Crucial mining sector and infrastructural projects in the Democratic Republic of the Congo will receive an initial investment of €50 million euros from the European Union
- This is in line with EU’s Essential Raw Minerals Act, which aims to secure crucial raw resources like lithium, cobalt, manganese, and rare earths required for electric vehicles and wind turbines
- DRC’s economy is growing, with 6.1% GDP growth expected in 2022 and 6.7% expected this year, according to the most recent IMF data
The crucial mining sector and infrastructural projects in the Democratic Republic of the Congo will receive an initial investment of €50 million euros from the European Union.
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The investment was revealed at the inaugural Kinshasa Economic Forum, which included representatives from France, the EU, and the DRC.
French President Emmanuel Macron was in attendance together with the European Commissioners for the Internal Market and International Partnerships, Thierry Breton and Jutta Urpilainen, as well as more than 50 CEOs of French companies.
A component of the EU’s Global Gateway programme, which seeks to offset China’s Belt and Road Initiative, is investment in geological mapping, urban infrastructure, and digital education initiatives in the Democratic Republic of the Congo.
EU’s Global Gateway programme, which has a budget of US$300 billion, mostly goes towards vital infrastructure projects in African nations as well as investments in the energy and manufacturing industries.
EU considers DRC’s potential for crucial minerals
Despite having an estimated €22.6 trillion worth of raw materials reserves, including almost half of the world’s largest cobalt reserves, the Democratic Republic of Congo (DRC) primarily exports raw minerals losing out on value addition benefits. China been the largest beneficiary having imported 84% of the DRC’s cobalt exports in 2019.
Jutti Urpilainen, the EU’s Commissioner for International Partnerships, emphasised that collaborations with the DRC “must be about more than just mining” and urged for a win-win partnership that expands the full value chain and encourages refining and manufacturing in the DRC.
Urpilainen, however, asserted that “peace and stability are prerequisites for sustainable development.” The Democratic Republic of the Congo and its neighbour Rwanda are embroiled in a protracted diplomatic dispute over Rwanda’s alleged support for rebel groups operating in the DRC.
The EU’s Essential Raw Minerals Act, which aims to secure crucial raw resources like lithium, cobalt, manganese, and rare earths required for electric vehicles and wind turbines, will be published, according to Commissioner Breton, in mid-March.
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DRC’s economy is growing, with 6.1% GDP growth expected in 2022 and 6.7% expected in 2023, according to the most recent IMF data.
It is a nation with investment potential due to its strategic minerals, which are crucial for the shift to green energy. Due to institutional advancements, credit rating agency Moody’s raised DRC’s rating in November of last year from Caa1 to B3 with a stable outlook.
“Creditworthiness remains hampered by its very low GDP per capita, low competitiveness, still-weak institutions, and deteriorating political risk environment,” the agency noted.
