Chinese investment in Congolese cobalt: the challenges of international mining investment

Chinese investment in Congolese cobalt: the challenges of international mining investment

Chinese investment in Congolese cobalt: the challenges of international mining investment

Credit: Dominik Vanyi on Unsplash

It is no secret that the world’s demand for minerals is growing and diversifying, and at exponential rates that threaten to leave behind considerations such as worker safety. This issue became headline news last year, when a Congolese mechanic was injured at work at the Kisanfu cobalt and copper mine in the Democratic Republic of the Congo (DRC). The incident has since become a flashpoint for well-trodden discussions about the need to balance profits and personal security in the mining industry.

Yet earlier this year, the case took a turn that was as unexpected as it was positive. The Kolwezi high court ruled that Panda International Congo Engineering, which provided mechanical services to the mine, would be obligated to pay the full salary and medical costs of Mukenge Zaluke, who was unable to work for three months after his hand was crushed by a truck engine.

While this is a certain victory for both workers and their legal teams, the case points to wider issues within Congolese mining in particular, and international mining projects in general. With a growing disparity between wealthy overseas owners interested primarily in productivity, and localworkers facing genuine risks to their health, the question remains if international mining can ever balance these seemingly incompatible ideals.

A high-profile verdict

The case that has drawn attention to this issue is a relatively straightforward affair. Zaluke’s hand was crushed by a falling engine, breaking bones and rendering him unable to work or pay medical expenses, and he was initially denied medical care from Panda, which is enshrined in the Congolese Labour Code.

The case was taken up by Josué Kashal and Etienne Ngoie of the Centre d’Aide Juridico-Judiciaire (CAJJ), a legal aid organisation based in Kolwezi, which successfully argued to the local high court last October that Panda ought to cover Zaluke’s expenses.

The high court and the lawyers agreed on the final amount owed in January of this year, and the verdict was hailed by workers’ and human rights groups as a victory for individuals employed by mining companies, who may have felt pressured to waive certain healthcare rights.

The case is also particularly important considering the DRC’s growing presence in the global mining industry. Already a well-established source of cobalt, responsible for more than 70% of the world’s supply, the total quantity of cobalt produced by mines in the DRC has doubled in the last decade, from 60,000 tonnes in 2010 to 120,000 tonnes in 2021.

On the one hand, the decision of a high court to rule in favour of workers in such a critical industry is an encouraging sign for those worried about worker safety at such operations. Yet the very nature of this case points to broader challenges within Congolese mining.

“Violations of labour rights and exploitation of workers at industrial copper and cobalt mines are very rarely heard by Congolese courts because workers are too scared or too poor to bring legal complaints,” explains Anneke Van Woudenberg, executive director of Rights and Accountability in Development (RAID), a charity that works to draw attention to, and correct, human rights abuses committed by companies.

“The Congolese Government has the primary responsibility to ensure its labour laws are respected,” Van Woudenberg continues, drawing attention to the fact that despite what the law says, such requirements have not always been enforced in the DRC. “Congo’s Labour Inspectorate, an administrative service that monitors the implementation of domestic labour regulation, is severely underfunded and understaffed. In 2021, there were only two labour inspectors assigned to the Kolwezi area, with limited ability to carry out their work.

Precedents and power

RAID has worked extensively with Congolese mining in recent years to draw attention to this dynamic. In November 2021, while the Panda case was ongoing, the charity published a report into worker welfare at the DRC’s cobalt mines, in which the authors concluded that Congolese workers were subjected to “dire conditions”, paid less than a living wage, and forced to endure “degrading treatment, discrimination, and racism”.

“We were working hard, without any breaks, for $2.5 a day,” said one Congolese worker quoted in the report. “If you didn’t understand what the boss said to you, he would slap you in the face. If you had an accident, they would just fire you.”

Yet this environment has brought with it significant financial investment and potential economic gains. Last August, China Molybdenum, which owns the Kisanfu mine, announced plans to invest $2.5bn into its Tenke Fungurume mine, also located in the DRC.

The company has noted that the investment will reduce the unit cost of mining by 29%, the administrative cost of the project by 11%, and the cost of plant units by 7%, as it looks to develop mining infrastructure that could lead to long-term growth in the surrounding area.

A Congolese court, however, temporarily took control of the mine in March this year, claiming that China Molybdenum had misreported the project’s mineral reserves and missed royalty payments to the government. While China Molybdenum did not respond to a request for comment for this piece, the string of worker pressure leading to a foreign owner losing control of a mine is emblematic of an imbalanced power dynamic in DRC mining.

There is a dramatic power imbalance between Congolese workers and the multinational companies or their subcontractors who employ them, explains Van Woudenberg, who went on to quote CAJJ lawyer Maître Josué, who worked on the Zaluke injury case.

“Multinationals and their subcontractors have a powerful hold over Congolese workers who depend on them for their livelihoods,” said Josué. “For a local court to shift this power imbalance, and publicly recognise the human rights of a worker, is unprecedented. Other Congolese tribunals should follow this example.”

Local change and international implications

These cases are just the latest troubles for Chinese miners in the DRC. In March, China Molybdenum CEO Sun Ruiwen visited the DRC for the second time in less than three months, to discuss possible responses to the seizure of ownership of the Tenke Fungurume mine with Congolese Prime Minister Sama Lukonde Kyenge.

The South China Morning Post reported that despite the controversy, Lukonde is eager for further investments of China Molybdenum, which reveals the tension at the heart of this issue. The DRC is in need of trading and investment partners to make the most of its vast cobalt reserves, and with China’s huge industrial needs, it is difficult to turn away the support of Chinese companies, irrespective of recent events that have shaken faith in their ability to manage Congolese mines.

A further complication is growing Congolese concern surrounding how many tangible benefits such constant foreign investment is actually delivering. In 2021, DRC President Felix Tshisekedi announced his intention to renegotiate a $6bn deal signed between the DRC Government and a consortium of Chinese companies, which would see the latter invest in mining and infrastructure projects in the former.

While the terms of the deal will see the money split evenly between mining and infrastructure, Tshisekedi claimed last year that less than $1bn had been invested into mining, and there was “no infrastructure in sight”, raising more questions concerning the commitment of Chinese investors to mining in the DRC beyond simply extracting cobalt.

Still, these remain large-scale challenges that are not unique to either the DRC or China. Van Woudenberg is hopeful that, at the very least, the case that drew attention to this issue can help deliver change for people on a local scale.

“This case sets an important precedent and begins to shift the power imbalance,” Van Woudenberg said. “Of course, huge challenges remain for workers including very low pay, excessive working hours, degrading treatment, violence, discrimination, racism, unsafe working conditions, and a disregard for even basic health provision. Many of these concerns are protected by Congolese law, yet too often violated by employers.

“The system can change with more government support to labour inspectors and courageous Congolese workers stepping forward to challenge their employers. If employers knew that they might face legal consequences for violating Congo’s labour code, they would be more likely to behave responsibly.”