Tag Archive for: Democratic Republic of Congo

How China wrested control of the Congo’s critical minerals

China’s system of bankrolling its state companies may be entrenching great inefficiency in its economy but has delivered it unchallenged dominance in the critical minerals required for advanced technologies.

Separate investigations by the New York Times and Bloomberg released in recent weeks have shown how Chinese mining companies, backed by state-owned banks, seized control of the Democratic Republic of the Congo’s most prized cobalt deposits. In 2016, China Molybdenum bought out the holdings of US mining group Freeport-McMoran using very similar means to those used by the Nixon administration to gain control of the DRC’s mineral resources in the 1960s.

Despite an avowed concern to end the US dependence on China for supplies of critical minerals, both the Obama and Trump administrations stood aside, allowing Freeport to hand control of the world’s largest cobalt mine to China Molybdenum with the sale of its nickel and cobalt operations in the DRC. The Chinese were assisted in their purchase by President Joe Biden’s son Hunter.

Cobalt is a very hard metal with a high melting point and magnetic properties. Its uses include jet turbines, rocket engines and permanent magnets, but its biggest application is in the cathodes for lithium batteries.

The New York Times article captures the story of China’s rise and the US’s fall as the dominant external power in Africa. It is a rise that underlines the futility of hopes that Australia’s abundant reserves of critical minerals might somehow relieve US dependence on Chinese supplies.

The Nixon administration understood the importance of putting its foot on the DRC’s rich mineral resources lest they come under the control of the Soviet Union. Richard Nixon hosted the president of the nation (then known as Zaire), Mobutu Sese Seko, at a White House dinner and a private deal handing the concession over rich nickel and cobalt reserves to a New York diamond merchant was concluded during a late night boat ride on the Potomac.

Nixon agreed to give Mobutu three C-130 Hercules transports, one of which was loaded with US$60,000 of Coca Cola at Mobutu’s insistence. Another was used by president as his personal aircraft, with the pilot’s seats upholstered in leopard skin.

The deal ran sour, partly due to anti-government rebels shutting down the mine’s rail link to the coast, and the mine was abandoned for around 20 years. But it was revived in the late 1990s under the control of Freeport, which may be familiar to Australian readers as the joint owner with Rio Tinto of the giant Grassberg gold and copper mine in West Papua.

Amid continuing civil war in the DRC, it took until 2007 before the project got going. Mindful of contemporary ‘social licence’ concerns, Freeport invested heavily in local infrastructure, building schools and covered marketplaces, digging wells, establishing an anti-malaria project and creating botanical gardens to preserve plants threatened by its mine.

But in 2012, Freeport made a US$20 billion investment in the oil industry, which left it in financial trouble when the oil price collapsed in 2015. Its DRC assets were on the market, and China Molybdenum happily paid US$2.65 billion for them in 2016.

A Freeport legal executive alerted an Obama administration national security adviser, General James Jones, about the imminent sale but was told, ‘There’s no one that’s going to be interested in that.’ The deal was facilitated by a US private equity firm in which Hunter Biden was a director.

When Freeport last year pinned a ‘for sale’ sign on its last remaining asset in the DRC, believed to be the world’s richest undeveloped cobalt deposit, China Molybdenum was again ready with US$550 million. The New York Times reports there was again no discussion of the sale within the Trump administration.

Former Chinese president Hu Jintao paved the way for Chinese mineral interests in the DRC in 2005 by hosting a reception for its new 33-year-old president, Joseph Kabila, at the Great Hall of the People in Beijing. This was followed by a US$6 billion agreement under which China would fund hospitals, railways, roads, schools and electricity networks.

The leak of a trove of more than 3 million documents from a Gabon-based bank, BGFI, which was run by Kabila’s brother, shows how Chinese interests ensured that US$55 million was channelled to the personal interests of Kabila and his family as part of a massive bribery scheme.

Chinese interests now own 15 of the 17 cobalt operations in the DRC. The five biggest Chinese mining companies with cobalt and copper interests in the country can draw on lines of credit with Chinese state banks totalling an extraordinary US$124 billion.

As New York Times reporter Mike Forsythe commented on Twitter, ‘Chinese mining companies in the DRC operated in an entirely different financial reality … When it comes to the new energy revolution, China is in the pole position and this state-backed financing plays a role.’

Contrast this with Australia, where Austrade is marketing the country as a ‘reliable and responsible cobalt source’. Cobalt is often found in association with nickel, of which Australia is a major producer. Australia is the third biggest cobalt producer, but its 4% of global production is dwarfed by the DRC’s 71%.

Austrade’s pitch highlights the top six cobalt prospects in Australia, with the leading contenders requiring around $1 billion to develop their prospects. Most are valued at less than $100 million, reflecting their speculative status.

The government has made clear that Chinese investment in Australia’s critical minerals isn’t welcome, but the chance of significant funding coming from elsewhere is slight, no matter how responsible our mining operations may be, given the market dominance that China has now achieved.

China is meanwhile continuing to build its profile in Africa. Direct Chinese investment in Africa has surpassed that of the US every year since 2014, while Beijing backs its economic interests with its own brand of soft diplomacy.

Chinese President Xi Jinping was beamed by video link into the triennial Forum on China–Africa Cooperation held in Senegal last week. As well as offering 1 billion doses of Covid-19 vaccine, he declared an ‘everlasting spirit of China–Africa friendship and cooperation … which features sincere friendship and equality, win–win for mutual benefit and common development, fairness and justice, and progress with the times and openness and inclusiveness’.

Reform of the UN Human Rights Council overdue

In a significant achievement for Australian foreign policy, UN members elected Australia to the UN Human Rights Council (HRC) last month. Australia will serve a three-year term commencing 1 January 2018. It now has the opportunity to substantially contribute to the pre-eminent intergovernmental body charged with protecting and promoting global human rights and addressing human rights violations.

In my special report for ASPI about Australia’s rationale for seeking election to UN intergovernmental bodies, I explored the recently renewed criticism that human rights violators continue to be elected to the HRC, as well as the US pursuit of HRC reform. Reform is overdue and Australia should actively support initiatives to achieve it.

Australia will join 46 members on the HRC including a number of countries with dismal human rights records. Among them are the Democratic Republic of the Congo (DRC), which was also elected last month. The HRC itself mandated an investigation into the DRC’s alleged atrocities. According to Human Rights Watch, government security forces have been responsible for many of the abuses in the southern Kasai region since August 2016 that have left up to 5,000 people dead, 600 schools attacked or destroyed, 1.4 million people displaced and nearly 90 mass graves across the region.

The African group (the DRC’s regional group for UN elections) presented a ‘clean’ slate at the HRC election. Only four candidates, including the DRC, stood for the group’s four available seats. While that meant that there was no contest and no alternative to the DRC, member states could have abstained from voting for the DRC, preventing it from receiving the majority support necessary to be elected. Despite lobbying efforts and a notable shortfall in support (151 of a possible 193 votes), the DRC secured the required majority.

The DRC’s election marks a low point in the HRC’s short history. The HRC’s predecessor, the UN Commission on Human Rights, was beset with criticism about ‘excessive politicization’ and states exploiting membership ‘to protect themselves against criticism or to criticize others’. It appears that history is repeating itself. The Americans voted against establishing the HRC because they weren’t convinced that the new body would be better than its predecessor and would go far enough to exclude some of the world’s worst human rights abusers from membership. Australia, with its ‘CANZ’ partners (New Zealand and Canada) did support the new HRC but wanted a stronger threshold for membership.

In 2011, Australia’s Julie Bishop raised concerns about states such as Libya and Cuba being elected to the HRC. Bishop contended that allowing human rights violators to use the HRC to ‘air their repugnant views’ would cause ‘serious damage to the reputation and credibility of the council’. She concluded that ‘it is the responsibility of those nations which genuinely support universal human rights to prevent those regimes from achieving their goals [of avoiding scrutiny]’.

Following the DRC’s election, Bishop said that the Australian government recognised the HRC’s failings and would work to improve it and the UN more broadly.

Australia has already committed to ‘strive to ensure competitive HRC membership elections’. Competitive slates would be welcome, but wouldn’t prohibit gross human rights violators from membership. While difficult to define, more robust eligibility criteria should also be explored. Under the current UN resolution relating to the HRC, member states must ‘take into account’ a candidate’s human rights record and members that are elected to the council must ‘uphold the highest standards in the promotion and protection of human rights’.

Clearly, these provisions inadequately regulate membership. Reform proposals should require election by a two-thirds majority rather than a simple majority. It’s incongruous that suspending an HRC member requires a two-thirds vote while it’s significantly easier to be elected. A two-thirds majority would also be consistent with the threshold requirement for election to the UN Security Council.

Clearly sensitivities exist for the Australian government taking a leading role in HRC reform. Criticism of Australia’s treatment of indigenous Australians and asylum seekers has been compounded by the government’s recent rejection of the Uluru Statement and closure of the Manus Island processing centre.

However, that shouldn’t preclude Australian efforts to reform the HRC. Australia’s HRC membership confers an even greater responsibility to pursue reform and ensure that the body delivers on its mandate to protect global human rights. The capacity for regimes with a history of systemic human rights abuse to exploit HRC membership by avoiding accountability diminishes both the body and, more broadly, the UN. As a committed multilateralist that relies on the rules-based system, that isn’t in Australia’s interests.

Since the establishment of the HRC, Australia has consistently expressed concern with the integrity of the HRC membership and has urged reform. Australia now has a voice at the HRC table. It should use it.

UN deaths in the DRC: it’s time to do more to support sanctions work

Image courtesy of United Nations Photo.

The recent loss of two UN sanctions experts in the Democratic Republic of Congo has highlighted the riskiness and conditions of the experts’ jobs. UN experts work in some of the most volatile environments imaginable to support the organisation’s efforts to bring peace to troubled countries and associated regions. Yet little’s known about their work outside of the UN Security Council, and even less is known about the safety precautions they must take.

UN Secretary-General Antonio Gutteres announced on 28 March that the bodies of Zaida Catalán and Michael Sharp had been located near Bunkonde in Kasia Central province in the DRC. The pair were members of the UN’s Group of Experts supporting the Security Council’s Sanctions Committee on the DRC. They were investigating large-scale violence and alleged human rights violations in the deeply unstable region by the Congolese army and local militia groups at the time of their disappearance. The UN also announced that its investigators had discovered 17 new mass graves in the Kasai region, after the Congolese military killed at least 114 people, including 41 children, during its campaign to combat an insurgency by the Kamuina Nsapu militia.

Little is known at present about the circumstances of the experts’ deaths. Most recently, the DRC Government attempted to rebut suggestions of its involvement by releasing a video of the murders to assert that anti-Government militia committed the acts. The experts’ disappearance marked the first time that UN experts had been reported missing in the DRC and was the first recorded disappearance of international workers in the Kasai provinces. The experts reportedly traveled through the bush on motorcycles, accompanied by four Congolese, as traveling in UN vehicles might have made them a target. The DRC government has criticised the UN for failing to protect the experts, stating that ‘if the Government had been informed of the activities of these officials, perhaps they would have had an escort for their safety’. However, given the experts’ investigations extended to the conduct of the Congolese army, notifying the government of their movements was never a realistic option.

Gutteres has confirmed that the UN will conduct an investigation into the deaths of Catalán and Sharp and encouraged the Congolese authority to also fully investigate the incident. Similarly, the Security Council has issued a press statement which condemned the murders and called on the DRC government to swiftly and fully investigate the crimes and bring the unidentified perpetrators to justice. According to Human Rights Watch, the Uruguayan peacekeepers and Tanzanian Special Forces, who deployed to locate the experts, found the DRC government uncooperative—which indicates that the UN may hit some roadblocks during the investigation.

The UN’s public statements to date have focused on its intention to identify the perpetrators of the murders. However, the investigation must also involve an examination of effective safety precautions for experts. This should include revisiting protocols to determine where the experts can reasonably safely travel, ensuring that reliable security intelligence is available to the experts to inform their investigative approach, and assessing the preferred composition of security that should accompany experts in the field. A full contingent of UN security personnel would have hampered the experts’ fieldwork as, in many respects, they needed to be agile in their work and not overwhelm locals that are key to their investigative work. However, a balance must be found to ensure that experts aren’t unacceptably vulnerable when carrying out their work. It won’t be an easy fix, but it’s necessary.

France, as the Security Council ‘penholder’ on the DRC, will lead the Council’s political input to the UN Secretariat’s investigation. The US will also be active, particularly as Sharp was a US citizen. They will need to pressure the DRC to be constructive in the investigation.

While Australia, a non-Council member, won’t be expected to play a role in the investigation, our track record as a strong advocate for UN sanctions during our recent Security Council term gives us authority to contribute to reform efforts. We should add to the process by connecting with Council members and the UN Secretariat to add weight to their investigation. It’s notable that the findings of the High Level Review of UN Sanctions, which Australia led in 2015, acknowledged that experts had raised concerns about the physical threats they faced. Those threats ‘could extend beyond dangers inherent in field work in conflict zones to include direct personal threat from individuals or entities being investigated’ and contended that effective UN duty of care policies should be in place. While the experts didn’t identify what they considered were the particular failed UN policies, the UN’s Department of Safety and Security and Security Council Affairs Division could address concerns by tightening its protocols on threat assessments and security attachments prior to further approvals for field work.

The deaths of the experts are a sad and timely reminder of the risks faced and the need for experts’ protections to be strengthened. Vital to that goal is that the UN act forcefully to ensure that there’s no impunity for these murders—not only because that is right, but also because it’s necessary to ensure that experts’ important work supporting UN sanctions continues.