Latest news with #US-DRC
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First Post
27-04-2025
- Business
- First Post
New front in US-China rivalry opens, this time in Congo's copper and cobalt mining heartland
DRC has offered US access to its vast mineral wealth as part of a broader plan to end violence in the country's east, where fighting has intensified this year after the Rwanda-backed M23 rebel group seized strategic cities read more Excavators and drillers at work in an open pit at Tenke Fungurume, a copper and cobalt mine 110 km (68 miles) northwest of Lubumbashi in Congo's copper-producing south. File image/Reuters Talks between the Democratic Republic of the Congo (DRC) and the United States over a proposed 'minerals-for-security' pact could threaten China's long-standing dominance in the central African nation's mining industry, though analysts warn the path ahead is fraught with complexity. Kinshasa has offered Washington access to its vast mineral wealth as part of a broader plan to end violence in the country's east, where fighting has intensified this year after the Rwanda-backed M23 rebel group seized strategic cities. In return, the DRC is seeking security guarantees and military support, with hopes that a closer partnership with the US will also encourage American investment and lessen its economic reliance on China. STORY CONTINUES BELOW THIS AD Under the proposal, the US would deploy diplomatic and economic levers to help broker peace, while gaining access to critical minerals — a move that could reshape competition with China, which currently dominates mining operations across the DRC, South China Morning Post reported. 'President [Felix] Tshisekedi and I discussed a minerals deal and charted a path forward,' Massad Boulos, Donald Trump's adviser for Africa, said at a recent briefing about his trip to Kinshasa. Experts suggest the arrangement may mirror China's own 'minerals-for-infrastructure' deal struck with the DRC in 2007, in which Chinese firms agreed to develop infrastructure in exchange for access to key resources like copper and cobalt. Joseph Cihunda, a law lecturer at the University of Kinshasa and project officer at Southern Africa Resource Watch, described the emerging US-DRC agreement as a 'minerals-for-security' deal involving 'the transfer of military industries, equipment and training.' However, Cihunda cautioned that 'it will be difficult to assess what needs to be exchanged to ensure a balance between the two partners.' The US appears set to leverage infrastructure projects such as the Lobito Corridor, which aims to rebuild railway links between the DRC, Angola, and Zambia's copper belt. By enhancing transport links, Washington hopes to diversify supply chains away from Chinese control and open up mineral flows towards American and allied markets. STORY CONTINUES BELOW THIS AD Yet forging a sustainable US-DRC deal comes with major hurdles. American firms have traditionally been reluctant to invest in the DRC, citing high risks and insecurity. As Wei Shen, a research fellow at the Institute of Development Studies in Britain, pointed out: 'American companies had been hesitant to invest in the DRC and American banks 'don't support entrepreneurs here.'' 'So, if Trump can ask American companies to invest and then ask Wall Street to support these deals, it's OK,' he said. Even then, he added, 'all the minerals they dig up will be shipped back to China for processing' under existing global arrangements. 'So even if we remove all the Chinese companies, I don't think any Western companies can take up their role.' The stakes are high. The DRC accounts for roughly 70 per cent of global cobalt production — a mineral vital for batteries in smartphones and electric vehicles — and is also a major supplier of copper, tin, gold, lithium, and tantalum. STORY CONTINUES BELOW THIS AD Chinese companies, through a series of acquisitions and contracts, have come to dominate the sector. Chief among these was the $6 billion minerals-for-infrastructure deal signed in 2007 under then-president Joseph Kabila, involving state-owned enterprises such as China Railway Group, Sinohydro Corporation, and private players like Zhejiang Huayou Cobalt. This barter deal — an example of resource-backed loans — was renegotiated in 2023 following Congolese grievances that it disproportionately favoured Chinese interests. The revised agreement was scaled up to a $7 billion infrastructure package, aiming for greater equity. Chris Berry, head of the US-based commodities advisory firm House Mountain Partners, suggested that the Trump administration's approach appeared to be purely transactional. 'I assume the administration would help 'keep the peace' and, in exchange, gain access to mine critical minerals,' he said. Still, Berry warned that the fundamental challenges of operating in the DRC remained. 'I would think that the likelihood of American companies or investors investing in the DRC is still slim,' he said, adding that investors would likely want to see sustained peace before committing capital. Without substantial backing from the US government, he added, China's grip on the sector may not loosen: 'They have operated in this part of the world for a long time.' STORY CONTINUES BELOW THIS AD Some signs of change have emerged. Following the visit by the US envoy, Alphamin Resources — a US-based company — announced earlier this month that it would initiate a 'phased' resumption of operations at its Bisie tin mine in the conflict-prone Walikale district. The announcement came after M23 forces withdrew from the site following 'discussions with parties involved in the conflict.' Rwanda has denied any links to the M23 rebels. According to Cihunda, the DRC's mining sector remains underdeveloped, offering ample room for new entrants. 'There's plenty of room for investors in both exploration and mining,' he said. 'The major challenge is to improve the business climate.' Whether the US-DRC deal can overcome these hurdles remains uncertain — but the strategic battle over Africa's minerals is clearly entering a new phase.
IOL News
23-04-2025
- Business
- IOL News
DRC arms for minerals deal amid Trump transactionalism, tariffs
Media reports suggest that a deal involving Donald Trump's US and the DRC could be modelled along the lines of the US- Ukraine deal, a transactional bilateral arrangement upon which the US would provide security support in exchange for critical minerals and rare earth metals. Media reports that the Democratic Republic of the Congo (DRC) has sought to negotiate an arms-for-minerals deal with the US at a time when Washington has imposed unilateral tariffs targeting both allies and opponents. Media reports suggest that the US-DRC deal could be modelled along the lines of the US- Ukraine deal, a transactional bilateral arrangement upon which the US would provide security support in exchange for critical minerals and rare earth metals. While the DRC faces a desperate security situation and has alluded to the need to diversify its partners, the Trump administration looks keen to take its transactional model of bilateral, and indeed multilateral, relations to conflict states, trading mineral resources for security needs. The motivation and timing of the DRC's overtures towards the US may throw the country into a catch-22. The Trump administration has been very clear about seeking maximum benefits for the US in line with the Trump Administration's America First Agenda by forging transactional relations with partners. At the same time, the DRC is pulling a huge gamble which could alienate its traditional trusted partners. At this juncture, African countries should seek collective solutions to emerging challenges, including in dealing with the chaotic, unpredictable, and transactional policies emerging from Washington. The DRC faces ongoing violence, instability, massive displacement of its citizens and a huge humanitarian crisis. Millions of its citizens have been forced to flee their homes to escape the advancing M23 rebels, allegedly supported by Rwanda. The rebel groups have responded with mixed signals to calls for a ceasefire by both the government of the DRC and Rwanda, while the SADC forces deployed to keep peace in the country are being withdrawn, leaving the Tshisekedi-led government desperate to bolster peace and stability in the country. China has emerged as the major investment and development partner in Africa and the DRC in particular. The Trump Administration has indicated its desire to continue pushing US interests for critical minerals, drawing big power competition and rivalry into the region. The U.S., through its International Development Finance Corporation, set up during Trump's first term in 2019, has pledged a $550 million loan to support the Lobito corridor project. The DRC, Angola, Zambia, and Tanzania are all participating in the Lobito corridor initiative, a $4 billion project which was originally launched by the Biden administration to develop railway infrastructure linking ports in Tanzania through the DRC and Zambia to Angola. The project, which seeks to facilitate the transportation of minerals resources and other raw materials found in abundance in this region, was touted as evidence to affirm that the US and EU are seriously back to invest in Africa, and possibly outcompete flourishing Chinese investments. According to the BBC, the U.S. chargé d'affaires and acting ambassador to Angola, James Story, told reporters that the United States is ''set to show our commitment to these projects,'' suggesting that the Trump administration is all in the planned partnership with the 4 Africancountries, the private sector, the US, and the EU countries. Western governments view the Lobito corridor project as their answers and alternative to massive Chinese infrastructure projects in the region backed by a combination of the Belt and Road Initiative (BRI) and the Forum for China Africa Cooperation (FOCAC). In contrast to ad hoc, recently emerging Western infrastructure initiatives in Africa, China has institutionalised its investments in the continent through combined public and private sector investments to assert itself in diversified supply and value chains, creating millions of jobs across the continent. Western countries and the private sector have previously been reluctant to invest massively in the continent. They have mostly directed their focus on humanitarian and security initiatives partly because Africa is generally viewed as unstable and characterised by poor governance. Compared to extensive Chinese investment in the DRC, and despite dangling billions of dollars in potential investment, US-DRC trade accounts for minuscule economic exchanges between the two countries. A summary of trade relations between the DRC and the US from the Office of the United States Trade Representative indicates that total goods trade with the Democratic Republic of the Congo reached $576.4 million in 2024. The US goods exports to the Democratic Republic of the Congo were $253.3 million in 2024, growing by 35.6 percent to reach $66.5 million from 2023, while the US goods imports from the Democratic Republic of the Congo clocked $323.1 million, gaining by 17.5 percent to $48.1 million. Since the 2000s, China has invested more than $155 billion in Sub-Saharan Africa, making Beijing a legitimate alternative to Western financing in the realm of developmental and commercial infrastructure. The DRC, which produces 80 percent of the world's cobalt, has attracted massive investments from state-owned enterprises and policy banks from China. Chinese companies have invested in half of the largest cobalt mines in the DRC, with a significant stake in the refining of cobalt and other minerals. China is by far the DRC's largest single trading partner, representing nearly half of its merchandise exports and more than a quarter of its imports, according to 2022 data from the World Trade Organization. When it comes to China's economic ties with DR Congo, the UN Comtrade Database shows that for years, China has been DR Congo's top trading partner since the 2000s. According to the United Nations COMTRADE database on international trade, Chinese exports to Congo reached US$4.49 billion in 2023. China has financed and built large-scale infrastructure projects in DR Congo, including hydropower plants and a dry port. The Chinese Loans to Africa Database run by Boston University says that Beijing extended $3.2bn (£2.5bn) of loans to the DRC between 2005 and 2022, mostly to fund road and bridge construction and the country's electricity grid. US investments in Africa in general, and the DRC in particular, are marginal. The Trump administration is equally proving transactional, basically self-interested in a very inside-looking way. The unilateral imposition of blanket tariffs on nearly 60 countries, which have been suspended for 60 days, requires the DRC to demonstrate a measure of solidarity, goodwill and, most importantly, seek a collective response with other African countries to maintain a diplomatically nuanced collective posture towards the US. China, the main economic partner with the DRC, is confronted with a cycle of additional US tariffs. In the context of the transactional operational mode characterising contemporary Washington foreign relations, and the tensions between Washington and Beijing triggered by Trumpsunilateral imposition of tariffs on China, the DRC, as with other African countries who aremembers of the BRICS, and have forged strong bilateral and multilateral relations with Beijing risk coercive backlash from Washington. While China is clear on its policy of non-intervention and non-interference in the internal affairs of other countries, Trump has threatened to impose debilitating tariffs on members of the BRICS group of countries. South Africa is facing intense pressure for some of its policies to address its domestic historical contradictions. Barring some serious delicate balancing act, the DRC risks alienating some of its traditional partners who have ploughed billions of dollars into the fragile state at a time when the US is proving unpredictable and unreliable, tearing the global economic and political rule book even for its historical partners. Gideon H Chitanga, PhD is a Post Doctoral Researcher at the Centre for China Africa Studies (CACS), University of Johannesburg.
Russia Today
08-03-2025
- Business
- Russia Today
Washington considering ‘rare earths' deal with African state
The US is exploring a deal with the Democratic Republic of Congo (DRC) to access its natural resources in exchange for American security assistance, the Financial Times has reported. Violence escalated in the resource-rich country's eastern provinces in January, with M23 group militants seizing several key cities. Last month, Prime Minister Judith Suminwa estimated that the conflict had caused 7,000 fatalities. The DRC has repeatedly accused neighboring Rwanda of backing the militants, claims that have been echoed by the West. Rwanda has consistently denied the allegations. On Saturday, the FT cited unnamed sources as saying that US-DRC discussions about a potential mineral deal have intensified recently, 'although several obstacles remain' and they are 'at a relatively early stage.' Last month, Tina Salama, a spokesperson of DRC President Felix Tshisekedi, wrote on X that Kinshasa 'invites the USA, whose companies source strategic raw materials from Rwanda, materials that are looted from the DRC and smuggled to Rwanda while our populations are massacred, to purchase them directly from us the rightful owners.' Rwanda has denied any involvement in mineral smuggling. Prior to that, DRC Senator Pierre Kanda Kalambayi sent a letter to US Secretary of State Marco Rubio saying that 'The United States is well-positioned to forge an enduring partnership with the DRC – a nation that possesses over $24 trillion in untapped reserves of critical minerals.' Among the resources mentioned are cobalt, which is of particular interest to the aerospace and defense sectors, as well as of lithium, tantalum, and uranium. Kinshasa would expect Washington to step up military cooperation, as well as efforts to train and equip the DCR military, Kalambayi stated. Since assuming office in January, US President Donald Trump has expressed interest in gaining access to overseas deposits of crucial minerals, most notably in Greenland and Ukraine. A minerals deal with Kiev was expected to be signed last week. However, a heated exchange between Ukrainian leader Vladimir Zelensky and Trump at the White House put the process on hold. Trump accused Zelensky of disrespect, ingratitude for past US aid, reluctance to seek peace with Russia, and 'gambling with World War III.' He was asked to leave and return only when he was ready for serious talks. In a post on X on Tuesday, Zelensky indicated that Ukraine was prepared to proceed with the arrangement.
