Blood cobalt and the chaos in central Africa

StrategyPage has a long essay on the Congo, and the elections.

but the part I want to quote is this, and I wonder how China managed to control their mineral wealth.

Just defeating Kabila in an election was a remarkable feat because the former president had enriched himself with corrupt dealings. The worst corruption was in eastern Congo (Ituri, North and South Kivu provinces) and southern Congo (Katanga province). These provinces are where foreign firms mine and export valuable minerals.

what it comes down to is that China is investing in the cobalt mining, and it's easy to bribe and let authorities steal the profit (and probably the Chinese firms will also divert some of that money).

In southeastern Congo (Lualaba province) the state-owned cobalt monopoly, Entreprise Generale du Cobalt (EGC), had been paying artisanal, or informal, cobalt miners a minimum price of $30,000 a ton for cobalt that was selling for $50,000 a ton. The government contended that unregulated minral brokers paid artisanal miners much less than $30,000 a ton. For a long time these independent miners have produced about ten percent of Congo’s Cobalt. Most of those mineral brokers work with or for Chinese companies which control an estimated 70 percent of Congo’s mineral deposits and mining industry. The Chinese state-owned CNMC (China Nonferrous Metal Mining Company Ltd.) owns huge cobalt and copper reserves in Congo.,,,

Congo is the world’s biggest cobalt producer, each year producing a growing majority of the world’s total cobalt. In 2020 Congo produced about 100,000 tons of cobalt, which was 71 percent of the world total. By 2021 industry sources estimated that Chinese companies controlled around 40 percent of Congo’s cobalt mining capacity. 

Why cobalt? China is planning to take over the world with their electric cars.

it is not just exploiting the workers and stealing the profits: It is also destroying the environment and displacing people from their traditional land.

Human rights abuses are well documented

AlJazeerah reportAlJazeerah report

In the report Powering Change or Business as Usual? published on Tuesday, Amnesty International and the DRC-based organisation IBGDH, or Initiative pour la Bonne Gouvernance et les Droits Humains (Initiative for Good Governance and Human Rights), detail how the expansion of multinational mining operations has led to communities being forced from their homes and farmland.,,“Climate justice demands a just transition. Decarbonising the global economy must not lead to further human rights violations. The people of the DRC experienced significant exploitation and abuse during the colonial and post-colonial era, and their rights are still being sacrificed as the wealth around them is stripped away.”

Amnesty International report:“The forced evictions taking place as companies seek to expand industrial-scale copper and cobalt mining projects are wrecking lives and must stop now,” said Agnès Callamard, Amnesty International’s Secretary General.

NPR reports:How 'modern-day slavery' in the Congo powers the rechargeable battery economy

much of the DRC's cobalt is being extracted by so-called "artisanal" miners — freelance workers who do extremelyKara says the mining industry has ravaged the landscape of the DRC. Millions of trees have been cut down, the air around mines is hazy with dust and grit, and the water has been contaminated with toxic effluents from the mining processing. dangerous labor for the equivalent of just a few dollars a day.

 

even Joe Rogan is publicizing this atrocity:

blood cobalt

StategyPage discusses the chronic civil war (and refugees and starvation and disease caused by the chaos of the war) in Central Africa, partly tribal and partly because President Kabila refuses to leave. The bishops devised a peaceplan there, but were ignored, so it appears it will continue.

The MSM ignores it (just another civil war, folks, just move on)..

But how many in the MSM will cover this: President Kabila plans to tax mining companies taking out cobalt (and copper).

February 10, 2018: Congo confirmed it intends to raise taxes on minerals as well as raise the royalty rate mining companies must pay the government. Parliament approved legislation to raise mining taxes as part of a new "mining code." ... Most of the mining companies affected are European, North American and Chinese. Cobalt will become more expensive and so will copper. Why? In 2016 the world produced an estimated 123,000 tons of cobalt and 57 percent came from Congo. ..

So what, you might say? Well this is why:

Cobalt has many uses, but it is critical in the production of rechargeable lithium-ion batteries, the type used to power mobile digital devices and electric vehicles...

 and who is buying all that cobalt?

China has been a major buyer of Congolese cobalt so that increase will hit Chinese manufacturers particularly hard. In the first nine months of 2017 China imported an estimated $1.2 billion worth of Congolese cobalt.

and then there is the corruption angle:

..Gecamines, the stare owned mining company, plays a key role in mismanagement and "diverting" mining revenues. Gecamines officials are beholden to the Kabila government. (Austin Bay)

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so what does this have to do with Zimbabwe?

well, there will be a need to find cobalt elsewhere:

The foremost risk, and perhaps the most challenging to solve, is geopolitical. Sixty-two percent of the world’s cobalt comes from the Democratic Republic of Congo, and combined with production from Zambia, Madagascar, South Africa and Zimbabwe, the five countries mine more than 71 percent of the world’s cobalt. Companies process ore locally and export more than 90 percent of the total to China for further processing and refining to produce commercial cobalt compounds used in batteries.
This exclusive trade between African countries and China exposes the market to Chinese regulatory volatility and export restrictions, a recent example being that of the rare earths market, which saw extreme shortages after the Chinese enacted export restriction in 2010. Since then, countries and private industries have had to resort to alternate sources and materials, and stockpiling.

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Well there is a lot of rare minerals in Zimbabwe too, and the mining companies see the new president as business friendly.

Mnangagwa, Zimbabwe’s former spy chief, became president in November with military backing and has offered to hold elections by July.
His administration abolished rules that mining operations must be at least 51% owned by black Zimbabweans for all minerals other than platinum and diamonds.
Zimbabwe is geologically rich, with deposits of gold, chrome, lithium, coal, diamonds, platinum and iron ore.
Mine development stalled under Mugabe, whose policies led to a collapse in the economy and hyperinflation.

more here:

‘Zim could become hub of battery mineral revolution’

February 9, 2018 in News

With Zimbabwe sitting on a lucrative mineral treasure trove and angling to attract foreign direct investment (FDI), Australian listed firm, Prospect Resources, is on course to spending an estimated US$55 million on a new lithium plant in the southern African country. Zimbabwe Independent business reporter Tinashe Kairiza (TK) spoke to Prospect Resources executive director Paul Chimbodza (PC, pictured) on how attractive Zimbabwe is as an investment destination and how the lithium plant will add impetus to government’s efforts to grow the economy

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WSJ laments China's race to get rare earth metals including cobalt

e companies dominate the cobalt supply chain that begins at mines in Congo

Miners pushing their cobalt-laden bicycles through a mine near Kolwezi, Congo, last June. They often sell to Chinese wholesalers. PHOTO:DIANA ZEYNEB ALHINDAWI FOR THE WALL STREET JOURNAL

By 

Scott Patterson and

 

Russell Gold

Feb. 11, 2018 1:46 p.m. ET

237 COMMENTS

KOLWEZI, Democratic Republic of Congo—Miners push bicycles piled high with bags of a grayish-blue ore along a dusty road to a makeshift market. There, they line up at wholesalers with nicknames such as Crazy Jack and Boss Lee.

Most of the buyers are Chinese. Those buyers then sell to Chinese companies that ship the bags, filled with cobalt, to China for processing into rechargeable, lithium-ion batteries that power laptops and smartphones and electric cars.

There is a world-wide race to lock up the supply chain for cobalt, which will likely be in even greater demand as electric-car production rises. So far, China is way ahead.

Chinese imports of cobalt from Congo, the world’s biggest producer of cobalt, totaled $1.2 billion in the first nine months of 2017, compared with just $3.2 million by India, the second-largest importer, government data show.

“We’re realizing that the Congo is to [electric vehicles] what Saudi Arabia is to the internal combustion engine,” says Trent Mell, chief executive of exploration company First CobaltCorp. , based in Toronto. Chinese firms are keenly aware of Congo’s importance to electric vehicles, he says, and “trying to control the whole ecosystem…from cobalt mining to battery production.”

From Congo to China

Lithium-ion battery production is concentrated in four countries.

Much of Congo's cobalt winds up in processed cobalt sulfate.

Congo produces more than half of the global supply of cobalt.

Percentage of raw cobalt production, by country

Percentage of world-wide cobalt sulfate production

Percentage of global production capacity*

Germany

9%

Zim investments will be respected if they are fair says MDC

from MINING WEEKLY via GeostrategyBlog:

Zimbabwe has the second-largest platinum resource in the world, and a host of other metals and minerals, which makes South Africa’s troubled neighbour an attractive mining destination.

Some, like the world’s second-largest platinum company, Impala Platinum, of Johannesburg, and junior Aquarius Platinum, which is listed in Johannesburg and Australia, grasped the Zimbabwe nettle years ago and had been reaping rich rewards until recently, when the platinum price collapsed.

Others, like platinum and chrome explorer Kameni, are very recent entrants, and then there are still others, like South Africa’s black-owned African Rainbow Minerals, that make no bones about being attracted by Zimbabwe’s prospectivity, have still not made any investment announcements and are presumably awaiting a globally acceptable political settlement, which several politicians, analysts and corporations believe may be only a stone’s throw away.

Zimbabwe’s Movement for Democratic Change (MDC) led by Morgan Tsvangirai, which is the frontrunning political entity that holds a key to a possible acceptable political outcome, has been vocal about mining companies investing in Zimbabwe.

The Johannesburg-based MDC treasurer-general, Roy Bennett, suggests that any new Zimbabwe government would need to scrutinise the mining investments that have been made to ensure that they are all able to withstand the full glare of the most rigorous of modern-day corporate-governance scrutiny....


Impala Platinum CEO David Brown is invariably open to media questioning at results presentations and has engaged in transparent transactions and ‘indigenisation’, the Zimbabwe equivalent of South Africa’s black economic-empowerment policy.

Brown has expressed parti- cular concern about the obli- gation that Impala Platinum has in Zimbabwe to continue to provide the employment that its activities at its 87%-owned Zimplats and Mimosa offer to the suffering people of Zimbabwe.

Brown is on record as praising the diligence and can-do approach of the employees of Zimplats and Mimosa, a view often also expressed by Aquarius Platinum CEO Stuart Murray.

Aquarius is also a shareholding in the Mimosa mine and there have been occasions where quarterly results have shown the high productivity levels that the Zimbabwe workforce is able to achieve.

Carroll says that Anglo American is still developing the infrastructure, roads and water supply at Unki, and, if the poli- tical environment improves, expects to break ground and start producing platinum in 2010.

“It’s a very big orebody. We have to keep investing to hold onto it. ...

more details at link

Zim mining sector faces collapse

Zimbabwe mining sector faces collapse Friday 13 April 2007

By Edith Kaseke HARARE – The mining industry in Zimbabwe could collapse under the weight of heavy debts and an unsustainable exchange rate, ironically at a time when world metal prices are booming, which would be another blow to the foreign currency starved country, the Chamber of Mines said. The mining sector is the biggest foreign currency earner in a country battling its worst ever economic crisis and its collapse could bring more misery to the majority who are squeezed by the world’s highest inflation rate of nearly 2 000 percent, unemployment above 80 percent and shortages of hard cash and food. With the agriculture sector in turmoil, mainly as a result of President Robert Mugabe’s government’s seizures of farms from whites, mining had become the largest employer and earned more than half of the country’s foreign currency. The Chamber of Mines said an official rate of $250 which miners are paid for a third of their earnings was unviable as this could not meet their Zimbabwe dollar costs, noting that for example suppliers of goods and services were pricing at black market rates. The United Stated dollar is trading around $17 000 at the black market. Miners are forced to liquidate nearly 33 percent of their forex receipts at the central bank at the official rate. "The official exchange rate of US$1:Z$250 continues to cause viability challenges," the chamber said on Thursday. "The shortage of foreign currency for suppliers of goods and services to the mineral sector is impacting on the determination of prices. It is no secret that in the absence of foreign currency on the official market, the parallel market is the only other source," it added. According to the Chamber of Mines, gold producers were hit by payment delays by the central bank, adding that at the beginning of this month, most producers had not been paid for gold delivered in January. Gold producers account for 52 percent of total mineral production and a third of gross domestic product.