Because a war for cobalt is being fought in Congo

What the New York Times Investigation into Congo Cobalt
Grabbing Reveals central to the world’s urgent race against global warming.
For more than a decade, the vast expanse of pristine land has been controlled by an American company. Now a Chinese mining conglomerate has bought it and is racing to recover its buried treasure: millions of tons of cobalt.
At 73, Kyahile Mangi has lived here long enough to predict the path ahead. Once the explosion starts, the walls of the mud brick houses will crack. The chemicals will seep into the river where women do laundry and wash dishes as they worry about hippo attacks. Soon a mine manager announces that everyone needs to be relocated.
“We know our land is rich,” said Mr. Mangi, a village chief who also knows that residents will share little of the mine’s wealth.
This wooded stretch of southeastern Democratic Republic of the Congo, called Kisanfu, holds one of the largest and purest untapped reserves of cobalt in the world.
The gray metal, typically mined from copper deposits, has historically been of secondary interest to miners. But demand is set to explode around the world as it is used in electric car batteries, helping them run longer without a charge.
Foreigners who discover – and exploit – the natural resources of this impoverished Central African country are following a colonial-era model. The United States went to Congo for uranium to help build the bombs dropped on Hiroshima and Nagasaki and then spent decades, and billions of dollars, trying to protect their mining interests here.
Now, with more than two-thirds of the world’s cobalt production coming from Congo, the country is once again center stage as major carmakers pledge to combat climate change by switching from gasoline to battery-powered vehicles. The new automobiles are based on a range of minerals and metals often not abundant in the US or the oil-rich Middle East, which supported the latest energy era.
But the Congo’s cobalt research has shown how the clean energy revolution, intended to save the planet from dangerously hot temperatures in an age of enlightened self-interest, is trapped in a familiar pattern of exploitation, greed, and play that often puts national aspirations above all else, as a New York Times investigation found.
The Times sent reporters to three continents involved in the competition for cobalt, a relatively obscure raw material that, along with lithium, nickel and graphite, has gained exceptional value in a world trying to sideline fossil fuels.
More than 100 interviews and thousands of pages of documents show that the cobalt rush has sparked a power struggle in the Congo, a repository of these increasingly precious resources, and has attracted foreigners bent on dominating the next era of global energy.
In particular, a rivalry between China and the United States could have far-reaching implications for the shared goal of safeguarding the earth. At least here in Congo, China is winning that race so far, with both the Obama and Trump administrations standing by as a Chinese government-backed company bought two of the country’s largest cobalt deposits in the past five years.
As the significance of these purchases becomes clearer, China and the United States have entered a kind of new “Great Game”. Last week, during an electric vehicle promotion visit to a General Motors factory in Detroit, President Biden acknowledged that the United States has lost ground. “We have risked losing our advantage as a nation, and China and the rest of the world are catching up,” he said. “Well, we’re about to turn the tables in a very, very significant way.”
China Molybdenum, the new owner of the Kisanfu site since late last year, bought it from Freeport-McMoRan, an American mining giant with a patchy history that five years ago was one of the largest cobalt producers in Congo – and now has completely left the country.
In June, just six months after the sale, the Biden administration warned that China could use its growing cobalt dominance to disrupt America’s push towards electric vehicles by crushing US manufacturers. In response, the United States is pushing for access to cobalt supplies from allies, including Australia and Canada, according to a national security official with knowledge of the matter.
American carmakers such as Ford, General Motors and Tesla buy cobalt battery components from suppliers who are dependent in part on Chinese-owned mines in Congo. A Tesla long-range vehicle requires about 4 pounds of cobalt, more than 400 times the amount in a cell phone.
Tensions over minerals and metals are already shaking the electric vehicle market.
The deadly unrest in July near a port in South Africa, where much of Congo’s cobalt is exported to China and elsewhere, caused a global jump in metal prices, a spike that only got worse over the rest of the year.
Last month, the leading forecaster of the mining industry said the rising cost of raw materials is likely to drive up battery costs for the first time in years, threatening to halt carmakers’ plans to lure customers with cars. electric at competitive prices.
Jim Farley, Ford’s chief executive, said the mineral supply crisis needs to be addressed.
“We have to solve these things,” he said at an event in September, “and we don’t have much time.”
Auto makers like Ford are spending billions of dollars building their battery plants in the United States, and are rushing to limit the need for freshly mined cobalt by developing lithium iron phosphate substitutes or switching to recycling. Consequently, a Ford spokesperson said: “We don’t see cobalt as a binding problem.”
The increase in the extraction and refining of cobalt by Chinese companies has helped meet growing demand and advanced the fight against climate change. But as more electric vehicles are produced by more car manufacturers around the world, the International Energy Agency predicts a cobalt shortage by 2030, based on an analysis of existing mines and those under construction. Other meteorologists say a shortage could hit as early as 2025.
A Times review of filings with regulatory authorities in China shows that acquisitions in Congo have followed a strict schedule, announced with great fanfare by Beijing in 2015, for dominate the emerging clean energy economy of the world.
As of last year, 15 of Congo’s 19 cobalt-producing mines were owned or funded by Chinese companies, according to data analysis by The Times and Benchmark Mineral Intelligence. The biggest alternative to Chinese operators is Glencore, a Swiss-based company that operates two of the largest cobalt mines there.
These Chinese companies have received at least $ 12 billion in loans and other funding from state institutions, and are likely to have drawn billions more. In fact, the five largest Chinese mining companies in Congo had state-backed bank credit lines totaling $ 124 billion, according to documents reviewed by the Times, although one of them, China Molybdenum, described itself as “a pure commercial entity ”traded on two exchanges.
China’s goal is to control the global supply chain from metals in the ground to the batteries themselves, no matter where the vehicles are made. The approach, in part, echoes Henry Ford’s investments in rubber plantations in the Amazon when the auto industry turned to mass production in the early 20th century.
The Kisanfu wooded mining site was just one of two big purchases in recent years by China Molybdenum. The first came in 2016, when he took control of Tenke Fungurume, a mine that alone produces twice as much cobalt than any other country in the world. At least $ 1.59 billion of Tenke Fungurume’s $ 2.65 billion price, according to financial records, came from loans provided by Chinese state-owned banks.
While the Chinese were stepping up their focus on green energy in 2016, future US president Donald J. Trump was extolling the fossil fuel industry, campaigning in West Virginia with a helmet and shovel and promising falsely to the coal miners that “you will work like crazy! After taking office, Mr. Trump would withdraw the requirements on American automakers to accelerate the transition to electric vehicles, giving the Chinese an even wider lane.
“It’s pretty nerve-wracking what happened here,” said Nicole Widdersheim, who worked on Africa issues for the National Security Council during the Trump administration. “Just so stupid.”
The Congo cobalt frenzy has attracted an international cast of opportunists, connoisseurs and dark characters eager to benefit from it. At one point, it also attracted a China-based private equity firm that Hunter Biden helped found and which was then scrutinized in the 2020 presidential campaign.
At the same time, Chinese companies are running into new headwinds. by the Congo government, according to documents obtained by the Times and interviews with current and former US officials.
Congolese officials are conducting an extensive review of past mining contracts, work they are doing with financial help from the US government as part of its broader anti-corruption effort. They are examining whether companies are meeting their contractual obligations, including a 2008 commitment from China to deliver billions of dollars of new roads, bridges, power plants and other infrastructure.
Congo president Felix Tshisekedi in August appointed a commission to investigate allegations that China Molybdenum, the company that bought the two Freeport-McMoRan properties, may have defrauded the Congolese government for billions of dollars in royalties. The company risks being expelled from the Congo.
At the Tenke Fungurume mine, there have long been problems associated with offenders from neighboring villages looking for cobalt. After China Molybdenum appealed to the government for help, Congolese troops fired on a violator inside the mine gates, killing him, as well as a second person who was shot after riots erupted in protest, witnesses and local officials have told the Times.
Afterward, at least a dozen employees or mine contractors told the Times that the Chinese property led to a drastic drop in safety and an increase in injuries, many of which were not reported to management. Two Congolese security officials said workers were assaulted after raising concerns and bribes were offered to cover up the incidents.
“Things are falling apart in terms of safety,” said Alfred Kiloko Makeba, who retired last year after a decade of working as a safety supervisor at the mine.
Vincent Zhou, a spokesperson for China Molybdenum, dismissed claims that the company would cheat the Congolese government or loosen security standards, saying the opposite was true, and questioned whether there was an organized effort to undermine the company.
China has a saying that goes something like, “Where there is the will to condemn, the evidence will follow,” Mr. Zhou said in a written response to the Times. “I vaguely feel that we may be trapped in the game of greater powers.” A presidential connection
African countries have for years turned to China for help in building infrastructure with loans or exchanges involving their natural resources – deals analysts report provide far more benefits to the Chinese.
A model for these agreements, now common across the continent, was drafted in 2005 when Joseph Kabila entered the Great Hall of the People in Beijing.
Mr. Kabila, then just 33 years old, was the new president of the Congo after the assassination of his father, another tragic milestone on the path of violence and political disintegration of the country struck by poverty.
China was familiar territory for Mr. Kabila, who had received military training there in the late 1990s. This visit aimed to enlist the help of President Hu Jintao to get the Congo economy going.
The United States, which had long provided economic and military assistance to the Congo, was stuck in the wars in Afghanistan and Iraq and had become less and less interested in the country. Congo’s poor record on corruption and human rights was also frightening many international banks and Western investors.
Mr. Kabila’s wish list was long: he wanted new streets, schools and hospitals as part of a revival plan that he hoped would make a nation exhausted and discouraged by years of conflict and corruption appreciate it.
In return, he was ready to offer his country’s vast mineral riches – unparalleled in much of the world.
In the imposing hall on Tiananmen Square, the two presidents outlined an agreement that would change the balance of power in Central Africa, according to Andre Kapanga, a former adviser to Mr. Kabila who offered details of the meeting for the first time in a interview with the Times.
Mr. Hu explained that many people in China’s western provinces live in profound poverty. The development of the area was a cornerstone of his domestic politics, and he needed minerals and metals to build new industries. Congo was ready to help, Mr. Kabila assured him.
China had already purchased raw materials from Congo’s neighbor Angola, where it offered generous financial support in exchange for oil.
But this potential deal with Mr. Kabila was more ambitious than any other, and a diplomatic drama would take place at the riverside Palais de la Nation in the capital Kinshasa before it was sealed.
The scenario was Mr. Kabila’s inauguration in 2006, after he presented himself to the voters in a formal election and won the presidency. The Bush administration sends a delegation led by Elaine Chao, then secretary of labor.
Mr. Kabila liked motorcycles, and she introduces him to a Harley-Davidson trinket when I greet him at lunch. This would be the limit of their interaction, Ms. Chao believed, but members of her delegation urged her to request a private meeting, according to Laura Genero, an associate deputy labor secretary who was part of the group. To her surprise, Mr. Kabila agrees to a meeting the next day.
Ms. Chao was so unprepared for her invitation that she had to borrow a beige suit from Ms. Genero. She had only packed a work suit.
The US delegation congratulated Mr. Kabila on his Democratic victory and listened as he spoke of wanting to expand access to electricity nationwide. One of his aides called the meeting mostly chat.
Instead, a similar meeting between the new president and Chinese officials took place differently, according to Mr. Kapanga, who was briefed on both the US and Chinese discussions.
The Chinese used the opportunity to begin formal talks with Mr. Kabila that would have resulted in a $ 6 billion deal: China would pay for roads, hospitals, railways, schools and projects to expand electricity, all in exchange of access to 10 million tons of copper and more than 600,000 tons of cobalt.
Local media called it “the deal of the century,” and as Mr. Kabila celebrated the deal, the global financial community reacted more cautiously, worried that Congo was getting too much debt.
American officials marveled at the historic scope of the agreement. In secret messages released by WikiLeaks, they noted that China’s previous investment in Congo had been “an informal, somewhat disorganized set of Chinese companies” that did not seriously threaten US interests.
But now something much bigger was in preparation: “2,000 miles of road connecting the provinces of Orientale and Katanga, 31 hospitals, 145 health centers, two large universities and 5,000 government housing units will be built,” according to a 2008 cable from the ‘US embassy in Kinshasa to members of the Central Intelligence Agency, the secretary of state and other officials.
“And that’s not all,” the cable continued. The Call of a Phoenix
In 2015, China’s presence in Congo had become visible in numerous infrastructure projects: Football stadiums rose from the dust, roads were widened, work began on water treatment plants.
But not all of its progress in putting the cobalt market at the center of attention could be measured in brick and mortar. The Chinese ambassador at the time, Wang Tongqing, launched an American-style diplomatic blitz.
Wang threw the jump ball that year at a Chinese corporate basketball tournament that attracted Congolese spectators.
He gave scholarships to Congolese students to study in China and was present when a Chinese organization gifted airline tickets to a Congolese choir for a tour in his country. At one point, he offered $ 1 million for Ebola relief in Congo.
Mr. Wang’s activities coincided with the launch in 2015 of his country’s “Made in China 2025” policy, which detailed China’s plan to transform itself into a “manufacturing superpower” in 10 areas, including batteries for electric vehicles.
Almost instantly, a wave of government-backed capital poured into Chinese companies in the Congo and elsewhere. The agreements were concluded quickly.
That year, the state-owned China Nonferrous Metal Mining Group said it would partner with Congo’s state-owned mining company Gecamines to develop the Deziwa site, then one of the largest copper and cobalt concessions in the country.
In 2017, Zijin Mining, a state-backed Chinese company with the slogan “Harmony Brings Wealth,” raised nearly $ 700 million from a private equity sale to develop its Kolwezi mine.
Public statements on the deals have signaled some of China’s ambitions, but the history and scale of the effort has not previously been reported.
Corporate documents, including annual reports and bond prospectuses, examined by the Times show that the five largest Chinese companies in Congo have received at least $ 124 billion in credit lines for their global operations. All companies are state-owned or have significant minority stakes held by various levels of the Chinese government.
“Unlike the United States, the Chinese government is always behind Chinese investors in Africa and more specifically in DRC,” said Mr. Kapanga, Mr. Kabila’s former adviser.
The biggest deal came in April 2016, when China Molybdenum, a company whose largest shareholders are a government-owned company and a mysterious billionaire, made its $ 2.65 billion bid to buy Tenke Fungurume. an American-owned mine on top of one of the largest cobalt reserves in the world.
There was a complication. Freeport-McMoRan had a Canadian partner who had the first offer right to buy its stake. China Molybdenum’s solution was to have the partner bought by a Shanghai-based private equity firm, but even that deal depended on Chinese government money.
None of the $ 1.14 billion raised to buy the partner’s stake came from private investors, company documents show. Instead, it came from state-controlled Chinese entities, including bank loans guaranteed by China Molybdenum as well as money brought into the deal through shady shell companies controlled by government-owned banks, according to the documents.
The board of the private equity firm, commonly known as BHR, was dominated by Chinese members but also included three Americans: Devon Archer, a businessman who was later convicted of defrauding the Oglala Sioux tribe in a case that still stands. proceeding through the justice system, and James Bulger, son of the former president of the Massachusetts Senate.
Another was Hunter Biden, whose father was vice president at the time.
It is unclear whether Mr. Biden, who helped found the company in 2013, was involved in the deal. Mr. Biden did not respond to requests for comment. A former member of BHR’s board of directors, who was not authorized to speak on internal corporate matters, said none of the Americans had played a role and that the taxes generated for the job had not been distributed to Mr. Biden or others. A spokesman for President Biden on Friday said he had not been made aware of his son’s connection to the sale.
How and why the company was involved was a mystery to the CEO who negotiated the sale for Freeport-McMoRan’s Canadian partner, Lundin Mining.
“They were a partner, their adviser or a lender
I don’t know, ”said Paul Conibear, then CEO of Lundin.
An elaborate event under white tents in Kinshasa celebrated China’s new ownership in May 2017. Mr. Wang was there along with Chinese officials who had helped finance the purchase – and a number of government-affiliated Chinese bankers who were trying to make even more mining deals.
Within a few years, they would help orchestrate the purchase of China Molybdenum from Kisanfu, the huge untapped cobalt reserve, from the same American mining giant. Together, the sales marked a changing of the guard in Congo as the United States abandoned its mining interests – a problem now weighing on President Biden, as he and his collaborators realized the extent of China’s dominance in clean energy. .
“The Democratic Republic of the Congo has a vast territory, rich natural resources and great investment potential,” Mr. Wang told the crowd. “A Chinese proverb says: ‘Build a beautiful nest to attract the phoenix'”. Security is on paper only
At first, the changes seemed almost trivial to Tenke Fungurume – a 24-hour business that employs more than 7,000 people in an area the size of Los Angeles, marked by deep craters and dust raised by construction vehicles.
The new Chinese managers showed up in shorts and trainers, a shock to employees who were required to wear steel-toed boots and safety glasses.
“We thought, ‘Oh, this is not possible,'” said Pierrot Kitobo Sambisaya, who worked as a metallurgist in the mine for a decade until 2019 and had grown accustomed to a more rigorous environment.
Soon, labor agreements came and went without any acknowledgment. The celebrations in which the families of the workers were invited to visit the mine have no longer taken place. Dozens of caretaker and driver jobs, once occupied by Congolese citizens, have gone to the Chinese.
This was just the beginning. Employees were concerned that the mine was becoming even more dangerous, according to interviews with workers from the communities surrounding the mine, current and former safety inspectors, Congolese government officials and mining managers.
Workers climbed into acid tanks to make repairs without checking the quality of the air. Others drove bulldozers and other heavy equipment without training or did dangerous welding jobs without proper supervision.
Last year, a worker sat in his truck as it was being towed, and it overturned. The worker tried to jump to safety, but the truck landed on him and crushed him to death, according to an annual report from China Molybdenum operations.
All of this was an extreme departure from the company’s American predecessor, which had “zero tolerance” for risky activities and security breaches, according to Alfred Kiloko Makeba, the veteran security supervisor, and 10 other current employees, executives and contractors. and ex.
Freeport-McMoRan, who had built the mine, had learned some hard lessons years earlier in its copper and gold mine in Indonesia, addressing international outcry over its dumping of toxic waste from the mine into a rainforest river, as well as violent conflicts over its local activities.
In Congo, the company had its struggles when it moved to build Tenke Fungurume, displacing more than 1,500 residents in a messy process. But once the mine opened, he gained an unusual amount of respect for his commitment to worker safety, both among local officials and among US diplomats.
Worker safety is an issue at other industrial mines in Congo, but under Freeport, employees who violated the rules were immediately sanctioned or fired, safety officials said. Logs reviewed by The Times show only one reported death among workers during the eight years that Freeport-McMoRan operated the mine, though it has repeatedly published near-fatal accident reports as precautionary guides.
When security inspectors discovered the violations after China Molybdenum took over, they were sometimes told to overlook them, or bribes were offered to do so, workers and supervisors said. And when they tried to enforce the rules, sometimes violence followed.
A security officer said he was thrown to the ground by a worker who he recalled for misusing the welding equipment. The man twisted his arm and broke his cell phone and the supplied camera.
An executive from Gecamines, the Congolese agency that is a minority shareholder in the mine, said employees reported clashes and safety concerns to the agency’s board. Security issues are now part of a broader review of China Molybdenum’s operations.
Zhou, the spokesperson for China Molybdenum, denied that the inspectors were attacked. The allegations, he suggested, were likely fabricated by fired employees.
In a statement to the Times, he said the mine had “a solid occupational health and safety framework and continues to exercise its zero tolerance rules.” Indeed, he said, “internal statistics” released in a company report this year showed that worker injuries have declined since the company took over.
But employees who said they were repeatedly asked not to report injuries believed the figures were set as part of a campaign to cover the escalating risks.
This suggestion, which The Times was unable to independently confirm and which China Molybdenum disputed, was crystallized for Mr. Makeba one evening last year when he received an urgent phone call. A mine worker had fallen off a high perch after not wearing the required safety harness, he said.
Mr. Makeba rushed to the scene and was shocked to learn, he said, that the worker, who had broken his leg, had been taken to a private clinic instead of the mine.
Mr. Makeba said the employee told him that his supervisors had paid him to keep quiet so that he would not be reported to management, where he would appear in the company’s verified injury tally.
When Mr. Makeba warned the boss about him, he said, he was told to drop the matter.
Mr. Zhou rejected Mr. Makeba’s account, adding that “any form of hedging in disclosure is against corporate rules and values.”
But according to Mr. Makeba and another safety officer who still works at the mine, working conditions have become increasingly important for car manufacturers sensitive to consumer and shareholder demands. So China Molybdenum, they said, prevented them from reporting near-fatalities and routinely ignored other injuries.
“Security is now only on paper,” said Mr. Makeba.
The problems at Tenke Fungurume aren’t just limited to employee complaints inside the mine.
Freeport-McMoRan struggled with offenders carrying cobalt sacks away. Some even died when the hand-dug tunnels flooded or collapsed.
With China Molybdenum in charge, the conflict has gotten much worse.
The company, faced with thousands of new offenders, asked the government to send soldiers to help control the situation, an executive who worked at the mine at the time told the Times.
The military arrived and began patrolling Tenke Fungurume and other local mines, demolishing the warehouses where offenders sold the cobalt rocks to traders.
The troops remained for months, and the situation eventually became deadly. A soldier in Tenke Fungurume opened fire, killing an unauthorized digger, according to an employee who told the Times he witnessed the clash.
Riots later broke out in the man’s hometown when friends arrived carrying his body. In the fray, a demonstrator was fatally shot, according to three local officials and the mine employee.
China Molybdenum paid for the burials, they said.
Troops with AK-47s were placed outside the mine this year, along with security guards hired by a company founded by Erik Prince, the former Navy SEAL-turned-private security consultant.
Even as this crackdown on thefts was underway, the new mine managers were looking for ways to cut costs and increase production.
China Molybdenum said it has saved more than $ 130 million annually through its “cost and efficiency” programs. “The new management revitalizes the business by bringing ‘Chinese efficiency and Chinese elements’,” the company boasts on its website.
The China Molybdenum expansion rush
is steadily increasing its production. Last December, it took over Kisanfu, paying Freeport-McMoRan $ 550 million for what is considered one of the largest untapped cobalt supplies in the world. The soil beneath the site contains enough cobalt, according to China Molybdenum estimates, to power hundreds of millions of Tesla in the long-range.
And then in August, China Molybdenum announced plans to spend $ 2.5 billion on Tenke Fungurume to double production over the next two years. When the expansion is complete, the mine will produce nearly 40,000 tons per year. Last year, the United States only produced 600 tons.
This expansion rush, however, has attracted the attention of senior Congo government officials, right down to Mr. Tshisekedi, the president.
Questions have emerged about the payments Tenke Fungurume operators may owe to Congo, dating back to when the American company controlled the mine. When new deposits are confirmed to Tenke Fungurume, owners are required to notify Gecamines, the Congolese agency, and pay $ 12 for each additional ton.
The allegations sparked a bitter dispute between Congolese officials and mine managers, with China spokesman Molybdenum calling the allegations “unbelievable, miscalculations” based on an accounting error.
Gecamines executives discussed forcing Tenke Fungurume’s management or even taking the mine out of China Molybdenum’s control, according to two Congolese mining executives involved in confidential discussions and a government official briefed on the talks.
Robert North, a New Mexico geologist who helped prepare mine reserve estimates for Freeport and China Molybdenum, said both companies and Gecamines knew of large amounts of cobalt underground at the site. China Molybdenum has been cautious in stating this, she said, until the company knows it wants to go at the expense of mining the deeper strata.
Mr. Tshisekedi’s commission is still investigating the allegations, and the president himself recently chaired a tense six-hour meeting with the company’s top executives.
Separately, the Congolese government, with financial assistance from the United States, is examining numerous mining contracts to determine whether Congo has been unfairly treated more broadly. While China-funded infrastructure projects got off to a flashy start, many haven’t been built, officials said.
During a visit to the cobalt mining region this year, the president acknowledged that corrupt or incompetent government officials in Congo may deserve some blame for the deals that have left the nation feeling left out.
“Some of our compatriots have badly negotiated mining contracts,” he said. “I am very hard on these investors who come to get rich on their own. They come with empty pockets and leave like billionaires “.
Chinese government officials insist the relationship is still ongoing and the benefits to Congo are substantial.
The countries have “a long-standing friendship, and practical bilateral cooperation has produced fruitful win-win results and enjoys broad prospects,” Zhao Lijian, a spokesman for the Chinese Foreign Ministry, said at a news conference in September.
In an interview in Kinshasa, Mr. Tshisekedi said his focus was not on which foreign power would dominate the mining sector in Congo, but rather on how his country could share in the wealth generated by the clean energy revolution.
“We have incredible potential for renewable energy, both through our strategic metals and through our rivers,” he said, referring to both mining and hydroelectricity. “Our idea is: how we can make this incredible resource available to the world, but making sure that it benefits the Congolese first and then the Africans
At 73, Kyahile Mangi has lived here long enough to predict the path ahead. Once the explosion starts, the walls of the mud brick houses will crack. The chemicals will seep into the river where women do laundry and wash dishes as they worry about hippo attacks. Soon a mine manager announces that everyone needs to be relocated.
“We know our land is rich,” said Mr. Mangi, a village chief who also knows that residents will share little of the mine’s wealth.
This wooded stretch of southeastern Democratic Republic of the Congo, called Kisanfu, holds one of the largest and purest untapped reserves of cobalt in the world.
The gray metal, typically mined from copper deposits, has historically been of secondary interest to miners. But demand is set to explode around the world as it is used in electric car batteries, helping them run longer without a charge.
Foreigners who discover – and exploit – the natural resources of this impoverished Central African country are following a colonial-era model. The United States went to Congo for uranium to help build the bombs dropped on Hiroshima and Nagasaki and then spent decades, and billions of dollars, trying to protect their mining interests here.
Now, with more than two-thirds of the world’s cobalt production coming from Congo, the country is once again center stage as major carmakers pledge to combat climate change by switching from gasoline to battery-powered vehicles. The new automobiles are based on a range of minerals and metals often not abundant in the US or the oil-rich Middle East, which supported the latest energy era.
But the Congo’s cobalt research has shown how the clean energy revolution, intended to save the planet from dangerously hot temperatures in an age of enlightened self-interest, is trapped in a familiar pattern of exploitation, greed, and play that often puts national aspirations above all else, as a New York Times investigation found.
The Times sent reporters to three continents involved in the competition for cobalt, a relatively obscure raw material that, along with lithium, nickel and graphite, has gained exceptional value in a world trying to sideline fossil fuels.
More than 100 interviews and thousands of pages of documents show that the cobalt rush has sparked a power struggle in the Congo, a repository of these increasingly precious resources, and has attracted foreigners bent on dominating the next era of global energy.
In particular, a rivalry between China and the United States could have far-reaching implications for the shared goal of safeguarding the earth. At least here in Congo, China is winning that race so far, with both the Obama and Trump administrations standing by as a Chinese government-backed company bought two of the country’s largest cobalt deposits in the past five years.
As the significance of these purchases becomes clearer, China and the United States have entered a kind of new “Great Game”. Last week, during an electric vehicle promotion visit to a General Motors factory in Detroit, President Biden acknowledged that the United States has lost ground. “We have risked losing our advantage as a nation, and China and the rest of the world are catching up,” he said. “Well, we’re about to turn the tables in a very, very significant way.”
China Molybdenum, the new owner of the Kisanfu site since late last year, bought it from Freeport-McMoRan, an American mining giant with a patchy history that five years ago was one of the largest cobalt producers in Congo – and now has completely left the country.
In June, just six months after the sale, the Biden administration warned that China could use its growing cobalt dominance to disrupt America’s push towards electric vehicles by crushing US manufacturers. In response, the United States is pushing for access to cobalt supplies from allies, including Australia and Canada, according to a national security official with knowledge of the matter.
American carmakers such as Ford, General Motors and Tesla buy cobalt battery components from suppliers who are dependent in part on Chinese-owned mines in Congo. A Tesla long-range vehicle requires about 4 pounds of cobalt, more than 400 times the amount in a cell phone.
Tensions over minerals and metals are already shaking the electric vehicle market.
The deadly unrest in July near a port in South Africa, where much of Congo’s cobalt is exported to China and elsewhere, caused a global jump in metal prices, a spike that only got worse over the rest of the year.
Last month, the leading forecaster of the mining industry said the rising cost of raw materials is likely to drive up battery costs for the first time in years, threatening to halt carmakers’ plans to lure customers with cars. electric at competitive prices.
Jim Farley, Ford’s chief executive, said the mineral supply crisis needs to be addressed.
“We have to solve these things,” he said at an event in September, “and we don’t have much time.”
Auto makers like Ford are spending billions of dollars building their battery plants in the United States, and are rushing to limit the need for freshly mined cobalt by developing lithium iron phosphate substitutes or switching to recycling. Consequently, a Ford spokesperson said: “We don’t see cobalt as a binding problem.”
The increase in the extraction and refining of cobalt by Chinese companies has helped meet growing demand and advanced the fight against climate change. But as more electric vehicles are produced by more car manufacturers around the world, the International Energy Agency predicts a cobalt shortage by 2030, based on an analysis of existing mines and those under construction. Other meteorologists say a shortage could hit as early as 2025.
A Times review of filings with regulatory authorities in China shows that acquisitions in Congo have followed a strict schedule, announced with great fanfare by Beijing in 2015, for dominate the emerging clean energy economy of the world.
As of last year, 15 of Congo’s 19 cobalt-producing mines were owned or funded by Chinese companies, according to data analysis by The Times and Benchmark Mineral Intelligence. The biggest alternative to Chinese operators is Glencore, a Swiss-based company that operates two of the largest cobalt mines there.
These Chinese companies have received at least $ 12 billion in loans and other funding from state institutions, and are likely to have drawn billions more. In fact, the five largest Chinese mining companies in Congo had state-backed bank credit lines totaling $ 124 billion, according to documents reviewed by the Times, although one of them, China Molybdenum, described itself as “a pure commercial entity ”traded on two exchanges.
China’s goal is to control the global supply chain from metals in the ground to the batteries themselves, no matter where the vehicles are made. The approach, in part, echoes Henry Ford’s investments in rubber plantations in the Amazon when the auto industry turned to mass production in the early 20th century.
The Kisanfu wooded mining site was just one of two big purchases in recent years by China Molybdenum. The first came in 2016, when he took control of Tenke Fungurume, a mine that alone produces twice as much cobalt than any other country in the world. At least $ 1.59 billion of Tenke Fungurume’s $ 2.65 billion price, according to financial records, came from loans provided by Chinese state-owned banks.
While the Chinese were stepping up their focus on green energy in 2016, future US president Donald J. Trump was extolling the fossil fuel industry, campaigning in West Virginia with a helmet and shovel and promising falsely to the coal miners that “you will work like crazy! After taking office, Mr. Trump would withdraw the requirements on American automakers to accelerate the transition to electric vehicles, giving the Chinese an even wider lane.
“It’s pretty nerve-wracking what happened here,” said Nicole Widdersheim, who worked on Africa issues for the National Security Council during the Trump administration. “Just so stupid.”
The Congo cobalt frenzy has attracted an international cast of opportunists, connoisseurs and dark characters eager to benefit from it. At one point, it also attracted a China-based private equity firm that Hunter Biden helped found and which was then scrutinized in the 2020 presidential campaign.
At the same time, Chinese companies are running into new headwinds. by the Congo government, according to documents obtained by the Times and interviews with current and former US officials.
Congolese officials are conducting an extensive review of past mining contracts, work they are doing with financial help from the US government as part of its broader anti-corruption effort. They are examining whether companies are meeting their contractual obligations, including a 2008 commitment from China to deliver billions of dollars of new roads, bridges, power plants and other infrastructure.
Congo president Felix Tshisekedi in August appointed a commission to investigate allegations that China Molybdenum, the company that bought the two Freeport-McMoRan properties, may have defrauded the Congolese government for billions of dollars in royalties. The company risks being expelled from the Congo.
At the Tenke Fungurume mine, there have long been problems associated with offenders from neighboring villages looking for cobalt. After China Molybdenum appealed to the government for help, Congolese troops fired on a violator inside the mine gates, killing him, as well as a second person who was shot after riots erupted in protest, witnesses and local officials have told the Times.
Afterward, at least a dozen employees or mine contractors told the Times that the Chinese property led to a drastic drop in safety and an increase in injuries, many of which were not reported to management. Two Congolese security officials said workers were assaulted after raising concerns and bribes were offered to cover up the incidents.
“Things are falling apart in terms of safety,” said Alfred Kiloko Makeba, who retired last year after a decade of working as a safety supervisor at the mine.
Vincent Zhou, a spokesperson for China Molybdenum, dismissed claims that the company would cheat the Congolese government or loosen security standards, saying the opposite was true, and questioned whether there was an organized effort to undermine the company.
China has a saying that goes something like, “Where there is the will to condemn, the evidence will follow,” Mr. Zhou said in a written response to the Times. “I vaguely feel that we may be trapped in the game of greater powers.”
A presidential connection
African countries have for years turned to China for help in building infrastructure with loans or exchanges involving their natural resources – deals analysts report provide far more benefits to the Chinese.
A model for these agreements, now common across the continent, was drafted in 2005 when Joseph Kabila entered the Great Hall of the People in Beijing.
Mr. Kabila, then just 33 years old, was the new president of the Congo after the assassination of his father, another tragic milestone on the path of violence and political disintegration of the country struck by poverty.
China was familiar territory for Mr. Kabila, who had received military training there in the late 1990s. This visit aimed to enlist the help of President Hu Jintao to get the Congo economy going.
The United States, which had long provided economic and military assistance to the Congo, was stuck in the wars in Afghanistan and Iraq and had become less and less interested in the country. Congo’s poor record on corruption and human rights was also frightening many international banks and Western investors.
Mr. Kabila’s wish list was long: he wanted new streets, schools and hospitals as part of a revival plan that he hoped would make a nation exhausted and discouraged by years of conflict and corruption appreciate it.
In return, he was ready to offer his country’s vast mineral riches – unparalleled in much of the world.
In the imposing hall on Tiananmen Square, the two presidents outlined an agreement that would change the balance of power in Central Africa, according to Andre Kapanga, a former adviser to Mr. Kabila who offered details of the meeting for the first time in a interview with the Times.
Mr. Hu explained that many people in China’s western provinces live in profound poverty. The development of the area was a cornerstone of his domestic politics, and he needed minerals and metals to build new industries. Congo was ready to help, Mr. Kabila assured him.
China had already purchased raw materials from Congo’s neighbor Angola, where it offered generous financial support in exchange for oil.
But this potential deal with Mr. Kabila was more ambitious than any other, and a diplomatic drama would take place at the riverside Palais de la Nation in the capital Kinshasa before it was sealed.
The scenario was Mr. Kabila’s inauguration in 2006, after he presented himself to the voters in a formal election and won the presidency. The Bush administration sends a delegation led by Elaine Chao, then secretary of labor.
Mr. Kabila liked motorcycles, and she introduces him to a Harley-Davidson trinket when I greet him at lunch. This would be the limit of their interaction, Ms. Chao believed, but members of her delegation urged her to request a private meeting, according to Laura Genero, an associate deputy labor secretary who was part of the group. To her surprise, Mr. Kabila agrees to a meeting the next day.
Ms. Chao was so unprepared for her invitation that she had to borrow a beige suit from Ms. Genero. She had only packed a work suit.
The US delegation congratulated Mr. Kabila on his Democratic victory and listened as he spoke of wanting to expand access to electricity nationwide. One of his aides called the meeting mostly chat.
Instead, a similar meeting between the new president and Chinese officials took place differently, according to Mr. Kapanga, who was briefed on both the US and Chinese discussions.
The Chinese used the opportunity to begin formal talks with Mr. Kabila that would have resulted in a $ 6 billion deal: China would pay for roads, hospitals, railways, schools and projects to expand electricity, all in exchange of access to 10 million tons of copper and more than 600,000 tons of cobalt.
Local media called it “the deal of the century,” and as Mr. Kabila celebrated the deal, the global financial community reacted more cautiously, worried that Congo was getting too much debt.
American officials marveled at the historic scope of the agreement. In secret messages released by WikiLeaks, they noted that China’s previous investment in Congo had been “an informal, somewhat disorganized set of Chinese companies” that did not seriously threaten US interests.
But now something much bigger was in preparation: “2,000 miles of road connecting the provinces of Orientale and Katanga, 31 hospitals, 145 health centers, two large universities and 5,000 government housing units will be built,” according to a 2008 cable from the ‘US embassy in Kinshasa to members of the Central Intelligence Agency, the secretary of state and other officials.
“And that’s not all,” the cable continued.
The Call of a Phoenix
In 2015, China’s presence in Congo had become visible in numerous infrastructure projects: Football stadiums rose from the dust, roads were widened, work began on water treatment plants.
But not all of its progress in putting the cobalt market at the center of attention could be measured in brick and mortar. The Chinese ambassador at the time, Wang Tongqing, launched an American-style diplomatic blitz.
Wang threw the jump ball that year at a Chinese corporate basketball tournament that attracted Congolese spectators.
He gave scholarships to Congolese students to study in China and was present when a Chinese organization gifted airline tickets to a Congolese choir for a tour in his country. At one point, he offered $ 1 million for Ebola relief in Congo.
Mr. Wang’s activities coincided with the launch in 2015 of his country’s “Made in China 2025” policy, which detailed China’s plan to transform itself into a “manufacturing superpower” in 10 areas, including batteries for electric vehicles.
Almost instantly, a wave of government-backed capital poured into Chinese companies in the Congo and elsewhere. The agreements were concluded quickly.
That year, the state-owned China Nonferrous Metal Mining Group said it would partner with Congo’s state-owned mining company Gecamines to develop the Deziwa site, then one of the largest copper and cobalt concessions in the country.
In 2017, Zijin Mining, a state-backed Chinese company with the slogan “Harmony Brings Wealth,” raised nearly $ 700 million from a private equity sale to develop its Kolwezi mine.
Public statements on the deals have signaled some of China’s ambitions, but the history and scale of the effort has not previously been reported.
Corporate documents, including annual reports and bond prospectuses, examined by the Times show that the five largest Chinese companies in Congo have received at least $ 124 billion in credit lines for their global operations. All companies are state-owned or have significant minority stakes held by various levels of the Chinese government.
“Unlike the United States, the Chinese government is always behind Chinese investors in Africa and more specifically in DRC,” said Mr. Kapanga, Mr. Kabila’s former adviser.
The biggest deal came in April 2016, when China Molybdenum, a company whose largest shareholders are a government-owned company and a mysterious billionaire, made its $ 2.65 billion bid to buy Tenke Fungurume. an American-owned mine on top of one of the largest cobalt reserves in the world.
There was a complication. Freeport-McMoRan had a Canadian partner who had the first offer right to buy its stake. China Molybdenum’s solution was to have the partner bought by a Shanghai-based private equity firm, but even that deal depended on Chinese government money.
None of the $ 1.14 billion raised to buy the partner’s stake came from private investors, company documents show. Instead, it came from state-controlled Chinese entities, including bank loans guaranteed by China Molybdenum as well as money brought into the deal through shady shell companies controlled by government-owned banks, according to the documents.
The board of the private equity firm, commonly known as BHR, was dominated by Chinese members but also included three Americans: Devon Archer, a businessman who was later convicted of defrauding the Oglala Sioux tribe in a case that still stands. proceeding through the justice system, and James Bulger, son of the former president of the Massachusetts Senate.
Another was Hunter Biden, whose father was vice president at the time.
It is unclear whether Mr. Biden, who helped found the company in 2013, was involved in the deal. Mr. Biden did not respond to requests for comment. A former member of BHR’s board of directors, who was not authorized to speak on internal corporate matters, said none of the Americans had played a role and that the taxes generated for the job had not been distributed to Mr. Biden or others. A spokesman for President Biden on Friday said he had not been made aware of his son’s connection to the sale.
How and why the company was involved was a mystery to the CEO who negotiated the sale for Freeport-McMoRan’s Canadian partner, Lundin Mining.
“They were a partner, their adviser or a lender
I don’t know, ”said Paul Conibear, then CEO of Lundin.
An elaborate event under white tents in Kinshasa celebrated China’s new ownership in May 2017. Mr. Wang was there along with Chinese officials who had helped finance the purchase – and a number of government-affiliated Chinese bankers who were trying to make even more mining deals.
Within a few years, they would help orchestrate the purchase of China Molybdenum from Kisanfu, the huge untapped cobalt reserve, from the same American mining giant. Together, the sales marked a changing of the guard in Congo as the United States abandoned its mining interests – a problem now weighing on President Biden, as he and his collaborators realized the extent of China’s dominance in clean energy. .
“The Democratic Republic of the Congo has a vast territory, rich natural resources and great investment potential,” Mr. Wang told the crowd. “A Chinese proverb says: ‘Build a beautiful nest to attract the phoenix'”.
Security is on paper only
At first, the changes seemed almost trivial to Tenke Fungurume – a 24-hour business that employs more than 7,000 people in an area the size of Los Angeles, marked by deep craters and dust raised by construction vehicles.
The new Chinese managers showed up in shorts and trainers, a shock to employees who were required to wear steel-toed boots and safety glasses.
“We thought, ‘Oh, this is not possible,'” said Pierrot Kitobo Sambisaya, who worked as a metallurgist in the mine for a decade until 2019 and had grown accustomed to a more rigorous environment.
Soon, labor agreements came and went without any acknowledgment. The celebrations in which the families of the workers were invited to visit the mine have no longer taken place. Dozens of caretaker and driver jobs, once occupied by Congolese citizens, have gone to the Chinese.
This was just the beginning. Employees were concerned that the mine was becoming even more dangerous, according to interviews with workers from the communities surrounding the mine, current and former safety inspectors, Congolese government officials and mining managers.
Workers climbed into acid tanks to make repairs without checking the quality of the air. Others drove bulldozers and other heavy equipment without training or did dangerous welding jobs without proper supervision.
Last year, a worker sat in his truck as it was being towed, and it overturned. The worker tried to jump to safety, but the truck landed on him and crushed him to death, according to an annual report from China Molybdenum operations.
All of this was an extreme departure from the company’s American predecessor, which had “zero tolerance” for risky activities and security breaches, according to Alfred Kiloko Makeba, the veteran security supervisor, and 10 other current employees, executives and contractors. and ex.
Freeport-McMoRan, who had built the mine, had learned some hard lessons years earlier in its copper and gold mine in Indonesia, addressing international outcry over its dumping of toxic waste from the mine into a rainforest river, as well as violent conflicts over its local activities.
In Congo, the company had its struggles when it moved to build Tenke Fungurume, displacing more than 1,500 residents in a messy process. But once the mine opened, he gained an unusual amount of respect for his commitment to worker safety, both among local officials and among US diplomats.
Worker safety is an issue at other industrial mines in Congo, but under Freeport, employees who violated the rules were immediately sanctioned or fired, safety officials said. Logs reviewed by The Times show only one reported death among workers during the eight years that Freeport-McMoRan operated the mine, though it has repeatedly published near-fatal accident reports as precautionary guides.
When security inspectors discovered the violations after China Molybdenum took over, they were sometimes told to overlook them, or bribes were offered to do so, workers and supervisors said. And when they tried to enforce the rules, sometimes violence followed.
A security officer said he was thrown to the ground by a worker who he recalled for misusing the welding equipment. The man twisted his arm and broke his cell phone and the supplied camera.
An executive from Gecamines, the Congolese agency that is a minority shareholder in the mine, said employees reported clashes and safety concerns to the agency’s board. Security issues are now part of a broader review of China Molybdenum’s operations.
Zhou, the spokesperson for China Molybdenum, denied that the inspectors were attacked. The allegations, he suggested, were likely fabricated by fired employees.
In a statement to the Times, he said the mine had “a solid occupational health and safety framework and continues to exercise its zero tolerance rules.” Indeed, he said, “internal statistics” released in a company report this year showed that worker injuries have declined since the company took over.
But employees who said they were repeatedly asked not to report injuries believed the figures were set as part of a campaign to cover the escalating risks.
This suggestion, which The Times was unable to independently confirm and which China Molybdenum disputed, was crystallized for Mr. Makeba one evening last year when he received an urgent phone call. A mine worker had fallen off a high perch after not wearing the required safety harness, he said.
Mr. Makeba rushed to the scene and was shocked to learn, he said, that the worker, who had broken his leg, had been taken to a private clinic instead of the mine.
Mr. Makeba said the employee told him that his supervisors had paid him to keep quiet so that he would not be reported to management, where he would appear in the company’s verified injury tally.
When Mr. Makeba warned the boss about him, he said, he was told to drop the matter.
Mr. Zhou rejected Mr. Makeba’s account, adding that “any form of hedging in disclosure is against corporate rules and values.”
But according to Mr. Makeba and another safety officer who still works at the mine, working conditions have become increasingly important for car manufacturers sensitive to consumer and shareholder demands. So China Molybdenum, they said, prevented them from reporting near-fatalities and routinely ignored other injuries.
“Security is now only on paper,” said Mr. Makeba.
The problems at Tenke Fungurume aren’t just limited to employee complaints inside the mine.
Freeport-McMoRan struggled with offenders carrying cobalt sacks away. Some even died when the hand-dug tunnels flooded or collapsed.
With China Molybdenum in charge, the conflict has gotten much worse.
The company, faced with thousands of new offenders, asked the government to send soldiers to help control the situation, an executive who worked at the mine at the time told the Times.
The military arrived and began patrolling Tenke Fungurume and other local mines, demolishing the warehouses where offenders sold the cobalt rocks to traders.
The troops remained for months, and the situation eventually became deadly. A soldier in Tenke Fungurume opened fire, killing an unauthorized digger, according to an employee who told the Times he witnessed the clash.
Riots later broke out in the man’s hometown when friends arrived carrying his body. In the fray, a demonstrator was fatally shot, according to three local officials and the mine employee.
China Molybdenum paid for the burials, they said.
Troops with AK-47s were placed outside the mine this year, along with security guards hired by a company founded by Erik Prince, the former Navy SEAL-turned-private security consultant.
Even as this crackdown on thefts was underway, the new mine managers were looking for ways to cut costs and increase production.
China Molybdenum said it has saved more than $ 130 million annually through its “cost and efficiency” programs. “The new management revitalizes the business by bringing ‘Chinese efficiency and Chinese elements’,” the company boasts on its website.
The China Molybdenum expansion rush
is steadily increasing its production. Last December, it took over Kisanfu, paying Freeport-McMoRan $ 550 million for what is considered one of the largest untapped cobalt supplies in the world. The soil beneath the site contains enough cobalt, according to China Molybdenum estimates, to power hundreds of millions of Tesla in the long-range.
And then in August, China Molybdenum announced plans to spend $ 2.5 billion on Tenke Fungurume to double production over the next two years. When the expansion is complete, the mine will produce nearly 40,000 tons per year. Last year, the United States only produced 600 tons.
This expansion rush, however, has attracted the attention of senior Congo government officials, right down to Mr. Tshisekedi, the president.
Questions have emerged about the payments Tenke Fungurume operators may owe to Congo, dating back to when the American company controlled the mine. When new deposits are confirmed to Tenke Fungurume, owners are required to notify Gecamines, the Congolese agency, and pay $ 12 for each additional ton.
The allegations sparked a bitter dispute between Congolese officials and mine managers, with China spokesman Molybdenum calling the allegations “unbelievable, miscalculations” based on an accounting error.
Gecamines executives discussed forcing Tenke Fungurume’s management or even taking the mine out of China Molybdenum’s control, according to two Congolese mining executives involved in confidential discussions and a government official briefed on the talks.
Robert North, a New Mexico geologist who helped prepare mine reserve estimates for Freeport and China Molybdenum, said both companies and Gecamines knew of large amounts of cobalt underground at the site. China Molybdenum has been cautious in stating this, she said, until the company knows it wants to go at the expense of mining the deeper strata.
Mr. Tshisekedi’s commission is still investigating the allegations, and the president himself recently chaired a tense six-hour meeting with the company’s top executives.
Separately, the Congolese government, with financial assistance from the United States, is examining numerous mining contracts to determine whether Congo has been unfairly treated more broadly. While China-funded infrastructure projects got off to a flashy start, many haven’t been built, officials said.
During a visit to the cobalt mining region this year, the president acknowledged that corrupt or incompetent government officials in Congo may deserve some blame for the deals that have left the nation feeling left out.
“Some of our compatriots have badly negotiated mining contracts,” he said. “I am very hard on these investors who come to get rich on their own. They come with empty pockets and leave like billionaires “.
Chinese government officials insist the relationship is still ongoing and the benefits to Congo are substantial.
The countries have “a long-standing friendship, and practical bilateral cooperation has produced fruitful win-win results and enjoys broad prospects,” Zhao Lijian, a spokesman for the Chinese Foreign Ministry, said at a news conference in September.
In an interview in Kinshasa, Mr. Tshisekedi said his focus was not on which foreign power would dominate the mining sector in Congo, but rather on how his country could share in the wealth generated by the clean energy revolution.
“We have incredible potential for renewable energy, both through our strategic metals and through our rivers,” he said, referring to both mining and hydroelectricity. “Our idea is: how we can make this incredible resource available to the world, but making sure that it benefits the Congolese first and then the Africans
At 73, Kyahile Mangi has lived here long enough to predict the path ahead. Once the explosion starts, the walls of the mud brick houses will crack. The chemicals will seep into the river where women do laundry and wash dishes as they worry about hippo attacks. Soon a mine manager announces that everyone needs to be relocated.
“We know our land is rich,” said Mr. Mangi, a village chief who also knows that residents will share little of the mine’s wealth.
This wooded stretch of southeastern Democratic Republic of the Congo, called Kisanfu, holds one of the largest and purest untapped reserves of cobalt in the world.
The gray metal, typically mined from copper deposits, has historically been of secondary interest to miners. But demand is set to explode around the world as it is used in electric car batteries, helping them run longer without a charge.
Foreigners who discover – and exploit – the natural resources of this impoverished Central African country are following a colonial-era model. The United States went to Congo for uranium to help build the bombs dropped on Hiroshima and Nagasaki and then spent decades, and billions of dollars, trying to protect their mining interests here.
Now, with more than two-thirds of the world’s cobalt production coming from Congo, the country is once again center stage as major carmakers pledge to combat climate change by switching from gasoline to battery-powered vehicles. The new automobiles are based on a range of minerals and metals often not abundant in the US or the oil-rich Middle East, which supported the latest energy era.
But the Congo’s cobalt research has shown how the clean energy revolution, intended to save the planet from dangerously hot temperatures in an age of enlightened self-interest, is trapped in a familiar pattern of exploitation, greed, and play that often puts national aspirations above all else, as a New York Times investigation found.
The Times sent reporters to three continents involved in the competition for cobalt, a relatively obscure raw material that, along with lithium, nickel and graphite, has gained exceptional value in a world trying to sideline fossil fuels.
More than 100 interviews and thousands of pages of documents show that the cobalt rush has sparked a power struggle in the Congo, a repository of these increasingly precious resources, and has attracted foreigners bent on dominating the next era of global energy.
In particular, a rivalry between China and the United States could have far-reaching implications for the shared goal of safeguarding the earth. At least here in Congo, China is winning that race so far, with both the Obama and Trump administrations standing by as a Chinese government-backed company bought two of the country’s largest cobalt deposits in the past five years.
As the significance of these purchases becomes clearer, China and the United States have entered a kind of new “Great Game”. Last week, during an electric vehicle promotion visit to a General Motors factory in Detroit, President Biden acknowledged that the United States has lost ground. “We have risked losing our advantage as a nation, and China and the rest of the world are catching up,” he said. “Well, we’re about to turn the tables in a very, very significant way.”
China Molybdenum, the new owner of the Kisanfu site since late last year, bought it from Freeport-McMoRan, an American mining giant with a patchy history that five years ago was one of the largest cobalt producers in Congo – and now has completely left the country.
In June, just six months after the sale, the Biden administration warned that China could use its growing cobalt dominance to disrupt America’s push towards electric vehicles by crushing US manufacturers. In response, the United States is pushing for access to cobalt supplies from allies, including Australia and Canada, according to a national security official with knowledge of the matter.
American carmakers such as Ford, General Motors and Tesla buy cobalt battery components from suppliers who are dependent in part on Chinese-owned mines in Congo. A Tesla long-range vehicle requires about 4 pounds of cobalt, more than 400 times the amount in a cell phone.
Tensions over minerals and metals are already shaking the electric vehicle market.
The deadly unrest in July near a port in South Africa, where much of Congo’s cobalt is exported to China and elsewhere, caused a global jump in metal prices, a spike that only got worse over the rest of the year.
Last month, the leading forecaster of the mining industry said the rising cost of raw materials is likely to drive up battery costs for the first time in years, threatening to halt carmakers’ plans to lure customers with cars. electric at competitive prices.
Jim Farley, Ford’s chief executive, said the mineral supply crisis needs to be addressed.
“We have to solve these things,” he said at an event in September, “and we don’t have much time.”
Auto makers like Ford are spending billions of dollars building their battery plants in the United States, and are rushing to limit the need for freshly mined cobalt by developing lithium iron phosphate substitutes or switching to recycling. Consequently, a Ford spokesperson said: “We don’t see cobalt as a binding problem.”
The increase in the extraction and refining of cobalt by Chinese companies has helped meet growing demand and advanced the fight against climate change. But as more electric vehicles are produced by more car manufacturers around the world, the International Energy Agency predicts a cobalt shortage by 2030, based on an analysis of existing mines and those under construction. Other meteorologists say a shortage could hit as early as 2025.
A Times review of filings with regulatory authorities in China shows that acquisitions in Congo have followed a strict schedule, announced with great fanfare by Beijing in 2015, for dominate the emerging clean energy economy of the world.
As of last year, 15 of Congo’s 19 cobalt-producing mines were owned or funded by Chinese companies, according to data analysis by The Times and Benchmark Mineral Intelligence. The biggest alternative to Chinese operators is Glencore, a Swiss-based company that operates two of the largest cobalt mines there.
These Chinese companies have received at least $ 12 billion in loans and other funding from state institutions, and are likely to have drawn billions more. In fact, the five largest Chinese mining companies in Congo had state-backed bank credit lines totaling $ 124 billion, according to documents reviewed by the Times, although one of them, China Molybdenum, described itself as “a pure commercial entity ”traded on two exchanges.
China’s goal is to control the global supply chain from metals in the ground to the batteries themselves, no matter where the vehicles are made. The approach, in part, echoes Henry Ford’s investments in rubber plantations in the Amazon when the auto industry turned to mass production in the early 20th century.
The Kisanfu wooded mining site was just one of two big purchases in recent years by China Molybdenum. The first came in 2016, when he took control of Tenke Fungurume, a mine that alone produces twice as much cobalt than any other country in the world. At least $ 1.59 billion of Tenke Fungurume’s $ 2.65 billion price, according to financial records, came from loans provided by Chinese state-owned banks.
While the Chinese were stepping up their focus on green energy in 2016, future US president Donald J. Trump was extolling the fossil fuel industry, campaigning in West Virginia with a helmet and shovel and promising falsely to the coal miners that “you will work like crazy! After taking office, Mr. Trump would withdraw the requirements on American automakers to accelerate the transition to electric vehicles, giving the Chinese an even wider lane.
“It’s pretty nerve-wracking what happened here,” said Nicole Widdersheim, who worked on Africa issues for the National Security Council during the Trump administration. “Just so stupid.”
The Congo cobalt frenzy has attracted an international cast of opportunists, connoisseurs and dark characters eager to benefit from it. At one point, it also attracted a China-based private equity firm that Hunter Biden helped found and which was then scrutinized in the 2020 presidential campaign.
At the same time, Chinese companies are running into new headwinds. by the Congo government, according to documents obtained by the Times and interviews with current and former US officials.
Congolese officials are conducting an extensive review of past mining contracts, work they are doing with financial help from the US government as part of its broader anti-corruption effort. They are examining whether companies are meeting their contractual obligations, including a 2008 commitment from China to deliver billions of dollars of new roads, bridges, power plants and other infrastructure.
Congo president Felix Tshisekedi in August appointed a commission to investigate allegations that China Molybdenum, the company that bought the two Freeport-McMoRan properties, may have defrauded the Congolese government for billions of dollars in royalties. The company risks being expelled from the Congo.
At the Tenke Fungurume mine, there have long been problems associated with offenders from neighboring villages looking for cobalt. After China Molybdenum appealed to the government for help, Congolese troops fired on a violator inside the mine gates, killing him, as well as a second person who was shot after riots erupted in protest, witnesses and local officials have told the Times.
Afterward, at least a dozen employees or mine contractors told the Times that the Chinese property led to a drastic drop in safety and an increase in injuries, many of which were not reported to management. Two Congolese security officials said workers were assaulted after raising concerns and bribes were offered to cover up the incidents.
“Things are falling apart in terms of safety,” said Alfred Kiloko Makeba, who retired last year after a decade of working as a safety supervisor at the mine.
Vincent Zhou, a spokesperson for China Molybdenum, dismissed claims that the company would cheat the Congolese government or loosen security standards, saying the opposite was true, and questioned whether there was an organized effort to undermine the company.
China has a saying that goes something like, “Where there is the will to condemn, the evidence will follow,” Mr. Zhou said in a written response to the Times. “I vaguely feel that we may be trapped in the game of greater powers.”
A presidential connection
African countries have for years turned to China for help in building infrastructure with loans or exchanges involving their natural resources – deals analysts report provide far more benefits to the Chinese.
A model for these agreements, now common across the continent, was drafted in 2005 when Joseph Kabila entered the Great Hall of the People in Beijing.
Mr. Kabila, then just 33 years old, was the new president of the Congo after the assassination of his father, another tragic milestone on the path of violence and political disintegration of the country struck by poverty.
China was familiar territory for Mr. Kabila, who had received military training there in the late 1990s. This visit aimed to enlist the help of President Hu Jintao to get the Congo economy going.
The United States, which had long provided economic and military assistance to the Congo, was stuck in the wars in Afghanistan and Iraq and had become less and less interested in the country. Congo’s poor record on corruption and human rights was also frightening many international banks and Western investors.
Mr. Kabila’s wish list was long: he wanted new streets, schools and hospitals as part of a revival plan that he hoped would make a nation exhausted and discouraged by years of conflict and corruption appreciate it.
In return, he was ready to offer his country’s vast mineral riches – unparalleled in much of the world.
In the imposing hall on Tiananmen Square, the two presidents outlined an agreement that would change the balance of power in Central Africa, according to Andre Kapanga, a former adviser to Mr. Kabila who offered details of the meeting for the first time in a interview with the Times.
Mr. Hu explained that many people in China’s western provinces live in profound poverty. The development of the area was a cornerstone of his domestic politics, and he needed minerals and metals to build new industries. Congo was ready to help, Mr. Kabila assured him.
China had already purchased raw materials from Congo’s neighbor Angola, where it offered generous financial support in exchange for oil.
But this potential deal with Mr. Kabila was more ambitious than any other, and a diplomatic drama would take place at the riverside Palais de la Nation in the capital Kinshasa before it was sealed.
The scenario was Mr. Kabila’s inauguration in 2006, after he presented himself to the voters in a formal election and won the presidency. The Bush administration sends a delegation led by Elaine Chao, then secretary of labor.
Mr. Kabila liked motorcycles, and she introduces him to a Harley-Davidson trinket when I greet him at lunch. This would be the limit of their interaction, Ms. Chao believed, but members of her delegation urged her to request a private meeting, according to Laura Genero, an associate deputy labor secretary who was part of the group. To her surprise, Mr. Kabila agrees to a meeting the next day.
Ms. Chao was so unprepared for her invitation that she had to borrow a beige suit from Ms. Genero. She had only packed a work suit.
The US delegation congratulated Mr. Kabila on his Democratic victory and listened as he spoke of wanting to expand access to electricity nationwide. One of his aides called the meeting mostly chat.
Instead, a similar meeting between the new president and Chinese officials took place differently, according to Mr. Kapanga, who was briefed on both the US and Chinese discussions.
The Chinese used the opportunity to begin formal talks with Mr. Kabila that would have resulted in a $ 6 billion deal: China would pay for roads, hospitals, railways, schools and projects to expand electricity, all in exchange of access to 10 million tons of copper and more than 600,000 tons of cobalt.
Local media called it “the deal of the century,” and as Mr. Kabila celebrated the deal, the global financial community reacted more cautiously, worried that Congo was getting too much debt.
American officials marveled at the historic scope of the agreement. In secret messages released by WikiLeaks, they noted that China’s previous investment in Congo had been “an informal, somewhat disorganized set of Chinese companies” that did not seriously threaten US interests.
But now something much bigger was in preparation: “2,000 miles of road connecting the provinces of Orientale and Katanga, 31 hospitals, 145 health centers, two large universities and 5,000 government housing units will be built,” according to a 2008 cable from the ‘US embassy in Kinshasa to members of the Central Intelligence Agency, the secretary of state and other officials.
“And that’s not all,” the cable continued.
The Call of a Phoenix
In 2015, China’s presence in Congo had become visible in numerous infrastructure projects: Football stadiums rose from the dust, roads were widened, work began on water treatment plants.
But not all of its progress in putting the cobalt market at the center of attention could be measured in brick and mortar. The Chinese ambassador at the time, Wang Tongqing, launched an American-style diplomatic blitz.
Wang threw the jump ball that year at a Chinese corporate basketball tournament that attracted Congolese spectators.
He gave scholarships to Congolese students to study in China and was present when a Chinese organization gifted airline tickets to a Congolese choir for a tour in his country. At one point, he offered $ 1 million for Ebola relief in Congo.
Mr. Wang’s activities coincided with the launch in 2015 of his country’s “Made in China 2025” policy, which detailed China’s plan to transform itself into a “manufacturing superpower” in 10 areas, including batteries for electric vehicles.
Almost instantly, a wave of government-backed capital poured into Chinese companies in the Congo and elsewhere. The agreements were concluded quickly.
That year, the state-owned China Nonferrous Metal Mining Group said it would partner with Congo’s state-owned mining company Gecamines to develop the Deziwa site, then one of the largest copper and cobalt concessions in the country.
In 2017, Zijin Mining, a state-backed Chinese company with the slogan “Harmony Brings Wealth,” raised nearly $ 700 million from a private equity sale to develop its Kolwezi mine.
Public statements on the deals have signaled some of China’s ambitions, but the history and scale of the effort has not previously been reported.
Corporate documents, including annual reports and bond prospectuses, examined by the Times show that the five largest Chinese companies in Congo have received at least $ 124 billion in credit lines for their global operations. All companies are state-owned or have significant minority stakes held by various levels of the Chinese government.
“Unlike the United States, the Chinese government is always behind Chinese investors in Africa and more specifically in DRC,” said Mr. Kapanga, Mr. Kabila’s former adviser.
The biggest deal came in April 2016, when China Molybdenum, a company whose largest shareholders are a government-owned company and a mysterious billionaire, made its $ 2.65 billion bid to buy Tenke Fungurume. an American-owned mine on top of one of the largest cobalt reserves in the world.
There was a complication. Freeport-McMoRan had a Canadian partner who had the first offer right to buy its stake. China Molybdenum’s solution was to have the partner bought by a Shanghai-based private equity firm, but even that deal depended on Chinese government money.
None of the $ 1.14 billion raised to buy the partner’s stake came from private investors, company documents show. Instead, it came from state-controlled Chinese entities, including bank loans guaranteed by China Molybdenum as well as money brought into the deal through shady shell companies controlled by government-owned banks, according to the documents.
The board of the private equity firm, commonly known as BHR, was dominated by Chinese members but also included three Americans: Devon Archer, a businessman who was later convicted of defrauding the Oglala Sioux tribe in a case that still stands. proceeding through the justice system, and James Bulger, son of the former president of the Massachusetts Senate.
Another was Hunter Biden, whose father was vice president at the time.
It is unclear whether Mr. Biden, who helped found the company in 2013, was involved in the deal. Mr. Biden did not respond to requests for comment. A former member of BHR’s board of directors, who was not authorized to speak on internal corporate matters, said none of the Americans had played a role and that the taxes generated for the job had not been distributed to Mr. Biden or others. A spokesman for President Biden on Friday said he had not been made aware of his son’s connection to the sale.
How and why the company was involved was a mystery to the CEO who negotiated the sale for Freeport-McMoRan’s Canadian partner, Lundin Mining.
“They were a partner, their adviser or a lender
I don’t know, ”said Paul Conibear, then CEO of Lundin.
An elaborate event under white tents in Kinshasa celebrated China’s new ownership in May 2017. Mr. Wang was there along with Chinese officials who had helped finance the purchase – and a number of government-affiliated Chinese bankers who were trying to make even more mining deals.
Within a few years, they would help orchestrate the purchase of China Molybdenum from Kisanfu, the huge untapped cobalt reserve, from the same American mining giant. Together, the sales marked a changing of the guard in Congo as the United States abandoned its mining interests – a problem now weighing on President Biden, as he and his collaborators realized the extent of China’s dominance in clean energy. .
“The Democratic Republic of the Congo has a vast territory, rich natural resources and great investment potential,” Mr. Wang told the crowd. “A Chinese proverb says: ‘Build a beautiful nest to attract the phoenix'”.
Security is on paper only
At first, the changes seemed almost trivial to Tenke Fungurume – a 24-hour business that employs more than 7,000 people in an area the size of Los Angeles, marked by deep craters and dust raised by construction vehicles.
The new Chinese managers showed up in shorts and trainers, a shock to employees who were required to wear steel-toed boots and safety glasses.
“We thought, ‘Oh, this is not possible,'” said Pierrot Kitobo Sambisaya, who worked as a metallurgist in the mine for a decade until 2019 and had grown accustomed to a more rigorous environment.
Soon, labor agreements came and went without any acknowledgment. The celebrations in which the families of the workers were invited to visit the mine have no longer taken place. Dozens of caretaker and driver jobs, once occupied by Congolese citizens, have gone to the Chinese.
This was just the beginning. Employees were concerned that the mine was becoming even more dangerous, according to interviews with workers from the communities surrounding the mine, current and former safety inspectors, Congolese government officials and mining managers.
Workers climbed into acid tanks to make repairs without checking the quality of the air. Others drove bulldozers and other heavy equipment without training or did dangerous welding jobs without proper supervision.
Last year, a worker sat in his truck as it was being towed, and it overturned. The worker tried to jump to safety, but the truck landed on him and crushed him to death, according to an annual report from China Molybdenum operations.
All of this was an extreme departure from the company’s American predecessor, which had “zero tolerance” for risky activities and security breaches, according to Alfred Kiloko Makeba, the veteran security supervisor, and 10 other current employees, executives and contractors. and ex.
Freeport-McMoRan, who had built the mine, had learned some hard lessons years earlier in its copper and gold mine in Indonesia, addressing international outcry over its dumping of toxic waste from the mine into a rainforest river, as well as violent conflicts over its local activities.
In Congo, the company had its struggles when it moved to build Tenke Fungurume, displacing more than 1,500 residents in a messy process. But once the mine opened, he gained an unusual amount of respect for his commitment to worker safety, both among local officials and among US diplomats.
Worker safety is an issue at other industrial mines in Congo, but under Freeport, employees who violated the rules were immediately sanctioned or fired, safety officials said. Logs reviewed by The Times show only one reported death among workers during the eight years that Freeport-McMoRan operated the mine, though it has repeatedly published near-fatal accident reports as precautionary guides.
When security inspectors discovered the violations after China Molybdenum took over, they were sometimes told to overlook them, or bribes were offered to do so, workers and supervisors said. And when they tried to enforce the rules, sometimes violence followed.
A security officer said he was thrown to the ground by a worker who he recalled for misusing the welding equipment. The man twisted his arm and broke his cell phone and the supplied camera.
An executive from Gecamines, the Congolese agency that is a minority shareholder in the mine, said employees reported clashes and safety concerns to the agency’s board. Security issues are now part of a broader review of China Molybdenum’s operations.
Zhou, the spokesperson for China Molybdenum, denied that the inspectors were attacked. The allegations, he suggested, were likely fabricated by fired employees.
In a statement to the Times, he said the mine had “a solid occupational health and safety framework and continues to exercise its zero tolerance rules.” Indeed, he said, “internal statistics” released in a company report this year showed that worker injuries have declined since the company took over.
But employees who said they were repeatedly asked not to report injuries believed the figures were set as part of a campaign to cover the escalating risks.
This suggestion, which The Times was unable to independently confirm and which China Molybdenum disputed, was crystallized for Mr. Makeba one evening last year when he received an urgent phone call. A mine worker had fallen off a high perch after not wearing the required safety harness, he said.
Mr. Makeba rushed to the scene and was shocked to learn, he said, that the worker, who had broken his leg, had been taken to a private clinic instead of the mine.
Mr. Makeba said the employee told him that his supervisors had paid him to keep quiet so that he would not be reported to management, where he would appear in the company’s verified injury tally.
When Mr. Makeba warned the boss about him, he said, he was told to drop the matter.
Mr. Zhou rejected Mr. Makeba’s account, adding that “any form of hedging in disclosure is against corporate rules and values.”
But according to Mr. Makeba and another safety officer who still works at the mine, working conditions have become increasingly important for car manufacturers sensitive to consumer and shareholder demands. So China Molybdenum, they said, prevented them from reporting near-fatalities and routinely ignored other injuries.
“Security is now only on paper,” said Mr. Makeba.
The problems at Tenke Fungurume aren’t just limited to employee complaints inside the mine.
Freeport-McMoRan struggled with offenders carrying cobalt sacks away. Some even died when the hand-dug tunnels flooded or collapsed.
With China Molybdenum in charge, the conflict has gotten much worse.
The company, faced with thousands of new offenders, asked the government to send soldiers to help control the situation, an executive who worked at the mine at the time told the Times.
The military arrived and began patrolling Tenke Fungurume and other local mines, demolishing the warehouses where offenders sold the cobalt rocks to traders.
The troops remained for months, and the situation eventually became deadly. A soldier in Tenke Fungurume opened fire, killing an unauthorized digger, according to an employee who told the Times he witnessed the clash.
Riots later broke out in the man’s hometown when friends arrived carrying his body. In the fray, a demonstrator was fatally shot, according to three local officials and the mine employee.
China Molybdenum paid for the burials, they said.
Troops with AK-47s were placed outside the mine this year, along with security guards hired by a company founded by Erik Prince, the former Navy SEAL-turned-private security consultant.
Even as this crackdown on thefts was underway, the new mine managers were looking for ways to cut costs and increase production.
China Molybdenum said it has saved more than $ 130 million annually through its “cost and efficiency” programs. “The new management revitalizes the business by bringing ‘Chinese efficiency and Chinese elements’,” the company boasts on its website.
The China Molybdenum expansion rush
is steadily increasing its production. Last December, it took over Kisanfu, paying Freeport-McMoRan $ 550 million for what is considered one of the largest untapped cobalt supplies in the world. The soil beneath the site contains enough cobalt, according to China Molybdenum estimates, to power hundreds of millions of Tesla in the long-range.
And then in August, China Molybdenum announced plans to spend $ 2.5 billion on Tenke Fungurume to double production over the next two years. When the expansion is complete, the mine will produce nearly 40,000 tons per year. Last year, the United States only produced 600 tons.
This expansion rush, however, has attracted the attention of senior Congo government officials, right down to Mr. Tshisekedi, the president.
Questions have emerged about the payments Tenke Fungurume operators may owe to Congo, dating back to when the American company controlled the mine. When new deposits are confirmed to Tenke Fungurume, owners are required to notify Gecamines, the Congolese agency, and pay $ 12 for each additional ton.
The allegations sparked a bitter dispute between Congolese officials and mine managers, with China spokesman Molybdenum calling the allegations “unbelievable, miscalculations” based on an accounting error.
Gecamines executives discussed forcing Tenke Fungurume’s management or even taking the mine out of China Molybdenum’s control, according to two Congolese mining executives involved in confidential discussions and a government official briefed on the talks.
Robert North, a New Mexico geologist who helped prepare mine reserve estimates for Freeport and China Molybdenum, said both companies and Gecamines knew of large amounts of cobalt underground at the site. China Molybdenum has been cautious in stating this, she said, until the company knows it wants to go at the expense of mining the deeper strata.
Mr. Tshisekedi’s commission is still investigating the allegations, and the president himself recently chaired a tense six-hour meeting with the company’s top executives.
Separately, the Congolese government, with financial assistance from the United States, is examining numerous mining contracts to determine whether Congo has been unfairly treated more broadly. While China-funded infrastructure projects got off to a flashy start, many haven’t been built, officials said.
During a visit to the cobalt mining region this year, the president acknowledged that corrupt or incompetent government officials in Congo may deserve some blame for the deals that have left the nation feeling left out.
“Some of our compatriots have badly negotiated mining contracts,” he said. “I am very hard on these investors who come to get rich on their own. They come with empty pockets and leave like billionaires “.
Chinese government officials insist the relationship is still ongoing and the benefits to Congo are substantial.
The countries have “a long-standing friendship, and practical bilateral cooperation has produced fruitful win-win results and enjoys broad prospects,” Zhao Lijian, a spokesman for the Chinese Foreign Ministry, said at a news conference in September.
In an interview in Kinshasa, Mr. Tshisekedi said his focus was not on which foreign power would dominate the mining sector in Congo, but rather on how his country could share in the wealth generated by the clean energy revolution.
“We have incredible potential for renewable energy, both through our strategic metals and through our rivers,” he said, referring to both mining and hydroelectricity. “Our idea is: how we can make this incredible resource available to the world, but making sure that it benefits the Congolese first and then the Africans
(Extract from the foreign press review of eprcomunicazione)