Why Do the Chinese Need Copper and Cobalt from the Congo?

The political leaders of Beijing have long had their eye on the minerals of African countries. Among the many partners, the Democratic Republic of the Congo stands out as a powerful producer of copper and cobalt. But why does China need these minerals, which is itself the world leader in their mining. Of course, this story could not do without the Russian Federation and its military-industrial complex.

Since the production of artillery shells, microelectronics and batteries is impossible without copper and cobalt, their supply chains to the Russian Federation should be limited by sanctions and attempts to circumvent these sanctions through third countries should be stopped. But it should be noted that the real picture looks somewhat different.

The economy of the Democratic Republic of the Congo (DR) is completely dependent on minerals, among which oil, copper and cobalt stand out. For example, the total value of this country's exports for the period from January 1, 2022 to April 30, 2024 is 69 billion dollars, three quarters of which are copper and cobalt.

Among the key foreign economic partners of the Congo are China ($37 billion, or 54% of the value of exports), the Republic of South Africa ($6.8 billion, or 10%), Hong Kong ($5.1 billion, or 7 5%), Mozambique ($4.5 billion, or 6.6%), Singapore ($3.9 billion, or 5.7%) and other countries (almost $10 billion, or approximately 14– 15% of the export value).

Interestingly, 97% of the total exports to China from the Democratic Republic of the Congo (DR) are minerals, namely copper and cobalt.

We tried to detail the export relations between the Democratic Republic of Congo (DR) and China. The total value of supplies of two types of noble metals, namely copper and cobalt, varies between 35–37 billion dollars.

It was also identified which African companies supply copper and copper products to the Chinese, as well as Chinese importing companies.

We have also monitored the growth dynamics of copper supplies from the Democratic Republic of Congo (DR) to China in recent years. The obvious increase and revitalization of trade in recent years cannot but lead to the idea that it is connected with the full-scale invasion of the Russian Federation into Ukraine.

It can be assumed that the systematic increase in export supplies proves the existence of a ready supply chain of minerals from the Democratic Republic of the Congo (DR) through China to the Russian Federation. Since China itself produces the lion's share of copper on a global scale, although somewhat inferior to the Latin American country of Chile, which is the leader in copper production and supply. It is unlikely that a country that is the world's "copper" leader is interested in purchasing copper from the Democratic Republic of the Congo (DR) for itself.

Moreover, China is a long-term supplier of copper to the Russian Federation. Given the existence of the growing needs of the Russian military–industrial complex (MIC), why not make money by increasing these supplies. The total value of copper exported from China to the Russian Federation for the period from 2022 to April 2024 is $1.12 billion.

It is important to note that it is quite difficult to track China's exports through customs databases. According to the Chinese case, such tracking is not standard (through customs declarations), but it is evaluated using the "reflection" method. Customs declarations of other countries that are importers are used as a basis, and these data are then reflected in the Chinese database, recreating the structure of Chinese trade.

At the same time, we note that in the previous analysis, copper trade between the Democratic Republic of Congo (DR) and China reached transactions for the aforementioned (analogous) period in the amount of 30.47 billion dollars.

The reason for such a difference with Chinese-Russian supplies is that China imports copper not for the purpose of reselling it in the Russian Federation, but for the production of certain goods, in particular for military purposes.

Here are the Russian companies that import copper from China and the Chinese companies that export it.

It is worth highlighting two enterprises that appear in the list of the top 5 copper importers from China to the Russian Federation, the Limited Liability Company "SNFS (Elos)" LLC and the Open Joint-Stock Company "Mohilevsky Metallurgical Plant" OJSC.

The first legal entity is the Limited Liability Company "SNFS (Elos)" LLC. The general director of this company is Han Hovei. He is also mentioned as the managing director of the investment and financial markets department of the Chinese company Zhongchengtong International Investment Co Ltd, which is related to the ZGC Group.

At the same time, the Limited Liability Company "SNFS (Elos)" LLC participated in the construction of facilities of the Baim Mining and Processing Plant (Chukotka, RF) with the aim of developing the "Pishchanka" copper-porphyry deposit, which is one of the top 3 undeveloped deposits of the Russian Federation and is the most northern compared to the other largest deposits. Han Hovei mentioned the relevant business project in one of the interviews.

Additionally, the Limited Liability Company "SNFS (Elos)" LLC coordinates its work with a rather specific structure, namely the Russian-Chinese Business Union. The agreement on the creation of this business and political structure was signed on October 14, 2004 in Beijing as part of Vladimir Putin's official visit in the presence of key high-ranking officials of the Russian Federation and China.

In 2014–2022, the relevant structure was managed by Hiennadii Timchienko, who is part of Putin's inner circle along with the Rotenberg and Kovalchuk brothers. Starting from 2022, the representative of the Chinese side, Zhen Khunbin, became the head of the "Russian-Chinese Business Union".

The second legal entity, namely the Open Joint-Stock Company "Mohilevsky Metallurgical Plant" OJSC, does not have Russian jurisdiction. This enterprise is registered in the Republic of Belarus. However, the fact that the Russian Federation and Belarus are members of the customs union played a role here.

Now let's move on to cobalt supplies. This metal is a by-product of copper and nickel mining. It is an important material for the production of lithium-ion batteries.

The Democratic Republic of Congo (DR) has the largest cobalt reserves in the world, about 6 million metric tons. Global demand for cobalt for use in batteries is projected to be 20.7 million metric tons in 2040, compared to 6.1 million metric tons today.

The total value of cobalt exported from Congo to China is 6.19 billion dollars. At the same time, the dynamics of cobalt export to China from the Democratic Republic of Congo (DR) is stable.

In turn, cobalt from China also goes further to the Russian Federation, but on a much smaller scale. The total value of cobalt exported from the People's Republic of China to the Russian Federation during the above-mentioned period is 133 million dollars. By analogy with copper, the "reflection" method is used in the analysis of supplies, because the amount of the transaction on the Chinese side was $111 million, but if we analyze the supplies from the Russian Federation according to customs declarations, then the corresponding monetary amount of transactions is supplemented by another $22 million.

Let's recall the key Russian companies importing cobalt from China and the Chinese exporting companies.

Some of these Russian companies are mentioned in the material in English, because it is in this language that they are mentioned in international customs declarations. However, during the search, it was not possible to identify their names in Russian due to deliberately made mistakes in the names.

Afterword regarding supplies of copper and cobalt to the Russian Federation through China

Exports of the Democratic Republic of the Congo (DR) from January 1, 2022 to April 30, 2024 in the absolute majority of cases relate to supplies of minerals, namely copper and cobalt.

In turn, China imported goods from the Congo during this period in the amount of $37.59 billion, or more than 54% of the value of all exports of this African country.

These metals are used to create microcircuits, modern batteries, artillery shells, etc. This all concerns the military-industrial complex of China and the Russian Federation, and therefore strengthens the defense of both countries.

That is why China is interested in Congolese minerals, which plays an important role in the economy and filling the state budget of the Democratic Republic of Congo (DR). And also, let me remind you, the diplomatic corps of the Russian representation in this African country has grown quite strongly and rapidly.

It is an undeniable fact that copper and cobalt play an important role in the production of military equipment, ammunition and heat-resistant metal alloys. Finally, let us remind you that one of the key Russian oligarchs — Vladimir Potanin (owner of the Norilsk Nickel company) — announced at the end of April 2024 about the relocation of the production facilities of his copper plant to China in order to circumvent the economic sanctions of Western countries.

Why would the People's Republic of China and the Russian Federation strengthen their cooperation in the framework of the Russian-Chinese-Congolese supplies of metals necessary for the military–industrial complex?