Source: Starship Creator, Author | Tang Xiaoyuan
01 The Village in the Mist: Some Changes and Strange Things
For many years, a poverty-stricken village has been nestled next to a wealthy gold mine—the Kisanfu Copper-Cobalt Mine (KFM) in Congo (Kinshasa). Since 2003, this resource-rich copper-cobalt mine has been lying dormant in the lush forest.
Alongside the nearby Tenke Fungurume Mine (TFM), one of the largest copper-cobalt mines in the world, it stands as one of the two most dazzling gems of the Central African Basin, always in the pocket of the American mining giant Freeport-McMoRan.
Like generations of villagers, Jacquie from Mayeba village never cared who owned the KFM mine.
The mine was once held by the Belgians, then passed around to the American Freeport. But what did it matter to her?—No matter who the owner was, the surrounding villages still had no electricity, no roads.
The village at the foot of the gold mountain was always shrouded in endless dark blue moonlight.
First, it was Jacquie's father under the moonlight, the man in the village who knew best how to select charcoal, picking the finest pieces by their texture to sell. Then, under the moonlight, the man's face turned into Jacquie's husband, who worked tirelessly but whose children went hungry. Next, if nothing unexpected happened, the man under the moonlight would turn into Jacquie's sons.
It was a kind of generational despairing blue, like the color of the azurite abundant in this place.
But tonight, the moonlight in Mayeba village was different. It was no longer a dilapidated old lamp, no longer hunched over, but trying to lean towards the earth, contributing a bit more light for new and old friends.
The change began a few years ago when the Chinese arrived.
A few years ago, Jacquie noticed some unfamiliar Eastern faces in the village. Each person wore a white or yellow safety helmet. Someone told her that a Chinese company had taken over the TFM and KFM mines from the Americans.
Very soon, there were more and more Chinese faces in the village. Often, Chinese people wearing red hats would come to the village, accompanied by a few dark-skinned locals, and they would all hold blueprints and gesture together. Some well-informed villagers said that the red hats were the highest authority, overseeing the yellow hats and white hats.
Jacquie had never seen Americans wearing safety helmets before. It was said that they all lived in spacious, bright buildings in the capital, Kinshasa, and would never set foot in villages without water or electricity.
The communication between the Chinese and the locals often involved a lot of gesturing, but Jacquie didn't think this was a problem. Because soon, the village had clean reservoirs, electricity, and roads were built. Then came health and education initiatives——the village started promoting malaria treatment, vaccination, and literacy classes. The Chinese also taught the villagers how to better grow corn using urea and NPK fertilizers.
Jacquie's light blue work clothes were neatly folded at the end of the bed, reflecting more of the cheerful moonlight.
After the Chinese arrived, the development of the two mines accelerated significantly, with tens of thousands of tons of ore and materials being transported between the mining area and the ports of Durban and Dar es Salaam. The mining road became increasingly busy, and the simple "houses" made of a few sticks covered with plastic sheets on the sides of the road disappeared, replaced by more brick houses being built——Jacquie and the villagers gradually understood that as long as the mining area continued to develop, life would get better and better.
In the past, the local people's means of livelihood had been limited to two options: either becoming part of the high-risk local "hand-grab mining" industry chain or making a living by producing charcoal.
Now, Jacquie had become a cleaner in the mining area, and her husband was learning equipment maintenance skills from Chinese masters. Their children attended the village school built by the Chinese enterprise. Unlike the Americans and Belgians who came and went before——even if the Chinese left in the future, her husband would have a skill.
And with the children receiving an education, perhaps one day, they could leave these continuous mountains.
A company from thousands of miles away coming to help her hometown achieve sustainable development was something she had never experienced before.
Only on some of the foggiest nights would Jacquie wake up startled. Some things made her uneasy.
Once, a few unfamiliar faces came to Mayeba village, asking the villagers some strange questions——had the arrival of the Chinese enterprise affected the villagers' lives? Had the Chinese enterprise damaged the surrounding environment?
Someone told her that these people were from an NGO organization.
Sometimes, it's the local rumors about the Chinese. Some say that the Chinese are driving down the price of ore, and these excessively low prices are plundering the Democratic Republic of the Congo (DRC).
Sometimes, it's the unambitious compatriots. Near the TFM mine, not far from the KFM mine, some outsiders, upon hearing that a Chinese company is going to develop the land there, immediately bring their families and quickly build a few "houses" with thatch, waiting for "demolition compensation."
But what Jacquie feared the most still happened.
Just as everything was booming, the business environment for Chinese mining companies in the DRC suddenly deteriorated.
In July 2022, the DRC government banned the export of products from the TFM mine, causing hundreds of thousands of tons of products to pile up in the mining area.
The TFM and KFM mines are not far apart. Jacquie knew that for almost a whole year, the TFM mine had no income. Although all the DRC workers still received their salaries from the Chinese companies as usual, and the Chinese investment in community construction continued, the Chinese couldn't possibly be there for charity——life had finally started to improve, but what if the Chinese couldn't hold on and left?
All of this left Jacquie feeling confused——in the past, generations of people living at the foot of the gold mountain were poor. Now, the green hills of Africa have never changed, but it was only after the Chinese arrived that the rare ores were truly converted into hospitals and schools, roads and electricity on this land, and for the first time, her life was tangibly changed.
What has blinded people's eyes?
02 The Secret of the Green Hills: What Kind of Africa Is It?
Today, rather than saying that Chinese mining companies "globally searching for mines" are facing a complex Africa, it is more accurate to say that Chinese companies and the people of the DRC, like Jacquie, who are eager for development, are jointly facing a complex Africa.
Its scars were never caused by China. But when you approach it, you have to bear its suffering and weight, navigate its schemes and cunning. And those who have scarred it are still creating fog, trying to blind it again——slowing down the steps of you and it moving forward hand in hand.
Africa's vastness and diligence are composed of countless workers like Jacquie. This is also the true underlying color of the African continent.
In 2016, when Jacquie's family was still making a living by producing charcoal, Chinese geological expert Zhang Li happened to pass by the TFM mine.
He had long heard of this world-class cobalt mine, but the moment he saw T mine, Zhang Li's heart began to race. It was a color that the most advanced printers in the world could not replicate, with the malachite-like mountain body shimmering under the dazzling sunlight. The green parts flashing within the mountain were the highest grade of copper, and the blue parts were the highest grade of cobalt. Like a swordsman encountering a treasured sword or a wine lover finding a fine wine, Zhang Li had never envied the Americans who owned the mine more than at that moment—"I was absolutely green with envy!"
A few days later, Zhang Li heard a shocking piece of news: a Chinese mining company had acquired the TFM mine from the Americans.
He noticed the name of the company for the first time: China Molybdenum Co., Ltd. (CMOC).
source: China Molybdenum Co., Ltd.
Between 2016 and 2020, China Molybdenum Co., Ltd. (CMOC) successively acquired the TFM and KFM mines from Freeport-McMoRan.
In February 2021, Zhang Li returned to Lubumbashi, and the mountain lay before him once again. This time, Zhang Li's role was as the Chief Construction Officer of TFM for China Molybdenum Co., Ltd. (CMOC), and his mission was to further awaken this sleeping giant in Central Africa—the development of the TFM mixed ore.
Today, with the joint efforts of the people of Central Africa, and with the awakening of the mine, the whole world can see—Chinese enterprises have carved out new territories among the mountains. From a high vantage point, rows of orderly buildings shine like silver dots and lines on a circuit board under the sunlight.
Above it, the mine is entering an unprecedented phase of efficient production—thanks to the copper and cobalt output from T mine and K mine, China Molybdenum Co., Ltd. (CMOC) surpassed mining giant Glencore for the first time in 2023 to take the top position in the global cobalt industry, and in 2024, it became the largest source of copper growth in the world.
Following Luoyang Molybdenum's arrival on this land, other Chinese mining companies such as China Minmetals, China Nonferrous Metal Mining Group, Jinchuan Group, and Zijin Mining also came. In Zambia, which borders the Democratic Republic of the Congo (DRC), China Nonferrous Metal Mining Group won the bid for the Chambishi Copper Mine in the last century and transformed this nearly abandoned mine under British control into Africa's first digital mine.
However, behind the significant achievements unseen by the world, Chinese enterprises are collectively facing the construction challenges caused by Africa's long-standing poverty and weakness.
No one has the right to say that an African who can walk back and forth dozens of kilometers on dirt roads to find work is "not hardworking," but years of poverty have locked them and their generations in remote and impoverished areas, preventing them from acquiring modern vocational skills. This has led to——
On one hand, Africa's overall employment rate is very low.
On the other hand, multinational companies coming from afar have to face the situation of lacking mature workers.
Moreover, the industrial foundation of this continent is weak——Africa's land area is equivalent to the combined area of China, India, the United States, and most of Europe, but its railway network is not much larger than the combined railways of France and Germany. According to data from the African Development Bank, the total railway mileage in Africa is only 84,000 kilometers, and it is mainly concentrated in North and South Africa——in the DRC, located in Central Africa, all companies coming here have to endure its pitifully low transportation efficiency and scarce supplies.
We checked public information and found that one of the biggest challenges for Chinese companies working in the DRC over the years is "logistics support." For example, Luoyang Molybdenum's TFM and KFM mining areas in Katanga Province, DRC, are far from ports, and the company has to face challenges such as long transportation distances and many uncontrollable factors along the way.
Similarly, when Zijin Mining was constructing the Kolwezi Copper Mine in Katanga Province, all the machinery, construction supplies, and daily necessities for employees had to rely on imports——strikes, delays, and postponements at major African ports like Durban in South Africa are commonplace.
The lack of infrastructure such as roads, railways, and ports also increases the cost of goods transactions between African countries by 30% to 40%.
Those who caused Africa's "resource curse" are trying to shift the blame to China.
During her visit to Africa, U.S. Treasury Secretary Janet Yellen claimed that China "caused the debt crisis in African countries."
What is the actual situation?
Jacquie's children are studying in rural schools built by Chinese companies. One day, they will know the answer to the question.
Before World War II, the conspiracy regarding Africa was public——Africa was the European "blood bag" repeatedly exchanged by colonizers. The borders of the African continent are straight and rigid——not divided by rivers and mountains, but by the Berlin Conference of 1855, in which no Africans participated: Africans of the same ethnicity were divided into different countries, while hostile tribes were deliberately placed together.
Thus, Tanzania "got" gold and diamonds, Zambia "got" copper, and 70% of the world's cobalt mines are in Congo (DRC).
The colonizers came happily, calling this place the Valhalla of hunters. They left satisfied, taking away tin, zinc, silver, nickel, and blood diamonds, leaving Africa impoverished.
After World War II, the wave of national liberation movements around the world forced the conspiracy regarding Africa to become more covert——
In the 1970s, the world entered a new era of neoliberal globalization dominated absolutely by the United States. However, this so-called "globalization" never truly included Africa.
Ethiopian scholar Tegegn Melakou said, "The 40 years of development experience since the 1960s have shown that market globalization has deepened Africa's impoverishment."
He pointed out an overlooked fact——the developmental capabilities of Africans have been consciously stripped away.
On one hand, although it appears that Africa has received financial aid from Europe and the United States in recent decades, they have never truly helped Africa build the basic forces needed for industrialization: education and infrastructure.
For example, the U.S. Congress promised $60 billion in financial support for Africa in 2018. By March 2020, the $8 billion raised by the institution had been spent——all on finance and insurance sectors, not on infrastructure construction.
On the other hand, Africa's debt problem has been longstanding. Most European bonds from developed countries have coupon rates below 2%. However, the ten-year European bonds issued by African countries from 2013 to 2019 had coupon rates ranging from 4% to 10%, laying the groundwork for a new debt crisis. Some African countries can only borrow new debt to repay old debt in the international market.
This is the answer to Jacquie's puzzling question——Why are generations of people poor at the foot of the golden mountain?
Because her country was first exploited by colonizers and then locked for generations into the role of a "resource nation."
Africa's second face is even more complex. Like a capricious beast, its cunning, changeable, and greedy side has shaped the intricate business environment of this land.
The reasons behind all this can also answer Jacquie's other question: Why have minerals never been exchanged for Congo's electricity, hospitals, and schools as they are today?
Because for many years, they were exchanged for offshore shell companies on the dark web, exorbitant intermediary fees for politicians, media mouthpieces, and fragmented tax systems.
For example, the United States once carried out an exclusive layout in Congo (DRC), supporting the puppet Mobutu. Most of the $800 million that the United States lavishly spent on Congo (DRC) ended up in the pockets of then-President Mobutu.
In the words of American writer Adam Hochschild: During the honeymoon period between the United States and Congo (DRC), generals lived lavishly by selling jet fighters, soldiers made a living by setting up roadblocks to collect tolls, and public services for the people were nearly paralyzed.
Another example is that, unlike China's aid to Africa, which is "resource-financed infrastructure" (RFI; also understood as infrastructure in exchange for minerals), the United States' approach is "official development assistance" (ODA): that is, international organizations or developed countries provide concessional loans to developing countries.
The biggest difference between the two is that the U.S. ODA model does not care how Africa's weak infrastructure will digest this huge sum of money. This money-throwing behavior protects "money politics," exacerbating the problem of corruption.
Looking at the long-term perspective, the facts are clear——
It is precisely the chaos and corruption caused by the "cultivation" of some Western countries in Africa over the years that have bred today's rampant illegal mining in Congo (DRC), inefficient logistics checkpoints, huge social disparities between rich and poor, and the resulting security and efficiency issues.
And the mouthpieces and intricate networks of interests they have cultivated also provide some fertile ground for today's lies about China to survive in Africa.
But just like how the poisoner eventually gets poisoned themselves—Europe and America have created a fragile national economy and a complex and deep business environment in Africa, such an Africa, even they themselves can no longer endure—
Since 2012, the financial transaction amount of U.S. FDI in the Democratic Republic of Congo (DRC) has been decreasing year by year. By 2021, the trade volume between the U.S. and Africa had shrunk to a low level of $64 billion.
At the corporate level, in 2016, due to multiple reasons including Freeport-McMoRan's failure in the oil sector and the inability of American companies to expand production capacity in the unique environment of the DRC—TFM was put on the shelf by the U.S. Four years later, Freeport-McMoRan sold KFM again.
In November 2021, a long report led by three-time Pulitzer Prize winner Eric Lipton was published in The New York Times, telling the story of China Molybdenum's acquisition of TFM.
In the report, then Freeport-McMoRan President Kathleen L. Quirk said, "Their (China Molybdenum's) actions were faster than anyone else's."
It can be said that the transfer of two world-class copper-cobalt mines in the DRC between Chinese and American companies was not only due to the courage and vision of Chinese companies but also because:
On the African chessboard, the U.S. has always been shortsighted—when it deemed the place no longer valuable, it treated the devastated Congo as a discarded pawn.
But this time, the Americans misjudged two futures.
While Trump proposed to "revitalize American oil and suppress the development of clean energy," in 2016, China's new energy vehicle industry reached a critical turning point:
On December 31, 2016, the Chinese government launched a new round of subsidy policies, starting targeted support for ternary lithium—CATL almost soared to the sky. Cobalt is an important raw material for ternary lithium batteries, and the DRC holds 50% of the world's total cobalt reserves and accounts for 70% of the production.
After that, the entire Chinese new energy vehicle industry, from downstream new energy vehicles to midstream lithium batteries, accelerated its explosion.
This means that the U.S. missed the first move in the electric vehicle field and misjudged the strategic importance of cobalt mines in the DRC.
The second point is the capability and determination of Chinese enterprises to continue globalization and move forward hand in hand with the African people.
In the Democratic Republic of the Congo (DRC), the development and construction of the TFM mixed mine is a highly challenging super project. During the period when it was managed by the American company Freeport, the TFM mine had only one production line for many years.
After Luoyang Molybdenum took over, they established a large logistics system capable of handling 600,000 tons of copper and 100,000 tons of cobalt—this "Africa-customized" logistics system can be replicated in more developing countries and regions in the future.
At the same time, the company provided employees and contractors with skills training such as forklift operation, language training, and high-risk operations. The KFM mining area also launched a mentorship program.
● In 2023, the total number of employees and contractors who received various types of training at TFM reached 16,786, accounting for 99% of the total number.
● In 2023, KFM achieved 100% employee training.
What the Americans couldn't achieve, Chinese enterprises accomplished with significant financial and human resources—all actions pointed to one goal: to cultivate a local talent pool in the DRC.
On the last day of June 2024, the TFM East Area of Luoyang Molybdenum reached its production capacity and standards, marking the full completion of five production lines—currently, TFM has an annual production capacity of 450,000 tons of copper and 37,000 tons of cobalt, ranking among the top five copper mines and the second-largest cobalt mine in the world.
KFM has an annual production capacity of over 150,000 tons of copper and 50,000 tons of cobalt—making it the world's largest cobalt mine.
As the TFM mining area continues to expand its production capacity, it has driven further aggregation and expansion of the upstream and downstream industrial and supply chains. Coupled with the effective implementation of ESG projects, by 2023, the population of the TFM mining area had exceeded 400,000, an increase of about eight times over 17 years. A large number of migrants have come here, seeking livelihoods and opportunities for economic development.
KFM has become the star company in Lualaba Province, bringing enough job opportunities and offering wages higher than the local average.
We have achieved the first phase of victory in this difficult construction.
Americans, upon realizing this, began to rethink their strategies——The U.S. cannot accept losing control over the African energy chessboard and is using both overt and covert means to try to hinder the globalization of Chinese enterprises——From "Chinese enterprises monopolizing African mines" to "Chinese enterprises driving down cobalt prices" and "low cobalt prices harming Africa's interests," lies are being custom-made to assist their re-entry into Africa.
This is the third reality that Chinese mining companies in Africa have to face today.
The first rope from the U.S. is overt. It tightens more and more with the Sino-American trade war.
The second rope is covert, more cunning and hidden. Its main battlefield is in the realm of public opinion——the smear campaign against Chinese enterprises is ever-changing, but at its core, it is a high-intensity repetition at any place and any time:
"China has overcapacity."
In the mining sector, this morphs into an illogical cold arrow——"Chinese enterprises are creating oversupply, driving down ore prices."
Today, whichever industry is leading the way, the "overcapacity" rhetoric targeting various links of that industry chain will appear first.
In this context, the most excellent and globally steady enterprises in today's advantageous Chinese industries will be the first to be attacked.
In 2023, China Molybdenum Co., Ltd. surpassed global mining giant Glencore to become the world's largest cobalt producer. The rhetoric of the new cobalt king "driving down cobalt prices" immediately followed.
In May 2024, an American news agency reported that Chinese mining companies were driving down cobalt prices, which would exploit the production site (Democratic Republic of Congo). In the report, U.S. Deputy Secretary of State Jose Fernandez said, "China Molybdenum is driving cobalt oversupply," and as a result, "keeping cobalt prices persistently low." Such prices would harm the interests of the Democratic Republic of Congo.
It is well known that the price of cobalt cannot be determined by a single company and that cobalt prices are cyclical. Its fundamentals are mainly determined by supply and demand. Fernandez's remarks were so outrageous that even Bloomberg, which interviewed him, cited the International Cobalt Association's completely opposite view in the same article:
"With the growth in demand for electric vehicles, the demand for cobalt will also surge, and cobalt prices are expected to rise within a decade."
Some forces are stirring in Africa, not truly caring about Africa, nor about the achievements jointly made by the people of China and Africa. Instead, they are fabricating lies to blind Africa's eyes.
Jacquie's concern about "TFM products being banned from export" (also known as the "royalty" incident) — according to reports from Africa Intelligence and other related media, the shadow of the United States is not absent. Shortly before the incident, the U.S. Treasury Secretary and the President's investment advisor expressed willingness to help the Democratic Republic of Congo renegotiate mining contracts with China.
This is the situation that Chinese enterprises in Africa are facing today.
It can be confirmed that in the future, absurd claims like "Chinese enterprises' overcapacity" and "Chinese enterprises driving down cobalt prices" will still appear from time to time — they are part of a whole set of tactics paired with the "trade war," targeting China's advantageous industries and the most stable Chinese multinational enterprises.
So, in such a complex and difficult situation, what supports Chinese mining companies in achieving dazzling results? And what gives us the confidence to continue moving towards vast lands?
03 The Rainy Season No Longer Comes
In the Democratic Republic of Congo, people who come from afar fear two times the most.
One is the long rainy season each year. The Democratic Republic of Congo has only two seasons throughout the year: dry and rainy. The dry season lasts from May to October, with pleasant temperatures and limited impact on construction. However, the continuous months of the rainy season severely affect the construction pace.
During the construction of Luoyang Molybdenum's KFM, the rainy season is a hurdle that must be overcome: either by closely monitoring weather forecasts and seizing the opportunity to work when the rain subsides, or by shifting tasks that can be moved indoors to be completed inside.
Secondly, the dawn in Congo (DRC) is like water. In the mining area, work and life have long been intertwined, making it hard to distinguish between the two. During the day, the soul is safe, and the intense and orderly work leaves you no time for anything else. Dusk is also safe; the sunset and mountains in Central Africa are more vivid than anywhere else, and their magnificent beauty soothes the heart of every wanderer.
But if you wake up at dawn and see the boundless night outside the window, the complications of long-term expatriation may intermittently flare up.
Some say that seeing friends and family back home eating and drinking together on social media made them so jealous that they cried on the spot.
A Chinese executive who went to Africa told me that upon hearing the news of a seriously ill relative thousands of miles away, he rushed home without eating or sleeping for two days, "but couldn't make it in time to see them one last time..." He lit a cigarette and said no more.
According to S&P's estimated average mine construction time, a super-large project like TFM mixed ore would take about five years. Based on publicly available information, Luoyang Molybdenum has halved this time. Even Africa's rainy season did not affect its rapid rise.
If it were merely about pursuing numbers, people far from home wouldn't strive so hard. Such high-intensity, self-demanding work might last a month or a quarter, but it's hard to sustain it for years. There must be something else supporting people. The only thing that can compensate for one emotion is another emotion.
Zhang Li said, "Anyway, we have pushed this project forward through thick and thin to this day."
Today, the global expedition of Chinese mining companies has brought long-term benefits to the motherland, to Congo (DRC), and to the global energy industry. It provides better material returns and supports those with a global vision to overcome mountains and valleys.
For China, the globalization of Chinese mining companies is ensuring the resource security of strategic minerals like copper and cobalt.
China's dependence on foreign sources for 12 strategic mineral resources exceeds 70% overall, largely because the ore grades within China are relatively low.
The cobalt grades of the two world-class copper-cobalt mines, TFM and KFM, are 0.25% and 0.99% respectively, far higher than the industry average.
Let's look at cobalt first. For a long period, Chinese cobalt was caught between "1%" reserves and "83%" demand.
The smooth development of multiple industries such as new energy has increased China's dependence on foreign cobalt from 83% in 2016 to 98.5% in 2022. However, the urgent demand and the almost non-existent domestic supply have led to China having no voice in the global cobalt product trade.
Now, in 2023, TFM's cobalt production is 21,700 tons. In the same year, KFM's cobalt production is 33,900 tons.
Luoyang Molybdenum has surpassed global mining giant Glencore to become the world's largest cobalt producer and a major member of the Cobalt Institute.
The situation with copper is similar to that of cobalt. China is both the world's largest copper consumer and extremely short of copper.
In 2023, China's refined copper consumption was 15.22 million tons, a year-on-year increase of 4.5%; among which, the consumption proportions of refined copper in the power, home appliances, and mechanical and electronic fields were 46.3%, 13.9%, and 8.3% respectively.
China's copper demand will continue to grow in the future, mainly driven by the development of industries such as new energy vehicles, AI, home appliances, and new energy facilities and equipment.
In 2023, TFM's copper metal production was 280,300 tons, and KFM's copper metal production was 113,700 tons. In 2024, the combined copper production of TFM and KFM will reach 600,000 tons.
This all means——
1. Chinese mining companies have basically taken the first step of "global mining exploration" steadily, changing the situation of low reserves and grades of Chinese cobalt and copper mines.
2. It has deepened the binding of China's new energy downstream and upstream resource ends.
Looking solely at the cobalt industry chain, upstream cobalt production capacity is beginning to concentrate among Chinese enterprises, and downstream demand is also concentrated in China. The data from the International Cobalt Association makes this even more apparent——
Cobalt is typically extracted from copper mines, and this light gray metal is an indispensable raw material for the batteries required by new energy vehicles and 3C products. New energy vehicles are its largest downstream super terminal.
In terms of the regional distribution of refined cobalt production:
● From 2001 to 2021, China's share increased from 4% to 77%, and it is expected to further reach 80% by 2025.
● During the same period, the share of Europe, the US, and Japan decreased from 65% in 2001 to 21% in 2021, and it is expected to further drop to 14.3% by 2025.
In 2023, the US accounted for only 0.3% of the global mined cobalt supply and had no refining capacity. The outlook for 2030 remains similar, with very few ongoing project developments.
In terms of the regional composition of refined cobalt consumption:
● From 2001 to 2021, China's share increased from 13% to 67%, and it is expected to further reach 70% by 2025.
● During the same period, the share of Europe, the US, and Japan decreased from 87% in 2001 to 33% in 2021, and it is expected to further drop to 30% by 2025.
China's past lack of bargaining power in global cobalt product transactions will also change.
For the Democratic Republic of the Congo (DRC), with the construction of Luoyang Molybdenum's KFM and TFM, this African country is truly integrating into the center of globalization for the first time:
The DRC's market supply capacity is rapidly increasing——in 2023, the DRC accounted for 76% of global cobalt production, playing a crucial role in the international market.
The Democratic Republic of the Congo (DRC) has shared the immense benefits brought by clean energy. According to the latest data from the Central Bank of the DRC, as of the end of April 2024, the DRC's exports amounted to $12.563 billion, imports were $11.174 billion, and the trade surplus was $1.389 billion. The DRC's trade with the rest of the world increased by 21.27% year-on-year, compared to 12.84% in the same period of 2023.
By 2023, the population of the TFM mining area had grown from tens of thousands in 2006 to over 400,000. The nights in Fungurume Town are no longer illuminated only by moonlight but have become as brightly lit as many European towns.
The Jacquie family living near KFM has built a brick house and can afford a small motorcycle for commuting.
For the world, a different kind of "globalization" is on the rise.
For a long time, developing countries have stopped exporting ideologies, which once firmly tied the definition of "globalization" to the chariot driven by the Statue of Liberty.
It was accompanied by a stratified "globalization" over the past few decades:
The core, the United States, sets credit and rules.
The second tier, countries like Europe and Japan, provide intellectual labor.
The third tier countries provide physical labor.
The African continent was firmly locked in the outermost layer, supplying various raw materials.
However, with the export product structure represented by Chinese new energy vehicles becoming increasingly similar to that of Europe and Japan, this decades-long structure is being broken, and more developing countries are seeing new choices.
In this context, companies in China's advantageous industries naturally attract talents from around the world and engage in free trade globally. The globalization of China's new energy industry is a simultaneous "export" and "going abroad" of a vast industrial forest, from downstream large-end new energy vehicles to midstream lithium batteries and upstream mining companies.
Mining companies are somewhat different in this forest——
First, the distribution of minerals worldwide is uneven, and humanity has never stopped exploring the world's treasures. "Globalization" is in the genes of this ancient industry.
Secondly, no matter how the information industry makes the world "flat," some businesses cannot be offshored, with mining being a prime example.
Therefore, all mining companies engage in "global mining," be it Freeport in the United States, Glencore in Switzerland, or China Molybdenum Co., Ltd. (CMOC). This is a purely commercial activity.
The unique aspect of Chinese companies' globalization lies in the pursuit of profit while always embodying a moral pursuit.
Alongside CMOC in Congo (DRC), there are China Railway Group Limited, China Sichuan Railway Investment Group, China 15th Metallurgical Construction Group, China Three Gorges Corporation, etc. Chinese enterprises have undertaken projects in Congo (DRC) such as the People's Palace, stadiums, rice technology promotion stations, Kinshasa General Hospital, and Lubumbashi General Hospital.
On a larger African scale, the Congo (DRC) Mantené-Chela-Singamki Road Rehabilitation Project by China Water Resources and Hydropower successfully launched last year. The Busanga Hydropower Station in Congo (DRC), invested and constructed by China Railway Resources, silently fulfills China's promise of bringing green mountains and clear waters to Africa.
Therefore, "de-globalization" has never been our path, nor have we ever engaged in "non-free trade." Today, if anyone views a global Chinese enterprise with prejudice, they are the ones violating free trade and opposing globalization.
Today, anyone hindering the mutual benefit and win-win cooperation between Chinese enterprises and Africa, and the shared dividends of the clean energy era, is the one opposing free trade and globalization.
Understanding this is crucial to confidently and steadfastly pursuing the globalization path of Chinese enterprises in a tumultuous environment.
04 The Dragon's Footsteps
There is an old Spanish proverb: "Its value is equal to a Potosí."
But "Potosí" is not in Europe; it is located in distant South America. Centuries ago, the silver mines of Bolivia made Potosí the wealthiest city-state of its time. However, after the Spanish plunder, Potosí had nothing left to offer.
By the 1970s, Uruguayan author Galeano described the fragile infrastructure of Latin America as follows:
“Brazil has no permanent land transportation with its three neighboring countries, Colombia, Peru, and Venezuela. There are no direct cable communication lines between cities on the Atlantic coast and cities on the Pacific coast. Therefore, making a phone call between Buenos Aires and Lima or between Rio de Janeiro and Bogotá inevitably has to go through New York. The same is true for telephone communications between the Caribbean and South America.”
Today, Bolivia's lithium salt lakes are becoming a new variable affecting the global supply pattern of lithium resources. Bolivia, Chile, and Argentina form the South American "Lithium Triangle."
Bolivia: 23 million tons of reserves
Argentina: 20 million tons of reserves
Chile: 11 million tons of reserves
When Chinese mining companies set foot in the deep mountains of South America, we are facing challenges as complex as those on the African continent. For example, Bolivia, which was once colonized, has not established its own industrial system for many years, which means——
1, Like Africa, Bolivia lacks the infrastructure and various supporting facilities necessary for mining.
2, Bolivia has not forgotten the tears of Potosí, and people have sensitive and cautious emotions towards foreign mineral developers.
In other words, in the new energy era, the globalization expedition of Chinese mining companies will inevitably face the complex situation caused by the "unethical behavior" of some Western countries for a long time to come.
But the steps of Chinese companies remain steady——including the acquisition of the world-class Las Bambas copper mine in Peru from Glencore by China Minmetals in 2015, and the acquisition of the development rights for the giant Uyuni and Oruro salt lake lithium mines in Bolivia by China Molybdenum and CATL in 2023.
In addition to the strength of the companies themselves, the following three advantages support Chinese mining companies to travel the world——
1, The driving force from the upgrading of the downstream new energy industry.
2, The combined strength of Chinese manufacturing in infrastructure and talent.
3, The call from many developing countries to truly integrate into "globalization"——all "peripheral resource-based" countries with weak industrial foundations need win-win cooperation from the world's largest developing country.
source: CMOC
The seating arrangement at the new energy industry table has changed.
In the past, the core of the supply chain was closer to coal and oil, and at that time, China was still a latecomer in the related industries.
Today, as humanity enters the green energy era, the core of the supply chain is shifting to places closer to key minerals. China's new energy industry is beginning to lead the world.
Take CMOC's global mineral exploration history as an example, and you will find that it is quite in sync with the development of China's new energy vehicle industry——
The huge market demand from China is the driving force and guarantee for today's Chinese mining companies' expeditions. This gives Chinese companies an irreplaceable position in the supply chain.
The efficient production capacity of Chinese mining companies not only supplies the domestic market but also meets the needs of energy industry transformation worldwide. The cost of excluding China from the key mineral supply chain is extremely high.
source: CMOC
The technological innovation of Chinese mining companies and the synergy of the upstream and downstream of the industrial chain are also helping Chinese mining companies to navigate through cycles. Let's take cobalt, which has recently entered a period of low prices, as an example to see how Chinese companies ensure strong financial support for global mineral exploration regardless of the cycle.
A quick look at cobalt prices over the past 50 years
The current global decline in cobalt prices is mainly due to the supply side. The supply of cobalt has been continuously increasing, with rising production from the Democratic Republic of Congo (DRC) and increased cobalt production from Indonesia (Indonesia's cobalt supply increased by over 200% year-on-year in 2022).
According to the 2023 annual report of China Molybdenum Co., Ltd. (CMOC), despite cobalt prices entering a relatively low-price cycle, the gross profit margin of the company's cobalt products alone is still 37.01%. Meanwhile, CMOC's 2024 semi-annual report shows a net profit attributable to shareholders of 5.417 billion yuan, a year-on-year increase of 670.43%.
One reason is the continuous rise in copper prices (cobalt is a by-product of copper). In 2023, the revenue from CMOC's standalone copper business in the DRC was 24.595 billion yuan, and the revenue from the cobalt business was 3.406 billion yuan.
Secondly, the company adheres to technological innovation and strategic vision.
For example, the average copper grade of China's largest copper mine, Julong Copper Mine, is 0.32%, while the average copper grade of the TFM mine is 2.84%, a nearly tenfold difference. This highlights the gap between domestic resources in China and world-class resources. CMOC often uses the term "exhaustive extraction", meaning using technological innovation to extract all resources from the ore and turn "waste" into "gold." The long-term experience of mining low-grade and difficult-to-process ores has honed the ability of Chinese mining companies in "low-cost development and lean production." Once this ability is replicated to world-class resources like T and K mines, it is essentially a dimensionality reduction attack.
At the same time, Luoyang Molybdenum has the first digital mining system in China, the first intelligent remote-controlled open-pit mining production line, the first green pure electric mining truck and pure electric unmanned truck, and the first 5G unmanned smart mine. One person can drive 15 unmanned mining trucks from Luoyang Molybdenum, saving costs of over 50 million yuan.
Chinese companies have also come up with vertical integration solutions for the industry chain, achieving indirect equity holdings in multiple overseas cobalt mines. For example, CATL acquired a 23.75% stake in Luoyang Molybdenum's TFM copper-cobalt mine. This allows the downstream and upstream industries of cobalt to benefit individually while sharing risks.
source: Luoyang Molybdenum
In the long run, cobalt will still face shortages. Cobalt prices will rise.
The International Cobalt Association predicts that by 2030, cobalt demand will more than double from 2023 levels. The cobalt market size will also double, with 95% of the growth coming from battery applications—global battery cobalt demand will grow nearly fourfold.
Currently, the United States has almost lost all its cobalt mines, and the domestic demand for cobalt in the U.S. is not as robust as in China.
As can be seen from the above image, in 2023, new energy vehicles are the biggest growth driver for cobalt, and batteries are the main downstream sector for cobalt. According to Benchmark Mineral Intelligence data, power batteries account for about 40%, consumer batteries about 30%, and high-temperature alloys about 9%.
In the field of power batteries, China has been the world's largest lithium battery consumption market for five consecutive years. China has formed a complete upstream and downstream battery chain, with China's battery anode and cathode materials and battery production capacity accounting for 70% or even higher globally.
The lithium battery industry in Europe and the United States is still in urgent need of support from Chinese enterprises (you can click on the old article "The European Poverty Alleviation Path of Chinese Enterprises: The Common Prosperity of New Energy is Not That Simple").
This means that despite the efforts of people like Fernandez to create public opinion for American companies to return to Africa, they are unable to truly motivate their companies to venture to the distant continent.
Finally, the efficiency brought by the collective efforts of Chinese manufacturing in mine construction also makes it more difficult for American companies to compete with Chinese companies in terms of cost-effectiveness.
Behind the "Chinese speed" of mines, we cannot ignore the contributions of Chinese brother units responsible for civil engineering in mining areas, such as Sichuan Railway, China Railway 9th Bureau, and China 15th Metallurgical. This is also accompanied by the increasing presence of Chinese railway design standards and power design standards in Africa.
05 Hi, Bro
Dar es Salaam, the western suburbs of the city. Passersby often stop at a cemetery here.
70 Chinese engineers rest in peace here.
In front of it, the rhetoric that "the Chinese are aiding Africa for the sake of mines" seems so ridiculous——Chinese enterprises and Chinese experts came to Africa long before they knew there were gold mines.
In the 1960s, Tanzania and Zambia wanted to build a railway. For many years, the roads and transportation built by colonizers in Africa were for their own convenience——there was not a single railway that could link the people.
China provided a 30-year interest-free loan for the construction of the Tanzania-Zambia Railway, with no political conditions attached.
Today, some people naturally attribute the globalization journey of leading enterprises in China's advantageous industries and China's aid to Africa to competition with the United States for "critical minerals"——but in the face of the ironclad facts of the Tanzania-Zambia Railway, such slander only exposes the lack of imagination on the other side:
A social Darwinist who believes in the winner-takes-all philosophy cannot imagine that there really exists a kind of idealism in this world——whether poor or strong, China has always been developing friendships with the people of the world.
American scholar Deborah Brautigam's data on China's aid to Africa also shows that China's aid to Africa is distributed fairly evenly (according to population proportion and development level) to the vast majority of countries, with no linear relationship found between these countries' resource richness.
Today, six decades later, the turning point in the TFM royalty incident is that workers from the TFM mining area in Congo (DRC) went to the provincial government to stage a petition and protest, demanding the government lift the export ban on Chinese companies.
Fred M'membe, leader of the Socialist Party of Zambia, said, "A lie can travel halfway around the world while the truth is still putting on its shoes. But in the long run, the victory will belong to the truth because lies cannot gain the support of the masses."
As Chinese companies are increasingly winning the hearts of the local people in Africa—this time, the United States, which has always followed the ODA model, claims it will also build infrastructure in Africa.
Last year, the United States announced a new project—to build a railway that can connect Angola, Zambia, and Tanzania. But for now, the promise looks like "yet another new pie in the sky."
On one hand, there is already such a railway from Angola to Tanzania, which is the Angolan Railway, designed and constructed entirely using Chinese railway construction standards.
On the other hand, the United States is unlikely to adopt China's RFI model—the U.S.'s infrastructure capabilities are barely adequate to cover its own territory, let alone overseas infrastructure projects.
Over the past years, U.S. industrial infrastructure has been neglected due to low revenue margins. According to the latest data from the American Society of Civil Engineers, U.S. infrastructure investment accounts for 2.6% of GDP, while the global average is 3.8% of GDP.
In terms of ground transportation alone, there is an investment gap of $1.125 trillion in U.S. infrastructure, resulting in 17% of U.S. national highways not being expanded in a timely manner. Even if the U.S. genuinely wants to build roads in Africa, it is unlikely to gather a construction team to go to Africa.
Regarding such actions by the United States, African elites have this to say—
Fred M'membe, leader of the Socialist Party of Zambia, said, "The West keeps talking about China in Africa every day, but China has never colonized us."
Kwesi Pratt, convenor of the Socialist Movement of Ghana, said, "Some people want to put Africa back on the chopping block, but now they find that there is China. We didn't have a choice before, but now we do."
On the land of Africa, China offers more than just superficial slogans:
A single hydropower station built by China in Africa can save tens of thousands of tons of standard coal; the 220kV LOT2.3 section L61/64 double-circuit transmission line in Lualaba Province to Haut-Katanga Province in Congo (DRC), constructed by PowerChina, achieved power transmission last year, alleviating the power shortage for the TFM mining area funded by China Molybdenum Co., Ltd. (CMOC). This is a microcosm of Chinese mining enterprises leading upstream and downstream companies to venture into Africa together, and it also helps local people in Congo (DRC) integrate into modern civilization faster.
As more and more Africans receive education and develop sustainable skills, no one can easily manipulate public opinion on this continent, and no one can cover Africa's eyes and mouth anymore.
Voices like Manbe's will be known to more Africans. The heartfelt voices of ordinary people like Jacquie in Congo (DRC) will be heard by the world.
Epilogue: Crossing the Green Mountains with You
"Ignorance" and "barbarism" are merely superficial labels for Africa, and only countries that have been similarly misunderstood can see its essence——
Africa is the continent with the highest concentration of developing countries.
Once people have the opportunity to learn and develop, enormous potential will burst forth. By 2050, the population of sub-Saharan Africa could reach 2.094 billion, twice the combined population of Europe, the United States, and Canada at that time.
Today, global mining enterprises like CMOC, which are at the forefront of globalization, have paved the way in Africa. The talent teams they have cultivated and the large logistics systems they have established in Africa have opened a new starting point for those who come to this continent later.
As for Africa, in the past, its elites always spoke French or English. This is because Europe and America started early in cultivating indigenous elites, imprinting Western cultural norms on their foreheads. But China does not follow this approach. What we do are just small, manageable tasks in the era of clean energy. For instance, we built a 141.5-meter-high concrete dam in the Busanga Gorge of Congo (DRC), and efficiently constructed and put into operation the TFM and KFM mines in Congo (DRC). Today, the population of the TFM mining area has exceeded 400,000: a single Chinese enterprise has supported the livelihood of hundreds of thousands of Africans.
Finally, we saw an interesting little story on the Luoyang Molybdenum Industry's official WeChat account: it is about how today's African elites view China.
Michel, the senior legal advisor of KFM, has been working on the KFM project for 20 years. In 2003, young Michel witnessed the KFM project obtaining its exploration license and joined the KFM company at its inception by Freeport in 2004. From that moment, this optimistic young man looked forward to the development of this treasure, hoping it would bring his hometown into the torrent of modernization.
But the K mine seemed forgotten. After nearly 20 years of long waiting, Michel finally saw KFM break ground, with a modern mining enterprise rising from the vast forest within two years. For Michel, now middle-aged, the K mine is like a child growing up before his eyes, taking on increasing responsibilities and bringing increasingly rich returns to his country and hometown. Michel passionately involved himself in handling K mine's external legal relations, quietly safeguarding its security. In his interactions with the Chinese, Michel was always curious about why they possessed such powerful strength.
He found the answer on his first trip to China.
After the 2024 Spring Festival, Luoyang Molybdenum Industry organized a trip to China for outstanding overseas employees. From Shanghai to Beijing, Michel admired the bustling night view of the Pujiang River, experienced the speed of high-speed trains, witnessed the rapid development achievements of China over decades, and personally touched the ancient bricks of the Great Wall. Michel felt a deeper spiritual connection with the Chinese people.
"In their work, Chinese people always do what they say and achieve what they aim for. When they want to achieve a goal, that goal is sure to be realized. When they decide to do something, they never back down." This determination drives everyone to passionately challenge the impossible, turning Mission: Impossible into Mission: Possible.
"The trip to China made me deeply respect the Chinese people. This nation is diligent and tenacious, and they always keep their promises. I believe this is the model for Congo (DRC) and the model for the future."
A distant country established an independent industrial system in less than a century, then underwent significant industrial upgrades, from trading shirts for airplanes to exporting high-tech value-added industrial products. This is almost akin to a miracle.
Now, this miracle has come to the land of Africa. It helps the people of this land together, crossing the mountains that have nurtured them for generations, moving towards a higher and farther direction.
