China’s Monopoly over Critical Minerals

Image Source: BBC

As part of China’s Belt and Road Initiative, the Chinese Communist Party (CCP) has taken to investing in critical mineral mines globally. One of these investment hotspots is the Democratic Republic of Congo (DRC). In 2020, the DRC was the world’s largest cobalt miner, producing 41 of all cobalt resources. Although not the largest producer of copper – Chile produces 27 percent of the global copper production – the DRC boasts the highest-quality copper reserves in the world, with mines estimated to contain copper with grades above 3 percent, 2.4 percent higher than the average supply globally. The mining industry is central to the DRC’s economy, making up over 90 percent of its exports.

The DRC welcomes foreign investment. More exports in addition to more investment in state infrastructure will ultimately make the economy more self-sufficient. A stable economy will lay the foundations for development, whilst making it a more attractive trading partner. Economic prosperity will aid political stability and provide the government with the capabilities to reduce crime and violence rates across the country. Despite extensive criticism of the Belt and Road Initiative’s (BRI) “debt-trap diplomacy,” money is money – and the DRC will take any investment it can get. The United States and its allies should be concerned about China’s dominance in the global critical minerals market. By retaining this monopoly in the market, the CCP can continue to leverage its access to critical minerals by gaining a significant lead in semiconductor and battery production, and subsequently in the field of climate security technologies. This would leave the rest of the world increasingly dependent on the Chinese economy and its ability to innovate.


These rare earth minerals are used in the manufacturing process of many key technologies. However, they are most importantly used for semiconductor production. Semiconductors are used in electric engines and other renewable energy sources that will be vital in addressing and adapting to climate change. Most clean energy technologies require a larger number of minerals to construct compared to their fossil fuel-based counterparts. Cobalt has a very high melting point as well as magnetic properties, making it useful in turbines, rocket engines, and permanent magnets. Moreover, it is used in cathodes for lithium batteries. The majority of all-electric engines and plug-in hybrid electric vehicles (PHEV) produced today use lithium-ion batteries. One of these engines will require approximately six times more mineral inputs than a gas-powered car engine. Likewise, compared to a gas-fired plant, an onshore wind power plant needs nine times more mineral resources. These minerals are vital in retaining battery energy density, longevity, and thus its battery performance.

(Graph from International Energy Agency’s Report on the Role of Critical Minerals in Clean Energy Transitions)

Chinese Investment

China is one of the largest producers and suppliers of critical minerals in the world, including the rare earth elements (REEs), lithium, antimony, indium, tungsten, and graphite, among others. These rare earth elements are critical to many high-tech and green energy applications. China accounts for over 80 percent of the world’s REE supply and is therefore a dominant player in the global market. Lithium is used in rechargeable batteries and is essential for the production of electric vehicles. China is the largest producer and consumer of lithium in the world. In addition to this, China is a major producer of antimony, which is used in flame-retardant materials and semiconductors; and tungsten, which is used in steel alloys and cutting tools. However, China does not host enough cobalt or copper resources to facilitate the acceleration in its semiconductor production. Instead, they have to look elsewhere for such resources, namely the DRC.

China has a significant presence in the cobalt mining industry in the DRC, owning 15 out of the 17 cobalt mining operations in the country as part of its BRI. One of these operations is the Luiswishi Mine, a medium-sized open pit mine located near the capital of Haut-Katanga Province, Lubumbashi. Chinese mining company Congo Dongfang International Mining, a subsidiary of Huayou Cobalt, acquired the mine in 2015. Chinese state banks have also extended lines of credit up to USD$124 billion to the top five largest Chinese mining companies to continue operations in the DRC. While China’s investments have brought economic benefits to the DRC, the country’s dominance in the mining sector has raised concerns about resource and trade exploitation. Mining operations must be conducted responsibly and sustainably, with benefits being shared equitably, to ensure the long-term economic development of the DRC and fair treatment of labor.

Infrastructure and Corruption

One of the biggest problems faced by DRC is the lack of vital infrastructure for critical mineral mining. This can be traced back to the Congo’s Third Civil War, which officially ended in 2003 but left a lasting impact on the country’s infrastructure. The conflict destabilized, resulting in a lack of funding for infrastructure projects, particularly in the remote mining regions in the southeast of the country. The war also caused significant damage to the country’s existing infrastructure, including roads, railways, and power grids, which were never fully repaired or replaced due to limited resources. Either international private or state-backed actors can readily provide funds for mining access infrastructure, essential for the industry’s viability in the DRC.

Furthermore, the conflict created a culture of corruption and exploitation, particularly in the mining industry. Armed groups seized control of many mining sites, using forced labor and violence to extract and trade minerals. Even after President Joseph Kabila attempted to police these areas and demilitarise the mining zones in September 2010, mineral smuggling and military involvement continued. Supply chain disruptions can occur if minerals are sourced from areas with a history of conflict or human rights abuses. In 2013/14, 79 percent of the 330 mines in the North and South Kivu provinces of DRC had either non-state armed groups or public security forces present. The lack of security in the mining regions has also discouraged investment in infrastructure, as companies fear losing their assets to armed groups or corrupt officials.

However, there have been examples of international companies seeking to profit from the country’s resources by paying off these groups for access to the mines, effectively funding conflict and perpetuating human rights abuses. There have also been cases of poor oversight of working conditions, the most prevalent cases have been Glencore and China Molybdenum Co. Ltd. In 2018 Glencore, a Swiss-based mining company, faced criticism for its activities in the DRC. Local citizens sued Glencore for alleged harm caused by its mining operations and accused it of purchasing minerals from miners who use child labor and workers in dangerous conditions. Another company that has been criticized for its activities in the DRC is China Molybdenum Co. Ltd, a Chinese mining company that acquired a majority stake in one of the country’s largest copper and cobalt mines in 2016. The acquisition was criticized by human rights groups, who accused the company of supporting groups responsible for allowing human rights abuses and corruption to pervade the DRC.

It is important to note that not all international mining companies operating in the DRC have engaged in unethical practices. Other international mining organizations have pushed for ethical mining practices. For example, Fair Congo, a U.S.-based social enterprise works with artisanal miners in the DRC to promote fair labor practices, reduce environmental harm, and ensure that a greater share of profits from mining activities go to local communities. Fair Congo also partners with international companies to ensure that their supply chains are free from conflict minerals and promote ethical mining practices. However, the ongoing conflict and lack of government regulation in the country’s mining industry make it difficult to ensure that all mining activities are conducted ethically and responsibly. Until the government can establish stability and security in these regions, as well as promote transparency and accountability in the mining industry, it is unlikely that significant progress will be made in developing the infrastructure necessary for sustainable and responsible mining practices. The pursuit of political stability and reduced militia activity in the DRC can be encouraged in the short term by international advocacy and support for stable governance. In the long term, sustainable aid and FDIs in the DRC’s institutions, education system, and labor-heavy sectors, particularly mining, will help build a resilient economy. Economic independence will provide further opportunities for citizens and deter reliance on crime and militia violence, thus creating a cycle of economic prosperity,

The U.S.-DRC-Zambia Memorandum of Understanding (MOU) is a partnership agreement signed in 2020 between the United States, the Democratic Republic of Congo (DRC), and Zambia. The MOU aims to promote responsible sourcing of cobalt, a critical mineral used in the production of batteries for electric vehicles, by improving transparency and traceability in the supply chain. The agreement also seeks to support economic development in the DRC and Zambia by promoting sustainable mining practices and providing technical assistance to small-scale miners. The MOU is seen as a positive step towards promoting responsible and sustainable mining practices in the region and ensuring that the benefits of mining are shared equitably.

Climate Change

Due to the significant impact of mineral production and processing on local communities and the environment, consumers and investors have demanded increased sustainably and more responsibly-sourced minerals. Many consumers are becoming more aware of the social and environmental impact of the products they buy, and investors are increasingly focusing on environmental, social, and governance (ESG) issues when making investment decisions. However, meeting this demand can be difficult if environmental and social performance are not improved. To meet the growing demand for sustainably- and responsibly-sourced minerals, companies must ensure that they operate in a socially and environmentally responsible manner, with transparent and traceable supply chains that are free from human rights abuses and environmental harm.

Furthermore, more than half of the world’s current production of lithium and copper is concentrated in regions with high water stress levels. This includes regions such as Australia, China, and Africa, where water scarcity is a major concern. Water is a critical resource in mining operations, particularly in the processing of minerals. In addition, these regions are also vulnerable to extreme weather conditions such as floods and high temperatures, which can disrupt mining operations and impact supply chains. The challenge is further compounded by increasing demand for electric vehicles and renewable energy technologies that rely on these minerals. As a result, mining companies and governments must work together to address the water stress and environmental challenges associated with the production of these critical minerals to ensure a stable and sustainable supply for the future.

The DRC lacks the infrastructure to deal with a number of issues surrounding critical mineral mining. Hence, the DRC has welcomed foreign direct investment and joint ventures in its mining operations with open arms. The CCP has taken full advantage of this opportunity as part of BRI. As a result, it has gained a monopoly over cobalt and copper resources in DRC, supplementing its own homegrown critical mineral resources. These critical minerals are key ingredients to semiconductor production. Semiconductors make up a critical component of chip manufacturing for electric engines, solar panels, wind turbines, and other forms of climate control technologies.

China’s advantage in semiconductor production will position it in the lead for innovation in the field of climate change security. The United States and its allies will find it hard to catch up with China due to the latter’s efficacy in cornering the market and will most likely increase the West’s dependence on China’s technology sector. The United States and its allies must focus on the critical mineral mining component of semiconductor production. Although there have been multilateral efforts to promote fair and sustainable mining operations, like Fair Congo and the MOU, more work can be done through public sector diplomacy and private sector investment by the United States and its allies to counter China’s growing monopoly, the preservation of a free and open market for essential ingredients in the development of technologies aimed at advancing climate change resilience and adaptation is of paramount importance. The establishment of a monopoly by China over critical minerals, which play a vital role in semiconductor production, poses a significant obstacle to this objective.

A more competitive approach by the United States and its allies will also benefit the DRC. Shedding light on the critical mineral mining sector in the DRC and its importance in semiconductor production, and subsequently climate change adaptability and resilience technologies will lead to an exponential growth in productivity and exports for the country. This leap in DRC’s GDP will provide more economic opportunities for the country’s citizens to develop their economy sustainably, independently, and equitably. Reducing economic strife will create more socio-political stability nationwide and reduce the hold that violent non-state actors and militia groups have on the country. The DRC can be a prime example of how using fair but competitive investment can promote a cycle of economic growth and political stability in developing and politically divided countries. Moreover, these types of investment will continue to be important in climate resilience and adaptation, both of which have become focal points in investment in innovation and technology in Sub-Saharan African economies.

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