China gains ground in DR Congo’s mining sector as Australian firm loses permits

Two significant decisions within eight days made by the government of the Democratic Republic of Congo reflect the current state of its mining industry, where Chinese companies have emerged as preferred partners. On March 19, DR Congo’s Mining Registry announced the cancellation of mining permits held by Australia’s AVZ Minerals for non-payment of surface rights fees. It was the second cancellation in three years suffered by the company in DR Congo after its Manono lithium concession was revoked by the government in 2023. It has 30 days to appeal the latest decision. Then, on Thursday in Beijing, DR Congo’s Minister of Mines Louis Watum Kabamba and China’s Minister of Natural Resources Guan Zhiou signed a memorandum of understanding (MOU) for “cooperation in the fields of geology and mineral resources”. The pact will involve regular consultations between their state institutions, compliance with DR Congo’s laws and regulations, and protection of investments. “This memorandum establishes a structured framework for cooperation,” Kabamba said in a statement on Friday. The contrasting actions reflect the current state of competition for critical minerals between Western mining companies and their Chinese counterparts in DR Congo, a country endowed with one of the world’s richest deposits of critical minerals. Chinese companies, already estimated to control more than 70 per cent of the country’s reserves of cobalt, lithium, copper and coltan, now have a chance to tighten their grip. DR Congo by some estimates holds about 70 per cent of the world’s reserves of cobalt and coltan, and 10 per cent of copper reserves. Others include zinc, tungsten, tin, iron ore, gold and diamonds. With the agreement, immediate attention is likely to focus on the Mines de Fer de la Grande Orientale (Mifor) project, where the government said an investment of US$28.9 billion would produce 50 million tonnes of iron within a year, and 300 million tonnes a year at peak production. “These prospects have aroused a keen interest on the part of the Chinese,” Kabamba said. These developments may appear ominous for the interests of AVZ Minerals and other Western mining companies struggling for a foothold in DR Congo. AVZ Minerals lost its original Manono lithium concessions after a disputed 15 per cent stake sale to China’s Zijin Mining, which Cominiere carried out over AVZ’s objections. DR Congo revoked AVZ’s permit in 2023, while Zijin moved ahead with development, investing US$1.4 billion in a joint venture where it holds 61 per cent and the government 39 per cent, with production set to begin in June. To balance Chinese dominance, Congolese President Felix Tshisekedi awarded the southern half of Manono to KoBold Metals, a US-backed firm. KoBold has delayed development pending resolution of the dispute with AVZ, which briefly suspended arbitration to seek a deal with KoBold but resumed proceedings in December. US companies importing from DR Congo, or prospecting for critical minerals there, will benefit from US President Donald Trump’s “Project Vault”, which aims to counter Chinese influence in Africa and expand American access to critical minerals. It involves a US$12 billion fund for building a buffer stock of vital supplies for the US tech and defence industries. Following Trump’s mediation of the conflict between DR Congo and Rwanda-backed M23 rebels, the US was granted more concessions for its support, including preferential access to some strategic assets. These include gallium and germanium, two minerals now subject to tightened Chinese export controls targeting US buyers. Still, as AVZ fights to reclaim the Manono concession, the latest regulatory action by the Congolese Mines Registry on its Manono Extension Project, which covers 79 exploration blocks distributed over 242 sq km (93 square miles), will further complicate its case, according to analysts. “The appeal process provides limited protection for permit holders,” said Muflih Hidayat, an analyst at Australian firm Discovery Alert, which provides market intelligence on mining companies listed on the Australian Securities Exchange (ASX), in a note on Friday. “AVZ’s multi-year dispute demonstrates that domestic appeals rarely reverse government determinations, forcing companies into costly international arbitration proceedings.” A critical point for both sides appeared to be whether a party to a contract can exit an unfavourable deal for more favourable terms offered by another party. This question has gained urgency as the West and China compete for favour in African countries, which are home to an estimated 30 per cent of critical mineral reserves. One response has been the resource nationalism of mineral-rich African nations, which are now demanding better returns. More African countries have been adding regulatory clauses that at least require first-stage local processing as a condition for granting mining concessions. Chinese firms have proved quicker to accept these terms and provide the required financing. The stance conflicts with the pit-to-port approach of Western mining companies, which focuses on exporting raw materials for processing abroad. The new strategy has the support of the African Development Bank, which has championed local value addition. A mining engineer by trade, Kabamba previously worked at Canada’s Ivanhoe Mines and served as board chair of its local subsidiary before his political appointment. Drawing on that experience, he is pushing to shape the future of the country’s mining industry. Amid intensifying competition and Trump’s tariff war, Beijing has unveiled a new incentive for African exporters of all sizes: zero-duty access to the Chinese market, effective May 1. Kabamba noted the importance of the gesture in his recent statement: “Exports from the [DR Congo] to China will benefit from duty-free access, strengthening the competitiveness of our mining sector and the prospects for economic growth.”

China gains ground in DR Congo’s mining sector as Australian firm loses permits

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Chinese firms emerge as preferred partners as African nations seek bigger returns on critical mineral extraction

Chinese firms emerge as preferred partners as African nations seek bigger returns on critical mineral extraction