The Democratic Republic of Congo (DRC) is set to play a crucial role in the global transition away from fossil fuels. About 70% of the world’s mined cobalt, an essential metal for many batteries used in electric vehicles (EVs) and consumer electronics, is produced in the country.
Despite its abundant resources central to the green transition, including lithium, copper and zinc, the DRC remains one of the least-developed countries in the world. The government hopes to change this by welcoming foreign direct investment and developing capacity for more local transformation of its raw materials.
Anthony Nkinzo Kamole, the managing director of the DRC’s National Investment Promotion Agency, tells fDi that the country has an ambition to move beyond extractive activities and further up global value chains.
“We want to play an extremely important role in electric batteries and create jobs across various value chains,” says Mr Kamole, adding that the DRC is in an advantageous position thanks to its roughly 100 million inhabitants and borders with nine growing African countries.
Reduction of trade barriers under the African Continental Free Trade Area is another potential boon for the country. Mr Kamole says that the DRC could be an attractive prospect to battery and automotive manufacturers seeking access to these burgeoning African consumer markets.
The ambition to create higher value from the country’s extractive sector is demonstrated by recent efforts by the DRC’s government too. President Félix Tshisekedi, who took office in 2019, has sought to renegotiate mining contracts signed by his predecessor Joseph Kabila.
One notable contract under review by the government is a $6bn infrastructure-for-minerals deal signed in 2008 with Chinese investors, including state-owned Sinohydro Corporation and China Railway Group. Critics claim that just a few of the promised infrastructure projects, including roads and hospitals, came to fruition.
A leak of documents published by various media outlets in November 2021 revealed how local commercial bank BFGI Bank was used to embezzle the DRC’s public funds and natural resources. Much of this benefitted the former president, Mr Kabila, and his inner circle.
Mr Kamole admits that corruption remains one of the biggest challenges facing the country, alongside improving the ease of doing business, infrastructure development and climate-related investment.
“Today, the fight against corruption at all levels is an extremely important issue and this is a key message from [our current president, Mr Tshisekedi],” he says.
Due diligence standards
Mounting demand for cobalt has seen multinational companies expand their mining operations in the DRC. S&P Global Market Intelligence forecasts that the DRC will produce just over 131,000 tonnes of mined cobalt in 2022, driving a 79.4% increase of the world’s supply.
But concerns persist around human rights abuses in the country’s mining industry. Some battery manufacturers have either reduced or removed cobalt from their batteries, replacing it with iron phosphate, for this very reason.
Mr Kamole says that he is not concerned by changes in the battery industry as the world is still moving towards EVs. The DRC is also home to large deposits of lithium, a mineral critical to all types of EV batteries.
“I think the DRC remains the country with the solution [to the EV supply chain] and where everything will play out,” says Mr Kamole.
This article first appeared in the June/July 2022 edition of fDi Intelligence. Read the online edition of the magazine here.