The Democratic Republic of Congo has been in the news again in recent months.

It's richness and resources have attracted the attention of everyone from Chinese mining companies to Donald Trump, as countries scramble to get a hold of resources which are important in the energy transition, defence and wider technology uses.

But what is the state of mining on the ground?

How are the lives of everyday Congolese people being impacted?

And what does this all have to do with the energy transition?

Welcome to the Energy Revolution podcast where we discuss the big stories that are shaping our energy transition with some of the brightest minds in energy.

If you're new here, I'm your host, Suleiman Elias Jarrett.

I've spent the last five to six years in senior government roles, both in the Department of Energy Security and Net Zero and as an advisor at #10 Downing St.

And I'm also a fellow at the University of Cambridge with an interest in all things energy.

Today I'm joined by Doctor Ben Radley, associate professor in International Development at the University of Bath and author of Disrupted Development.

In the Congo, The fragile Foundations of the African Mining Consensus.

Published by Oxford University Press, it's a challenging conversation, but one with glimmers of hope and a reminder that a just transition will be hard, but ultimately the only true way forward.

This episode is sponsored by Gowling WLG.

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Thank you very much for joining us today, Ben.

We're going to be talking about the Democratic Republic of Congo, which is, you know, a country which people probably have a passing understanding of its economics and that it's sort of vaguely important in some way to the energy transition.

But I wonder if to start with, as someone who kind of studies DRC and has spent a lot of time doing research there, if you could give us a quick recent history of the sort of political economy and the state of play of DRC.

Yeah, I can try.

So you said recent history.

So maybe the place to go back to with that would be the turn of the century, which was when the Congo came out of several years of there's a First Congo War and the Second Congo War.

They ended in the early 2000s and that was when Joseph Kabila came to power.

He was the president in Congo from 2002 to 2019.

And during that time in coming out of the Congo wars, the Congolese economy was all but collapsed.

Really.

There was hyperinflation in the late 1990s and the economy needed to be or the formal economy needed to be refounded.

And essentially it was refounded on a similar premise to as it had been prior to that historically, which is fundamentally the political economy of Congo, is the political economy of mining.

You know, it's a mining economy.

It's a heavily mining dependent economy, perhaps one of the most heavily dependent on mining globally.

And Joseph Kabila when he came to power in the early 2000s, really relaunched the national economy along these lines, introduced a new mining codes, liberalized the sector, opened up for foreign investment and that attracted a lot of investment came in.

It was during a commodity boom, which was throughout the 2010.

So there's a lot of investment that came in and it drove sustained high GDP growth rates for a period of time that we can discuss perhaps later on who benefited from from that growth.

But nonetheless, in terms of the political economy of the Congo was very much working along along those lines of being driven by and dependent upon mining and mining exports.

So that was maybe the first major phase in recent history.

And then in terms of the most recent phase and where we are now today, which was in 2019 when the current president, Filios Tisha Cady came to power.

So it's a change, change in presidents, change in political party.

This was a, you know, significant political change in Congo.

It was a peaceful transition of power that hasn't taken place in many neighboring countries, for example.

So this was a significant moment in kind of Congolese history.

Tisha Kady came to power.

He's the current president six years later on, having been re elected a few years ago.

But broadly speaking, while a new mining code was introduced in 2018, which tried to tighten and regulate the mining companies operating in the Congo a little bit more than had been the case previously, broadly speaking, the political economy still functions along again similar lines to under Kabila.

It's still remains heavily dependent mining economy.

There have been some shifts though.

I think the major one worth noting possibly is that Tisha KD has been a lot more hostile to and confrontational with mining investors and investment in the country, Chinese investors, but also non Chinese investors than Kabila was.

Kabila was quite close to had, you know, quite close relations with China, was very open to Chinese investment and mining investment broadly until his last few years.

Tisha KD, the stance has shifted.

So there's a lot, there's a lot more, lot more confrontational stance against these companies than was the case.

And that's very much ongoing today.

And it's as I think we'll come on to LinkedIn some ways to the energy transition.

And, you know, you mentioned the energy transition, which will obviously be the core of this discussion.

Where does the economy of Congo fit in to the energy transition?

Why is, you know, on a podcast talking about energy?

Why is the Congo an important topic to be talking about?

Within the context of the global energy transition, the Congo is an important context to be talking about, I think primarily due to its importance in the global supply of Cobalts especially, but also copper.

So 2 critical metals within the energy transition, copper particularly for its use in electrification infrastructure for electrification as a conductor and other uses.

And cobalt perhaps there's been particularly well publicized I think in over the last several years, the use of cobalt perhaps most famously in electric vehicle batteries, but also more generally in electric batteries and energy storage systems.

And Congo provides around, I think more than 2/3 of global supply currently of cobalt comes from Congo.

It's around 7075% of global supply comes from the Congo and has around half of global reserves, known global reserves.

So in that sense, to the extent that electric vehicles and renewable energy infrastructure is central to the transition as it's currently conceived, and you know, the Congo is, is a central component within that.

And you mentioned copper and cobalt as the two major resources.

Again, a lot of people would have heard of the Congo in the context of conflict minerals.

Could you tell us a bit about if and how those conflict minerals play into the energy transition or if they're slightly separate discussions?

Yeah.

And that's that's an excellent question because that is often I think at least from what I've seen, a slight confusion that can come when thinking about the Congo and energy transition and conflict minerals.

There's often a tendency I think to conflate all those things together, whereas in fact there is a need to separate them out.

So in Eastern Congo, which is where you currently have the ongoing war, the Rwandan backed occupation in many parts of eastern Congo and what's known as conflict minerals, that's mainly in reference to what's called the three TS and gold.

So the three TS are tin, tungsten and tantalum and gold.

Now tungsten is listed I think by the EU and US and others as a critical metal linked to energy transitions.

I think tungsten has the highest, I think it's 3400°F as it's melting.

So I think it's the highest.

So it's has a lot of uses in technologies, but it's only the volume that Congo produces is pretty insignificant globally.

So it produces very small amounts.

So there's not a huge link to what dependence upon Congo for tungsten.

But otherwise, the minerals are metals that are being produced in Eastern Congo under the conflict minerals known as conflict minerals, not strongly linked, I would say, to the energy transition.

So that's slightly separate conversation because the copper and cobalt, which as we've been talking about are connected to the transition, are produced in a different region of Congo.

So they're produced in the southwest of Congo, which is particularly around the former Katanga province or the Katanga region, which is sort of the copper, cobalt heartland.

That's where those minerals and metals come from.

And that's that part of the Congo is, is not and has not been for a long time a conflict area or region.

So it's not to say there aren't problems or issues with the way in which mining is taking place, but it's not it's separate from the conflict in the east.

So there are its own issues of course, but when we're thinking of conflict minerals, that's something that I think broadly sits outside of the energy transition dynamics.

I think that's a really important point and distinction to make because you're right that in, you know, often the resource dependence of the energy transition is something which is held up both in terms of a, you know, legitimate critique of like this.

Something that we need to think about and talk about in order to make sure that we are not kind of overly dependent on poor mining practices in parts of the world to build the energy transition.

But it's also something that's really kind of clutched on by those that are just anti renewable and finding a new excuse to be anti renewable.

And so I've definitely seen some kind of quite misleading articles which suggests that these two are related.

And they kind of say, oh, the batteries in your E VS are being funded by conflict minerals in DRC.

And, and as you say, it's not that, you know, Labor Standards are always fantastic in some of these mines, which we'll come to, but it's separate from the conflict minerals question.

And really what we're dealing with is mining practices which are maybe under regulated, probably not to the standards that we would like in the DRC, but aren't explicitly tied to conflict or as kind of flagrant human rights abuses that you're seeing in the eastern part of the country.

Yeah, absolutely.

Yeah.

Wonderful.

And and so could you tell us a little bit about the mining structure in the parts of the Congo where we are seeing cobalt and copper?

Like what?

What does it look like on the ground?

So on the ground, what does it look like?

So it's worth saying cobalt is produced as a byproduct of copper in the Congo.

In fact, I think globally 98% of cobalt is produced either as a byproduct of copper or of nickel.

So in Indonesia, which is the world's second largest producer of cobalt after Congo, I think it's around 810% of global supply, It's a byproduct of nickel in Congo, byproduct of copper.

So it's not to say that every copper mine in Congo is producing cobalt.

There are some that aren't, but most are.

And so copper, copper and cobalt are being produced together on the ground in the being extracted from the same places in the same spaces.

In terms of how it looks on the ground, probably the best way to conceptualize it and think about it is distinguishing between two dominant modes of extraction.

1 is the industrial extraction being led by foreign mining corporations and then the other is what's commonly referred to as artisanal or small scale mining, which is being done.

But the extraction is being done mostly by Congolese, although the traders and the buyers may not.

Certainly not all Congolese, but most of the labour is being done by Congolese and it's very labour intensive.

And I approximately I think it accounts for around, I mean it's an informal economy, the artisanal and small scales.

So all the data are best estimates because it's not documented trade and production, but estimates point to it being around 1/5 to 1/4 of total cobalt production in Congo is being done through artisanal small scale mining.

So a significant percentage both in the Congo and then of course, globally given how much supply comes from the Congo.

So you have these two, but they're very different in terms of how they look on the ground.

So the industrial mining will be extremely capital intensive, heavy machinery, not too many workers around.

So it looks very different.

I mean, of course, you know, if you see the visuals of these mines when you go there, I mean, just, you know, big digging ever deeper craters in the earth to extract everything.

So these, you know, huge craters that then lead to huge tailings, sort of the kind of residual leftovers from the extraction and then get dumped somewhere nearby that kind of look like, you know, hills or mountains.

But they are basically just the sort of unwanted rocks and materials from the earth that then get left somewhere.

So you have visually quite a striking landscape in that sense.

But then the artisanal and small scale mining looks very different because because it's much more labour intensive.

You will have mines that have thousands of workers or hundreds of workers who are digging their own tunnels and creating their own mine shafts using either manual tools and handheld tools, manual labour, some small scale machinery, potentially explosives or diggers and some other some other capital.

But mostly it's very labour intensive and involves huge mining communities that sort of then will sort of live around and expand around these mine sites and be dependent upon upon those mines.

So you know, those two, those two ultimately they will feed into the same supply chain at a certain point.

But in terms of the way in which the metals are being extracted, they of course look very different and have very different, I suppose, impacts.

Yeah.

And for the for the industrial ones that you mentioned, you mentioned that there was some kind of Chinese corporations that were involved who who owns them basically when when we're talking about these large scale industrial mining conglomerates, are they like household names?

Are some of them Western, you know, European or US?

Is it majority Chinese?

Is it a bit of a mix?

So today and as has been the case I'd say for the last several years or so, it's majority Chinese.

I looked recently at the 10 largest copper cobalt projects in Congo and it was seven of them that were majority owned by a mix of state owned Chinese corporations or private Chinese corporations, but nonetheless with close links to the Chinese government.

So it's certainly a space that's dominated by Chinese corporations.

In terms of Western companies, the one that is probably most familiar to people would be Glencore.

So Glencore and Glencore, I think I'm right in saying, owns two of the three largest copper cobalt mines in Congo.

So Glencore is definitely a big player still in that space.

And then you have EUR Asian resources, which I think is registered in Kazakhstan.

So you have Eurasian resources, you have Glencore which has two of the top ten EUR Asian resources has one of them and then the other seven are Chinese.

So China is certainly the dominant, dominant player in Chinese mining companies, certainly the dominant, dominant force in the copper and cobalt sector in Congo.

Yeah.

And is that quite a new development?

Yes, relatively new.

SO when Kabila came to power, initially you had more Western companies.

So you had AUS, for example, US miner Freeport Mcmoran was was there and had one of the largest copper mines in Congo around 2015.

It's sold to a Chinese company, I think it's CMOC Group.

Tenge from Gurume was the mine.

They sold it up and they left.

And so there has been a shift over the last ten years or so towards Chinese investment and and, and Chinese mining companies.

So that is, that is relatively recent.

Interesting.

And you know, I'll come back to the more informal sector as well in in a second.

But just to understand the, the supply chain dynamics, I guess as as more of these corporations have become Chinese involved in the extraction, is it that effectively it's shipped directly to then China for refinement processing and then eventually it turns into I guess EVs or components that go into wind farms etcetera?

This is it.

China has of course not complete control, but it does have a pretty strong fully integrated supply chain from extraction right through to the manufacturer with the end products.

So in terms of, you know how those supply chains look in industrial mining under the from the Chinese companies, they will there will be some smelting or very basic refining that takes place in Congo.

So the cobalt, for example, will be smelted into concentrates, and that's partly been due to government legislation in the Congo to make that process, you know, trying to capture more value domestically and that.

So now there's a level of smelting that will take place, but that will be through the Chinese, you know, still managed under the management of the Chinese companies.

And then they will export that to their own refiners in China.

And it will then be further refined and broken down into oxides and sulfates.

If we're talking about lithium ion batteries, for example, then then goes into the manufacturing process, gets made into cathode components, then into the lithium ion battery.

And then it goes into the the lithium ion battery that goes into vehicles and storage systems and whatever else.

And that whole process from the extraction to that end products, you know, China has has control of it.

Absolutely.

So those supply chains are fully integrated.

And this of course has been one of the big major concerns of the EU, the US and and other, you know, regional blocs, countries and governments is sort of a concern about their access, access to cobalt in particular, given its given its strategic importance, because we haven't mentioned that cobalt is also used a lot in military technologies and defence.

So holds a lot of strategic importance for many reasons.

And so China's dominance in this space is, I think, something that has been a concern for governments elsewhere who are trying to figure out how they're going to, you know, guarantee and maintain the supply to the minerals and metals that they need.

Yeah.

And you just, as you hint at it sounds like it's been a very considered strategy basically from China to be like, hey, actually this is a really important set of both in terms of the of raw materials, but then also recognizing that clean energy and things like defence are important sectors internationally.

So let's really capture as much of the supply chain as we can now, whereas maybe some of the nations haven't been thinking in that way.

I think so because yeah, sometimes get the question, well, why did you know if Western companies were more dominant 1015 years ago, then why did they let that go?

And I think possibly the answer is that precisely that the thinking between.

You know, Freeport, Mcmorran and other mining companies in the US and Europe and and their governments has not been as joined up as it is in China.

And so, yeah, I think you're right that I think China has played a much longer game.

And I think it's the way it's been sort of thinking and laying the groundwork for this for a long time.

In some ways it caught many, I think Western countries and governments asleep at the wheel in that sense and not necessarily thinking or engaging in longer term strategy and industrial planning in the way that China has been.

And so now it's reacting, you know, it's coming to it after the fact really and and trying to react and get on top of things.

But of course, China is now in a very strong position.

Yeah.

And it is, you know, in the, in the, you know, we spoke most of mostly about the recent history of the Congo.

But in the long history of the Congo, that's quite a radical change in that historically, because of the basically colonial endeavours of the Belgians in the kind of 19th and early 20th century, a lot of the mining was very captured by Western European companies.

So it's, it's quite a significant change in what it sounds like a relatively short period of time.

Or was there sort of a gradual relaxing of the control that certain kind of European conglomerates had as US conglomerates started to take more power and then eventually a shift to China?

Or has it been quite, you know, overnight one shifts to the other?

Yeah, perhaps not overnight, but I think yeah, when you put it in the long run of Congolese history, as you say, going back to late 19th century, certainly pretty rapid in the in the sense that if you looked at the in the mid 2000s, even early 2000 and 10s, it was the landscape of ownership and management over the Congolese mining sector.

China was certainly nowhere near or close to sort of the dominant actor that it is today in that space.

So relatively, relatively rapid process in terms of, you know, the long run of, of the country's history.

Yeah.

And taking it back to what that looks like on the ground now for people in in Congo, is there a distinction in the practice that has changed with more Chinese investment versus some of the kind of European and American investors or on the ground?

Does it all look pretty similar if you're you know someone from Congo that's working in a local mine?

I think that's it.

And I think I think there's a tendency often people will often focus on this question, well, you know, which mining companies are better or who's between China and Western companies.

And you know, and I think often that can feed into a bit of a kind of bit of Sinophobia, often kind of China bashing in Chinese, you know, relative to Western companies.

But I think you put your finger precisely on the point, which is how does this look from the perspective of Congolese either working for these companies or living in these areas?

I would say it's broadly similar.

I think not to say that all mining companies operate in the same way and have the same impacts at the local level.

There will be significant differences, but to but in my mind they don't run along the lines of nationality or whether the company is Chinese or Western.

It's more about that particular company.

Chinese companies as Western companies have their own corporate social responsibility practices and protocols.

Some Western companies do it better than others.

Some Chinese companies do it better than others.

And so I don't think the way it's received or perceived and experienced in the Congo necessarily runs along those lines.

I think it's, it's very much kind of varies from firm to firm and and mine to mine, I would say.

Yeah, that makes sense.

And and I guess, you know, maybe now is a good time to come onto the more artisanal mining because what what proportion of Congolese people that are working in the mining sector will be involved with a large conglomerate verse in the kind of artisan sector?

Oh, in terms of workers, so in the industrial mining sector in Congo, I think today you have around 100,000 people working in that sector across the country.

So you know, they also have industrial gold mines, some diamond mines and others.

So you have around 100,000 people working in that sector, which is when you consider and how important the mining sector is in that country of 100 million people is a pretty small workforce.

And that's partly because mining is so capital intensive these days.

I mean, you have some mines in Congo that are and globally that are now fully automated mines where you have sort of trucks that are going in on rail, on railroad, going in on rail tracks underground to extract and coming back out that are being, you know, automated.

So you have sort of very few workers in industrial mining I would say and especially relative to artisanal informal mining.

This employs, you know, estimates across the country we're talking around 2 million people who are working in artisanal small scale mining.

20 times more than in the industrial.

Across the country, yeah, yeah.

So it's industrial mining relative to artisanal small scale mining in terms of the number of workers involved.

It's certainly, you know, much more labour intensive in the artisanal small scale space and it's probably 1 of the largest, you know, after agriculture, you know, I would be guessed as probably the largest employer nationally.

Yeah.

And So what does, you know, coming back to the, you know, what does this look like for Congolese?

It sounds like actually whoever owns the industrial mind doesn't make that much difference for most people, partly because, as you said, actually the culture of individual minds doesn't depend so much on what country it comes from.

It's more about the conglomerate itself, but also because actually most people don't work or engage with the industrial mines.

So So what does the artisanal mining operation look like for most people that are working in them?

Yeah.

I mean, one thing I would say to that is that the industrial, the presence of industrial mines certainly does have an impact and effect on artis or people working in artisanal mining because often they're working in in similar areas and trying to access the same deposits, right?

And one of the big dynamics over the last few decades has been since the turn of the century, the reindustrialization of the mining sector in Congo.

One of the major processes that's taken place within that has been as foreign mining companies have been arriving in the country to set up their concessions, they've had to forcibly displace Congolese miners who were previously mining in those areas.

And that's involved the Congolese state having to use its own police and military to, to undertake that displacement.

So there has been, you know, mass levels of displacement of miners and communities living in these areas.

And then they often will get pushed to the more marginal deposits or the less productive deposits.

And they're often mining around the mining around the side.

So I mentioned the tailing deposits earlier, these kind of mountains that get piled up by the industrial mines.

They will often work in those tailings as well.

So there's certainly they're very much operating in the same or very proximate locations.

So they, so they do relate to each other in that sense.

So what, Yeah, what does it look like for an artisan or minor working?

I would say, broadly speaking, in terms of the the labor conditions, tough to say the least.

I have not myself been to too many cobalt and copper artisanal mines, but I have been to plenty of artisanal gold mines in Congo.

And I've spent some limited time down those mine shafts, but enough time to get a sense of how physically demanding that is.

You're working in these very narrow shafts, which barely have enough room for two people to pass each other or a person to drag out a bag of ore with, you know, dust circling around.

The respiratory problems generated by that and the health impacts of that are significant.

On top of not infrequent mine collapses and fatalities.

The pretty regular media story in the Congo is mines that are collapsing, particularly during the the rainy seasons.

So the working conditions and this is what will often get, you know, if mining in Congo is picked up and covered in Western media, what will often be picked up is precisely these these conditions and for not much, not much income for most people.

Although on the other side, the income that you can earn in artisanal small scale mining is often or usually significantly more than somebody could earn locally through other alternative forms of employment.

So to give you an example, you know, agricultural day labour, and if you're an agricultural day labourer in Congo, you're probably earning around a dollar a day more, give or take.

If you're a teacher in a local primary or secondary school, you're maybe earning $5060.00 a month from that job.

But you know, if you're an artisanal small scale minor, again, I haven't researched copper cobalt so closely myself.

For artisanal mining, at least in the gold mining sector, your, your income varies from month to month depending on what you're extracting, but you're likely earning sort of 150 up to three, $400.00 a month.

So you know, significantly greater incomes that might be available to you otherwise.

So that's where there's sort of this tension really in this sector in terms of the working, in terms of the how does it look like and how is it experienced, which is that?

Yes, they're struggling for and want to have, you know, better working conditions.

But at the same time, I think there's often this idea that the sector is kind of full of forced labour and slave labour and, and people who are being sort of forcibly compelled to go there at the barrel of a gun.

That happens in extreme situations and contexts, but I think for the most part, it's people who are struggling for a better life, a better way forward for themselves and their families, you know, in a horizon of pretty limited opportunities, right?

So the incomes that can be made.

And of course, there's always this idea, this hope that people, you know, get, get, get rich quick or, you know, finds particularly this is common in gold and diamonds, right?

You find like that big nugget or you find that big deposit of gold.

And, and you know, there's lots of stories of people in that mining sector in artisanal small scale mining who start out as a miner, who accumulate some money, who then become a trader, who then buy a trading house.

And these people, you know, very much looked up to and revered in the, you know, in the Congolese mining landscape.

And it's kind of a pathway that's aspired to by many because they see that many people have come from relatively little and managed to find the way out and are now sort of, you know, living in modern comfortable houses in cities, sending their children to universities internationally and living a sort of lifestyle that Congolese aspire to and, and, and look up to.

So I'd say it's a sector that's in some ways, you know, you need to look at it from, from different sides, I suppose, to understand it fully.

It's not just a sector of super exploitation and horrific working conditions, although it is that and there is that element, but the way that I think Congolese see it and relate to it and perceive it is perhaps a little more nuanced and a little more complex.

Yeah.

And that nuance is important because it's you you have to sort of contextualise the basically, you know, we'll come to later on like what what can be done, if anything.

And you know, some of the answers would be quite challenging because it's obviously there isn't a quick fix to the state of play in Congo.

But the situations that we see in mining in the Congo are largely a kind of symptom of the overall underdevelopment of the Congo as a country.

And you can't separate the two, this idea that, oh, maybe we can make mining perfect.

We can make it so that it's this, you know, job where everyone has absolutely fantastic working conditions and great pay and, you know, capture loads of the good benefits of the supply chain.

But the nothing else changes in the rest of the economy.

It's so long as the alternative is something which is, you know, I mean, all of this is living in, you know, below what we would consider acceptable levels of wealth, but living even further down the poverty ladder effectively.

And unless you are able to change that as a whole and kind of change the the general fortune stability economy of DRC, it feels like it's going to be very challenging to address something like mining in isolation.

Yes.

And I think that's partly been one of the lessons that's come out of the last 15 years now of efforts to do that with conflict minerals in the East, where there's been precisely this attempt from sort of Western external intervention to try and address this perceived issue of conflict minerals and the sort of human impacts and harm that that's causing in the Eastern Congo.

But I think if there's one lesson that we've learned from that experience, at least from, you know, what I've been able to sort of see and, and understand and, and read, it's that to drive meaningful change that materially improves lives of Congolese in those affected regions as an external actor is tough.

It's hard to do.

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I guess maybe now is a good time to talk at least in the theory or the abstract.

And you know, if there are some concrete examples that you've come across in Congo that would be fantastic as well about what what, what can be done.

Like what we've talked a lot about the the challenges of mining in DRC, but it's their kind of hope are are there countries or economies that have been able to kind of improve their mining sector over time?

Are there sets of policies which either in theory or in practice noting that these are can't be ones which are just imposed by some outside body, but that can kind of help the DRC get out of this kind of primary resource trap?

Well, I think one of the things that, and we touched on this earlier, one of the things that I think has shifted in the Congo as a result of the energy transition, because the energy transition I think has made it very clear to Congolese government and political leaders that, you know, they're very keenly aware of this heavy dependence upon Congolese cobalt and copper.

As I've said, it's the world's major producer of cobalt.

It's the second largest producer of copper.

And I think that awareness of the intensification of demand for those metals projected, you know, to 2030 to 2050 has in, in some sense catalyze efforts to think about how they may leverage that as an opportunity.

So this is, you know, both I suppose, theory and practice, because the theory is you can try to industrialize through your mining sector and through that process capture more value from the minerals and metals that you're extracting.

So we were just talking before, before we started the podcast about the electric vehicle value chain globally.

So there was a recent report that was published by the European Council on Foreign Relations, which shows quite, it has this visual graph of the supply chain, which shows, you know, very clearly the disparities in the value that's being captured in that supply chain globally.

So it puts a figure of $7 trillion which is being captured within the electric, you know, the manufacturer distribution of electric vehicles.

And on the other end it's $11 billion from the mining.

So you go from 11 billion through the kind of smelting, refining manufacturer to 7 trillion, right?

So you've got this huge, huge difference.

And so in theory, what you can try and do if you're a country like the Congo is say, OK, so it's a huge dependence upon our cobalt.

We're going to try and leverage that.

It's an opportunity to industrialize and move up this supply, this value chain by developing our ability to refine and eventually manufacture.

And this has precisely been one of the flagship government industrial strategies under Felicia Cady has been precisely this trying to move up this electric vehicle value chain.

And so they, they have been and they're still looking to finalize plans to start a manufacturing capacity, a manufacturing factory with Zambia that they're looking to move into as one way.

And they've been introducing, for example, export bans.

So saying you cannot just export unprocessed copper and cobalt.

You need to have at least some level of smelting into concentrates.

So there was a ban on exporting anything that wasn't yet concentrate and then the next stage would be oxides and sulfates and so on or into the Ingos.

So, you know, they have been introducing policy to try and move in this direction.

But of course, in some ways my sense is they might have just missed the starting gun.

I think this was maybe something that needed to be being looked at 20 years ago when China was looking at it, for example, because the space is so well captured by not just China, you know, other players as well.

It's very difficult to then move into that.

And the other, the other factor that I think is working against the Congo in this sense is that as the Congo is trying to move up and capture value in this cobalt space.

And one thing it's been in some discussions with Indonesia about recently is introducing, you know, almost trying to control the price of cobalt in the way that OPEC do or the way they're trying to say to Indonesia, OK, Congo and Indonesia, we control 90 plus percent of global supply.

Let's control the price, right?

So we at least get what we deem to be sufficient income for what we're exporting.

One of the big tensions that they're running up against is the speed at which the speed of technological change away from the use of cobalt in lithium ion batteries.

So what you're seeing more and more now in the lithium ion battery space is some are now completely free from Cobalts or the the volume of cobalt in in those batteries is, is exponentially decreasing.

That's partly been driven by this fear of the dependence upon supply from Congo.

And so there's Congo is sort of caught in a bit of a bind there, which is that the more that it tries to industrialize or move into the cobalt space and get what it deems to be a fair price for what it's exporting, the more that the more that manufacturers of that products seem to be running away from cobalt and looking to other other minerals and metals.

So it's very, very tricky to do that within mining.

And historically, you mentioned other other examples or success stories or when you can look at look at the mining sector.

I mean, Botswana is often a country that's held up in the African context as a success story heavily dependent upon exporting diamonds.

But even Botswana with all of the.

I would say relative success that it's had has not managed to diversify away from its dependence upon diamonds.

And so now Botswana has faced I think and De Beers as well with this kind of existential crisis around the introduction of artificial or not artificial but factory made diamonds.

And this is going to be a huge problem now for Botswana.

And so I think Botswana illustrates as well as what you possibly can do if you're able to.

I mean, Botswana was quite a unique situation with De Beers, but you know, illustrates some extent the possibilities in terms of fiscal revenue that can be captured and how that can be reinvested into welfare provision, but also I think the structural difficulties of diversifying away from that dependence.

And I think historically, as you know, that has proved very difficult.

And that, I think, is the real challenge that many countries face, and Congo is certainly no exception there.

Yeah, that's really interesting.

And actually was was talking about this kind of attempt to move up the value chain with former guest and friend of the podcast, Paul Domjan.

And one thing we were talking about is the, the, the challenge of developing that comparative advantage, which it sounds like you've you've touched on there where it's, yes, maybe the DLC can try to capture more of that existing value chain.

But the point that Paul always makes, and I think I agree with is, is that if you've got a country like China that's been doing it for a very long time, how are you going to become basically, you know, competitive at that without driving up the cost?

And as you say, although they've got a kind of monopoly on cobalt, it's, it's maybe more substitutable than people realize as battery chemistries change.

So it's a, it's a, it's a challenging 1.

And it, and it does sound, you know, obviously we're not going to fix the economy of Congo in this 50 minute podcast.

But it does sound like the key thing is if if there are nations that are able to capture some of that initial early wealth, the key thing basically becomes investment in skills generally, like developing the ability and the capacity to be competitive at certain elements of the industry.

Yeah.

And there's I think there's an awareness of that in, I mean in, I think it was the former head or the current head of Jacques Amines in Congo, which is the Congo, which is the Congo's largest state owned mining company, commented to the Financial Times in an interview a few years ago that there was a window of opportunity here in the Congo and we lost it.

So I think there's there is an awareness that perhaps they're moving too late into this space and that's partly due to timing, partly due to the fact that in the early 2000s, Congo was just coming out of the Congo wars.

So it was in a very different space.

And yeah, I think, I think moving up the value chain, you know, as as you were just saying, is especially as a late entrance into that particular sector or market, which if it's already been well captured, very difficult thing to do.

And my sense is the Congo may struggle, may struggle to do that in in a meaningful way.

And I think it is possible that the window, they might already have lost, lost the window to do this.

But nonetheless, it is something that they're they're going after.

And, you know, the role of the Congolese state and the Congolese government in this process is very different than how it looked, for example, under Kabila.

Yeah, You do see like a much more active state and a much more interventionist state that's trying to guide and direct this process than than I think we saw during the Kabila presidency.

Yeah, that's and presumably as well since the kind of end of the most recent Congo wards or large scale Congo wards presumably with more stability as well, which is probably I imagine important for just general economic development.

It it's hard to build much by way of, you know, industry or economic development if you are like ongoing kind of in the middle of conflict.

Well, yes and no, because of course there is that you know, there has been with the what's been going on in the east of the country at you know high level of instability over the last, you know, particularly like 1218 months, which for now has been confined to the is confined to the eastern parts of the country.

But has definitely threatened at points to sort of spillover and sort of begin to move westward towards Kinshasa.

And that has certainly concerned I think some of the mining investors and companies.

So there has also been that dynamic going on in the background.

It's a tough one because I, you know, I always try to, you know, towards the end of the podcast, talk about solutions, things that we can do.

But you know, I guess, you know, it's an open question for people that are listening to this who maybe are, you know, in the energy industry, probably not loads who are very directly involved in kind of mining all the companies in the immediate supply chain or value chain.

But I may be, you know, procuring wind turbines or EVs or I guess solar panels, but slightly less relevant for Congo metals.

Is there anything that they can or should be doing or thinking about to have some kind of impact further downstream?

Yeah.

I think in that case, I think the first thing would be to say tread carefully I suppose and be cautious.

I think if it's something that a particular company or individual feels strongly that they want to engage in, then I think what what recent history has shown us both in the Congo and elsewhere with these sorts of efforts is that there is the potential to do more harm than good.

That is there, I think a surface level of engagement can often produce and has often produced in the Congo counterproductive outcomes or outcomes that have been counter to those that were intended, that have actually caused harm.

And so I think it's what I would say is it's about if that's something that, as I say, a company or an individual wants to do, it's about taking that very seriously and engaging in a sort of being prepared to commit to engaging in a sustained and long term way.

And in a way which is being led by people in the country and the groups who are most directly affected and impacted.

So being aware of your own, I suppose, ignorance of that particular context, you know, that's myself included.

And, you know, being led by people who know a lot more than you know, you or I do about about the situation.

And also being led by what, you know, what are the changes that they might want to see right, in a particular area or context, whether it's a mining region or not.

And and and being LED led by them and being in the back seat, I suppose.

Yeah, and are you aware of not to put you on the spot too much, but any, you know, interesting organisations that are working in the Congo that you know, again, if someone was listening to this and thinking, oh, I want to start engaging, but I don't know where to start the.

Fairphone is a Dutch company that I think would be an interesting one to speak to.

I'm actually not too sure of how they've been doing in the last few years, but I think Fairphone is an example of a company that did engage seriously in this way trying to produce and manufacture.

I mean, they do distribute what they call Fairphones, basically trying to trying to ensure that all the materials that go into the manufacturer of their phones are sort of resourced as kind of sustainably and responsibly as as possible.

And they did engage in a very sort of substantive way in the Congo in a way that a lot of other companies haven't or didn't.

So, yeah, I think if someone is thinking of doing something similar, then I think Fairphone would be a good company to to look up and and reach out and make contact with.

Because they've been doing that work both in Congo and in China and other parts of the world where they where they source their materials from and being very open and transparent with also the challenges and publishing everything, putting everything out online.

So I mean, I think that's, yeah, quite a, quite an interesting example to take a look at.

Yeah, that's good to know.

And, and I guess another thing actually that'd be interesting to get your view on is the kind of battery chemistry point.

Because I know this is something which has, you know, I've seen and I know that there are some, you know, battery researchers that listen to this podcast.

I've seen this debate around a shift away from technologies which rely so heavily on cobalt, partly for economic reasons, partly because of this kind of fear of conflict minerals and being worried that it's going to be hard to sell your product in the mainstream market when people are understandably worried about the, you know, kind of human rights abuses that might be further down the supply chain.

Again, not just in energy, but in kind of across technologies.

Is this a move which could be beneficial or is actually is it something that could inadvertently do harm because you're undermining the value of cobalt, which is still an important kind of industry within DRC?

What's the are they are they competing views on this?

Yeah, I think so.

It reminds me a little bit about the Bangladeshi textile industry.

Then if you remember when there was the, I forget, was it the the Rama Plaza or there were there were the fires in the factories in Bangladesh.

And then there was a call for a global boycott or that it's from some parts of the West.

There was a call to boycott that industry.

Whereas the, the Bangladeshi workers and unions came out and said that's not going to help us.

We don't actually want a boycott, right?

We're struggling to improve our working conditions.

And perhaps there's an extent to which that's that's applicable here.

Because I think your question is around, is the, is the move away from cobalt or the shift to go away from it going to be beneficial for what's happening in Congo?

I mean, I would say boycotts or moving away for those reasons.

It's a difficult one to answer.

But yeah, I think it's similar to the Bangladeshi case.

I think it's more about because ultimately if you're moving, if you're moving away and you're moving away, the demand that is going to have some impact on particularly artisanal small scale miners and mining communities who are dependent upon upon that resource.

And it's not necessarily going to help resolve or solve or move things forward, which is ultimately down to Congolese right themselves to sort of through their own struggle and their own organizing to, to shape their futures.

And but I think that probably is a debate to which, you know, that needs to take place through mining or outside of mining.

So that's why I'm a little bit struggling to answer it.

I think a little bit on the fence with that one because you can, you know, you can also see an alternate future in which that might open up different possibilities or a different.

It would all depend, I think, on the political context in the Congo, if there was a, you know, I think there is a way in which you can conceive of the Congo and its future outside outside of the mining sector.

But that would need to my mind, a very politically committed and involved government and leadership and state to direct and support that process and that that shift from the mine independent economy to a different economy.

So to the extent that kind of a withdrawal of demand or moving away from Congolese cobalt takes place absent of that broader shift, then it is going to cause a lot of harm.

But that doesn't necessarily mean at the same time that, you know, the Congo should forever and always remain A dependent mining economy because the last 150 years of history teaches us that that delivers very little for the majority of Congolese in terms of, you know, material improvements in their own lives.

So I think fundamentally it's about, well, how would that shift take place?

And is it being, is it a shift that's sort of being like planned and thought through and overseen by the Congolese state and the Congolese government in a way that can then mitigate against some of those impacts and fallouts?

If that's not the case, it's going to lead to a lot of hards, a lot of hardship.

And you know, that's broadly what we saw in the eastern Congo.

Just to say quickly, 15 years ago when there was a, there was precisely this shift took place with conflict minerals and there was legislation passed in the US called Dodd Frank Section 15-O2 and Byers basically withdrew.

So it was a de facto boycott because of fear of the kind of regulatory implications of sourcing minerals from the East and it led to huge economic hardship and fallout.

So, yeah, I think again, it's about sort of being cautious there and and thinking through the sort of full implications of of the actions that are being taken, I suppose.

That was a, a good nuanced answer to a very impossible question.

And I think you're right.

It's that, you know, ultimately you don't want, I mean, DRC, but most countries to be heavily dependent on mining.

But it's how that dependence ends.

If it's overnight because demand suddenly falls off a Cliff, that's going to cause a lot of immediate pain.

Whereas if it's done in a structured way where the government has some kind of plan and intention and we want to move away from it in this managed way, maybe in the meantime we try and improve mining a little bit.

You know, it's impossible to say exactly what that would look like.

But, you know, as you say, it needs to be a, a coherent plan shift away rather than a sudden turning off of the taps.

Wonderful.

Well, yeah.

Thank you very much for joining us, Ben.

It's Yeah, we've covered a lot today and thank you very much at home for listening.

It's.

Been a pleasure, thank you.

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