Addressing China’s Dominance and Criminal Networks in the DRC’s Cobalt Sector

II. Problem Statement

The DRC’s cobalt sector is not just a development issue—it is a strategic chokepoint. Three interrelated problems demand urgent U.S. attention:

• Chinese Strategic Control
  China controls 8 of the DRC’s 14 largest cobalt mines, and over 80% of global refining. Through entities like CMOC and Huayou Cobalt, it sets prices and terms across the global market, often to the detriment of producers and importers alike.
• Illicit Trade and Criminal Networks
  Up to 30% of DRC’s cobalt is extracted through artisanal and small-scale mining (ASM), often informal and dominated by organized crime. Smuggling is rampant across DRC’s borders, facilitated by collusion with corrupt officials, and resulting in billions of dollars in lost state revenue.
• Fragile Governance and Social Exploitation
  Regulatory gaps, child labor, and weak state capacity undercut efforts to formalize the sector and promote inclusive growth. Despite cobalt’s importance, the DRC remains 164th out of 174 countries in the Human Capital Index.

III. U.S. Interests and Policy Leverage

National Security:
Cobalt is listed as a critical mineral by the U.S. Department of Energy. Disruptions in cobalt supply chains directly threaten the production of batteries for EVs, satellites, and defense equipment.

Economic Resilience:
China’s state-backed firms are using oversupply to undercut prices and limit the ability of competing producers—including potential U.S. partners in the DRC—to operate profitably and transparently.

Values-Based Foreign Policy:
Addressing child labor, corruption, and human rights in the DRC’s mining sector supports broader U.S. foreign policy commitments under the Biden administration’s Global Labor Strategy and Responsible Mineral Sourcing initiatives.

IV. Policy Recommendations

To reduce exposure to Chinese-controlled cobalt supply chains and promote sustainable growth in the DRC, the U.S. government should act along four strategic pillars:

1. Enhance Governance and Anti-Corruption Efforts

• Support independent monitoring of cobalt trade and transparency initiatives under the Extractive Industries Transparency Initiative (EITI).
• Increase funding to civil society and investigative journalism focused on mineral smuggling and state capture.

2. Formalize Artisanal Mining

• Provide technical assistance to the DRC government to integrate ASM into legal frameworks.
• Co-fund safe mining cooperatives with traceability systems to improve labor conditions and reduce child labor.

3. Scale U.S. Investment in Downstream Capacity

• Accelerate support for domestic refining facilities like EVelution Energy (Arizona), which will import DRC cobalt outside of China’s refining ecosystem.
• Provide export credit and political risk insurance to U.S. firms seeking to partner with vetted Congolese producers.

4. Build Infrastructure for Diversified Trade Routes

• Expand support for the Lobito Corridor, which connects the DRC’s Copperbelt to Atlantic ports via Angola and Zambia—offering a China-free export pathway.
• Leverage DFC and MCC tools to invest in logistics, customs modernization, and energy access near key mining zones.

V. Conclusion

If the U.S. is to compete in the 21st-century clean energy economy, it must treat cobalt as a strategic resource. China’s current dominance—enabled by state-backed firms, weak governance in the DRC, and an absence of Western alternatives—poses a direct risk to American security and competitiveness. By acting now to reshape supply chains, formalize mining, and align commercial interests with governance reforms, the United States can secure a resilient, ethical, and strategically aligned cobalt supply system.

About the Author: Over 25 years of experience in development economics and U.S. foreign policy, including 20 years of on-the-ground work in Africa, Latin America and South Asia.  With first-hand experience with the critical minerals sector in the DRC.