Chinese investment in Congolese cobalt: the challenges of international mining investment

It’s no secret that global demand for minerals is growing and diversifying, and at exponential rates that threaten to sideline considerations such as worker safety. This issue made headlines last year, when a Congolese mechanic was injured on the job at the Kisanfu cobalt and copper mine in the Democratic Republic of Congo (DRC). The incident has since become a flashpoint for well-rehearsed discussions about the need to balance profits and personal safety in the mining industry.

However, at the beginning of the year, the case took a turn as unexpected as positive. The Kolwezi High Court ruled that Panda International Congo Engineering, which provided mechanical services to the mine, would be obliged to pay the full salary and medical expenses of Mukenge Zaluke, who was unable to work for three months after his hand was crushed by a truck. engine.

While a definite victory for the workers and their legal teams, the case highlights broader issues within Congolese mining in particular, and international mining projects in general. With a growing disparity between wealthy foreign owners interested primarily in productivity and local workers facing real health risks, the question remains whether international mining can ever balance these seemingly incompatible ideals.

A highly publicized verdict

The case that has drawn attention to this issue is a relatively straightforward one. Zaluke’s hand was crushed by a falling engine, which broke his bones and left him unable to work or pay medical bills, and he was initially denied medical treatment of Panda, which is enshrined in the Congolese Labor Code.

The case was taken up by Josué Kashal and Etienne Ngoie of Center d’Aide Juridico-Judiciaire (CAJJ), a legal aid organization based in Kolwezi, who successfully argued in the local high court last October that Panda had to cover Zaluke’s costs.

The high court and lawyers agreed on the final amount due in January this year, and the verdict was hailed by labor and human rights groups like a victory for individuals employed by mining companies, who may have felt compelled to forgo certain health care rights.

The case is also particularly significant given the DRC’s growing presence in the global mining industry. Already an established source of cobalt, responsible for over 70% of the world’s supply, the total amount of cobalt produced by mines in the DRC has doubled over the past decade, from 60,000 tonnes in 2010 to 120,000 tonnes in 2021.

On the one hand, the decision of a high court to rule in favor of workers in such a critical industry is an encouraging sign for those concerned about the safety of workers in such operations. Yet the very nature of this case points to broader challenges within Congolese mining.

“Labour rights violations and the exploitation of workers in industrial copper and cobalt mines are very rarely heard by Congolese courts because the workers are too scared or too poor to press charges,” says Anneke Van Woudenberg. , executive director of Rights and Accountability in Development (RAID), a charity that works to bring attention to and redress corporate human rights abuses.

“The Congolese government has the primary responsibility to enforce its labor laws,” Van Woudenberg continues, drawing attention to the fact that despite what the law says, such requirements have not always been enforced in the DRC. “Congo’s Labor Inspectorate, an administrative service that monitors the implementation of national labor regulations, is severely underfunded and understaffed. In 2021, there were only two labor inspectors assigned to the Kolwezi area, with limited capacity to carry out their work.

Background and Power

RAID has worked extensively with Congolese miners in recent years to draw attention to this dynamic. In November 2021, while the Panda case was ongoing, the charity published a report on the welfare of workers at DRC Cobalt Minesin which the authors concluded that Congolese workers were subjected to “appalling conditions”, paid less than a living wage and forced to endure “degrading treatment, discrimination and racism”.

“We worked hard, without any breaks, for $2.5 a day,” said a Congolese worker quoted in the report. “If you didn’t understand what the boss was telling you, he would slap you. If you had an accident, they would fire you.

Yet this environment has resulted in significant financial investments and potential economic gains. Last August, China Molybdenum, owner of the Kisanfu mine, announced its intention to invest $2.5 billion in its Tenke Fungurume mine, also located in the DRC.

The company noted that the investment will reduce the unit cost of mining by 29%, the administrative cost of the project by 11% and the cost of plant units by 7%, as it seeks to develop mining infrastructure that could lead to long term growth in the surrounding region.

A Congolese court, however, temporarily took control of the mine in March this year, saying China Molybdenum had misreported the project’s mineral reserves and failed to pay royalties to the government. Although China Molybdenum did not respond to a request for comment for this article, the series of worker pressures leading to the loss of control of a mine by a foreign owner is emblematic of a lopsided power dynamic in the world. mining in the DRC.

There is a dramatic power imbalance between Congolese workers and the multinational companies or their contractors who employ them, says Van Woudenberg, who went on to quote CAJJ lawyer Maître Josué, who worked on the injury case. from Zaluke.

“Multinationals and their contractors have a powerful hold on Congolese workers who depend on them for their livelihoods,” said Josué. “For a local court to change this power imbalance and publicly recognize a worker’s human rights is unprecedented. Other Congolese courts should follow this example.

Local change and international implications

These cases are just the latest problems for Chinese miners in the DRC. In March, China Molybdenum CEO Sun Ruiwen visited the DRC for the second time in less than three months, to discuss possible responses to the seizure of the Tenke Fungurume mine property with the Congolese Prime Minister. Sama Lukonde Kyenge.

The South China Morning Post reported that despite the controversy, Lukonde is eager for further investment from China Molybdenum, which reveals the tension at the heart of this issue. The DRC needs trade and investment partners to make the most of its vast cobalt reserves, and with China’s huge industrial needs, it’s hard to turn down support from Chinese companies, regardless of recent events. who have shaken faith in their ability to manage Congolese mines.

Another complication is the growing concern among the Congolese about the number of tangible benefits that this constant foreign investment is actually bringing. In 2021, DRC President Felix Tshisekedi announced his intention to renegotiate a $6 billion deal signed between the DRC government and a consortium of Chinese companies, which would see the latter invest in mining and infrastructure in the first.

While the terms of the deal will see the money split evenly between mining and infrastructure, Tshisekedi claimed last year that less than $1 billion had been invested in mining and that he there was “no infrastructure in sight”, which raises more questions about the Chinese involvement. investors to mining in the DRC beyond the simple extraction of cobalt.

Yet these are large-scale challenges that are not unique to the DRC or China. Van Woudenberg hopes that, at the very least, the case that has drawn attention to this issue can help bring about change for people locally.

“This case sets an important precedent and begins to shift the power imbalance,” Van Woudenberg said. “Of course, enormous challenges remain for workers, including very low wages, excessive working hours, degrading treatment, violence, discrimination, racism, dangerous working conditions and a disregard even for basic health care. Many of these concerns are protected by Congolese law, but too often ignored by employers.

“The system can change with increased government support for labor inspectors and the brave Congolese workers who come forward to challenge their employers. If employers knew they could face legal consequences for violating the Congolese labor code, they would be more likely to behave responsibly.

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