PPLAAF) and Mediapart and shared with The Sentry by PPLAAF and the European Investigative Collaborations (EIC) network, now shows that the Chinese state-owned enterprises had a few aces in the hole all along: a shell company, a slick intermediary with a network of companies, and BGFIBank DRC. The trove of documents and data, called the Congo Hold-up leak, reveals that the state enterprises used a middleman with accounts at the bank run by the president’s brother to pump tens of millions of dollars into the pockets of the Kabila family, their associates, and businesses at crucial junctures in what are known as the Sicomines agreements.²⁶²

These arrangements, which the news media dubbed the “deal of the century,” lacked transparency from the start. And in drawing back the curtains, The Sentry’s investigation has found clear evidence of corruption showing that Chinese corporations colluded with power players in the DRC to secure access to billions of dollars’ worth of natural resources—all with an assist from the world of high finance. Put differently, a generational investment in the DRC’s potential, one meant to help heal the wounds from decades of mismanagement and successive wars, in fact served another purpose all too prevalent in the world’s resource-dependent economies: lining the pockets of the powerful with the wealth buried beneath the impoverished population’s feet.²⁶³

The leaked files show that the shell company at the center of the scheme—Congo Construction Company (CCC)—received $55 million from foreign sources apparently intended for Kabila and his entourage. CCC later funneled $10 million back out to safety as the Kabila family faced losing both political power and control over the bank. These funds transited the international financial system, flowing through major financial institutions like Citibank and Commerzbank to and from a country plagued by corruption, doing so under false pretenses and with little to no documentation, exposing how financial giants whose market values can dwarf the entire Congolese economy fail to protect the world’s poor from kleptocracy.²⁶⁴

As their time at BGFIBank DRC came to an end, top executives at the bank, which is the subsidiary of a Gabonesecorporate parent, battled a dogged internal auditor who accused them of money laundering, pointing to transactions that bore worrying indications of forgery and fraud. The auditor alleged that the executive team hid payments by moving bulk cash instead of making proper transfers and moved millions of dollars based on documents that appeared not to exist and for clients they hadn’t even fully identified. He also blamed them for stonewalling his inquiries and, in his own words, “blowing off” his concerns while generally operating “in another world.²⁶⁵

CCC’s role has all the hallmarks of a massive bribery scheme linked to the Sicomines deal: large amounts of money flowing into the accounts of people with close ties to the president, funds transiting through a bank run by the president’s brother without any meaningful scrutiny, insufficient or inaccurate documentation to justify the transfers, companies with unclear ownership, intermediaries with conflicts of interest, and decisions made in secret with significant financial benefits for the provider of the illicit funds. This in a deal between state actors in the DRC and China, two countries known to have a high risk of corruption.²⁶⁶

By right, the Congolese people own many of the strategic mineral deposits driving the world’s latest wave of industrialization, enriching mining companies, engineers, and manufacturers while greatly benefiting end consumers of electric vehicles, mobile phones, and laptops. But Kabila’s ruling clique captured the institutions that were supposed to represent the Congolese people’s interests writ large, and the same individuals also captured the crucial element needed to secure their ill-gotten gains: a bank. Though Kabila worked to sell Congolese voters on a Sino-Congolese project that would principally be to their benefit, modernizing their country and freeing them from destitution, these events also entrenched a system that denies the public the proper and honest administration of their extraordinary wealth, deferring the DRC’s hopes for transparency and weighing on its long-awaited recovery.²⁶⁷

None of the companies behind the minerals-for-infrastructure deal responded to requests for comment, nor did former President Joseph Kabila or any members of his family. Furthermore, the bank at the center of the leak—BGFIBank DRC—did not respond to detailed questions about the matters discussed in this report.²⁶⁸

The Sentry, once again, makes the following recommendations:

• Global financial institutions and Congolese banks should evaluate the activities outlined in this report and institute measures to prevent a repeat. In particular, global and Congolese banks should work together to enhance customer due diligence standards, investigate the findings in this report, and generally improve monitoring of transactions related to the DRC that may present a high risk for illicit financial activity.
• The United States, European Union, and United Kingdom should investigate whether activities outlined in this report constitute violations of law; issue public advisories concerning the money laundering risk associated with the DRC and complex infrastructure financing deals linked to certain Chinese state-owned enterprises; and, where appropriate, impose targeted sanctions on key individuals and companies named in this report.
• The government of the DRC should institute a range of measures to identify any violations of law connected to the activities in this report, redouble the independence of key oversight agencies, bolster monitoring of potentially risky transactions, use robust asset declarations and information-sharing between government authorities and commercial banks, and generally make it more difficult for officials to violate public trust.²⁶⁹

Africa Confidential described what has happened as both process and product of state capture by Joseph Kabila and his band of loyalists.

Millions of leaked bank papers which expose the mechanics of former leader’s plunder of the state could up-end national politics. Using evidence from the biggest ever leak of financial documents in Africa, an international investigative journalism consortium has tracked the main sources of the staggering wealth, reckoned to run into billions of dollars, of former President Joseph Kabila and his family.²⁷⁰

The paper trail, based on a leak of over three million documents from the Banque Gabonaise et Française Internationale (BGFI), shows how Kabila, his family and business associates, captured some of Congo-Kinshasa’s key institutions between 2001 and 2018 and siphoned off immense sums of money. It is the biggest political scandal in Congo-K since President Mobutu Sese Seko was ousted in 1997 by Kabila’s father, Laurent-Désiré Kabila.²⁷¹

Resources desperately needed for schools and public health services were diverted from the state treasury to private companies controlled by the Kabila family. The new government under President Félix Tshisekedi, which inherited a near empty treasury when it came to power in 2019, is struggling to finance an ambitious secondary school programme and shore up public health services to deal with the Covid-19 pandemic and serial outbreaks of Ebola.²⁷²

These files, documenting millions of transactions between Kabila’s inner circle and BGFI, central Africa’s biggest bank, shine a light on the plundering of the country’s most important institutions, including the Banque Centrale du Congo, the central bank, the Commission Electorale Nationale Indépendante (CENI) and the state mining company Gécamines.²⁷³

The vehicle for the plunder was the local branch of BGFI, a bank with a history of malfeasance and links to the ruling families of Congo-Brazzaville and Gabon. The BGFI, 11% of which belongs to the family of Gabon’s President Ali Bongo grew out of the now-defunct French Intercontinental Bank (Fiba), which was at the centre of one of the biggest corruption cases of the 20th century, the Elf scandal in France (AC Vol 48 No 6, Financial secrecy).²⁷⁴ BGFI and Fiba laundered funds in a succession of scandals implicating the ruling cliques of Gabon and Congo-B.²⁷⁵

The initial findings that $138m was stolen from state institutions between 2013 and 2018 are the tip of the iceberg.²⁷⁶ Over $100m more in suspect funds went to Kabila’s entourage through BGFI, about a third of it in cash and the rest transiting through an account held by BGFI at the Banque Centrale du Congo (BCC), the central bank.²⁷⁷

Key to the embezzlement was Francis Selemani, CEO of BGFI in Congo-K from 2012 to 2018.²⁷⁸ Selemani is, according to researcher Eric Kennes’s 2003 Biographical Essay on Laurent-Désiré Kabila, the adopted brother of Joseph Kabila. Selemani and Joseph Kabila were brought up together in Tanzania by one of the wives of Adrien Kanambe, a guerrilla comrade of Laurent-Désiré Kabila, who led the forces that overthrew Mobutu and preceded Joseph Kabila as president (AC Vol 38 No 7, Kabila’s long march). When Kanambe died in 1985, soon followed by his wife, Selemani was adopted by Laurent-Désiré.²⁷⁹

Selemani’s role in the Congo Hold-up scandal has been detailed by Mediapart in its investigation into Sud Oil, a company under Selemani’s control, acting through a proxy. Originally an oil services company, Sud Oil was taken over by the Kabila family in the autumn of 2013.²⁸⁰ Selemani’s wife Aneth Lutale owned 80% and Kabila’s sister Gloria Mteyu 20%. After that it stopped working in oil and became a repository for cash stolen from state institutions.²⁸¹

Sud Oil took in over $90m from public institutions, including national mining company Gécamines, the BCC, CENI, and even funds meant for Congolese peacekeepers in the Central African Republic.²⁸² Over half of the stolen funds were withdrawn in cash by Selemani’s front-man, Sud Oil General Manager David Ezekiel. Mediapart describes how Ezekiel withdrew $30m in cash from Sud Oil and related companies from May to December 2018, just before Kabila left the presidency in January 2019 after 18 years in power. Anti-corruption group The Sentry also reveals that Selemani and his companies received millions of dollars from Sud Oil, and bought 17 properties in America and South Africa. Congo Hold-up said its questions were ignored by almost all the parties concerned, including Selemani, BGFI, Kabila and the BCC.²⁸³

GBFI is a cross-border bank, according to Africa Confidential.

BGFI was a creation of two presidents: Omar Bongo of Gabon – who died in 2009, his son Ali Ben Bongo taking his place – and Denis Sassou-Nguesso of neighbouring Congo-B. Strongly backed by successive French governments and oil companies, Bongo and Sassou-Nguesso have presided over a succession of national financial scandals.²⁸⁴

In a brochure celebrating ’40 years of shared history, ambition and passions’, BGFI describes how its roots go back to 1971, when French bank Paribas opened a branch in Gabon, ruled since 1967 by the two Bongos. Paribas Gabon dealt ‘only with big corporate clients, particularly oil companies, and a small base of relatively VIP customers’, says the brochure.²⁸⁵

But many of their loans went unpaid and had to be written off. By the early 1990s Paribas sold the majority of its shares to the Gabonese state and to ‘private interests’, and Paribas Gabon was renamed the Banque Gabonaise Française et Internationale (BGFI).²⁸⁶

The bank at the centre of the Congo Hold-up consortium’s revelations of state capture and grand corruption in Congo-Kinshasa, Banque Gabonaise et Française Internationale (BGFI), has been a key facilitator of the shadowy Françafrique system, which unites Francophone African leaders with top French politicians and business people.²⁸⁷

Because of its presidential backing, BGFI is the biggest bank in Gabon and Congo-Brazzaville and the fifth biggest in Congo-Kinshasa. In all three countries, BGFI hold accounts for the biggest state entities: the national oil company and major ministries, such as the public works ministry, in Congo-B; the national oil refinery and an account for receiving state oil dividends in Gabon; and in Congo-K, accounts for the Banque Centrale du Congo (BCC), the central bank and the state mining company Gécamines.²⁸⁸

BGFI has been coy about those ‘private interests’. A report in 2001 in Gabon’s L’Union newspaper names two as Delta Synergie (with 13% of the bank) and the Compagnie du Komo (with 25%), both linked to Bongo and his family. Delta Synergie was the Bongo family’s holding company, through which it owned stakes in the oil industry, as well as media and mining. The Compagnie du Komo is 15% owned by Delta Synergie. According to the latest available documents, the Bongo family owns 11% of BGFI’s holding company in Gabon through these two companies.²⁸⁹

In 2000, BGFI opened a subsidiary in Congo-Brazzaville. There, Denis Sassou-Nguesso seized power in 1979 and has stayed in charge, apart from a 1992-97 interregnum and civil war. In 1990, Bongo married Sassou-Nguesso’s daughter, Edith, and so became the son-in-law of Congo-B’s President, even though he was eight years his senior.²⁹⁰

Beyond its ties to Paribas Gabon, it is BGFI’s strong links to the French Intercontinental Bank (Fiba), that explain its role in state capture projects in the region. Fiba was central in one of the biggest scandals of the 20th century: the corrupt system through which French oil company Elf siphoned money to French politicians at home, and to dictators and rebel groups in Africa. Founded in 1976, Elf merged with the country’s other leading oil companies Total and Fina in 2003.²⁹¹

It is rather unfortunate that doubts are now being seriously cast on the entire integrity of Joseph Kabila and his administration after eighteen years in power – doubts that come as a huge disappointment especially when the fact of the youthfulness of Kabila is taken into consideration. His performance record can now be seen to be badly mixed with monumental greed and sleaze and whatever he claimed to have been his achievements while in power.

Kabila ostensibly jumped off the cliff with his eyes closed, forgetting there is tomorrow when he can be called to account for his stewardship while in power for eighteen years.

It is an irony that it is several bodies of journalists that collaborated to produce the report that has indicted Kabila and his cronies. In this scenario it is virtually impossible to single out any journalist for reprisal since all the journalists and researchers involved are international journalists and researchers and reside outside the country. In broad context, the media has become the Nemesis of Kabila forcing him to wage the battle of his life (not to go to prison for gross abuse of office and corrupt practices) on a multiple front not only in the political circles where his influence is gradually diminishing but also on the streets and in the newsrooms of media houses.

The sleazy story is not known to have emanated from the political circle nor from the streets even though both are not unaware of the likelihood of such highly suspicious of criminal activities of Kabila while in power. In other words, this reportage is a product of highly commendable investigative journalism at its best. Reading through various media coverage of the expose it is objectively evident that Joseph Kabila and his cronies have criminal cases to answer in the law court; there are enough criminal charges to indict and prosecute them – a prosecution that could lead to their conviction and jailing (the latter where they most probably belong) if there is enough political will on the part of the current government in Kinshasha to diligently prosecute the serial cases against them.

What has happened here is an attestation to the critical role of the media in not only helping to consolidate democratic rule in Africa but perhaps more importantly to expose African leaders and hold them accountable for their stewardships while in power. The era of conniving with political leaders to sweep criminal acts under the carpet should be drawn to a close. African media must really sustain the courage to live up to its self-assigned role as the “watchdog” of the society, of governance and political intrigues.

But with the unfolding accusations and counter-accusations of abuse of power or office and financial improprieties, it is very apparent that a power struggle is going in Kinshasha in a battle for political supremacy between the incumbent President, Felix Tshisekedi, and the former President Joseph Kabila who is being highly suspected of making covert moves to come back to power in the 2023 general elections. A battleground is the mining sector with Gecamines as the trophy to be claimed: whoever succeeds in controlling Gecamines will have enormous clout and political leverage in the 2023 general elections. Caught in the crossfire is the chairman of Gecamines itself, Albert Yuma Mulimbi. The battle is raging to yank him off the sinecure post in which he has ensconced himself over the last decade and has largely succeeded in building visible formidable forces of loyalists who even consider him a presidential candidate.

Lining behind the political gladiators are global forces. For instance, it is now apparent that the United States has gone to bed with the incumbent President Felix Tshisekedi who is considered an ally in the global politics of climate change along with its domestic variables especially in the mining sector – as against former President Joseph Kabila alongside Albert Yuma Mulimbi who have corruption allegations hanging on their necks to discharge. It can be extrapolated from the foregoing that China and other allies are most probably rooting for Kabila and/or his allies in covert resistance to the reforms already instituted by Tshisekedi aimed at bringing the mining sector into alignment with global best practices.

Tshisekedian Mining Force Fields

Félix Antoine Tshisekedi Tshilombo was the UDPS party’s candidate for president in the December 2018 general election, which he won, despite accusations of irregularities from several election monitoring organisations and other opposition parties. The Constitutional Court of the DRC upheld his victory.²⁹²

On 20 May 2019, Tshisekedi reached a deal with the FCC coalition and Kabila, appointing the career civil servant Sylvestre Ilunga as prime minister. Ilunga began his political career in the 1970s and held a number of cabinet posts under Mobutu Sese Seko before his overthrow in 1997. He is also an ally of Kabila. In late July 2019, Tshisekedi reached a deal with parliament on forming a new government. Ilunga’s new cabinet would include 65 members, 48 ministers and 17 vice-ministers, which should be divided between the Kabila-aligned FCC and Tshisekedi’s CACH alliance. The majority of the ministries went to the FCC, including three of the six most important ones (Defence, Justice, and Finance), while the Foreign Affairs, Interior, and Budget portfolios went to Tshisekedi’s allies.²⁹³

After a power struggle saw the coalition with allies of Tshisekedi’s predecessor break down and many legislators were won over, Ilunga was forced to leave office and Tshisekedi appointed Gécamines leader Jean-Michel Sama Lukonde as successor on 15 February 2021.²⁹⁴ On 12 April 2021, Tshisekedi formally ended his two-year coalition with Kabila and his allies when prime minister Sama Lukonde formed a new government. On national television, Tshisekedi’s spokesman Kasongo Mwema Yamba Yamba announced a number of new appointments, including Antoinette N’Samba Kalambayi as mines minister. The president succeeded to oust the last remaining elements of his government who were loyal to Kabila.²⁹⁵ Tshisekedi promised to end and reverse deforestation in the Democratic Republic of the Congo by 2030, in the COP26 climate summit’s first major agreement.²⁹⁶

The first practical step probably taken by President Felix Tshisekedi in the mining sector was the establishment of a new body meant to break the monopoly of Gecamines.

Democratic Republic of Congo has granted a monopoly to a new state-owned company to purchase and market all cobalt that is not mined industrially in an effort to exert greater influence over prices, a government decree shows.²⁹⁷

The November decree, seen by Reuters on Friday, creates a new subsidiary of state mining company Gecamines with exclusive rights to sell artisanally-mined “strategic minerals”, such as cobalt, a key component in electric car batteries. The decree says it was motivated by “the necessity of controlling the entire artisanal supply chain and boosting government revenues through control of prices”. It also aims to exert greater state oversight of working conditions in the artisanal sector, which has been plagued by instances of child labour and other abuses.²⁹⁸

The move was confirmed by Albert Yuma, chairman of Gecamines, the main state-owned producer of copper and cobalt. “We felt it was time to stop the loss of human lives of our fellow citizens in miserable working conditions and undignified remuneration,” Yuma told Reuters by telephone.²⁹⁹

The entity is called Enterprise Generale du Cobalt, according to a source within Gecamines. However, it was not clear when the new company would begin operations. Trading of artisanal cobalt, which is extracted with rudimentary tools in often unsafe conditions, is dominated by Chinese middlemen.³⁰⁰

Congo produces about 60% of the world’s cobalt. It has been hurt by falling prices for the metal, which are now less than a third of their 2018 peak around $95,000, due to excessive supply and the impact of the U.S.-China trade war. While most of Congo’s cobalt is extracted by industrial operators like Glencore and China Molybdenum , artisanal miners account for about a quarter of production.³⁰¹

The decree, published in the government’s official journal on Dec. 1, said the new company would also have a monopoly over other minerals designated “strategic” by the government, including coltan, a tantalum-rich ore, although Gecamines is not present in the part of the country where coltan is mined.³⁰²

Gecamines is heavily in debt and has repeatedly struggled to implement projects aimed at boosting output. President Felix Tshisekedi announced the creation of the new subsidiary in December, but did not say it would have a monopoly. Artisanal mining in Congo was the second largest source of global supply after the country’s own official sector in 2017, according to estimates by research house CRU.³⁰³

Africa Confidential reported in mid-July 2021 that reports emerging from parallel investigations in Britain, Switzerland, and the United States point to the operation of an elite network which has laundered cash and paid over US$360 million in bribes to senior figures in ex-President Joseph Kabila’s government.³⁰⁴ Based substantially on court documents, the reports published today, in Africa Confidential  (AC Vol 62 No 15, Court documents show Gertler at centre of $360m cash laundry), Israel’s Ha’aretz newspaper and Bloomberg News, suggest the multi-jurisdictional investigations are set to uncover more information about the key figures and companies in the network, and the consequent losses to Congo-Kinshasa’s treasury (AC Vol 62 No 10, Gertler’s billions).³⁰⁵

Britain’s Serious Fraud Office (SFO), which has been investigating claims of serial corruption in mining deals in Congo-K, provided critical information to Switzerland’s Federal Criminal Court on the workings of what appears to be a well-organised money-laundering and bribery system.  The SFO is now trying to identify all the individuals and companies in the money-laundering network, including entities in Switzerland. It is doing so in parallel with the US Department of Justice and federal Swiss investigations into allegations of corrupt payments to officials in Kinshasa in exchange for mining rights.³⁰⁶

These probes are making headway as Congo-K goes through a political and economic transition. Earlier this year, President Félix Tshisekedi wrested control of parliament and the security services from his predecessor Joseph Kabila (AC Vol 62 No 3, Félix tips the scales). Some of Kabila’s corporate associates have been distanced under the new order.³⁰⁷

Two technocrats have been appointed to manage the economy: ex-UN official Nicolas Kazadi is the new finance minister and ex-International Monetary Fund economist Malangu Kabedi-Mbuyi was appointed governor of the central bank this month. Kazadi and Kabedi-Mbuyi have to steer a new US$1.5 billion economic reform programme with the IMF, the country’s first for a decade. A key component of that will be greater transparency and accountability in Congo-K’s mining sector. As the biggest cobalt producer in the world, Congo should be benefiting from the global shift towards electric vehicles, many powered by cobalt-based rechargeable batteries.³⁰⁸

[Furthermore], Felix Tshisekedi, president of the Democratic Republic of the Congo (DRC), [also] demanded a ban on issuing and trading mining permits until the country’s mining registry has been audited, a measure aimed at combatting fraud within the sector. Tshisekedi told ministers he wanted to end the squandering of mining assets by unnamed political actors and officials involved in the administration of the mining register, which records mining concessions, according to minutes of the meeting seen by Reuters news agency on Saturday. “This recommended clean-up will increase the contribution of the mining sector to the state’s budget and help, as a priority, the people benefit from the mineral wealth of our country,” Tshisekedi told ministers. The move is an escalation of Tshisekedi’s continuing review of deals struck by his predecessor Joseph Kabila, which includes a $6bn “infrastructure-for-minerals” deal with Chinese investors.³⁰⁹

Transparency activists have estimated the DRC has lost out on billions of dollars of revenue from mining deals over the past two decades. Mining companies who fail to comply with their administrative and social obligations should have their licences revoked, Tshisekedi told Mining Minister Antoinette N’Samba. He asked N’Samba to identify mining companies where the state had not gained 10 percent of shares when the permit flipped from exploration to exploitation, as required by the mining code.³¹⁰

While violence continues in eastern DRC, there is potentially more progress in the hugely important mining sector located largely in the Upper Katanga province, where there has been much less violence. Tshisekedi’s government is involved in a long process of negotiations with a consortium of Chinese mining investors based in the south-east of the country. These negotiations, while slow, may yet yield some benefits for the Congolese state. The talks centre on how much money Chinese investors will give the state in return for the minerals they mine. In May, the president stated that he believed previous mining contracts could be reviewed. In general, he sought to renegotiate the infamous Sicomines “minerals-for-infrastructure” deal that was struck between a group of Chinese investors and the Congolese government in 2008. In August, he formed a commission to examine mining deals with a view to getting better terms in general.³¹¹

If a good mining deal can be arrived at, the relative prosperity of this sector could serve to propel Tshisekedi’s plans beyond the old 100 day emergency programme. First, it could help the ailing infrastructure sector, which has seen little development. Much of it is in a state of disrepair. A decent road network would help to propel business and not least those in the agricultural sector, which is so important for the DRC. Secondly, more state funds could help the president tackle the problems in the education system. There is currently a serious teacher strike in the DRC, with lack of pay being one of the reasons for the stoppage. This is a problem in need of an urgent solution. Third, the DRC’s health sector could also do with a boost in investment, not least because of the pandemic. In short, Tshisekedi’s government now has some hard-won political capital with which to enact some of the changes that he promised during his campaign. Some of these changes could be delivered if a decent mining deal can be negotiated, and if that money finds its way to the right places. The mining sector – controversial as it is – has seen sustained growth since the commodity boom in 2007. Transparency within the mining sector is also reportedly improving. It is, therefore, time for Tshisekedi to secure a good deal and resolve some of the many problems his citizens are experiencing.³¹²

On a visit to the mining Eldorado of Katanga, the president of the Democratic Republic of Congo (DRC), Felix Tshisekedi, announced his intention to renegotiate mining contracts, particularly those signed with China by his predecessor Joseph Kabila, a revision promised in the name of the Congolese people who “still languish in misery”.³¹³

“It is not normal that those with whom the country has signed exploitation contracts get rich while our people remain poor,” said Felix Thisekedi on Thursday during a visit to the mining town of Kolwezi. “He said it was time for the country to readjust its contracts with the miners to seal win-win partnerships,” he said at a rally in the town centre, cheered by thousands of residents.³¹⁴“I’ve really had enough! (…) I’m very harsh on these investors who come to enrich themselves alone. They come with empty pockets and leave as billionaires,” the head of state blasted. “It is also our fault. Some of our compatriots had badly negotiated the mining contracts. Worse, the little that goes to the state, they put in their own pockets,” he accused, promising to make “the great Katanga, the whole Congo (…) the world capital of strategic minerals”.³¹⁵

Under colonisation, and then independence with the state-owned Gécamines, the region has always contributed more than 50% of the national budget, and almost all exports. The bankruptcy of Gécamines in the 1990s was synonymous with the collapse of the country’s economy.³¹⁶

Foreign mining investors arrived massively in Katanga in the 2000s (during the “mining boom”), as Gécamines’ deposits were sold off, but without the slightest impact on the daily lives of the 90 million Congolese people, most of whom have been left to fend for themselves by a failed state, while the DRC remains the eighth poorest country in the world.³¹⁷

Some forty mining companies are currently operating in Katanga, including the giants Gécamines and Tenke Fungurume Mining (TFP). About thirty are Chinese or have a majority of Chinese capital. For the daily “Le Potentiel”, the words of Félix Tshisekedi during his visit to Katanga are aimed primarily at the Chinese partner. He is thus starting “a showdown with China over contracts with Kabila”, while the DRC, “once a major ally” of Beijing, “has now moved closer to the United States”.³¹⁸ In power from 2001 to 2019, Joseph Kabila had negotiated in 2008 a contract in the form of barter (cobalt and copper in exchange for the construction of infrastructure) with a Chinese consortium for an amount of nine billion dollars, renegotiated to six billion under pressure from the IMF. To date, nearly $2.74 billion has been disbursed by the Chinese side, mostly in the form of investments.³¹⁹

“The DRC and Africa must not be the battleground of the powers that be. Let’s be vigilant to those who shout about fighting and seek to create hostility,” China’s ambassador to the country, Zhu Jing, commented on Twitter on Friday. This comes as President Tshisekedi spoke by phone on 7 May with his Chinese counterpart Xi Jinping. “This concerns all miners, but in fact the Chinese have a dominant position in the sector today,” explains the source at the Congolese presidency. “We should expect discussions with all the miners in the coming months,” the source warned. And “this will be done methodically, in accordance with the roadmap set out by the president”.³²⁰

Democratic Republic of Congo leader Félix Tshisekedi is seeking a review of some mining contracts with foreign companies as a lobby warns that the country will potentially lose at least $3.7 billion in skewed mining and oil deals with controversial Israeli billionaire Dan Gertler. Kinshasa has already lost out on nearly $2 billion in revenue by selling mining and oil assets to Mr. Gertler, according to a coalition of Congolese and international organisations, which has urged the government to review the deals.³²¹

Companies owned by Mr. Gertler, who is under US sanctions for alleged corruption in Congo, stand to gain $1.76 billion in the next 20 years from copper and cobalt projects in the country, said the lobby, Congo Is Not For Sale. Mr. Gertler, a close friend of former Congolese president Joseph Kabila, denies any wrongdoing. He has never been charged with a crime. “The coalition calls on Congolese authorities to end their silence on this matter and take urgent measures to ensure that Congo’s mineral wealth benefits the DRC Treasury and its people,” the group said in a report.³²²

The lobby wants President Tshisekedi to “take the bold step of ordering a thorough and credible investigation into all mining deals involving Mr. Gertler”. “The Congolese government cannot ignore the hemorrhage of billions of dollars from its coffers when it desperately needs the funds to rebuild its economy and pull its citizens out of poverty,” said the group’s spokesperson Jean Claude Mputu.  According to a financial investigation by the group, DRC lost $1.95 billion in revenues between 2003 and 2021. A further $1.76 billion in future royalty payments to Gertler’s companies will have been paid by 2039.³²³

Congo is the world’s largest source of cobalt and Africa’s biggest copper producer. Mr. Gertler’s companies own royalty streams from three of the world’s biggest cobalt projects run by Glencore Plc and Eurasian Resources Group Sarl, which could soon produce more than 70,000 tonnes of cobalt a year – about half of total global output in 2019. They are also significant copper producers. Mr. Gertler’s companies took over the royalties from state-owned miner Gecamines in a series of transactions over a decade, some of which are being scrutinised by activists and foreign regulators from the US, UK and Switzerland.³²⁴

The lobby’s report builds on calculations published in 2013 by former UN Secretary-General the late Kofi Annan-led Africa Progress Panel, which alleged that Congo lost out on $1.36 billion through the underpricing of mining assets bought by companies linked to Mr. Gertler.³²⁵

Mr. Gertler’s spokesman denied the deals for the royalties were mis-priced and, in reference to his most recent royalty transaction in 2017 involving a tailings project, said the valuation was done “in line with industry standards.” “At that time, there was no certainty at all any royalty would even be paid,” the spokesman said. Mr. Gertler announced last year he would allow Congolese citizens to invest in the royalty stream from the copper and cobalt project, known as Metalkol. The Congo Is Not For Sale coalition has also criticised that proposal. Mr. Gertler’s companies also control oil and gold permits in northeastern Congo that were not part of the coalition’s calculations. The sanctions against Gertler have complicated the development of those projects.³²⁶

Having spent much of his life in Belgium, Tshisekedi may be an unlikely architect of a corruption crackdown. The son of revered opposition leader Étienne Tshisekedi, he is controversially deemed to have beaten opposition leader Martin Fayulu and Kabila pick Emmanuel Ramazani Shadary in a 2018 election marred by allegations of fraud. Even after his victory, he was forced to do business with Kabila and his powerful political allies.³²⁷

Jean Pierre Okenda, a Congolese lawyer and senior analyst at Brussels-based advocacy group Resource Matters, says that Tshisekedi’s victories could give impetus to reform efforts. “We expect progress now as, finally, the political deal between him and the former president is completely cancelled,” says Okenda.³²⁸

Despite the promise of change, uncertainty looms. In February, President Tshisekedi appointed the head of Gécamines, Sama Lukonde, Prime Minister. Rights groups fear the advent of a new generation of cronyism. “It is a game-changer. But the question is: will the game-change benefit the state or the citizens of Congo?” asks Okenda.³²⁹

The move by Felix Tshisekedi brings back memories of the efforts by former Tanzanian leader the late John Magufuli who, in 2017, instituted drastic changes in the mining sector through Parliament to protect the country’s natural resources and the employment opportunities for its citizens.³³⁰

In January it emerged that outgoing US President Donald Trump had secretly suspended sanctions against Israeli businessman Dan Gertler, accused by the Treasury Department of grand corruption in Congo-Kinshasa. Trump had done so at the urging of Mossad and Israel’s ambassador to Washington. But incoming President Joe Biden’s administration promptly re-imposed the sanctions, leaving some in Washington DC asking what further action may be taken against Gertler.³³¹

Dan Gertler, who made his fortune as a go-between in many of Congo-Kinshasa’s biggest mining deals, has promised to allow Congolese to ‘directly participate’ in the country’s mineral wealth for the first time. In an initiative dubbed Yabiso – ‘it’s ours’ in Lingala – he plans to sell rights to the public in the royalty streams obtained through one of his many controversial deals. Such royalty rights typically go to the state, and not to private individuals like Gertler.³³²

Dan Gertler’s mining deals could cause losses to Kinshasa’s treasury of at least US$3.7 billion, more than double previous estimates, according to new data from a coalition of Congolese and international campaigners.³³³

However, according to Onesphore Sematumba, analyst on Democratic Republic of Congo and Burundi, in an interview with International Crisis Group, faced with this challenge, Tshisekedi started to weaken the former president and to counter the FCC’s influence upon government bodies by pulling Kabila deputies into his own camp. Deputies who remained loyal to the former president have protested that Tshisekedi used undemocratic methods in this manoeuvring. By appointing three new judges to the Constitutional Court in October 2020, the president secured the loyalty of this institution, which was once suspected of being in Kabila’s service. In November, Tshisekedi launched political consultations, including with civil society groups, leading to the coalition’s dissolution one month later. He then looked to form a new majority. The Constitutional Court allowed parliamentarians to leave their former political groups and join new alliances. This decision gave deputies the opportunity to switch political allegiance without the risk of being let go by their original parties and consequently losing their seats. In this way, Tshisekedi persuaded numerous FCC deputies to join the new Sacred Union majority, alongside opposition heavyweights Moïse Katumbi and Jean-Pierre Bemba.³³⁴

Tshisekedi then secured a series of further victories over Kabila, shifting the balance of power in his own favour. Between December 2020 and January 2021, the new government majority’s deputies toppled via successive motions the presidents of the National Assembly and of the Senate, as well as Prime Minister Ilunga and his government. On 15 February, following negotiations between different Sacred Union factions, Tshisekedi named Jean-Michel Sama Lukonde as the DRC’s new prime minister. Originally from Grand Katanga and former CEO of the country’s largest mining company, Gécamines, the 43-year-old Lukonde belongs to a small political party without a single seat in the National Assembly called Avenir du Congo. Lacking any real political clout and without ambitions for the 2023 elections, the government’s new leader is likely to work in Tshisekedi’s shadow, allowing the president to carry out his policies unhindered during the last two years of his presidency.³³⁵

It can be seen clearly that President Tshisekedi has set his mind to have a firm control of the Congolese mining sector by carrying out series of reforms, if only step-by-step, in order to break with the sordid past history of the mining sector in Congo.

The government of the Democratic Republic of Congo has announced ambitious plans to take control of the country’s…artisanal cobalt sector. A new state company, Entreprise Generale du Cobalt (EGC), has been given monopoly powers to purchase and market cobalt from the informal sector. The move is being hailed by the government as a way to clean up a sector that is tarnished with a reputation for child labour, lax safety and illegal activity…The human cost of mining in the Congo, which accounts for more than 60% of global cobalt production, is one of the reasons companies such as Tesla are actively trying to engineer the metal out of their battery supply chain…³³⁶ “We are going to eliminate child labour, we are going to eliminate labour by pregnant women and we are going to eliminate fraud in this sector so that the cobalt (…) will be responsible cobalt,” according to Albert Yuma, chairman of state mining company Gecamines, which will oversee the EGC…The problems associated with artisanal cobalt mining in the Congo are generating an aggressive industry response with consumers trying to eliminate or at least drastically reduce the metal’s usage in lithium-ion batteries. That in turn acts as a major hindrance to building out a sustainable and responsible cobalt supply chain…³³⁷

Integrating artisanal production into the official sector should boost the government’s mineral take and put more money in the pockets of the miners, who receive a fraction of the cobalt price…If the new EGC is successful in its attempt to take control of artisanal production, which is still a big “if”, it will assume the mantle of global swing producer…³³⁸

Part of the Tshisekedian reforms of the mining sector include the appointment of Sama Lukonde Kyenge as Prime Minister of the Republic.

Within the general context of power relations (including the evident power struggle between the former President, Joseph Kabila, and the current President Felix Tshisekedi) and the commanding height of Gecamines in Congo, President Felix Tshisekedi named mining executive and ally Sama Lukonde Kyenge as prime minister of the world’s biggest cobalt producer. The appointment entrenches the president’s break with predecessor Joseph Kabila, whose allies Tshisekedi has accused of blocking his political and economic reform program. It’s likely to result in the overhaul of the central African nation’s cabinet in the coming weeks.³³⁹

Lukonde is currently the chief executive officer of Gecamines, Congo’s state-controlled copper and cobalt mining company.  Lukonde, 43, previously served as minister of youth and sports and as a representative to parliament, according to the Twitter account of Congo’s presidency. The premier didn’t immediately respond to a message requesting comment.³⁴⁰

The immediate challenge for the new government is its need to raise more revenue to support an expansion of social programs, particularly in the face of the ongoing Covid-19 pandemic, Lukonde said Monday after meeting Tshisekedi in Kinshasa, the capital. His remarks were broadcast over the Twitter feed of Congolese media outlet Actualite.cd.³⁴¹

The appointment comes after the previous prime minister and Kabila ally, Sylvestre Ilunga, was forced to resign last month after lawmakers passed a motion of censure against his administration. In recent months, allies of Tshisekedi have been appointed to the Constitutional Court and the leadership of the National Assembly. The country’s Senate head — another Kabila ally — was also forced to resign.³⁴² Aljazeera was of the view that the appointment capped “a series of political victories over his once-dominant predecessor, Joseph Kabila,” in order to “help Tshisekedi install a more loyal cabinet to push through his agenda.” The appointment “came amid an intensifying power struggle that saw Tshisekedi announcing in December he wanted to break free of a power-sharing deal with Kabila he had entered in the aftermath of a widely disputed election about two years ago. The incumbent’s bid to remove Kabila’s camp from the DRC’s institutions notched up its first win on December 10, when MPs removed the National Assembly’s pro-Kabila speaker, Jeanine Mabunda. The awkward alliance, which forced Tshisekedi to bargain with his predecessor over any policy shift, added to challenges facing his government, such as corruption and spiralling violence in the mineral-rich east.”)³⁴³

Further, as part of the hegemonic struggle for the control of the mine fields, Yuma, along with Gécamines’ managing director and secretary general, has been asked to make himself available to the courts. On 27 December 2019, in a statement made on national television, President Tshisekedi himself urged the courts “to do their job.”³⁴⁴ Although backed by Joseph Kabila, the Gécamines’ boss – who is currently entangled in a dispute with Israeli businessman Dan Gertler – could end up bearing the brunt of President Félix Tshisekedi’s anticorruption policy.³⁴⁵

The €200m case is the subject of much speculation in the Democratic Republic of Congo (DRC). The stakes are so high that the prosecutor’s office in Kinshasa took up the matter at the end of 2019. (Ibid) If the case has had such a big impact, it is because Yuma, 64, is an important figure in the DRC’s economy. In addition to chairing Gécamines’ board of directors since 2011, he runs the Fédération des entreprises du Congo, the Conférence Permanente des Chambres Consulaires Africaines et Francophones and the Central Bank of the Congo’s Audit Committee. Above all, he is a close ally of former president Joseph Kabila, and both are Katangan and from the small town of Kongolo.³⁴⁶

To grasp the origins of the case, we have to go back to October 2017. At that time, Fleurette Mumi, a company owned by Israeli businessman Dan Gertler, agreed to loan Gécamines €200m ($221.9m). An initial instalment of €128m was paid to the miner. Six months later, in April 2018, this portion of the loan fell due.  (Ibid) However, the mining company refused to pay back the sum. According to Gécamines’ legal team, paying this debt at a time when Gertler is being sanctioned by the US Department of the Treasury (and has been since December 2017) could lead Gécamines to be sanctioned. Gertler’s legal team has refuted this argument.³⁴⁷

Meanwhile, the loan taken out by Gécamines from Fleurette Mumi has been transferred to another Gertler-owned company, Ventora Development Sasu. Ventora brought the case before a Congolese court to recover the €128m loan and the Lubumbashi Commercial Court ruled in its favour in a decision dated 14 November 2019. Gécamines has appealed the ruling.³⁴⁸  Pending a legal or political solution, citizens continue to speculate over how Gécamines used the funds. The company initially asserted that they were used to finance development projects but later explained that the money was used to pay tax advances.³⁴⁹

Will Yuma crack under pressure? In September 2019, as the boss of all Congolese bosses, he was part of the delegation which accompanied President Tshisekedi on his first official visit to Belgium. The two men had been on good terms these past months. Nevertheless, Tshisekedi, who came into power just a little over a year ago, has put anti-corruption measures at the top of his priority list and knows that his country’s citizens and international partners fully expect him to follow through on his promises.³⁵⁰

The fact is, Yuma is a divisive figure. A technocrat who studied at the Université Catholique de Louvain in Belgium, he began his career in the early 1980s at Belgian textile company UTEXAfrica, now known as TEXAF and primarily involved in real estate. He made his fortune at the company, and Kinshasa has not forgotten the lavish wedding he organised for his daughter in July 2019. A skilled speaker, at times haughty and always impeccably dressed, he has expressed sovereignty-focused views over the past several years and readily criticises Western investors, who he accuses of not paying “an adequate portion of their revenues and profits to the Congolese people,” whilst being much more conciliatory towards his Chinese partners.³⁵¹

In 2017, the non-governmental organisation Global Witness accused Gécamines of mismanaging and embezzling sums totalling several hundreds of millions of dollars. Yuma denied the claims and defended his record. However, the West is on edge and takes a dim view of his close relationship with Kabila, who is suspected of trying to stay in power, and Gertler, who has been sanctioned by the US Department of the Treasury since December 2017. At that time, they were still friends.³⁵²

To make matters worse, in 2018, Yuma positioned himself as an ardent supporter of the new Congolese mining code, which was set to be stricter with foreign investors compared to the previous code. At that time, according to a person close to the former president, “Yuma was in direct contact with Kabila, who consulted him unofficially on a number of matters.”³⁵³

Today, Yuma finds himself at the centre of a battle being waged by Kabila and Tshisekedi. Gécamines is of crucial importance to the economy and, by extension, to those in power. This is nothing new, as part of the reason why the Belgians supported and funded the Katangan secession in the 1960s was so that they could retain control over the company, then known as Union Minière du Haut Katanga.³⁵⁴

When Tshisekedi began his term as the DRC’s leader in early 2019, he made sure to assert his authority over Gécamines’ management and was directly advised by Dany Banza, once considered to be close to Kabila rival Moïse Katumbi, on the issue. The President did not succeed in removing Yuma, who Kabila attempted – in vain – to force him to appoint as prime minister, but in early June Tshisekedi signed several orders which overhauled the company’s management team.³⁵⁵

The tensions arising from the decision have been so high that the state portfolio ministry, under the control of Kabila’s coalition, refuses to implement the reform orders (however, the two heads of the executive branch seem to be close to reaching an agreement on the matter).³⁵⁶

What is in Tshisekedi’s best interest appears to be to get rid of the troublesome Yuma, first of all because, as a member of the President’s inner circle put it, he “is being targeted by the US and could be sanctioned”. But what will Kabila do? Yuma is still key to his firm grip on the mining sector, just like former mines minister Martin Kabwelulu. According to a source from the Kabila-allied Front Commun pour le Congo (FCC): “Turning him over to the courts would be a sign of weakness in the eyes of Tshisekedi and send a bad signal to his own supporters since they may see it as proof that Kabila is losing power and influence.” In other words, if a Kabila machine heavyweight like Yuma can be given over to the courts, then anyone can. The former president is all too aware of this. Just as he knows that if Yuma ends up in the hands of the courts, his economic and financial networks could be threatened.³⁵⁷

Tshisekedi, on the other hand, does not seem like he will let the case go. On 31 December 2019, he met with Kabila and reiterated that he wanted the truth to be brought to light about the case. On 10 January, two FCC members of the government – justice minister Célestin Tunda Ya Kasende and decentralisation minister Azarias Ruberwa – tried to make a case for Yuma in the middle of the council of ministers’ meeting, arguing that Yuma is vital to Gécamines’ smooth operation. However, Tshisekedi dismissed their argument, explaining that he had blocked a letter that his attorney general had wanted to send to the state prosecutor to ask him to authorise the Gécamines executives’ trip to Lubumbashi, where the company’s headquarters is located. According to a minister, “The President was very upset that day. He took a hard line on the issue.”³⁵⁸

It remains to be seen whether or not a political, as opposed to a legal, solution may be found, bearing in mind that the FCC does not plan on backing down.³⁵⁹

On 22 January, Emmanuel Ramazani Shadary, the leader of Kabila’s party, issued a public warning: “[Yuma] didn’t commit any wrongdoing. People are looking to blame him for something, but for what exactly? If we hear that something bad has happened to him […], we’ll paralyse the country.”³⁶⁰

There can be no more doubt that a raging political battle is on in Kinshasha for the control of the mining sector between two major forces: President Felix Tshisekedi and his American allies and former President Joseph Kabila and his Chinese allies.

Looking ahead to the 2023 presidential election and with the CACH coalition struggling to remake itself, the president of the Democratic Republic of Congo is trying to expand his electoral base by adding new political allies. On 20 September, Congolese President Félix Tshisekedi agreed to meet with a delegation led by his high representative, Kitenge Yesu. According to our sources, Yesu’s goal was to begin work to establish a large platform uniting new political allies around the Congolese president, with a view to the 2023 presidential election. Figures who took part in the discussion include Fiyou Ndondoboni, from the Orange party, and former presidential candidates Pierre Pay Pay (2006), Adam Bombole (2011), and Gabriel Mokia and Noël Tshiani (2018). Also in attendance were Eugène Diomi Ndongala, member of the Christian Democracy party, Jean-Claude Muyambo, former president of the Lubumbashi Bar Association and member of Moïse Katumbi’s Ensemble pour le changement platform, and Jean-Bertrand Ewanga, former secretary-general of Vital Kamerhe’s Union for the Congolese Nation (UNC) party. As the group’s eldest member, Pay Pay assured Tshisekedi of their willingness to back him in his “anti-corruption fight”. A drafting committee has been tasked with drawing up a charter and bylaws for the expanded platform, and they are set to be submitted to the head of state in the coming days. However, the Nairobi agreement signed by the latter and his ex-chief of staff, Kamerhe, who on 20 June was sentenced to 20 years in prison on charges of embezzlement of public funds, states that the UNC’s leader is to be the coalition’s candidate in the upcoming presidential election.³⁶¹

It is apparent that Felix Tshisekedi is going to re-contest in the 2023 general elections for the Presidency. In fact he is too young not to consider re-contesting. That is why he has been maneuvering and counter-maneuvering cobbling political alliances together here and there. For instance, he has hired and fired three Prime Ministers and he is currently with the fourth Prime Minister, indicating the shifting or perilous political ground on which he has to operate and ensure his regime and policy safety.

On the surface, the US is courting Tshisekedi to support its climate change position. It is also supporting Tshisekedi in his anti-corruption drive in the Congo, including other sundry supports. However, the warm embrace between the US and Tshisekedi government is not only meant to knock out or neutralize Joseph Kabila and his political allies out of the way in Congo politics especially in the looming 2023 general elections but essentially to wrestle Congo from the vicious grips of the Chinese and other contending global powers in the mining sector. Indeed, any move at a comeback in 2023 by Joseph Kabila is being rebuffed and slowly thwarted by the United States.

It is a proxy war that has been going on ever since the independence of Congo in the early 60s, with its tidal ebbs and flows of fortunes for all parties concerned. From the brutal assassination of Prime Minister Patrice Lumumba by Belgian colonial forces, American CIA and their local quislings, to the installation of one of the ruthless and venal dictatorships in Africa led by Mobutu Sese Seko to the brief interregnum of Laurent Kabila and to Joseph Kabila for eighteen years – to the present time – the US has always played a grandmaster role in masterminding and micro-managing some of the political upheavals in the Congo. However, it seemed that under Joseph Kabila-led government, the US temporarily lost out in the geopolitical “game of thrones” in the Congo to the new global power entrant, China, which came with its various multinational companies to take over the mining sector in Congo and subtly bullied all other rivals out of the way.

Logics and Implications

Cobalt has rapidly emerged as an essential ingredient for some of world’s fastest-growing industries, with products ranging from electric cars to laptop computers to cell phones. The Democratic Republic of Congo (Congo) decisively dominates global cobalt supply. This could be a good news story, of how rapid technological innovations which drive demand for raw materials could potentially be an engine of development for a long-suffering country with the majority of the world’s supply of one of those critical raw materials.³⁶²

Unfortunately, the story is beginning to unfold in a much different way, but it doesn’t have to. Increasingly, cobalt production in Congo is tied to grand corruption which undermines peace and democracy in the country and along with copper are two of the main sources of funds for the violent kleptocracy that President Joseph Kabila presides over. Cobalt production in Congo is also marked by human rights abuses, including child labor at the mines, well documented by Amnesty International and others. Because of the devastating impact the sourcing of cobalt for the products we buy has on Congolese citizens, urgent action is required to shine a light on the insidious linkages in Congo’s cobalt trade, to help alter the incentive structure away from violence, corruption and human rights abuses and towards a transparent, peaceful and responsible supply chain.³⁶³

It should be noted as well that cobalt mining occurs almost exclusively in tandem with or as a byproduct of copper mining. Copper is used in a wide variety of construction, transportation, defense technology, and machinery worldwide. In 2017, the National Mining Association reported that copper was the second most used mineral by the U.S. Department of Defense. Given this global industrial criticality, many of the contracts currently coveted for their cobalt production in Congo were first established mainly for their copper potential, before the surge in international demand for cobalt. Therefore, many of the findings and recommendations in this report can also be strategically applied to copper industry stakeholders in Congo and throughout the supply chain.³⁶⁴

Driven by a boom for its metallurgical and battery applications, demand for cobalt tripled between year 2000 and 2010. While cobalt extracted as a by-product of other metals was sufficient to supply the market during the 20th century, the steady growth in its demand in the last decade encouraged a large number of artisanal and small-scale miners (ASM) to extract heterogenite, a very common cobalt-ore in South-Eastern Congo. Unfortunately, what could have been an incredible opportunity to generate fair revenue and local development has so far not fulfilled its potential: the difficult coexistence of industrial and artisanal mining, combined with a lack of governance, generated severe negative social impacts in Katanga, the region that ensured half of the global cobalt production in 2010.³⁶⁵

The problems associated with ASM cobalt mining have chronic poverty at their root. The prices paid for the mineral, the revenue its sales generate for the government, and how those are distributed, seldom seem to benefit the miners and their families equitably or allow for investment in mine sites and working conditions. It is a systemic problem and its solution lies in a collective responsibility for action. Any organisation operating as part of — or associated with — the global cobalt supply chain should consider how it might best contribute to a solution. By taking a holistic approach, incorporating every stage of the cobalt supply chain, we can identify root causes and construct effective solutions to address the issues upstream.³⁶⁶

To build a green, sustainable and technology-driven economy, companies in the electronic and automotive industries are relying increasingly on battery technology. The performance of batteries is tightly tied to cobalt, which plays a critical stabilising role during recharging. As the demand for mobile communications and electric vehicles (EV) increases, the search for reliable and responsible sources of cobalt intensifies.³⁶⁷

The Democratic Republic of the Congo (DRC) is by far the world’s largest cobalt producer. The southern province of Lualaba (formerly Katanga), lying within the highly mineralised Copper Belt zone, has a long history of industrial mining. Rich cobalt deposits are found alongside the copper from which the area derives its name, concentrated around a handful of cities.³⁶⁸ Reputed to be some of the largest in the world, these mineral resources are estimated to comprise 51% of global cobalt reserves and currently, more than 70% of global production – an equivalent of 100,000 metric tonnes in 2019.³⁶⁹

While industrial cobalt mining accounts for approximately 80-85% of freshly mined cobalt production, artisanal and small-scale mining (ASM) makes up the balance and, historically, provided even greater volumes when large mines were not operating. Nearing the end of the Second Congo War in 2002, an estimated 90% of all cobalt mining was artisanal. Today, ASM is said to make up about 20% of Congolese national production, totalling approximately 20,000 tonnes in 2019.³⁷⁰

While cobalt is important for economic development, public discourse around its production has been largely negative. Its extraction process holds strong ties to poverty-driven child labour, unsafe working conditions, and lack of transparency in local mineral markets and inequitable distribution of benefits. This has created a rift in how cobalt is characterised. On one hand, it is the key to reaching a clean carbon-free future; on the other hand, it is a mineral that brings unwanted risks to corporate reputations and brand value.³⁷¹

Most artisanal cobalt mining sites in the DRC do not have adequate equipment or the capacity to monitor the safety of miners. Men descend down pits, which frequently exceed the maximum depth limit of 30 meters, without gloves, boots or hard hats, their only assistance is a cheap torch acting as a light source. Lack of proper management has also allowed diggers to excavate horizontal tunnels around the shafts, destabilising the entire area. Fatalities at these sites are unacceptably high and accidents are extremely frequent, however, only the best run sites have access to emergency equipment and clinics.³⁷²

Artisanal mining has been labeled one of the worst offenders of child labour by some international rights groups. Thousands of children have been recorded working on cobalt mining sites since 2014, some spending more than 24 hours underground (Amnesty 2016). Although much has been done to reduce these instances, child labour is still reported from the cobalt fields of the DRC. Many children, once removed from one mining site, will find work at another. With school fees putting a tremendous strain on the incomes of many families, children are either unable to attend school and instead complete domestic work or miss days or weeks of class-time to help fund their own education. This being said, child labour is not necessarily in competition with school attendance, as school hours are limited to just a few hours per day and no after school activities are provided. With nowhere else to go, many children follow older family members to work.³⁷³

The possibilities open to the DRC to strengthen and diversify their economy are abundant; regarding its natural resources, soil fertility, and availability of land, the country is thought to be one of the richest in the world. Many towns have become dependent on the mining sector, however, and have not attempted to diversify their income sources. This leaves the DRC with a limited range of employment possibilities that are unrelated to mining, a reliance on the import of goods that could be procured from their own assets and the decrease of competitive pricing for their non-cobalt exports; all symptoms of Dutch disease or, as it’s often known, the Resource Curse.³⁷⁴

While the DRC government permits artisanal mining at specially designated areas, as of 2020 only 1 out of 60 is currently operational. These areas require exploration and development, an expensive process that many ASM operators cannot easily afford. The majority of ASM takes place in mining zones not designated specifically for ASM and that require a formal agreement to operate. Some ASM operators either falsely claims to have such an agreement, possess agreements that have expired or ones that were issued by entities that have no legal authority to do so. While this informal practice can persist for years, it can also result in the removal of ASM from sites devastating the jobs of the miners and, in worst cases, resulting in local conflict. While such loose application of national rules and regulations can be accepted locally, it can also leave operators, mine workers and shareholders unwilling to invest in improvements at ASM sites and in the security of workers.³⁷⁵

Artisanal cobalt mining also causes several negative impacts for local communities of the Copperbelt, especially resulting from soil, air and water pollution: According to Banza et al. (2009), populations living in a radius of 10 km from mine-related activities showed higher urinary concentrations of Co, Pb, Cd and U than those of a control population. Nevertheless, soils in the Copperbelt naturally bear high concentrations of these elements, and industrial mining companies have a share of responsibility as well. Regarding human rights violation, prostitution of children in artisanal miner’s settlement has been reported. Indigenous rights are mostly ignored by groups of artisanal miners, in spite of the legal framework which imposes consultation of local communities and compensations for negative impacts on the resources of the community (agricultural land, drink water, wood stock, public infrastructures). Moreover, miners have higher incomes, and their presence results in local inflation that threatens the purchasing power of indigenous people. Rare cases of social investments from individual mine owners for drinking water supply and health care infrastructure are reported, although they do not result from a well-structured community engagement project.³⁷⁶

Apple, Google, Tesla and Microsoft are among firms named in a lawsuit seeking damages over deaths and injuries of child miners in the Democratic Republic of Congo. The case has been filed by the International Rights Advocates on behalf of 14 Congolese families. They accuse the companies of knowing that cobalt used in their products could be linked to child labour.³⁷⁷

The lawsuit filed in the US argues that the tech companies had “specific knowledge” that the cobalt sourced for their products could be linked to child labour. They say the companies failed to regulate their supply chains and instead profited from exploitation. Other companies listed in the lawsuit are computer manufacturer Dell and two mining companies, Zhejiang Huayou Cobalt and Glencore, who own the minefields where the Congolese families allege their children worked.  Glencore said in a statement to the UK’s Telegraph newspaper that it “does not purchase, process or trade any artisanally mined ore” adding that it also “does not tolerate any form of child, forced, or compulsory labour.”³⁷⁸

The court papers, seen by the UK’s Guardian newspaper, give several examples of child miners buried alive or suffering from injuries after tunnel collapse. The 14 Congolese families want the companies to compensate them for forced labour, emotional distress and negligent supervision. In a response to the Telegraph, Microsoft said it was committed to responsible sourcing of minerals and that it investigates any violations by its suppliers and takes action. A spokesperson for Google told the BBC that the company was “committed to sourcing all materials ethically and eliminating child mining in global supply chains”. An Apple spokesperson said the company was “deeply committed to the responsible sourcing of materials” and “if a refiner is unable or unwilling to meet our standards, they will be removed from our supply chain. We’ve removed six cobalt refiners in 2019”.³⁷⁹

The situation in Congo does not look good despite the pretense to the contrary. Comparatively, Congo’s situation is confounding and similar to that of Nigeria that is the sixth largest producer of crude oil in the world but for the last thirty years or thereabout cannot refined its oil for domestic consumption because of the inexplicable collapse of the four refineries established more than forty years ago. Nigeria’s existing four refineries have been allowed to run down over the decades with the implication of Nigeria importing all her refined products which in turn produces its own consequences via the greatest scam on the surface of this earth known as fuel subsidy for which trillions of Naira have been skimmed off by the ruling elite and its collaborators in the downstream sector of the oil industry.

Congo does not have a single industry built based on the domestication of any of its solid minerals. Congo is simply a supplier to the world market of the raw materials but not a manufacturer of finished products from the mineral resources. It simply has built no known local capacity to turn any of these materials into manufactured of finished products within Congo.

In short, Congo has willy-nilly but tragically surrendered itself as a pawn in the chessboard of global buyers and players in the solid mineral sector, pushed hither and thither, tossed up and down like a football – ultimately with little benefits for the citizens to obviate its sufferings of child abuse it has encountered in the course of domestic exploitation of these solid mineral resources. It is a tragedy of the century for a developing country or economy to have so little control over its natural resources because of its cosmic leadership failure. None of the multinational companies involved in the production or manufacturing of finished products based on these solid minerals has ever considered locating a manufacturing base in Congo based on the simple principle of economy of scale. All the MNCs have barely hidden contempt for the sovereignty of Congo and its people including its leadership.

Conclusion

Democratic Republic of Congo stands at a critical turning point in her political evolution. Even though she calls herself a “democratic republic”, she has only experienced minimal democratic rule. Patrice Lumumba was the first democratically elected Prime Minister immediately after independence but had his government violently terminated and personally gruesomely murdered by forces linked with Belgium, United States, Soviet Union and internal collaborators. Lumumba’s murder became a checkered point in the post-colonial history of Democratic Republic of Congo (formerly Zaire)

President Mobutu Sese Seko came to power in 1964 as a direct beneficiary of the truncation of democratic rule and the murder of Patrice Lumumba and was humiliated out of power in 1997, after 33 years in power. Mobutu was never democratically elected. Neither was Laurent-Desire Kabila who took over from Mobutu. Joseph Kabila took over from his father, Laurent Kabila, and was also not democratically elected. He only agreed to an election after enormous pressure both from within DR Congo and from without. President Felix Antoine Tshisekedi would be the second democratically elected President in the political history of DR Congo.

The economic history of DR Congo has been woeful. The economy has been battered over the decades by unheard-of gross mismanagement and corrupt practices by the political elite including the devastating effects caused by civil conflicts over the decades. In fact a key word has emerged to describe or characterize the poor state of the economy: kleptocracy. DR Congo is one of the poorest countries in the world despite the super abundance of solid mineral resources all which have been described as strategic because of their importance to the unfolding Fourth Industrial Revolution on a global scale part of which is the transition from heavy reliance and consumption of non-renewable fossil fuels to renewable “green” energy. Cobalt of which DR Congo has the largest deposit in the world (about 70 percent) is at the forefront of this green energy frontier which is mainly deployed in lithium-ion battery used in powering cell phones, laptops, solar panels, electric vehicles not to talk of military and other industrial applications.

The abundant availability of cobalt places DR Congo squarely in the centre of the global movement of the Fourth Industrial Revolution. But tragically, DR Congo has not been able to seize this opportunity to turn its economy around.

Nowhere else is this kleptocracy or kleptomania demonstrated more than in the mining sector. The crisis in the mining sector is much deeper than individual analysis would probably reveal. The crisis does not involve just the whole gamut of artisanal mining problems, not even the scale of corruption that has been recorded in the sector. The real crisis actually speaks directly to the exercise of sovereignty of Congo in the ownership of the mining sector.

The deal between Joseph Kabila government (2001 to 2019) and the Chinese-owned mining companies which involved ceding mining rights to these companies in exchange for nebulous infrastructure development projects is condemnable in its despicable nature. It is this broad context that the effort by Felix Tshisekedi government to enact and implement a new mining legal code to correct the extant problems afflicting the mining sector and restructure it for optimal revenue yield must be seen and appreciated. 

The recent syndicate report by 19 international media houses and 5 non-governmental organizations called “Congo Hold-Up” coordinated by European Investigative Collaborations (EIC) on the “Platform for the Protection of Whistleblowers in Africa (PPLAAF)” including two separate reports by The Sentry titled “Embezzled Empire: How Kabila’s Brother Stashed Millions in Overseas Properties” and “The Backchannel: State Capture and Bribery in Congo’s Deal of the Century” were a mind-boggling revelation about sordid and criminal corrupt practices in the immediate past Government of Democratic Republic of Congo, former President Joseph Kabila, his family members, cronies and foreign actors. This has already led to the establishment of a judicial panel of investigation into the multiple allegations of criminal acts that call for the prosecution of all the accused. How Joseph Kabila personally and the other indicted individual actors will wriggle out of the noose of the accusations leveled against them is left to be seen. The revelations, however, show how the media can play a very critical role to help deepen democratic rule, not only in the DR Congo, but also throughout Africa.

Artisanal mining in DR Congo presents a large-scale problematique in a huge embarrassing manner to the Congolese State, the multinational mining companies and the manufacturing giants making use of cobalt and other metals as their main raw materials in their production cycles. Nobody knows the extent to which the new mining legal code will tackle and help resolve the existential problems posed by artisanal mining. But interestingly, despite the huge cost in terms of loss of lives, dislocations of communities, and environmental degradation, artisanal mining has not broken the vicious cycles of poverty at all from DRC. DRC remains one of the poorest countries in the world, a fact that is often unpalatable to make publicly because of its embarrassing nature. Rather, artisanal mining has escalated or deepen poverty in Congo because the revenue from artisanal mining is only meant for daily survival purpose and not enough to start small and medium scale business that could push back the frontier of poverty. Artisanal mining, whether legal or illegal, does not generate wealth sufficient enough to eradicate poverty. On the other hand, it more often than generate poverty and insecurity as the empirical case of Nigeria has shown where in some Northern states of Nigeria, especially Zamfara and Katsina states are now two of the epicentres of insecurity (kidnapping for ransom, insurgency, banditry and all manners of criminalities) in Nigeria.³⁸⁰

About half of the youth (including children as old as 6 years) of the is engaged in artisanal mining which has not uplifted it out of poverty or fundamentally change the dynamics of economic activities in the  DR Congo. The youth of the country is being destroyed right before the very eyes of the Congolese State instead of providing for the welfare and security of the youth.

Changing the economic landscape of the Congo has become an imperative.  Gently withdrawing the youth and children employed “unofficially” by the mining companies and those who employed themselves and returning them back to school and other forms of vocational training is an urgent task before the Congolese State.

Tracing the antecedents of the superpowers and their involvement in the developing countries, there is no doubt in public mind that Democratic Republic of Congo has unwittingly boxed itself into a tight strategic corner whereby it has become a pawn in the chess board of the superpowers and their multinational giant corporations trying to perennially exploit the resources of their host countries, and thus forcing the government to loose sovereign ownership of their natural resources. The transition from Third Industrial Revolution based on the superstructure of consumption of non-renewable fossil fuels to the Fourth Industrial Revolution presumably based on consumption of renewable green energy and superstructure of digitalization has brought the superpowers into a visible unhealthy rivalry to the detriment of the natural resource-rich countries such as DR Congo with its super abundance of agreed strategic solid minerals such as cobalt. While DR Congo has no known strategic stockpile of these resources for future use, superpowers such as the United States, China, Russia and others are stockpiling these same resources.

The brave new world of the Fourth Industrial Revolution lies before Democratic Republic of Congo. It can make good its sordid past by carrying out a wholesale reform of the mining sector, eliminating artisanal mining and giving new opportunities for the Congolese youth not only in terms of education but also for employment opportunities. Solid minerals even including crude oil are the natural resources available to DR Congo to lift itself out of soul-shattering poverty and launched itself into the club of developed economies based on both the ingredients of Third and Fourth Industrial Revolutions.

That is the only way by which DR Congo can make itself strategically relevant not only for itself and African continent but also in the world, occupying a pride of place in the respected comity of nations.

Yet, a dangerous future exists. While cobalt is still considered strategic for now, this may not necessarily be the case in the coming future because of constant technological innovations or revolution. There is high possibility that dynamics in technological revolution can change the current scenario in the nearest future, thus leaving DR Congo like a fish out of water as a result of such changes in technology. The hint for this can be gleaned from report that in an effort to reduce U.S. dependence on foreign countries, the U.S. Department of Energy has released a national blueprint in June to help guide investment to develop domestic lithium battery manufacturing and support further R&D. Among its goals, the blueprint calls for eliminating cobalt from lithium batteries by 2030. Two U.S.-based start-ups, Sparkz and Texpower, say that they can help, though the companies have yet to prove out their technologies in electric vehicles. If such happens by 2030, just about nine years to this time, what would DR Congo do as regard its huge deposit of cobalt and other minerals?