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(Bloomberg) — The Democratic Republic of Congo will ship copper to Saudi Arabia and the United Arab Emirates through a US-backed partnership with Mercuria Energy Group Ltd., as the Trump administration looks to challenge China’s dominance over the supply of key metals.
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Congo’s state-owned miner Gecamines will provide 50,000 tons of copper cathode via its joint venture with Mercuria, the US International Development Finance Corp. said on Wednesday. DFC, a US government agency, is in talks to finance the new venture, which already agreed to ship 100,000 tons to the US last month.
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“Growing cooperation between the US and the DRC ensures valuable critical minerals are directed to the US and our allies, and strengthens the economic viability of our African partners,” DFC Chief Executive Officer Ben Black said in an emailed statement.
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Mercuria declined to comment on the deal. Gecamines did not immediately respond to a request for comment on Wednesday.
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The US government wanted to support the deal in order to divert the supply flow of key critical minerals away from strategic adversaries like China and to help ensure a reliable source of the metals for the US and its allies, a DFC official said, speaking on the condition of anonymity. Although the deal will help secure more diverse supply chains, it’s still a commercial project that’s seen as yielding a return on the US government’s investment, the official said.
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The announcement comes on the sidelines of an international critical minerals conference in Washington on Wednesday, and extreme volatility in metals markets as countries and traders look to ensure future access to minerals used in technology, energy and defense.
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Chinese producers currently dominate the mining and processing of Congo’s copper and cobalt.
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The agreement also shows the unusual avenues the Trump administration is willing to pursue in order to reduce dependence on China. DFC’s Black has vowed to take on projects normally considered too risky for the US government, and supporting the export of Congo’s minerals to Middle Eastern allies shows investors how far outside its comfort zone the administration is willing to go.
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Congo, the world’s second-biggest copper producer and home to the richest deposits of the battery mineral cobalt, has offered the US access to mining and infrastructure projects in exchange for support to quell a rebellion in the east of the country backed by neighboring Rwanda.
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—With assistance from Joe Deaux and Archie Hunter.
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English (US)