Will Congo Benefit from U.S. Losing Control of Mining

Battery cells typically represent nearly one third of an electric car’s cost. The cells used by GM and other U.S. automakers are produced in South Korea but depend on the Chinese mined and processed cobalt from Congo.

The world’s supply chain for the cobalt now essential for the manufacture of electric vehicles is in the hands of China.  China’s purchase of the largest and richest  cobalt mine in the world, the southern Congo Tenke Fungurume mine, confirms its partnership with Congo in mining the country’s supply of two thirds of the earth’s known cobalt reserves. (See this blog’s 11/17 article “Congo’s Cobalt Powers Electric Cars” for more on cobalt) The second largest economy in the world now owns a controlling share of 15 of the 19 Congolese mines producing this critical raw material in the green revolution.

Having been the world leader in processing cobalt for years, China has succeeded in replacing the U.S. as Congo’s foremost foreign partner in mining the country’s reserves of the element and other strategic metals and minerals. The U.S. foreign policy and corporate establishment have largely ignored the few voices raising the alarm over the potential loss of access to Congolese supplies for powering electric vehicles and for semiconductor and chip manufacturing.  As the New York Times reported in a series of articles in November the 2020 sale by a U.S. company of a second Congolese mine rich in unexploited reserves of cobalt went virtually unreported in leading U.S. news media and caused little to no concern in the U.S. establishment.

China Molybdenum, a company partially owned by a Chinese government agency, has begun cobalt extraction at the Kisanfu mine, its second recent Congolese mining purchase. (Photo by Ashley Gilbertson of the NYT)

Although both the Obama and Trump administrations created bodies to study and protect the country’s supplies of vital resources for the nation’s economic growth, neither mounted opposition to purchase of the mines by China Molybdenum from Arizona based Freeport-McMoRan.  According to the Times investigators, the Arizona based company had invested heavily in fossil fuel extraction shortly before the 2010’s plunge in oil prices and thus needed a massive infusion of capital to remain viable.  Its sale in 2016 and 2020 of the two cobalt mines in Congo brought in over $3 billion.

Considering the decades of U.S. infusions of development and security aid, all with the declared intent of securing control of Congo’s vast reserves of vital raw materials, the country’s relinquishing the mining partnerships to China is perplexing.  When the superpower wrested Belgium’s mining interests in southern Congo from the former colonial power it was considered a foreign policy victory for the U.S.. But has the U.S. ceding dominance of Congolese mining jeopardized the Congolese people or their economic future? There is convincing evidence that it has not.    

When Freeport-McMoRan replaced another U.S. company as owner of the Tenke Fungurume mine in the early 2000’s, the property lay in ruins and overgrown with vegetation.  Congo’s challenges to the organizing of an efficient, productive mining operation, including the area’s periodic civil unrest, discouraged and finally overwhelmed the U.S. overseers.  Following its ouster of the Mobutu dictatorship, the Kabila administrations of father and son were eager to benefit from a transfer of ownership to a different U.S. company. That partnership with another U.S. mining firm ended with the Freeport sale of its mines to China Molybdenum.  The U.S. company’s cash deal with the Chinese in the final months of the Obama administration preceded  the end of the Kabila “kleptocracy” in December 2018. It also coincided with the boom in production of electric vehicles and the rising prices for cobalt. 

The sale also came almost ten years after China had signaled its aim to become the leading foreign partner in Congolese mining with the signing of a 2008 agreement.  In that agreement China committed to invest $3.6 billion to build roads, river transport, hospitals, universities and mining infrastructure in Congo.  A dam supplying electricity to a mining partnership of the two countries has now been built and is operational at a cost of $656 million.  While the agreement with China, called the “contract of the century” by the current Congolese Minister of Mines, was signed the same year Freeport McMoRan took over the Tenke Fungurume mine, no comparable aid package from the U.S. private or public sectors accompanied the purchase.

A Chinese crew is rebuilding a road next to the Tenke Fungurume copper-cobalt mine. (Photo by Ashley Gilbertson of the NYT)

At the beginning of 2021, China cancelled $24 million in debt repayments by Congo and pledged aid of $17 million for development projects in the country.  In return, the new Congolese President Tshisekedi signed on to the staggeringly ambitious Chinese Belt and Road Initiative for Asia, Central Asia and Africa.  A comparison of the eras of U.S. and now Chinese dominant influence in foreign aid for Congo does not favor the outcomes of western development and military aid. 

During my two years in Mbandaka from 1969-71, the U.S. replacement of Belgium as the leading foreign presence brought hope to the Congolese intelligentsia and the populace as a whole. Visions of sharing the country’s incomparable resources were supported by the burgeoning investments of U.S. companies and our government’s aid to Mobutu.  The fall of copper prices in the  mid 1970’s awakened some Congolese to the reality of a new neo-colonial economic order.  Along with the increased brutality and open corruption of the Mobutu rule, insurrections threatened resource extraction in Congo’s East and South where the riches lay.

By January, 1976, the Tenke Fungurume mine, had been abandoned by its U.S. overseers.  In effect, the company had declared defeat.  The recent NYT article notes that Henry Kissinger helped write a cable apologizing to Congolese authorities for the “mothballing” of the mining project in southern Congo.  Despite the huge investment in making a cobalt-free battery to power electric vehicles, continued growth of production at the TF mine today appears to be a safe bet. 

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The New York Times revised version of the article “How the U.S. Lost Ground to China in the Contest for Clean Energy” was published December 7, 2021. It was the lead in a series of articles written by three journalists focusing on the U.S.-Congo and China-Congo history of partnership and accompanied by Congo photos taken by Ashley Gilbertson.  

For more on the consequences of a dearth in cobalt supplies see this blog’s April 2021 article “Kansas City Auto Workers Pay the Price for U.S. Ceding Access to Congo’s Cobalt”).

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