The European Union (EU) has announced a $52 million investment deal to boost mining in DRC.
Noteworthy, the Democratic Republic of Congo (DRC), is home to the world’s largest coltan reserves and significant amounts of cobalt, lithium, manganese, and rare earth minerals.
The EU announced the deal at the inaugural Kinshasa Economic Forum, which representatives from France, the EU, and the DRC, including President Emmanuel Macron and European Commissioner Jutti Urpilainen attended.
Moreover, the $52 million deal is part of the EU’s $316 billion investment plan for Africa, aimed at counterbalancing China’s Belt and Road Initiative on the continent.
At the heart of the initiative is the need to develop infrastructure projects, including investment in energy and productive sectors.
Therefore, the DRC’s mining deal is in line with the EU’s Essential Raw Minerals Act, which aims to secure crucial raw resources for electric vehicles and wind turbines.
Facts About Mining in DRC
According to the World Bank, DRC is the world’s richest country in terms of natural resources. However, most of its raw mineral deposits remain untapped and are worth about $24 trillion. The EU is banking on the DRC’s nascent economy, with a 6.7 percent GDP growth expected in 2023, according to the International Monetary Fund.
Despite the DRC’s wealth in natural resources, poor trade partnerships with the EU have existed for decades. Today, the EU imports less than 1 percent of products from the DRC, using Everything But Arms (EBA) preferences. The EU is now seeking to build the entire value chain for a win-win situation, and Jutti emphasized that “partnerships with DRC must be about more than just mining.”
In 2021, imports from the EU to the DRC hit $723 million, making the union the fourth most important import market. However, 84 percent of the DRC’s cobalt exports went to China in 2019, with China, India, and South Korea being the most important export markets for Congolese products and accounting for 76.4 percent of overall exports. South Africa and Tanzania are the DRC’s most important trading partners in Africa.
The EU’s investment in the DRC’s mining sector is a significant step towards securing essential raw minerals for green technologies, ensuring sustainable development, and creating a win-win situation for both parties.