China in the Democratic Republic of the Congo: A New Dynamic in Critical Mineral Procurement

Critical minerals will continue to grow in importance across the globe in the coming decades as technological advancements require greater quantities of these materials. The 2023 US Department of Energy Critical Materials Assessment report listed seven materials as critical in the short term because of their uses for magnets, batteries, and fuel cells: dysprosium, neodymium, gallium, graphite, terbium, iridium, and cobalt.¹ That same year, the Department of Defense noted cobalt’s critical applications to military technology.² Although cobalt is just one of dozens of critical minerals, its supply chain has come to be uniquely dominated by Chinese ownership. Cobalt, a key component in advanced technologies like batteries and solar-powered vehicles, underscores a growing geopolitical challenge for the United States as China strengthens its grip on critical-mineral supply chains. The case of cobalt highlights how China has come to control much of this critical mineral—with direct and indirect implications for American national security. Cobalt also warns of a dynamic that could be repeated for other materials like lithium, manganese, and additional rare earth minerals.

China’s dominance of global cobalt supply chains has coincided with expansions of the country’s economic and military influence to developing countries, particularly in Africa. Since the early 2000s, China has spent more than $155 billion in Sub-Saharan Africa, creating new markets for Chinese construction companies and making China a legitimate alternative to Western financing in the realm of developmental and commercial infrastructure.³ Although China has invested capital into multiple mineral-rich nations, the Democratic Republic of the Congo (DRC) stands out because of its vital role in the cobalt market. The DRC produces 80 percent of the world’s cobalt—Chinese state-owned enterprises and policy banks control 80 percent of the total output.⁴ Of the 10 largest cobalt mines in the world, nine are in the DRC’s southern Katanga region. Of the 10 largest mines, half are owned by Chinese companies.⁵ In refining cobalt, the position of Chinese state-owned enterprises is similarly dominant: Their refineries account for between 60 and 90 percent of the global supply.⁶ The DRC is essential to China’s position in the global market: 67.5 percent of China’s refined cobalt comes from the DRC.⁷

The DRC, Africa’s second-largest and fourth most populous country, has been devastated by internal conflict for decades, including two wars since the mid-1990s and ongoing rebel violence in the east that required a 24-year-long UN peacekeeping mission, with Chinese participation.⁸ Because of the country’s conflicts, the DRC has a vast, untapped potential to develop its mining capabilities and refine its outputs and a constant need for infrastructure and mining investments to meet the global demand for minerals. The DRC’s lack of domestic refining capability, need for investment, and unique position as the dominant source of cobalt made the country a prime vehicle for public and private Chinese investment—as part of the Belt and Road Initiative and frequently predating it. For example, in 2008, the DRC’s newly elected government signed an infrastructure and mining deal with China that was worth $6 billion.⁹ The funds—which would be equally split between mining and infrastructure development—established China as a major investor in the DRC, especially at a time when the DRC’s gross domestic product was only $19.79 billion.¹⁰ At its core, the deal exchanged natural resources for infrastructure spending. As a result, Chinese companies came to own 15 of the DRC’s 19 best cobalt and copper sites.¹¹ In theory, the deal was mutually beneficial and would provide the DRC with the stability and investment needed to capitalize on its tremendous reserves of natural resources.

In the decades since the 2008 Sicomines deal was signed, the deal has become symbolic of difficulties in the DRC–China relationship, as the former seeks better terms and more investment whereas the latter aims to consolidate its dominant position in DRC cobalt and copper mines. In the DRC, the agreement has increasingly been seen as imbalanced in China’s favor and the promised infrastructure investments have been fewer than anticipated. In 2016, the entire infrastructure expenditure as part of the Sicomines framework totaled $750 million.¹² In 2023, the DRC state auditor claimed the mines at issue had been undervalued and called for infrastructure spending to be raised to $20 billion. The auditor also claimed Chinese infrastructure investments since 2008 totaled $822 million.¹³ Other issues, such as the fact that Chinese companies administer all the mines and retain tax-exempt status, created pressure for the DRC’s leaders to strike a new balance. Since his election in 2018, Félix Tshisekedi, the current president of the DRC, has pushed for a favorable renegotiation of the 2008 deal.¹⁴

In January 2023, Tshisekedi’s efforts finally came to fruition. A final round of negotiation with the Chinese-backed Sicomines consortium led to a new agreement of $7 billion for infrastructure development.¹⁵ This new deal, however, does not seem to address the core issues of its predecessor. No new steps have been taken to increase accountability for how much money is invested or how the money is spent, nor will the DRC’s ownership stake in the mining sites increase. Instead, the deal seems to be a temporary solution for both sides. Chinese companies continue to extract raw materials while the Congolese government can point to higher infrastructure spending commitments. The lack of oversight is likely to continue, allowing for continued investment in the short term but furthering tensions over asymmetric interests in the long run.

Because of decades of investment and the increasing importance of cobalt to global manufacturing, China has little choice but to nurture its relationship with the Congolese government. China’s dominance in the cobalt supply chain is a result of its investments in mines in the DRC and its long-term transportation investments in surrounding countries like Tanzania and Zambia.

Although a significant portion of the DRC’s cobalt is brought to port by commercial trucking through Zambia to Tanzania, border posts have seen crossings brought to a standstill at various points in the last year. The journey to port, which can take more than one month round trip, also leaves truck drivers and their wares exposed to theft.¹⁶ These inefficiencies, estimated to cost Zambia and the DRC half a million dollars per day, have prompted suggestions to improve freight rail services.¹⁷

The Tan-Zam railway (also known as the TAZARA railway), constructed between 1970 and 1975 and funded by the Mao government, stretches more than 1,000 miles to connect coastal Tanzania and landlocked Zambia.¹⁸ Although Tanzania seeks additional aid from Beijing to modernize the ailing railway, the project has been widely seen as a successful case of Chinese investment in Africa and has aligned Tanzania and Zambia with China and against anti-communist countries like South Africa and Zimbabwe (formerly known as Rhodesia). The railway currently exports cobalt and other minerals out of Zambia, and in the future, the railway could be an important way for Chinese companies to extract cobalt from the isolated southern Katanga region in the DRC. An examination of the Zambia section of the railway reveals how close it comes to the border of the DRC, which could allow the railway to transport cobalt and other minerals from the DRC to Dar es Salaam. The Tan-Zam railway is a direct competitor of the US-backed plan to direct resource shipments to the Atlantic port of Lobito in Angola.¹⁹ In February 2024, China announced plans to spend $1 billion modernizing the Tan-Zam railway in return for operational control, which has the potential to increase critical mineral exports to China exponentially.²⁰ Because of crowding in Dar es Salaam’s ports, China has also taken steps to modernize shipping from Tanzania. In 2013, the Tanzanian government, and the Oman Investment Authority announced a $10 billion deal to redesign and modernize Bagamoyo port, which sits north of Dar es Salaam.²¹ In 2016, then-Tanzanian President John Magufuli contested the terms of the deal and halted the project.²² After Magulfi’s unexpected death in 2021, the current president, Samia Suluhu Hassan, expressed interest in reviving the port deal, but no concrete steps have been taken and negotiations are ongoing. Contingent on future Chinese investment, the various sites discussed could eventually comprise a sophisticated network of Chinese mining sites, transport sites, and refineries that guarantee secure access to natural resources.

China’s dominance in the cobalt market has direct and indirect implications for American national security and our military procurement process. In 2023, the Department of Defense identified cobalt as a “component of multiple munitions and high-temperature aerospace alloys used by [the Department of Defense]” and noted cobalt “has critical applications in high-capacity batteries for military and commercial electric vehicles.”²³ Beyond its direct military applications, cobalt is integral to many advanced consumer technologies, particularly lithium-ion batteries. Given the increasing importance of electric cars, by 2030, cobalt demand is expected to grow to four times its 2020 levels.²⁴ China’s involvement in the DRC cobalt supply chain could present a possible national security issue and put American companies at a disadvantage in the race to make more efficient and affordable electric vehicles. By failing to secure its cobalt supply chain, the United States runs the risk of losing access to an essential component of several ubiquitous technologies. Although cobalt’s military applications may be fewer than its commercial uses, insecure cobalt supply chains still represent a substantial national security threat.

Despite some of the attention the issue of cobalt has received in the last few years, China’s rise in the DRC’s cobalt-mining industry resulted from diminishing American investment. In 2016, Arizonan mining company Freeport-McMoRan Inc. sold Tenke Fungurume, a copper- and cobalt-mining site, to China Molybdenum Company Limited. In 2020, Freeport-McMoRan Inc. made another sale of an undeveloped copper and cobalt site to China Molybdenum Company Limited. In both cases, the only companies with competitive bids were Chinese firms. According to Kathleen L. Quirk, Freeport-McMoRan Inc.’s president, “[Chinese firms] were able to move swiftly and quicker than anybody else could.”²⁵ American companies, given no support by the federal government to retain their holdings in the DRC or purchase holdings for sale, were unable to compete with Chinese companies and their billions of dollars in government loans.

Although cobalt is just one of the many critical minerals that will prove decisive in developing advanced military and commercial technologies, the dynamic the mineral illustrates between the United States, China, and resource-rich developing countries is likely to continue to play out over the coming decades. China’s close relationships with the leaders of many developing countries, its long-standing investments in infrastructure, and the support China provides its domestic firms will put the United States at a disadvantage. If the United States seeks to secure the supply chains for critical minerals, it will need to present itself as a viable alternative to Chinese investment.

To present the United States as a viable alternative, the United States and its partners cannot simply follow the Chinese playbook. An alternative to Chinese financing should offer something better. One way to attract the interest of African states would be to support investments that allow African countries to add value by refining and manufacturing rather than solely exporting their raw materials. By focusing on projects that add value to resources domestically, the United States and its allies could offer a more compelling alternative to Chinese financing while enabling African states more latitude and agency in the process.

If the supply chains for other critical minerals go the way of cobalt, the United States will find itself unable to rely on the resources most necessary to defense and commercial applications.

Farrell Gregory

Farrell Gregory is a junior at Dickinson College, majoring in Chinese and international studies. He is currently a visiting student at Mansfield College, Oxford, studying politics, philosophy, and economics. Gregory also serves as a policy fellow at the Foundation for American Innovation and a research assistant at the Yorktown Institute. His published works include analyses of Chinese foreign investment, American national security, and supply-chain vulnerabilities. His work experience includes internships with the US Senate, the US International Development Finance Corporation, and the China Landpower Studies Center at the US Army War College.

LTC Paul J. Milas

Lieutenant Colonel Paul J. Milas is a US Army Sub-Saharan Africa foreign area officer and the director of African affairs at the Strategic Studies Institute, US Army War College, where he researches and publishes on national security topics important to the defense community. His experience includes serving as the senior defense official / defense attaché at the US Embassy in Kigali, Rwanda. Milas’s experience also includes serving in the Middle East / Africa Regional Center at the Defense Intelligence Agency and at the US Embassy in Addis Ababa, Ethiopia. He holds a master of international public policy degree from Johns Hopkins University and a bachelor of arts degree in political science from Indiana University.

Endnotes

1. U.S. Department of Energy, Critical Materials Assessment (U.S. Department of Energy, May 2023). Return to text.
2. “DOD Enters Agreement to Expand Domestic Manufacturing and Strengthen U.S. Cobalt Supply Chains,” U.S. Department of Defense (website), June 15, 2023, https://www.defense.gov/News/Releases/Release/Article/3429442/dod-enters-agreement-to-expand-domestic-manufacturing-and-strengthen-us-cobalt/. Return to text.
3. Robert Bociaga, “China’s Africa Belt and Road Investment Drops as West Spends More,” Nikkei Asia (website), March 25, 2023, https://asia.nikkei.com/Spotlight/Belt-and-Road/China-s-Africa-Belt-and-Road-investment-drops-as-West-spends-more. Return to text.
4. “From Cobalt to Cars: How China Exploits Child and Forced Labor in the Congo,” Congressional-Executive Commission on China (website), November 14, 2023, https://www.cecc.gov/events/hearings/from-cobalt-to-cars-how-china-exploits-child-and-forced-labor-in-the-congo. Return to text.
5. “World’s Ten Largest Cobalt Mines in 2020,” Mining Technology (website), September 6, 2021, https://www.mining-technology.com/marketdata/ten-largest-cobalts-mines-2020-2/. Return to text.
6. Brian Deese and Jason Bordoff, “How to Break China’s Hold on Batteries and Critical Minerals,” Foreign Policy (website), October 4, 2023, https://foreignpolicy.com/2023/10/04/ev-electric-china-us-batteries-critical-minerals-energy-oil-renewable/. Return to text.
7. Claude Kabemba, “China-Democratic Republic of Congo Relations: From a Beneficial to a Developmental Cooperation,” African Studies Quarterly 16, no. 3–4 (December 2016). Return to text.
8. John Pomfret, “China Sending Troops as Congo Peacekeepers,” The Washington Post (website), February 11, 2003, https://www.washingtonpost.com/archive/politics/2003/02/12/china-sending-troops-as-congo-peacekeepers/4690a140-75e8-4b01-ab90-10ceeb0c3e48/. Return to text.
9. Michael J. Kavanagh, “Congo Reviews $6.2 Billion China Mining Deal as Criticism Grows,” Bloomberg (website), September 28, 2021, https://www.bloomberg.com/news/articles/2021-09-28/congo-reviews-6-2-billion-china-mining-deal-as-criticism-grows. Return to text.
10. “Congo, Dem. Rep.,” World Bank Group (website), n.d., accessed on March 6, 2024, https://data.worldbank.org/country/congo-dem-rep. Return to text.
11. Gracelin Baskaran, “A Window of Opportunity to Build Critical Mineral Security in Africa,” Center for Strategic and International Studies (website), October 10, 2023, https://www.csis.org/analysis/window-opportunity-build-critical-mineral-security-africa. Return to text.
12. Claude Kabemba, “China-Democratic Republic of Congo Relations: From a Beneficial to a Developmental Cooperation,” African Studies Quarterly 16, no. 3–4 (December 2016): 73–88. Return to text.
13. Emmet Livingstone, “Uncertainties Remain with Renegotiated Chinese Mining Deal in DRC,” Voice of America (website), January 26, 2024, https://www.voanews.com/a/uncertainties-remain-with-renegotiated-chinese-mining-deal-in-drc-/7458908.html. Return to text.
14. “DR Congo Wants to Revise 2008 Mining Agreement with China,” The Brussels Times (website), March 19, 2023, https://www.brusselstimes.com/415519/dr-congo-president-tshisekedi-wants-revision-of-mining-contract-with-china-from-2008. Return to text.
15. Livingstone, “Uncertainties Remain.” Return to text.
16. Isabelle King, “Refining the Lobito Corridor: The Future of Cobalt in Sub-Saharan Africa,” Harvard International Review (website), August 22, 2024, https://hir.harvard.edu/refining-the-lobito-corridor-the-future-of-cobalt-in-sub-saharan-africa/. Return to text.
17. Kathy Short, “DRC, Zambia Vow to Resolve Customs Delays for Trucks Hauling Copper, Cobalt,” Voice of America (website), February 20, 2023, https://www.voanews.com/a/drc-zambia-vow-to-resolve-customs-delays-for-trucks-hauling-copper-cobalt/6970809.html. Return to text.
18. “Historical Background of Tazara,” Tanzania Zambia Railways (website), n.d., accessed on October 16, 2024, https://www.tazara.co.tz/. Return to text.
19. Matthew Hill, “The Great Rail Race to Tap Zambia’s Copper: Next Africa,” Bloomberg (website), February 23, 2024, https://www.bloomberg.com/news/newsletters/2024-02-23/us-china-in-race-to-get-copper-cobalt-out-of-africa. Return to text.
20. Matthew Hill and Taonga Mitimingi, “China Proposes a $1 Billion Tanzania-Zambia Railway Revamp,” Bloomberg (website), February 7, 2024, https://www.bloomberg.com/news/articles/2024-02-07/china-proposes-a-1-billion-tanzania-zambia-railway-revamp. Return to text.
21. “Tanzania’s China-Backed $10 Billion Port Plan Stalls over Terms – Official,” Reuters (website), May 22, 2019, https://www.reuters.com/article/markets/tanzania-s-china-backed-10-billion-port-plan-stalls-over-terms-official-idUSL5N22Y26W/. Return to text.
22. Jan-Ole Voss and Daniel Fabian, China and Tanzania in the New Era: A Complicated Relationship, Voices from Tanzania no. 2 (Konrad Adenaur Stiftung, July 2022). Return to text.
23. “DOD Enters Agreement to Expand Domestic Manufacturing and Strengthen U.S. Cobalt Supply Chains,” U.S. Department of Defense (website), June 15, 2023, https://www.defense.gov/News/Releases/Release/Article/3429442/dod-enters-agreement-to-expand-domestic-manufacturing-and-strengthen-us-cobalt/. Return to text.
24. Kara Norton, “Cobalt Powers Our Lives. What Is It—and Why Is It So Controversial?,” National Geographic (website), December 21, 2023, https://www.nationalgeographic.com/environment/article/cobalt-mining-congo-batteries-electric-vehicles. Return to text.
25. Eric Lipton and Dionne Searcey, “How the U.S. Lost Ground to China in the Contest for Clean Energy,” The New York Times (website), November 21, 2021, https://www.nytimes.com/2021/11/21/world/us-china-energy.html. Return to text.

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