The clean energy revolution is ushering in a new global force to replace oil and gas: the minerals and metals required for electric car batteries, solar panels, and other renewable energy sources.
Countries like the Democratic Republic of Congo, which produces two-thirds of the world’s cobalt supply, are stepping into responsibilities traditionally held by Saudi Arabia and other oil-rich countries. A race between China and the US to obtain supply might have far-reaching consequences for the shared objective of environmental protection.
The New York Times conducted an investigation that included over 100 interviews on three continents and hundreds of pages of financial, diplomatic, and other documents. Here are a few of the results.
As it embraces green energy, the United States is subject to price shocks and supply shortages.
Even as China was gearing itself to dominate the new electric vehicle age, the US government failed to protect decades of diplomatic and financial commitments it had made in Congo.
The selling of two large cobalt reserves in Congo by an American mining behemoth to a Chinese conglomerate, which began in 2016, signified the end of any meaningful US cobalt mining presence in the country.
To ensure consistent supplies of the metal, Chinese battery makers have reached deals with mining businesses.
Beijing financed a mine-buying spree in Congo, securing a vital supply line.
According to data analysis, Chinese corporations controlled or financed 15 of Congo’s 19 cobalt-producing mines last year. In addition, the corporations had received at least $12 billion in loans and other finance from government-backed institutions, with billions more on the way.
The five largest Chinese mining businesses in Congo focused on cobalt and copper have $124 billion in credit lines from Chinese state-backed banks.
China Molybdenum, one of the government-backed businesses that purchased the two American-owned reserves, portrayed itself to The New York Times as a “pure business entity” that was traded on two stock exchanges. However, according to records, a Chinese municipal government owns 25% of the corporation.
Congolese officials accuse Chinese mining corporations of defrauding the country of promised earnings and upgrades.
As part of a larger anti-corruption drive, the Congolese are revisiting prior mining contracts with financial assistance from the US government. They’re also looking at whether China followed through on commitments to develop roads, schools, hospitals, and other infrastructure.
Separately, at its Tenke Fungurume cobalt and copper mine, Chinese Molybdenum is accused of delaying payments to the government. However, the corporation said it had done nothing wrong and questioned whether there was a coordinated attempt to bring it down.
A Chinese proverb goes, “Where there is a will to condemn, proof will follow,” according to a spokeswoman. “I have a nagging suspicion that we are caught up in the game of bigger powers.”
A corporation having Hunter Biden on its board of directors helped the Chinese takeover of an American-owned mine.
Tenke Fungurume, one of the world’s largest cobalt mines, was owned by Freeport-McMoRan, an American corporation. Then it was sold to China Molybdenum for $3.8 billion in a series of transactions in 2016. A Chinese private equity group assisted the transaction by purchasing a minority stake in the mine.
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Hunter Biden, the son of the American president, was a founding board member of the private equity firm. According to Chinese financial filings, a Washington business managed by Mr. Biden remains a shareholder in the enterprise. Mr. Biden’s lawyer, Chris Clark, stated that his client “no longer has any interest, directly or indirectly,” in the Washington and Chinese companies. According to Chinese filings, he is no longer a member of the Chinese firm’s board of directors. Requests for a response from Mr. Biden were not returned.
“No,” a White House spokeswoman answered when asked if the president was aware of his son’s involvement in the deal.
Although Chinese ownership has expanded global cobalt supply, workers have complained over safety violations.
China’s increased mining and processing of cobalt have aided in meeting the world’s expanding demand. However, at least a dozen employees or contractors at the Tenke Fungurume mine told The New York Times that Chinese ownership had resulted in a significant drop in safety and a spike in injuries, many of which went unreported.
The corporation said that the accusations were most likely false and that it had improved safety.
In the quest for minerals, the United States is lagging.
The United States is playing catch-up as the globe pivots to a future centered on electric vehicles, albeit both Congress and the Biden administration are taking preliminary moves. On Friday, the House passed legislation that would provide more than a half-trillion dollars to help the US economy transition away from fossil fuels and toward renewable energy and electric vehicles.
According to Amos Hochstein, the State Department’s senior adviser for global energy security, access to solar panels and electric car batteries will decide energy security in the future.
“It is a national security imperative for the United States to ensure that the twenty-first century does not replicate the weaknesses of the twentieth,” he stated.
