https://twitter.com/fastandfiryIS THE UNITED STATES SUBVERTING...

https://twitter.com/fastandfiry

IS THE UNITED STATES SUBVERTING CHINA'S INFLUENCE IN THE DRC?

In the battle for resources in the race for clean energy, the Democratic Republic of Congo (DRC) stands as a vital piece of the puzzle, holding access to key metals such as cobalt, lithium, copper and coltan. While China was an early dominant investor, the United States is upping the ante and seeking to open up competition.

Africa's mineral and petroleum resources have long been coveted for industrial development in the global north. But the demand for these raw materials has begun to shift in the face of growing climate threats.

Today, as the world moves towards a greener future and global oil investment plummets, the demand for metals such as cobalt, lithium, copper and coltan has increased dramatically. Their role in “green” technologies has sparked a new wave of geopolitical competition.

Nowhere is this more acute than in the Democratic Republic of Congo (DRC), where the power struggle between China and the United States is intensifying.

Admittedly, the DRC has a major comparative advantage. With around 70% of the world's reserves of cobalt, vast reserves of copper and coltan, and large mostly untapped lithium deposits, the country is a vital cog in the future development of next-generation technologies, including batteries. electric vehicles (EV). As a result, Kinshasa is being aggressively courted by Washington amid Beijing's already strong presence in the DRC.

China, one of the first entrants in the DRC

At present, China controls about 60% of the global electric vehicle battery market and holds about 70% of the market share in the DRC's mining sector. This is due to historical factors. First, Beijing's voracious appetite for minerals over the past two decades has made China a major investor in major mining markets, providing it with an arguably unrivaled global resource network.

Second, China invested aggressively in the DRC from around 2005, when it courted President Joseph Kabila. During his tenure, Kabila oversaw the awarding of dozens of lucrative mining contracts to Chinese state-linked companies, which multiple investigations have found were backed by substantial bribes to the government. political elite.

Friction with Western institutions has also seen the DRC increasingly dependent on China for funding. The clearest example of this is the controversial US$6 billion Sino-Congolese deal in 2007, which allowed Chinese-backed companies to take control of a number of major mining sites.

Third, the West has been largely ambivalent. Sino influence in the DRC has remained relatively unchecked by the United States, even as the development of the electric vehicle industry began to accelerate in the 2010s. And despite the emergence of green technologies at the center of the global sustainability debate from around 2015/2016, investments in these areas were largely ignored by the US administration of Donald Trump.

This left China with a wide opening to consolidate its position in the EV battery market – and the DRC. Moreover, the reputational risks associated with widespread corruption and the difficult operating environment in the DRC have deterred any major initiative from the West.

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Now, in light of larger geopolitical factors – and despite China's considerable influence in the DRC – the United States is intent on playing catch-up and is stepping up its efforts in this regard. Indeed, the balance of power shifted belatedly following leadership changes in the United States and the DRC, which saw Joe Biden and Felix Tshisekedi respectively take power. This has catalyzed a more constructive relationship since 2021, especially given the pro-business reforms and political direction taken by Kinshasa. Several developments reinforced this momentum. The first was the approval of a $500 million loan from the World Bank in May 2021 for the development of socio-economic infrastructure in Kinshasa. After that, the International Monetary Fund (IMF) approved a US$1.52 billion Extended Financing Facility (ECF), the terms of which were partly centered on reforming the mining sector and reviewing all controversial contracts. - mainly Chinese - to ensure the receipt of appropriate income. . In August, several contracts awarded to Chinese companies were suspended following the launch of an audit. Shortly thereafter, the US government agreed to provide US$1.6 billion to the DRC over five years under a joint cooperation agreement. Fighting for Supremacy in the “Clean Energy Revolution” While these developments have not been overtly anti-China, the US government interest in the DRC - and desire to diminish Chinese influence - became clear during a visit by its deputy security adviser Daleep Singh in January 2022. During a press briefing following meeting with Tshisekedi, Singh called China's operations in the DRC 'opaque and coercive', and suggested the US would be a more mutually beneficial partner by investing in the 'clean energy revolution' . Curiously, Beijing had remained largely silent on the DRC's maneuvers and the West's turn, presumably as it grappled with multiple domestic crises, particularly the externalities of the pandemic. China has also apparently done little efforts to respond to claims made against its state-linked mining companies in the DRC. In fact, after trying to make piecemeal concessions, he took a rather hostile stance. This was particularly the case after the DRC in 2022 called for a review of the Sino-Congolese mining deal, and subsequent threats to cancel the lucrative Tenke Fungurume mine contract unless changes to the deal were made. China's stance contrasted with the continued US diplomatic charm offensive. There were few trips to Africa made by US Secretary of State Antony Blinken in 2022 that did not involve visiting the DRC, while the Tshisekedi government received more development financial support from the United States. United. U.S. efforts reached an important milestone in January 2023, when Washington announced it had signed a memorandum of understanding with the DRC and Zambia to help those countries — through technical support and investment facilitation — to develop a value chain for electric vehicle batteries. The role of the United States in creating what could emerge as a large electric vehicle production chain could well see it become the DRC's preferred electric vehicle battery export partner, reducing its own dependence on with respect to China. agreement with DRC and Zambia to help these countries – through technical support and investment facilitation – develop a value chain for electric vehicle batteries. The role of the United States in creating what could emerge as a large electric vehicle production chain could well see it become the DRC's preferred electric vehicle battery export partner, reducing its own dependence on with respect to China. agreement with DRC and Zambia to help these countries – through technical support and investment facilitation – develop a value chain for electric vehicle batteries. The role of the United States in creating what could emerge as a large electric vehicle production chain could well see it become the DRC's preferred electric vehicle battery export partner, reducing its own dependence on with respect to China.

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It should be noted that the United States is not the only Western actor interested in the DRC. Australian companies, for example, have started to become leading investors in the Congolese mining industry. However, the United States is the only one actively trying to overthrow Beijing's influence in the DRC (and is seen as the only capable actor given Washington's diplomatic and economic hegemony). While China is by no means "persona non grata" in the DRC, developments in recent years have indicated a growing shift towards the United States after decades of Chinese influence. China faces significant obstacles China's ability to counter an aggressive US charm offensive will face a variety of challenges. Chief among these is China's unfavorable reputation in the DRC under the Tshisekedi administration, due to both Beijing's resistant stance on mining sector audit and years of unsavory operational practices. Second, China cannot offer what the United States does — local investment and development — which remain core policy priorities for the Tshisekedi government. This is supported by the fact that China is also unlikely to match US investment in any case, as evidenced by limited inflows in recent years and outflows from its own crises. I' DRC's alignment with the United States has also been advantageous with respect to DRC's relations with the Bretton Woods institutions and the United Nations (allowing it both access to funding and diplomatic support); under a Kabila regime strongly aligned with Beijing, the DRC's relations with these institutions were strained. For Kinshasa, the United States presents a strategic ally as the Tshisekedi administration seeks to steer the country away from the economically destructive practices of past administrations. In addition to financial support, Washington's appeal lies in its clear alignment with the Congolese government's medium- and long-term political objectives. These include the fight against corruption, the reform of the mining sector, the local economic investment and the development of national processing industries. China's historical involvement in the DRC has largely run counter to these, and it has not demonstrated its intention to support the country's development goals. To be clear, this does not mark the beginning of the end for China in the DRC; the Asian giant will remain a dominant player in the DRC's mining sector - and economy - for the foreseeable future. Indeed, in the expected absence of a direct check on the United States, China will most likely soften its resistant stance in the DRC to protect its mineral inflows. But, the DRC is in a unique position to balance the economic and diplomatic benefits of alignment with the United States, while allowing China to continue its operations and associated contribution to the economy. In sum, the DRC can and should leverage its position to secure more favorable terms from both Washington and Beijing.