Tshisekedi Poised for Victory in DRC Presidential Election Amid China’s Mineral Quest

[ad_1]

The Democratic Republic of the Congo (DRC) is currently still counting votes from its presidential election held Dec 20-21, but incumbent leader Félix Tshisekedi appears to be the winner, with the country’s electoral commission on Dec. 25, saying he has won over 80 percent of the vote so far.

The election is significant not only for DRC citizens, eager for governmental solutions to economic and social challenges but also for the Chinese Communist Party (CCP), whose interest lies in securing the central African nation’s vast mineral resources and ensuring the smooth progression of its “Belt and Road” initiative.

The poll follows the historic 2019 presidential election that marked the first peaceful transfer of power in 63 years, resulting in the election of Mr. Tshisekedi.

One of the key focuses of the election was “cleaning up of the mining industry,” heightening tensions between the local government, the populace, and mining companies under CCP control. Recent years have seen an escalation in these tensions, reflecting the high stakes involved in the electoral outcome.

The DRC holds a strategic position as the world’s leading source of cobalt, with 70 percent of global cobalt extraction originating from its mines. Chinese companies, in particular, have targeted a substantial share of the DRC’s cobalt production, extracting 50 to 70 percent of the world’s lithium and cobalt while also dominating the production of other critical minerals essential for energy transition and defense manufacturing.

The presence of 58 Chinese companies in the DRC, as reported in the CCP “List of Chinese Institutions in the DRC in 2016,” is noteworthy, with 15 out of the top 19 DRC leading companies wholly or partially owned by Chinese entities.

Related Stories

Podcast Reveals Modern Day Slavery at CCP-Controlled Cobalt Mines in the Congo
Congo's $6 Billion China Mining Deal 'Unconscionable,' Draft Report

In 2021, the DRC government initiated a review of a $6 billion “infrastructure-for-minerals” deal with Chinese investors, part of a broader examination of mining contracts.

One prominent player is Zijin Mining Group, based in Longyan City, Fujian Province, which has heavily invested in and acquired mining rights in collaboration with the DRC local government. Notably, the group completed the Kamoa-Kakula copper mine in 2015, which has now been ranked as the world’s fourth-largest copper mine.

Another significant player is Zhejiang Huayou Cobalt Ltd., whose subsidiary, Congo Dongfang International Mining, plays a role in providing raw materials for Apple iPhone batteries. The company made substantial investments in the DRC, building two cobalt refining plants in the region in 2015 after obtaining mining rights. By 2017, Huayou Cobalt’s global market share reached 21 percent.

Mr. Tshisekedi has voiced concerns about mining contracts that did not fully benefit the DRC, emphasizing the need for better cooperation terms with Chinese authorities.

This sentiment aligns with the government’s announcement in August 2021 to reevaluate the reserves and resources of the Tenke Fungurume large copper-cobalt mine, purchased by China’s Luoyang Molybdenum Industry Co., Ltd. in 2016 for $2.65 billion from Freeport McMoRan Inc.

In March 2022, the Luoyang Molybdenum Industry faced legal repercussions, with a court stripping its management control over the Tenke Fungurume mine due to allegations of evading royalty fees.

The Sud-Kivu province witnessed the suspension of nine mining companies, including six Chinese enterprises, to restore order in gold mining activities. This move was aimed at addressing conflicts between local communities and foreign gold miners, particularly in the Mwenga region.

 An employee of Luoyang Molybdenum at a pit of the Tenke Fungurume mine in the Democratic Republic of the Congo (DRC) on June 17, 2023. (Emmet Livingstone/AFP)
An employee of Luoyang Molybdenum at a pit of the Tenke Fungurume mine in the Democratic Republic of the Congo (DRC) on June 17, 2023. (Emmet Livingstone/AFP)

Additionally, an agreement with Sinohydro Corporation and China Railway Group Limited (CREC) in 2007 underwent government scrutiny to ensure fair and effective implementation.

Mr. Tshisekedi’s consistent calls for improved cooperation terms underscore the intricate challenges facing the DRC in managing its mineral wealth, especially concerning contracts with China. He explicitly stated that the $6.2 billion mineral-for-infrastructure contract signed with China by the previous president did not benefit the DRC.

Shifting Dynamics

The United States and its Western allies are strategically re-engaging with Africa, aiming to challenge China’s dominance in the mining industry within the DRC. This shift positions the DRC and Zambia, both rich in mineral reserves, as key targets for U.S. cobalt production and supply.

In a significant development, the United States announced a groundbreaking move at the Group of Seven (G7) summit in Japan earlier this year. The U.S. International Development Finance Corporation (DFC) is currently assessing a $250 million financing plan for the Lobito Atlantic Rail Corridor in Africa. This marks the DFC’s inaugural railway investment on the continent, with the completed railway expected to serve as a more convenient gateway for European imports and a cost-effective transportation route for copper, cobalt, and manganese mined in Angola, the DRC, and Zambia.

The United States envisions that this corridor will not only boost the investment appeal of the three African countries but will also establish an alternative route to destinations beyond China for mineral processing. The move is part of a broader U.S. strategy to increase its African presence and reduce dependence on China for critical minerals.

In September 2022, the DRC took a notable step by participating as a non-partner country in the inaugural summit of the Minerals Security Partnership, a collaboration initiative initiated by the Biden administration in conjunction with major Asian and European allies.

Subsequently, the DRC attended the U.S.-Africa Summit hosted by the Biden administration, culminating in the signing of an agreement for the joint development of the electric vehicle battery supply chain.

 U.S. Secretary Antony Blinken (C) poses with Democratic Republic of the Congo (DRC) Foreign Minister Christophe Lutundula (L), DRC President Felix Tshisekedi (2nd L), Zambia's President Hakainde Hichilema (2nd R) and Zambian Foreign Minister Stanley Kakubo (R) during a memorandum of understanding signing ceremony in Washington, on Dec. 13, 2022. (Evelyn Hockstein/AFP via Getty Images)
U.S. Secretary Antony Blinken (C) poses with Democratic Republic of the Congo (DRC) Foreign Minister Christophe Lutundula (L), DRC President Felix Tshisekedi (2nd L), Zambia’s President Hakainde Hichilema (2nd R) and Zambian Foreign Minister Stanley Kakubo (R) during a memorandum of understanding signing ceremony in Washington, on Dec. 13, 2022. (Evelyn Hockstein/AFP via Getty Images)

During these summits, U.S. Secretary of State Antony Blinken emphasized that the United States, in collaboration with the DRC and Zambia, aims not only to extract minerals but also to process, manufacture, and assemble them into batteries. This strategic move directly challenges China’s dominant position in this crucial sector.

The United States has long sought the reduction of Chinese companies’ shares in the DRC’s mining sector. Under the pretext of anti-corruption measures, the United States has supported the DRC in conducting a comprehensive review of past mining contracts signed with China. This support has provided the DRC with increased leverage in negotiations with China.

Mr. Tshisekedi, during his visit to China in May, issued instructions to his team to explore possibilities for increasing the DRC’s stake in the cobalt-copper joint venture with China from 32 to 70 percent.

 Trucks loaded with copper prepare to leave Tenke Fungurume Mine, one of the largest copper and cobalt mines in the world, in the southeastern Democratic Republic of Congo (DRC) on June 17, 2023. (Emmet Livingstone/AFP via Getty Images)
Trucks loaded with copper prepare to leave Tenke Fungurume Mine, one of the largest copper and cobalt mines in the world, in the southeastern Democratic Republic of Congo (DRC) on June 17, 2023. (Emmet Livingstone/AFP via Getty Images)

Asserting Dominance

In the prevailing global climate of containment efforts, Shanghai Synica Co., Ltd., a Chinese company, asserted in its 2022 annual report that Shituru Mining Corporation (SMCO) in the DRC stood as its majority-owned subsidiary.

However, tensions escalated when SMCO’s minority shareholder, La Générale des Carrières et des Mines (Gécamines), along with its two partners, allegedly “unlawfully entered” an SMCO low-grade copper ore deposit site. Private security and military police were stationed to guard the site, leading to the gradual removal of an estimated 640,000 tons of ore.

Subsequently, several Chinese media outlets criticized the DRC for “seizing 640,000 tons of copper ore from a Chinese company,” invoking rhetoric that underscored power dynamics, with threats implying that strength determines authority. The incident prompted a notable response from China’s Ministry of State Security on Nov. 30.

In an unusual move, the ministry openly addressed the significance of China’s overseas mineral development and the associated risks in an article on its official WeChat account. The ministry emphasized the need to bolster the security of China’s overseas investments, personnel, and property, ensuring the safety of overseas mineral cooperation projects and securing China’s critical mineral resource supply chain.

For the typically secretive Ministry of State Security, responsible for external covert operations, discussing security issues related to overseas mineral development and enterprises is a departure from its usual approach.

Chinese investment strategy expert Mike Sun, based in the United States, suggested to The Epoch Times that China, facing significant pressure, may view this public announcement as a form of intimidation. Despite challenging the sovereignty of the opposing party, Mr. Sun noted that China might perceive this method as necessary to protect its overseas enterprises in the absence of better alternatives.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *