China cracks down on several mining firms in the Democratic Republic of Congo

Beijing demands the overseas companies obey the local government, after protests outside a Chinese mine that had ignored local orders – after Congolese authorities suspended six small Chinese firms’ operations over illegal mining and destruction of the environment.

The Democratic Republic of Congo ( DRC) has more than half of the world’s known reserves of cobalt ore, and with the Zambian copper belts, the second largest global reserve of copper, about 1/3 the size of the Chilean reserve. Both the DRC copper and cobalt deposits are some of the highest grade ore deposits in the world.

China has ordered the 6 small companies that broke laws and environmental standards in the Democratic Republic of Congo to cease operating and leave the country – at a time when the African nation’s government is aiming to renegotiate “infrastructure for minerals” deals with China.

It came after South Kivu province suspended six Chinese firms’ operations over illegal mining and destruction of the environment. The companies had missed a deadline to register their activities with the Congolese authorities, and entered the province with only a research permit and subsequently started illegal mining operations.

Congo fails to tap into boom owing to poor infrastructure ...

Wu Peng, director general of the Chinese foreign ministry’s African affairs department, on Tuesday said that the authorities in China had investigated and “commanded the companies involved to respect the order of the local government of the DRC, stop their business completely and leave South Kivu province as soon as possible”.

The companies will be punished by the Chinese government, Wu said. It is unusual for China to order firms to cease their overseas operations.

“We will never allow Chinese companies in Africa to violate local laws and regulations,” Wu said, a day after police in the South Kivu city of Mwenga fired tear gas at residents who protested outside a Chinese mine that had ignored last month’s order by governor Theo Kasi to stop operating.

The DRC identified the companies as BM Global Business, Congo Blueant Minerals, Orientale Resource Congo, Yellow Water Resources, New Continent Mineral, and Groupe Cristal.

“We support the DRC in cracking down on illegal economic activities,” Wu said.

Zhu Jing, China’s ambassador to the DRC, tweeted on Tuesday: “The Chinese authorities have taken action to support the Congolese government in the fight against the illegal exploitation of natural resources. A special cell has also been set up within the Chinese embassy.”

Source: South China Morning Post, 16 Sept 2021 https://www.scmp.com/news/china/

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The broader context – the role of the World Bank

While there is no question that some China-based mining companies have in this instance failed to follow local laws and have caused environmental harm,, it is also true that China has taken significant steps to improve its overseas environmental performance. See our recent post on China’s new guidelines for green development in the Belt & Road Initiative (link below). However, there is a broader context that should be borne in mind. (https://china-environment-news.com/2021/08/22/chinas-new-guidelines-on-green-development-what-it-means-for-the-belt-and-road-initiative/)

Recently China-DRC relations have been caught up in local internal political infighting after DRC President Felix Tshisekedi ordered a review of mining deals with Chinese companies signed by his predecessor Joseph Kabila. The Tshisekedi government is accusing its predecessors of corruption.

The DRC has been under pressure from the International Monetary Fund (IMF) to “clean up lopsided mining agreements granted to foreign firms” as a precondition for a new US$1.5 billion credit line. The IMF is also caught up in a dispute with US-backed elements in the World Bank, who are pushing to limit Chinese influence on IMF policy.

As far back as 2017 Li Keqiang, China’s prime minister, criticised the way the World Bank appeared to discriminate against China and urged Bank officials to free entrepreneurs from red tape—and crimson ink. They cut fees, streamlined approvals, and began to use electronic seals instead of the traditional ink stamp on many documents. This is now the focus of the US allegations being made against the IMF by the US as being “too pro-China”.

The World Bank and the IMF were set up in 1944 under the Bretton Woods Western agreements for a post world war 2 international financial order.

The World Bank is in real terms firmly under the control of the US government which negotiates, with the governments of other major capitalist powers, the policies to be followed within the World Bank, and under its leadership. It has frequently fails to make the effort to reach a consensus with its principal partners (since the end of the 1950s, these are Japan, Germany, Great Britain and France) and it imposes its views directly on the Bank.

“Since its origin and up to the present time, the president of the World Bank has been a US citizen proposed by its government. The members of the Board of Governors simply ratify the candidate presented by the US. This privilege does not figure in the statutes of the Bank. Although the statutes allows it, no governor has ventured up to now to propose a candidate of another country or candidate other than the one selected by the US government. … From its beginnings the US is the only country to have a de facto right of veto at the World Bank.”

CADTM, 2 April 2020 https://www.cadtm.org/Domination-of-the-United-States-on-the-World-Bank