The European Union has announced an initial investment of €50m in the Democratic Republic of Congo’s critical minerals sector and infrastructure projects.
The funding was announced at the first-ever Kinshasa Economic Forum, which brought together the DRC, the EU, and France.
French President Emmanuel Macron attended the forum alongside the European Commissioners for internal market and international partnerships Thierry Breton and Jutta Urpilainen, and more than 50 French company CEOs.
The investment in the DRC’s geological mapping, urban infrastructure, and digital education projects is part of the EU’s Global Gateway initiative, which aims to counterbalance China’s Belt and Road Initiative.
Half of the $300bn budget made available for the initiative is intended for African countries for key infrastructure projects, as well as investment in the energy and productive sectors.
EU eyes DRC’s critical minerals potential
Despite holding an estimated €22.6 trillion worth of untapped raw materials reserves, including almost half of the world’s largest cobalt reserves, the DRC largely remains a raw minerals exporter. In 2019, 84% of the DRC’s cobalt exports went to China.
EU Commissioner for International Partnerships, Jutti Urpilainen, stressed that partnerships with DRC “must be about more than just mining” and called for a win-win partnership that builds the entire value chain, promoting processing, refining, and manufacturing in the DRC.
But Urpilainen also argued that “peace and stability are preconditions for sustainable development.” The DRC is involved in a protracted diplomatic crisis with neighbouring country Rwanda, which Kinshaha accuses of backing DRC-based rebel groups.
Commissioner Breton announced that the EU would release its Critical Raw Minerals Act in mid-March, aimed at securing critical raw materials, including lithium, cobalt, manganese, and rare earths needed for electric vehicles and wind turbines.
DRC’s economy is nonetheless on an upward trajectory, with 6.1% GDP growth in 2022, and is projected to achieve 6.7% this year according to IMF’s latest figures.
Its strategic minerals – essential for the green energy transition – makes it a country with vast investment opportunities. Last November, credit rating agency Moody’s upgraded DRC rating to B3 from Caa1 with a stable outlook as a result of institutional improvements.
The agency nonetheless noted that the country’s “creditworthiness remains constrained by its very low GDP per capita, low competitiveness, still-weak institutions and deteriorating political risk environment.”
