Democratic Republic of the Congo: Riding the battery raw materials wave

November 2021

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The COP26 meeting of world leaders wrapped up in mid-November with a number of critical action points that will set the tone for the clean energy transition, particularly in relation to reducing road transport emissions. Among these action points are the need to increase available charging infrastructure ports, the implementation of fuel efficiency standards and regulations to curb CO2 emissions and ensuring that the move toward zero-emission vehicles encapsulates the globe in a distributed manner for greatest impact.

Strategic minerals in Africa are at the forefront of the green energy transition

Part of this transition will involve a significant increase in the supply of critical minerals such as cobalt, copper, and lithium used in the manufacture of battery storage. The Democratic Republic of the Congo (DRC) will play an important role in the global supply chain for such minerals given the limited number of alternative suppliers. Others, such as Tanzania, are also looking to position themselves for the growth in critical mineral demand and have ramped up investment drives to secure additional funding for developing prospective resources. Most notably this includes the USD 1.3 billion Kabanga nickel mine – the new development comes off the back of rising demand for nickel as an alternative to cobalt in the production of batteries.

The increasing interest in alternative critical minerals to cobalt in the production of batteries comes as a result of the opaque nature of the mining supply chain in the DRC. It has come under increasing scrutiny since a landmark 2016 report by UNICEF, in which it accused cobalt production of being involved with human rights abuses and in some cases, the use of child labour, as also noted by a recent report by UK-based NGO Rights and Accountability in Development (RAID). At present the DRC accounts for some 70 percent of global cobalt production totalling 100,000 tonnes in 2019, out of a total global production figure of 140,000, while employing some 200,000 workers both formally and through artisanal mining. Though cobalt is key to battery components it is also a major contributor to the ability to recycle batteries once they reach end of life, as a way to minimise waste by-products and close the loop on the full cycle of cradle-to-gate.

The pace of the energy transition, desire to phase down coal usage, and an acceleration in battery electric vehicle production has created an increased urgency in Kinshasa to seek more value from the ‘blue gold’ that lies under its southern provinces. Yet, simultaneously, cobalt end users and the international community are investing millions in technological research to minimise, or even remove, cobalt from lithium-ion battery composition. This is a direct result of the environmental, social and governance risk involved in sourcing cobalt from the DRC.

However, as it stands, projected demand for cobalt cannot solely be met by other global sources. Russia, Cuba, and Australia, and even deep-sea mining, will not succeed in meeting the forecasted growth of 500 percent for both cobalt and lithium leading up to 2050, as outlined by the World Bank in its report, ‘Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition’. To keep Congolese cobalt alive and achieve its goal of taking a larger share of the cobalt value chain, the DRC needs to act quickly to clean up supply chains. Without traceability, and clean supply chains, the country will struggle to realise the private sector investment necessary to underpin investment in value-added processing.

Homegrown solutions: How can the DRC act to clean up cobalt supply chains and stimulate investment in value-addition?

While a complex issue, the Congolese government has a few immediate steps that can be taken to demonstrate its commitment to the international community to establishing clean cobalt supply chains:

  1. Make adherence to international best practice for responsible production a prerequisite for licence allocation.
  2. Bring in private partners to share knowledge around navigating regulatory hurdles, occupational health and safety, and responsible sourcing guidelines.
  3. Invest in training more labour inspectors in the mining industry, establish scholarships, and increase fines for poor behaviour.
  4. Allocate more artisanal mining zones for the implementation of artisanal formalisation programmes such as the Entreprise Générale du Cobalt (EGC).

A future Congolese cobalt value chain must address two critical domestic priorities

The Congolese administration realises the urgency, in the face of international regulatory pressure, to clean up cobalt supply chains and capitalise on new momentum in the face of COP26 and the green transition. Equally, the DRC must gain more from its natural resources, and have more influence over the full value chain. President Felix Tshisekedi and his government need to act immediately, with its private partners, to establish a cobalt value chain that covers two domestic priorities.

First, skills development and job creation. The sub-contracting law established in 2018 went some way to involving more Congolese in the cobalt supply chain, but also presented weak spots for largescale miners attempting to map and trace their suppliers. There is a compromise to be made. A few solutions would include bringing value chains closer to mine sites, therefore cutting down the distance, and potential for governance and social risks down the supply chain. Alongside rigorous regulatory enforcement, there is potential for Congolese value chains to answer international transparency calls, as well as provide jobs and skills for local communities.

Second, and related, developing in-country processing. Domestic beneficiation is the linchpin of the DRC’s manufacturing development goals and, barring the lack of necessary power provision (the mega hydropower project Inga III remains stalled), would be a boon for the country’s economic development. A Congolese cathode production site would prove invaluable for battery and vehicle manufacturing across the continent, and in Europe. Talks to establish a DRC Battery Council – a multi-stakeholder initiative driven by the Congolese government – will be crucial to kickstarting progress on in-country processing. Equally, the Congolese government should seek to develop more ‘mineral diplomacy’, not only with European countries keen to bring battery production closer, but also fellow African countries to develop an African cobalt value chain.

Kinshasa must act now for regulation to catch up with demand

The DRC is in a quandary – it has the largest known supply of one of the most valuable metals globally in the next 20 years, and yet without quick, and concerted action, it risks reducing global appetite, limiting the potential benefits it can garner from its natural resources. The Congolese government and its private stakeholders have a long journey ahead of them – but one that is full of opportunity.