Rwandapodium

LEGAL ACTION OVER HUGE DRC LITHIUM PROJECT ON HOLD AS US BATTLES CHINA’S DOMINANCE

Australia’s AVZ Minerals has paused legal action over a Congo mining project as the US seeks to buy its stake and rival China’s interests. By Jevans Nyabiage

Economics dimanche 1er juin 2025

Washington is backing American start-up KoBold Metals – funded by tech billionaires including Bill Gates and Jeff Bezos – to acquire AVZ’s stake in the Manono lithium project. Photo : AVZ Minerals

Australia’s AVZ Minerals has suspended its arbitration case against the Democratic Republic of Congo until later this month, following US encouragement to resolve the dispute over the massive Manono lithium project.

The suspension, announced last week, comes as Washington backs American start-up KoBold Metals – funded by tech billionaires including Bill Gates and Jeff Bezos – to acquire AVZ’s stake in Manono.

If successful, KoBold will pledge US$1 billion (7.2 billion yuan) to develop the project, countering China’s Zijin Mining, which controls the northern section of Manono after the DR Congo revoked AVZ’s rights in 2023.

However, KoBold is a small entity compared to CMOC Group, CNMC and other Chinese mining companies operating in the central African country.

AVZ said in a statement last week that the US government had “encouraged the parties to take whatever steps are necessary to allow for a climate conducive to discussions leading to a meaningful settlement” between the DR Congo and AVZ.

The move signals Washington’s growing efforts to secure critical minerals in Congo, directly challenging China’s dominance in the country over control of critical minerals such as lithium and copper, vital for the global green energy transition.

Congo is advancing negotiations on a proposed “minerals-for-security” deal with the United States, which has offered to help broker peace between Congo and Rwanda to stabilise the mineral-rich eastern Congolese region.

The mining site of China’s Zijin Mining in Kolwezi, Democratic Republic of Congo. China has long held mining interests in the central African country. Photo : Xinhua

That marked a significant shift from the US policy on minerals in Congo. Until recently, the US showed little interest in investing in Congo’s mining sector, as American companies saw the country as “risky, corrupt, and opaque” for investment.

By contrast, China has, in less than two decades, steadily ramped up investments there, even acquiring interests previously owned by US companies, to become the largest investor in Congo’s mining sector.

Chinese infrastructure investment commitments in Congo were valued at US$7 billion last year, making China the largest investor in the country.

A report by the Atlantic Council last month said China, the US and the European Union were “engaged in a technological race spurring competition for access to these critical minerals”, and at the centre was the DR Congo, which was “being courted by these powers like never before”.

Kai Xue, a Beijing-based China-Africa mining lawyer, took a positive view of the potential Congo-America minerals-for-security deal, arguing that US President Donald Trump’s engagement signalled genuine interest.

He said that while lithium was strategically important, Congo’s greatest economic potential was in copper, particularly for the green transition. The country is the world’s second-largest copper producer.

Xue said copper output could “triple again”, potentially making Congo the world’s largest producer of the metal by 2040 and enabling it to achieve middle-income status based on copper alone.

He said that if a US company were to secure lithium interests, prompting the US to promote regional stability and thus boost copper mining growth, the scenario would benefit all stakeholders – Congo, Chinese mining companies and the global green energy transition.

Chris Berry, head of US-based commodities advisory firm House Mountain Partners, acknowledged the Trump administration’s rationale for wanting a presence in Africa but questioned whether the minerals-for-security deal could go ahead.

“What or who defines ‘security’ ? Are the economics of a deposit irrelevant, meaning if the mining does not make economic sense, are the security guarantees still enforceable ?” he asked.

“Given the plethora of critical mineral deposits in more reliable geopolitical jurisdictions, it is somewhat surprising that KoBold has decided to focus on the [DR Congo] as opposed to elsewhere,” Berry added.

“I will be curious to see what the terms of these deals are when the ink is dry on the contracts. I don’t think the dust has settled here yet.”