Cover Story: China Digs In to Boost Mining in Democratic Republic of Congo

By Luo Guoping and Denise Jia

In the southern Democratic Republic of Congo (DRC), the Katanga Plateau embodies Africa’s vast untapped potential, hosting the world’s largest copper mine, Tenke Fungurume Mining (TFM). Twice the size of New York City, and driven by Chinese metals giant CMOC Group Ltd. and local state-owned miner Gecamines, the operation has navigated a labyrinth of challenges to emerge as a linchpin in the global commodities market.

After a protracted two-year negotiation with the DRC government, CMOC retained its 80% stake in TFM while agreeing to an $800 million equity transfer over six years. This compromise reflects the complex dynamics of mining in the former Belgian colony, Africa’s second-largest country by land area and population, where corporate and national interests collide. Partnering with commodity behemoths like Glencore and Trafigura after guaranteeing its exclusive selling rights, the DRC government aims to leverage its mineral wealth to capitalize on booming demand for copper and cobalt.

Global commodities markets are surging, driven by the energy transition and demand for materials essential to electric vehicles, power grids and artificial intelligence. Copper prices peaked at $11,100 per ton in 2024, with TFM output projected to rise 60% to 450,000 tons this year. Combined with CMOC’s nearby Kisanfu mine, the company’s production is set to reach 600,000 tons, solidifying China’s dominance in the region.

The DRC holds 15% of global copper deposits and over 50% of cobalt reserves, with grades far surpassing China’s own resources. These critical metals, vital for the clean energy transition, make the DRC’s underdeveloped copper-cobalt belt a prime opportunity for latecomer Chinese investors.

“Africa is worth exploring,” said Zhang Weibo, chief researcher at the Mining Policy Institute of the International Mining Research Center under the China Geological Survey, noting that the continent’s vast resources, high profitability and manageable risks make it a viable investment destination.

Chinese companies now control over 70% of the DRC’s copper production, driven by investments exceeding $20 billion. Firms including China Railway Group Ltd. and Zijin Mining Group Ltd. have revitalized the sector, filling the void left by Western businesses wary of the region’s risks.

China-based metal extractors view copper as a secure long-term investment because of its relatively fixed mining costs and upward price trends, which motivates them to pursue expansion and monetization as quickly as possible, an executive at a Chinese smelter in the DRC told Caixin.

To develop the African country’s natural resources requires overcoming stubborn challenges. Corruption, poor infrastructure and erratic power supply plague development efforts. With mining contributing 75% of GDP, the government faces mounting pressure to address these obstacles.

At the China Mining Conference in Tianjin last month, Kizito Pakabomba Kapinga, Minister of Mines of the DRC, pledged to develop infrastructure, improve traceability, and combat corruption to ensure the mining industry’s sustainable development and bolster foreign investor confidence. “We aspire to be more than just an exporter of raw minerals—we want to become an important part of the battery and emerging technology supply chains,” he said.

As the global competition for critical minerals intensifies, the DRC finds itself at the nexus of geopolitical rivalries. The U.S., Europe and Japan have ramped up engagement, challenging China’s dominance. DRC President Félix Tshisekedi welcomed diverse investors while seeking to maximize the country’s gains from the clean energy revolution.

China Steps into Gap

In 2002, DRC opened its mining sector to foreign investment. Former President Joseph Kabila, who studied in China, fostered a business-friendly environment, allowing Chinese companies to establish a foothold. Sicomines, a landmark joint venture between China Railway Group, other Chinese state and private enterprises, and DRC’s Gecamines, completed its first phase in 2015. That marked the dawn of large-scale Chinese investments, which surged after 2019.

Sicomines exemplifies the “resources for infrastructure” model. In exchange for mining rights, the Chinese entities built vital roads and bridges across the whole country. By 2023, improved infrastructure cut travel times dramatically, enhancing access to key mining sites. As Zhou Chao, China president of Canadian mining giant Ivanhoe Mines, noted, early Western investors did not provide infrastructure development, leaving that opportunity open for Chinese firms to exploit.

Today, China-based companies dominate copper and cobalt production in the DRC. CMOC’s acquisitions of TFM and Kisanfu Mining (KFM) have placed it at the forefront of global mining. In 2023, CMOC accounted for 32% of global cobalt supply growth. Meanwhile, Ivanhoe and Zijin Mining transformed the Kamoa copper mine into the world’s fourth-largest, producing 20% of the DRC’s output of the metal and 3% globally.

By integrating mineral extraction with infrastructure and technology, Chinese enterprises have optimized operations and efficiencies. The widespread adoption of Chinese equipment has slashed production costs, with Chinese mining vehicles now commanding 90% of the local market.

Looking forward, Chinese natural resource enterprises are leveraging their operational and infrastructure prowess to prioritize environmental, social and governance (ESG) practices, aiming for long-term sustainability in the DRC.

Cost-First Strategy

Over the past decade, Chinese mining companies have redefined the DRC’s mining sector by leveraging cost-efficient technologies and operational models to navigate one of the world’s most challenging resource environments. This approach has allowed them to succeed where Western companies often faltered.

China’s edge lies in its engineering expertise, mining skills and cost efficiency, says Li Chaochun, vice chairman of CMOC. This competitive advantage has enabled Chinese firms to thrive in challenging conditions. For example, new production lines at TFM built by CMOC have cut costs by $500 per ton. Similarly, Jinchuan Group extended the life of the Ruashi mine, once deemed unviable by South African operators, by innovating methods to process lower-grade ores.

Feng Tao, vice president of technical service at Ivanhoe Mines China, noted that Chinese companies’ experience with small, low-grade domestic mines has honed their processing and smelting skills. “If you can profit in China, you can profit even more in the DRC,” he said. “Unlike Western firms with high investment thresholds, Chinese companies don’t mind small, challenging, low-margin projects as long as they’re profitable.”

Despite their successes, Chinese companies face challenges in a shifting market. The surge in DRC and Indonesia’s cobalt production has created a glut in supply, pushing prices for the metal to a nine-year low. That has forced some producers to halt operations.

While Chinese firms excel in efficiency, some critics maintain they often lack an emphasis on long-term planning, safety standards and sustainable practices, compared to their western counterparts. Experts such as mining industry consultant Ge Yunbo emphasize the need for Chinese miners to adopt higher operational standards, akin to those of Western rivals, to enhance their global reputation. Projects like Kamoa, jointly managed by Ivanhoe Mines and Zijin Mining, showcase the benefits of blending Chinese efficiency with international best practices, Ge said.

Renewed Western Competition

The COVID-19 pandemic, the Russia-Ukraine conflict and U.S.-China tensions have exposed vulnerabilities in global supply chains, turning Africa into a geopolitical battleground for resources. While Chinese firms tighten their grip on DRC’s mining sector, the U.S. and Europe are racing to reclaim influence—but with little progress to show so far.

In 2022, the U.S. signed a trilateral memorandum with DRC and Zambia to develop a local battery industry and pledged a $30 billion investment in special economic zones. The EU followed in 2023 with framework agreements with DRC and Zambia to create strategic partnerships on key raw material supply chains. The U.S.-led Mineral Security Partnership launched in 2022 including allies such as Australia, Canada and the EU, sought to secure critical minerals through multinational alliances.

Despite these ambitious plans, analysts argue that these agreements remain non-binding, and progress is hampered by a disconnect between political strategies and corporate execution.

Géraud Neema, a Carnegie Africa Program scholar and Africa editor for the China-Global South Project, told Caixin that while the U.S. aims to counter China on the continent, it has yet to take concrete actions or define its support to Africa. So far, no major Western companies have returned to the DRC, he said.

The U.S.- and E.U.-backed Lobito Corridor, a $1.6 billion railway project connecting Angola, DRC and Zambia, is the first major U.S. rail infrastructure investment in Africa. Funding delays have stalled progress, according to people familiar with the project.

DRC President Tshisekedi has signaled openness to both sides, encouraging partnerships that balance China’s infrastructure investments with Western technology and market access. During a 2023 visit to China, Tshisekedi proposed using the DRC’s lithium project Manono to leverage both Chinese infrastructure investment and Western manufacturing expertise and end-user market.

Breaking Raw Material Dependency

The DRC aims to leap from a raw material supplier to a value-chain powerhouse. However, longstanding systemic challenges threaten to derail these ambitions.

At a 2021 business forum, Tshisekedi rallied African leaders to seize the low-carbon transition opportunity by integrating into the global electric battery market. Despite supplying 70% of the world’s cobalt, the DRC captures just 3% of the battery and electric vehicle value chain. Tshisekedi’s five-year plan for 2024-2028 prioritizes industrialization, infrastructure and maximizing the socio-economic benefits of its mining industry. “It is time to keep mined minerals in the country for processing,” he said in an interview during his 2023 visit to China.

Despite the ambition, experts point out the country’s lack of infrastructure and industrial capacity as the major challenge. “Industrialization in the DRC suffers from a lack of infrastructure and skilled labor, with even semi-skilled workers scarce,” said a financial officer of a Chinese-funded project. Meanwhile, heavy reliance on imports drives local consumer prices to three to four times those in China, with living costs in Lubumbashi, the country’s second-largest city, rivaling Europe.

Power shortages exacerbate operating costs for miners, with regular outages and soaring diesel prices forcing reliance on costly backup generators. Mining enterprises face power outages up to 120 times annually.

Chinese miners are attempting to tackle power shortages by repairing old hydropower units, importing electricity from neighboring countries and building dedicated power lines. “The solution lies in hydropower, solar and energy storage,” said TFM’s power executive Ma Yongjun. While solar and storage offer short-term relief, a long-term solution will require major hydropower projects, he said.

Efforts to expand hydropower are slow-moving. The Inga III hydropower project, promoted as the “African Dream Project,” has seen decades-long delays due to financing hurdles and complex international interests.

Transportation infrastructure is another major constraint. With no public transport systems, deteriorating railways and the lack of a highway network, logistical inefficiencies add to the nation’s economic struggles. The country needs to establish a nationwide artery system to unlock the value of its resources, said Antoine Roger Lokongo, associate professor at Joseph Kasa-Vubu University in DRC. He cited a Chinese proverb, “if you want to be rich, build roads first.”

Paul Collier, a professor of economics and public policy at Oxford University, warned that resource wealth can be a curse without robust governance and income management. The DRC’s journey from resource dependency to industrialized economic power hinges on its ability to build institutional capacity and attract responsible investment, he told Caixin.

Political risks in the DRC make operating costs unpredictable, prompting many mining firms to prioritize early monetization. However, CMOC’s Li emphasizes that mining companies should focus on long-term sustainability, balancing speed and efficiency with strategic planning.

Despite the instability, Li identified three stabilizing factors in the DRC: widespread Christian faith moderating public sentiment, neighboring countries’ interest in regional stability and the mining sector’s reliance on Chinese partnerships. As Chinese mining firms mature, they focus on balancing short-term gains with long-term sustainability while navigating complex local politics.

Contact reporter Denise Jia (huijuanjia@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

Image: romul014– stock.adobe.com