This piece was originally published by the Strategic Studies Institute.
Critical minerals will continue to grow in importance across the globe in the coming decades as technological advancements require greater quantities of these materials. The 2023 US Department of Energy Critical Materials Assessment report listed seven materials as critical in the short term because of their uses for magnets, batteries, and fuel cells: dysprosium, neodymium, gallium, graphite, terbium, iridium, and cobalt. That same year, the Department of Defense noted cobalt’s critical applications to military technology. Although cobalt is just one of dozens of critical minerals, its supply chain has come to be uniquely dominated by Chinese ownership. Cobalt, a key component in advanced technologies like batteries and solar-powered vehicles, underscores a growing geopolitical challenge for the United States as China strengthens its grip on critical-mineral supply chains. The case of cobalt highlights how China has come to control much of this critical mineral—with direct and indirect implications for American national security. Cobalt also warns of a dynamic that could be repeated for other materials like lithium, manganese, and additional rare earth minerals.
China’s dominance of global cobalt supply chains has coincided with expansions of the country’s economic and military influence to developing countries, particularly in Africa. Since the early 2000s, China has spent more than $155 billion in Sub-Saharan Africa, creating new markets for Chinese construction companies and making China a legitimate alternative to Western financing in the realm of developmental and commercial infrastructure. Although China has invested capital into multiple mineral-rich nations, the Democratic Republic of the Congo (DRC) stands out because of its vital role in the cobalt market. The DRC produces 80 percent of the world’s cobalt—Chinese state-owned enterprises and policy banks control 80 percent of the total output. Of the 10 largest cobalt mines in the world, nine are in the DRC’s southern Katanga region. Of the 10 largest mines, half are owned by Chinese companies.5 In refining cobalt, the position of Chinese state-owned enterprises is similarly dominant: Their refineries account for between 60 and 90 percent of the global supply. The DRC is essential to China’s position in the global market: 67.5 percent of China’s refined cobalt comes from the DRC.
The DRC, Africa’s second-largest and fourth most populous country, has been devastated by internal conflict for decades, including two wars since the mid-1990s and ongoing rebel violence in the east that required a 24-year-long UN peacekeeping mission, with Chinese participation. Because of the country’s conflicts, the DRC has a vast, untapped potential to develop its mining capabilities and refine its outputs and a constant need for infrastructure and mining investments to meet the global demand for minerals. The DRC’s lack of domestic refining capability, need for investment, and unique position as the dominant source of cobalt made the country a prime vehicle for public and private Chinese investment—as part of the Belt and Road Initiative and frequently predating it. For example, in 2008, the DRC’s newly elected government signed an infrastructure and mining deal with China that was worth $6 billion. The funds—which would be equally split between mining and infrastructure development—established China as a major investor in the DRC, especially at a time when the DRC’s gross domestic product was only $19.79 billion. At its core, the deal exchanged natural resources for infrastructure spending. As a result, Chinese companies came to own 15 of the DRC’s 19 best cobalt and copper sites. In theory, the deal was mutually beneficial and would provide the DRC with the stability and investment needed to capitalize on its tremendous reserves of natural resources.
