In Depth: How China’s Companies Came to Dominate DRC’s Copper and Cobalt Mining Belt

The Democratic Republic of Congo (DRC) is a vital player in the global mining industry due to its substantial deposits of copper, cobalt, and other essential minerals. These resources have attracted global mining companies, which use the country as a testing ground for different management strategies. Western companies often struggle with the high risks and costs involved, whereas Chinese firms have become prominent players by implementing aggressive cost-control measures and localized strategies, although they face challenges concerning operational and safety standards [para. 1][para. 2].

The DRC's mining history dates back to 1908 with Belgium's colonial establishment of the first copper refinery. The mining sector experienced significant disruptions following the overthrow of Mobutu Sese Seko's dictatorship in 1996 and the country's subsequent civil wars, which opened the sector to foreign investment as the country sought to rebuild its infrastructure [para. 3].

Western mining companies, notably from Europe, North America, and Australia, entered the DRC starting in the late 1990s. Companies like BHP Billiton engaged in ambitious projects, including the construction of a hydroelectric plant to support mining operations [para. 4]. However, Western firms encountered a challenging environment marked by political instability, corruption, and prohibitive operating costs, leading some to exit, particularly during tumultuous times such as the 2008 financial crisis and the 2016–2018 presidential transition [para. 5][para. 6].

Glencore plc, a Swiss mining company, began acquiring significant copper and cobalt mines in the DRC in 2007, growing its holdings substantially over the years. However, Glencore scaled down operations in 2019 due to reassessments of reserves and faces challenges with corruption charges, paying substantial settlements in 2022 to resolve these issues [para. 7][para. 8].

In contrast, Chinese companies capitalized on the departure of Western firms. Jinchuan Group Ltd., for example, acquired Metorex in 2012, securing crucial copper and cobalt projects in the DRC, while China's MMG Ltd. purchased Anvil Mining the same year. Chinese firms now dominate the mining belt from Lubumbashi to Kolwezi [para. 9][para. 10][para. 11].

CMOC Group is a notable entrant, gaining control of Tenke Fungurume Mining (TFM), the world's largest copper mine, through strategic acquisitions from Freeport-McMoRan in 2016 and 2020 [para. 12][para. 13][para. 14]. CMOC's approach involves monitoring global assets and engaging with major players to secure strategic resources in times of opportunity [para. 15][para. 16].

The exit of Western companies from the DRC reflects their cautious investment strategies focused on profit recovery rather than rapid expansion. This tendency often results in slow development and challenges in managing complex political and legal environments, making the DRC less attractive to them [para. 17][para. 18].

Chinese companies, by contrast, often replace existing management teams with their own upon taking control and introduce cost-cutting measures. Jinchuan and CMOC exemplify this approach by transforming management to enhance efficiency [para. 21][para. 22]. Concerns about sustainability arise over Chinese firms' focus on cost control and reduced safety standards, prompting calls for improved strategic planning and risk management [para. 23][para. 24][para. 25].

Efforts are underway to train local workers and elevate their roles within the operations of these companies [para. 26]. Experts advise that China's mining industry must adapt to higher standards and refine its competitive edge to succeed on the international stage [para. 27][para. 28][para. 29]. This adaptation is seen as crucial for enhancing China's international image and expanding its footprint in the global mining sector [para. 30].