Mining minerals

Congo-Kinshasa: rare earth minerals to accelerate economic growth

The Democratic Republic of Congo (DRC) joined the East African Community (EAC) in March 2022 in a development that has been widely hailed as positive.

This decision was taken by the Heads of State of the other member countries. The BBC, in a report which covered the development, said that although the country has officially become a member of the regional bloc, not much will change immediately. Indeed, at that time, in March 2022, Congolese lawmakers had yet to ratify the decision.

The report adds that Congolese citizens wishing to travel to other member countries of the East African Community had to wait a little longer. The BBC gave the example of South Sudan which took four months to become a full member in 2016.

  • The DRC recently joined the EAC, which should help the country realize its mining potential through regional economic cooperation.
  • The DRC has the largest known deposits of rare earths which is the collective name for cobalt and lithium. These popular minerals in the DRC are critical in the transition to renewable energy because they are used in the production of solar products.
  • EAC member countries share borders with the DRC, except one, which means member states will be able to trade.

World Bank: Economic Outlook for Sub-Saharan Africa

The DRC’s motivation for joining the bloc was and remains to improve commercial and political relations with its neighbors who constitute the bloc.

Ideally, being a member of a regional bloc like the EAC should improve trade and business for its member states. In the specific case of the EAC, citizens of member states can travel to any country in the bloc without needing a visa.

This ease of mobility, it is said, should reduce trade frictions and restrictions. For its part, there is a very significant geographical advantage to the accession of the DRC to the EAC. The country shares borders with all member states except Kenya. This means that automatically with the stroke of a pen, the DRC now has easy access for its goods to the other five markets that make up the bloc. The same goes for the countries on the other side of the border with the DRC.

South Sudan, Uganda, Rwanda, Burundi and Tanzania all share borders with this vast Central African country.

According to World Bank statistics, the population of the DRC stands at no less than 89.56 million in 2020. It is a market that is becoming easily accessible to five of the six countries due to geography and the entry of the DRC into the EAC.

The benefits of the DRC’s membership in the regional bloc are symbiotic.

The DRC has as much to gain as the other six members. For other member states, DRC boarding means they will have instant access to the Atlantic Ocean and the DRC itself will have easy access to the Indian Ocean. The significance of this is profound in terms of global trade and maritime access to foreign markets.

Ease of access to either ocean is not an advantage that will be immediately appropriated by any of the EAC countries. Indeed, reaching the Atlantic Ocean would involve cutting across the width of the DRC, which is by no means a small feat. The DRC is the largest country in sub-Saharan Africa with a land mass of approximately 2,344,858 square kilometers.

There is also little infrastructure to facilitate the movement of goods across the mammoth country to the Atlantic Ocean, whether by road, rail or port. The development, however, opens up opportunities for the development of said infrastructure. There is enormous potential for economic transformation for the DRC by joining the EAC. The country will automatically benefit from assistance from member states in terms of exploiting its vast natural resources.

Since the advent of the transition to net-zero rare earths, minerals like lithium and cobalt have come into vogue. These minerals are part of what are collectively known as critical minerals. They earned this moniker because of their importance in helping the global transition to clean renewable energy and moving away from fossil fuels.

The DRC has vast deposits of rare earth minerals with equally vast applications.

Lithium is used in the manufacture of batteries used to power electric vehicles. The Council on Foreign Relations states that cobalt is an essential mineral used for batteries in electric cars, computers and cell phones. Demand for cobalt is growing as more electric cars are sold, especially in Europe, where governments are encouraging sales with generous environmental bonuses.

The Council adds in an article they published titled “Why Cobalt Mining in the DRC Needs Urgent Attention”, the demand for cobalt will quadruple by 2030 due to the electric vehicle boom. More than 70% of the world’s cobalt is produced in the DRC by methods that can be described as artisanal. This means that there is room for more significant development of minerals from the cobalt mining industry in the DRC.

  • The inclusion of the DRC in the EAC gives other EAC member countries access to the Atlantic Ocean if the required infrastructure in the DRC can be developed.
  • Artisanal mining methods are still dominant in the extraction of rare earths in the DRC. There is little mechanization in mining activities.
  • The alarm has been raised over the use of child labor in the extraction of rare earths in the DRC. The EAC should clean up the mining image of the DRC

The New Yorker, an American publication, made similar claims about the extent of rare earth minerals “In June 2014, a man began digging in the soft red earth in the backyard of his home, at the outskirts of Kolwezi, a town in southern Democratic Republic of Congo. As the man later told his neighbors, he intended to create a pit for a new toilet. About eight feet in the ground, his shovel hit a slab of gray rock streaked with black and dotted with what looked like drops of bright turquoise mold. He had found a seam of heterogenite, an ore that can be refined into cobalt, one elements used in lithium-ion batteries. Among other things, cobalt keeps the batteries, which power everything from cell phones to electric cars, from catching fire. As global demand for lithium-ion batteries has increased, the price of cobalt also increased. man suspected that his discovery would make him rich – if he could get it out of the ground before the others.”

Southern Congo, according to the New Yorker, has a resource of at least 3.4 million tonnes of cobalt, or at least half of the world’s known supply. The challenge with the current state of the rare earth mining industry is that its image desperately needs to be cleaned up and reinvented.

There have been disconcerting reports of Asian countries employing children in cobalt mines.

The Center for Business and Human Rights, for example, once published a report that “the current state of child labor and human rights abuses in Congo’s mining sector” is particularly criticism,” a Jesuit priest said during a recent House hearing on charges against China for the exploitation of children in Africa in the mining of cobalt, lithium and various rare earth minerals.

The admission of the DRC into the EAC could help eradicate this human rights problem. Member states could, for example, create binding treaties and conventions criminalizing child labor in DRC’s cobalt and rare earth mines.

The countries that make up the bloc can also jointly apply the same conventions by introducing a certification process similar to that used by the global diamond mining industry. The Kimberley Process is used to certify that diamonds that find their way to world markets have been produced using ethical methods.

A similar certification process convention may be instituted by the EAC to avoid and prevent “blood cobalt” or “blood rare earth minerals” from ending up in world markets. Obviously, such a collective approach will require a concerted and coordinated effort by other Member States to create and implement such conventions.

Investing and Trading Strategies in a Stagflation Environment