I figured there were at best two thousand people in the whole world who knew or cared about the back story and real import of what was going on so I'd just drop it as an Easter egg for the cognoscenti and other assorted electric vehicle/conflict mineral/African warlord/Elon Musk/extractive industry/Génocidaire hunter/U.S. political corruption watchers to find.
Well now that cat's out of the bag.
Big kudos to the FT's Henry Sanderson for recognizing one hell of a story and a small request for the Financial Times: Can you tell us what the old ENRC is up to these days?
From The Financial Times, May 25:
China plays long game on cobalt and electric batteries
Chinese company’s acquisition of Congo cobalt mine has repercussions for car industry
As China Molybdenum announced it was buying one of Africa’s largest copper mines earlier this month one thing was soon clear: the acquisition was about far more than the red metal.
The $2.65bn deal, the biggest private investment in the Democratic Republic of Congo’s history, is instead designed to secure China’s supplies of cobalt, a once niche raw material that is crucial to developing batteries for electric cars.
The purchase of the Tenke mine, which contains one of the world’s largest known deposits of copper and cobalt, shows how Chinese companies are now moving to take a dominant position in battery materials as the country prepares to shift its economy from heavily polluting industries.
Companies that make batteries for carmakers, from Tesla Motors to General Motors, will be increasingly reliant on Chinese-controlled supply chains as they scale up production of the electric cars western policymakers hope will help cut emissions and reliance on imported oil.
“The majority of the cobalt is heading straight to China,” said Edward Spencer, an analyst at metals consultancy CRU. “Their global hold is huge.”
If the Tenke mine deal goes through, Chinese companies will be responsible for around 62 per cent of global refined cobalt production next year, according to CRU estimates. Demand for the material is expected to soar by more than two-thirds over the next decade.
In many ways, China is following a familiar playbook. At the turn of the millennium, the country moved to secure supplies of traditional commodities like oil and industrial metals, sometimes through acquisitions, other times through investments and loans-for-oil deals with countries such as Angola and Venezuela that held big deposits of the raw materials.
But China’s control of other commodities last decade raised strategic concerns in Washington and Tokyo, after so-called rare earth metals — which were then primarily mined in China — were subject to export restrictions.
Beijing is now pushing the development of its electric vehicle market as a strategic goal, aiming to make its carmakers more competitive abroad while reducing air pollution at home.
China Moly’s largest shareholders are Luoyang Mining Group, a state-owned company, and Cathay Fortune Corp, a Shanghai-based private equity company.
The DRC, one of the world’s poorest countries, accounts for over half of the world’s supply of cobalt, which is also used in smartphone batteries. The Tenke mine, which lies in the south-east of the DRC, some 175km north-west of the provincial capital of Lubumbashi, last year produced 16,000 tonnes of cobalt and it has reserves that could last 25 years, according to the company.
“Chinese strategists have long seen the DRC as one of the prime places for Chinese access to raw material, including cobalt,” says Alex Vines, head of the Africa programme at Chatham House. “I’ve always suspected the natural resources-for infrastructure model that happened in Angola was actually a testing of a model they wanted to deploy in the DRC.”
Around 93 per cent of China’s cobalt units originate in the DRC, according to analysts at Macquarie, the highest proportion of commodity supply from a single country. That is unlike other battery commodities such as lithium, where China can supply 17 per cent of its own supply.
“There’s no other commodity where China is so reliant on a single country,” says Colin Hamilton, an analyst at Macquarie. “When you have that concentration risk they want some degree of security.”...MORE
