The Chinese owner of one of the world's largest copper and cobalt mines has been removed from office by a court in the Democratic Republic of Congo, a victory for the government as it seeks to become a bigger player in the global clean energy revolution.
The Chinese leadership of the mine has been removed for at least six months because of a dispute over billions of dollars in payments to the government of the Democratic Republic of the Congo.
The company bought the Tenke Fungurume mine in 2016 from an Arizona-based mining company. The Chinese government is trying to dominate major supply chains for minerals and metals needed in the production of batteries for electric vehicles.
The battery range of electric vehicles is extended by the use of coboman. It is at a three-year high.
The New York Times reported in November that employees at the mine had complained about a dramatic decline in worker safety under the Chinese ownership, including claims by safety inspectors that they had been bribed to cover up accidents. The company said the claims were part of a larger effort to get rid of them.
The president of the country named a commission to investigate allegations that China Molybdenum may have cheated the government out of royalty payments. The Commercial Court of Lubumbashi took legal action on Monday after the country's state-owned mining enterprise sought the removal of the mine's Chinese management.
A third-party administrator will be in charge of the mine for at least six months as auditors look into the allegations against the company. The state mining enterprise claims that China Molybdenum failed to declare hundreds of thousands of tons of copper and cobalt reserves buried at the site.
The world's second-largest source of cobalt in 2020 was the mine held by G9camines. 70 percent of the world's cobalt was produced by the Democratic Republic of the Congo.
The office of the President declined to comment on the ruling. China Molybdenum has denied in the past that it hid reserves or owed additional royalties.
Some mining industry executives described a shakedown when the threats of legal action against foreign mining companies were resolved when the companies made payments to government officials.
In this case, executives at both the mine and the company have told The Times that the claims against China Molybdenum are based on legitimate concerns about its operations and a belief that the company has been hiding information.
The temporary mine administrator was named by the court on Monday as a Congolese engineer.
Dr. Ngoie was recently appointed to a new management role after working at Tenke for two years overseeing waste disposal and other major engineering tasks. In a telephone interview, he said he was not prepared to describe the changes he might make at the mine, which has more than 7,000 employees and contractors.
The court gave Dr. Ngoie the task of reconciling the two partners on different issues, including access to technical information and the determination of the rights of the parties to the mining reserves. Most of the mine's concentrate is exported to China.
The government of the Democratic Republic of the Congo is looking into contracts signed with Chinese-backed mining companies after complaints of unfulfilled promises. Chinese-backed companies owned or had a financial stake in 15 of the 19 mines in the country.
The world's demand for fossil fuels has led to too much of the profits from the nation's metals and minerals not benefiting the country.
U.S. officials have raised concerns that China could control the supply chain for battery materials and cause prices to go up, which could make it difficult for auto manufacturers to convert fleets away from the engine.
The vice president at the Export-Import Bank of the United States held a hearing last week about metals needed for renewable energy and military applications, and she said that China has a sort of stranglehold on the supply chain. It is an issue, other than to say it is.
The Biden administration is looking for ways to strengthen ties with the Democratic Republic of the Congo. A group of White House officials went to the capital of the Democratic Republic of the Congo in February to meet with the president. The review of mining contracts in the Democratic Republic of the Congo is being supported by the U.S. government.
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