At the beginning of March, a Congolese court ordered Chinese Molybdenum Co. (Luoyang Luanchuan Molybdenum) to cede control temporarily (for approximately six months) of the cobalt mine –Tenke Fungurume. The state-owned miner Gécamines SA of the Democratic Republic of the Congo (DRC) accused Chinese Molybdenum of trying to evade paying millions of dollars in royalties by under-reporting reserves. China Molybdenum acquired the mine from Freeport McMoRan Inc. in 2016 for $2.65 billion. The investigation has been extended to several other Chinese companies there. That extension threatens to affect China’s global competition in cobalt.
The DRC’s cobalt belt is the world’s richest source of cobalt. It has become critical to the global transition to cleaner energy. Cobalt can boost charge rates and has a stabilizing effect, extending battery life and preventing cathode corrosion that can lead to battery fires. Just one electric vehicle can require between 10 and 30 pounds of cobalt to build its battery, depending on the manufacturer.
China has been using electric vehicles as a breakthrough point to catch up with the Western auto industry. It has not only included them in the ten key areas of “Made in China 2025” but has also laid out a big plan to monopolize cobalt by investing heavily in Africa. China’s interest includes areas from cobalt mining to the generation of lithium batteries. It also includes cobalt refining, manufacturing battery cells, integrating battery modules and assembling batteries. China is trying to control the entire ecosystem. The Wall Street Journal previously reported that, for more than a decade, Chinese companies have spent billions of dollars buying out U.S. and European mines in the DRC’s cobalt belt.
According to the estimates by Darton Commodities, Chinese refineries supplied 85 percent of the world’s battery cobalt in 2020. Most of this cobalt came from the DRC. Last year the DRC accounted for 70 percent of the world’s total cobalt production. Chinese companies dominate nearly 70 percent of the country’s mining industry.
The DRC is one of the world’s poorest countries. More than 60 percent of its 90 million people live on less than $1.90 a day. According to the World Bank, the DRC’s annual budget is about $7 billion. In the middle of last year, during a visit to mining areas, DRC President Félix Tshisekedi vowed that his government would continue to review mining contracts to ensure that the Congolese people benefit from their vast extractive industry and finally break the so-called resources curse by paying higher wages and royalties.
Euractiv even reported that the Congolese workers of Sicomines who are employed by a company a Chinese consortium owns claim that they do the same work as Chinese workers do but are paid much less than Chinese and their Chinese supervisors subject them to degrading treatment.
Source: Epoch Times, March 12, 2022
https://www.epochtimes.com/gb/22/3/12/n13641727.htm