Last month, the president of the Democratic Republic of Congo (DRC), Felix Tshisekedi, announced he planned to renegotiate mining contracts signed by his predecessor, Joseph Kabila, with special attention to those with China. Tshisekedi complained that contracts have put the population and the state at a disadvantage losing out on the mineral wealth of the country (Africanews, 2021). In 2007, under the aegis of Kabila, the Congolese government agreed with Beijing to establish Sicomines (Sino-Congolaise des Mines) with a Chinese shareholding majority of 68% and signed an infrastructure-for-minerals deal, awarding mining rights to China, in 2008 (Karlsson, 2019). China has since been able to mine copper and cobalt which are essential for electric vehicles batteries and electronics such as phones and computers as well as for the manufacture of aircraft engines and gas turbines (Maiza Larrarte, 2019; Niarchos, 2021).
What makes the DRC so attractive to Beijing is that of the estimated global cobalt reserves of 7.1 million metric tons, Congo holds more than half of that at 3.6 million metric tons (USGS, 2021). Congo dominates the global cobalt production, in 2020, making up almost 70% of total production (Roskill, 2021).
Hence, it does not surprise then that the mining sector is vital for Kinshasa’s economy: the extraction and processing of minerals in the province of Katanga, endowed with the largest mineral riches in the DRC, contribute more than 50% to the state’s budget (Africanews, 2021). Since the forming of Sicomines, Congo’s macroeconomic performance has flourished. Until 2018, copper production rose six-fold and cobalt production three-fold, which has improved significantly Kinshasa’s economy turning a negative trade balance in goods to the positive (Karlsson, 2019). Only six years after the Sicomines deal, an influx of Chinese mining companies had manifested itself. In 2010, already 80% of mineral processing plants in Katanga province were owned by Chinese enterprises and 90% of extracted minerals were exported to China, contributing to China being Congo’s most important trading partner. Today, more than 40% of Congolese cobalt mining capacity is in Chinese control and Chinese enterprises account for about 80% of cobalt refining output globally, in particular the production of chemicals used in batteries (Roskill, 2021).
The consequences of mining in the DRC: corruption, racism, human rights abuses
The 2008 investment-for-minerals deals was supposed to cover $6 billion to finance the building of infrastructure which had suffered during years of civil war. Investments were to be split evenly between mining operations and construction of roads, rails, but also other infrastructure projects like dams, hospitals and schools. In exchange, China was to receive 10 million tons of copper and 0.6 million tons of cobalt valuing $50 billion over 25 years. However, there were no further stipulations nor guarantees in the contracts on how the financial benefits from the deal should go to the population, and in 2016 only $1.2 billion were spent on infrastructure and mining credits (Karlsson, 2019). Infrastructure investments were designated as debt until equal financial mining wins would be achieved and, as such, were tax-exempted until infrastructure and mining loans would be completely repaid by Kinshasa to Beijing making the state lose out on tax revenues from Chinese mining activities (Maiza Larrarte, 2019).
Unexpected costs and political corruption have skewered the agreement even more the population’s disadvantage. Quality control of the infrastructure projects were assigned to the very same companies which had built them, and as a result, insufficient studies on environmental and social impact were published (Karlsson, 2019). Paying bribes to government officials is a common practice by Chinese companies to be awarded mining rights. The former governor of Lualaba, another province with rare earths mines, Richard Muyej Mangez Mans, has come under investigation for corruption as he had channeled hundreds of thousands of dollars through banks to his personal profit (Niarchos, 2021).
There is now more than circumstantial evidence that Chinese practices undermine positive developments in Congo’s mining sector. One Chinese mining company, Huachin, operating in Katanga has been accused of deforestation, land pollution with wastewater, contamination of drinking water and restriction of local population’s movements. Reports have emerged telling of environmental destruction and the demolition of whole neighborhoods beyond reconstruction to build and expand mining operations. To generate profit faster at newly acquired mines by Chinese corporations few safety protections are used and unsafe labor conditions as well as lax security standards in mines are rampant. This leads regularly to accidents, such as in June 2019, when a landslide at a mine killed over 40 workers or, in December 2014, when 15 workers died in a collapsed mine tunnel (Niarchos, 2021).
Even though economic parameters have improved, positive effects on the population are scarce. Instead Chinese practices seem to have a detrimental effect on local hiring. Only few employment statistics exist showing a lack of transparency. However, the few statistics suggest that Congolese workers are in lower-skilled areas of mining and Chinese expatriate workers outnumber locals by 15 to 1 (Niarchos, 2021).
Niarchos (2021) reports that during a visit to the Congo Dongfang mine in Kaolwezi, the regional capital of Lualaba, he witnessed several incidents of blatant racism of Chinese nationals towards the local population. In one instance, an armed Congolese guard was beating a conational worker lying on the ground commanded to do so by a Chinese superior. Degrading remarks by Chinese are common when they speak about their Congolese inferiors In the town’s Chinese-run casino locals are not allowed in as according to staff Black Africans “can’t be trusted with money” (Niarchos, 2021). This fits in a wider pattern of racist behavior by the Chinese put on display across Sub-Saharan countries (Schikowski, 2018).
Most outrageously, child labor in the Congolese mining sector is a frequent occurrence. For example, Amnesty Internationl (2017) revealed that the Chinese processing corporation Huayou Cobalt has been using child labor in inhumane working conditions and a further 28 Chinese companies reportedly employed child labor with disregard to any international standards. Thousands of children may work in mines it is estimated where they have to endure the harshest conditions. Children are forced to work in inhumane working conditions; they have to toil in tunnels with a maximum height of 1.5 meters, high temperatures and low levels of oxygen; they are mistreated by other workers; they are drugged to suppress hunger (Niarchos, 2021).
The social impact of child labor is huge. Child laborers often have to leave school early and do not even receive sufficient primary education. Consequently, former child laborers are less likely to find jobs and those who find employment mostly end up in low-payed positions. The latter are on longer job searches which dents their later income. There is also a strong correlation between child labor and armed conflict which is 77% higher in such countries than the global average (Compassion, 2021).
Implications for the West
European governments have to brush aside the misleading rhetoric of African leaders accusing Western companies which want to make business in Africa of racist and imperialist behavior. Congo’s Chinese experience with extreme human rights abuses, fueling of political corruption, and exploitation is eerily reminiscent of the most egregious injustices perpetrated during the times of European colonialism.
Now, Europe can support diplomatically Tsishekedi in his aimed-for re-negotiations of the contracts with China signed under Kabila. This would also be a more direct and efficient form of development aid than simply transferring money to ministries where most of it disappears in private pockets and does not arrive at the local level (Dávid-Barrett et al., 2020)
The EU can lend support to African governments to form committees of experts as suggested by Professor Maiza Larratre (2019). Such committees could guarantee that quality controls are independently led and fulfill their purpose; they can participate in the creation of a fair and transparent public procurement process; they can monitor the implementation of contracts according to international standards avoiding damage to the environment and society.
From a purely geopolitical point of view, China’s dominance in the copper and cobalt mining sectors could be detrimental to Western market participants, putting the security of supply in danger as close relations between Beijing and Kinshasa may block out Westerners who want to build self-contained localized batter supply chains (Roskill, 2021). Therefore, Western companies need to lock in feedstock with long-term agreements comprising fair conditions and ensuring the compliance with international labor standards. Europe could then aid in collecting taxes from the mining industries which could then, in turn, benefit the development of the DRC and its population.
Bibliography:
Africanews (2021, May 14). DRC: President Tshisekedi to renegotiate mining contracts. https://www.africanews.com/2021/05/14/controversy-over-the-location-of-amazon-african-headquarters-in-cape-town-south-africa//
Amnesty International (2017). Time to Recharge. Corporate Action and Inaction to Tackle Abuses in the Cobalt Supply Chain. https://www.amnesty.org/download/Documents/AFR6273952017ENGLISH.PDF
Compassion (2021). Child Labor Facts. https://www.compassion.com/poverty/child-labor-quick-facts.htm
Dávid-Barrett, E., Fazekas, M., Hellmann, O. et al. (2020). Controlling Corruption in Development Aid: New Evidence from Contract-Level Data. St Comp Int Dev 55, 481–515.
Karlsson, C.-J. (2019, June 28). The Chinese Power Grab in the DRC. https://www.gbreports.com/article/the-chinese-power-grab-in-the-drc
Maiza Larrarte, A. (2019, Apr 03). How to avoid flawed minerals-for-infrastructure deals like DR Congo and China’s Sicomines pact. https://qz.com/africa/1586753/china-and-dr-congo-sicomines-cobalt-mine-deal-is-flawed/?utm_source=Media+Review+for+April+4%2C+2019&utm_campaign=Media+Review+for+April+4%2C+2019&utm_medium=email
Niarchos, N, (2021, May 24). The Dark Side of Congo’s Cobalt Rush. https://www.newyorker.com/magazine/2021/05/31/the-dark-side-of-congos-cobalt-rush
Roskill (2021). Cobalt – Outlook to 2030, 16th Edition. https://roskill.com/market-report/cobalt/
Schwikowski, M. (2018, Nov 09). The racist face of the Chinese presence in Africa. https://www.dw.com/en/the-racist-face-of-the-chinese-presence-in-africa/a-46223068
USGS (2021). Mineral Commodity Summaries 2021. https://pubs.usgs.gov/periodicals/mcs2021/mcs2021.pdf
By Andreas Rösl : The European Institute for International Law and International Relations.
