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Legal action over huge DR Congo lithium project on hold asUS battles China’s dominance

Australia’s AVZ Minerals has paused legal action over aCongo mining project as the US seeks to buy its stake and rival China’sinterests

Published: 12:00pm, 1 Jun 2025Updated: 4:00pm, 1Jun 2025

Australia’s AVZ Mineralshas suspended its arbitration case against the Democratic Republic of Congo until later this month, following US encouragement to resolve the dispute over the massive Manono lithium project.

The suspension,announced last week, comes as Washington backs American start-up KoBold Metals– funded by tech billionaires including Bill Gates and Jeff Bezos – to acquireAVZ’s stake in Manono.

If successful, KoBoldwill pledge US$1 billion (7.2 billion yuan) to develop the project,countering China’s Zijin Mining, which controls the northern section of Manono after the DR Congo revoked AVZ’s rights in 2023.

However, KoBold is a small entity compared to CMOC Group,CNMC and other Chinese mining companies operating in the central Africancountry.

AVZ said in a statement last week that the US governmenthad “encouraged the parties to take whatever steps are necessary to allow for aclimate conducive to discussions leading to a meaningful settlement” betweenthe DR Congo and AVZ.

The move signals Washington’s growing efforts tosecure critical minerals in Congo, directly challenging China’s dominance in the country over control of critical minerals such as lithium and copper, vital for the global green energy transition.

Congo is advancing negotiations on a proposed “minerals-for-security” deal with the United States, which has offered to help broker peace between Congo and Rwanda to stabilise the mineral-rich eastern Congolese region.

That marked a significant shift from the US policy on mineralsin Congo. Until recently, the US showed little interest in investing in Congo’smining sector, as American companies saw the country as “risky, corrupt, andopaque” for investment.

By contrast, China has, in less thantwo decades, steadily ramped up investments there, even acquiring interestspreviously owned by US companies, to become the largest investor in Congo’smining sector.

Chinese infrastructure investmentcommitments in Congo were valued at US$7 billion last year, making China thelargest investor in the country.

A report by the Atlantic Council lastmonth said China, the US and the European Union were “engaged in atechnological race spurring competition for access to these critical minerals”,and at the centre was the DR Congo, which was “being courted by these powerslike never before”.

Kai Xue, a Beijing-based China-Africamining lawyer, took a positive view of the potential Congo-Americaminerals-for-security deal, arguing that US President Donald Trump’s engagementsignalled genuine interest.

He said that while lithium was strategically important, Congo’sgreatest economic potential was in copper, particularly for the greentransition. The country is the world’s second-largest copper producer.

Xue said copper output could “tripleagain”, potentially making Congo the world’s largest producer of the metal by2040 and enabling it to achieve middle-income status based on copper alone.

He said that if a US company were tosecure lithium interests, prompting the US to promote regional stability andthus boost copper mining growth, the scenario would benefit all stakeholders –Congo, Chinese mining companies and the global green energy transition.

Chris Berry, head of US-basedcommodities advisory firm House Mountain Partners, acknowledged the Trumpadministration’s rationale for wanting a presence in Africa but questionedwhether the minerals-for-security deal could go ahead.

“What or who defines ‘security’? Arethe economics of a deposit irrelevant, meaning if the mining does not makeeconomic sense, are the security guarantees still enforceable?” he asked.

“Given the plethora of critical mineral deposits in morereliable geopolitical jurisdictions, it is somewhat surprising that KoBold hasdecided to focus on the [DR Congo] as opposed to elsewhere,” Berry added.

“I will be curious to see what theterms of these deals are when the ink is dry on the contracts. I don’t thinkthe dust has settled here yet.”