August 2023
Critical Minerals and Routes to Diversification in
Africa: Opportunities for diversification into
Mobile Phone Technologies - The Case of
Democratic Republic of Congo
Antonio Andreonia,b and Elvis Avenyob
aSOAS University of London, United Kingdom
bUniversity of Johannesburg, South Africa
Background paper commissioned by the
UNCTAD secretariat for the 2023 edition of
the Economic Development in Africa Report
Abstract
This paper develops a framework that maps the global mobile phone technologies value chain
and analyses how the Democratic Republic of the Congo (DRC) can potentially leverage its
mineral resources to localise and capture value within mobile phone technologies technologies,
including leading the building of regional value chains in Africa. In doing this, we develop an
in-depth country case study and highlights DRC’s specific routes to diversification and
technological deepening, including opportunities for regional coordination and industrial
development. The industrial policy lessons for productive transformation across Africa are
discussed based on the empirical and sectoral-specific case studies.
The findings, interpretations and conclusions expressed herein are those of the author and do not necessarily
reflect the views of the UNCTAD secretariat or its member States. The designations employed and the
presentation of material do not imply the expression of any opinion on the part of the United Nations concerning
the legal status of any country, territory, city or area, or of authorities, or concerning the delimitation of its
frontiers or boundaries. This paper has not been formally edited.
Acknowledgement: We are grateful to Anja Slany and Habiba Ben Barka from UNCTAD for
their invaluable conversations, guidance, and feedback in drafting the background papers. We
also thank Gideon Ndubuisi and Rex Asiama for their insightful contributions and assistance
in developing several parts of this paper.
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Contents
1. Introduction ........................................................................................................................... 3
2. Critical minerals in DRC ....................................................................................................... 5
3. Pivot for industrial diversification and technological deepening in the DRC ................... 7
3.1 Diversification route 1: Precursors industry development ......................................... 7
3.2 Diversification route 2 : Mobile phone technologies .................................................. 9
4. Concluding remarks and policy direction .......................................................................... 14
References .................................................................................................................................... 15
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1. Introduction
The Democratic Republic of Congo (DRC) is a vast country with an enormous wealth of
biodiversity and natural resources, including critical minerals. Notwithstanding, over the last
decades, continuous conflicts have dramatically affected the country’s development trajectory
and many opportunities for structural transformation and diversification have remained
untapped. The Second Congo War, from 1998 to 2003, has left a difficult legacy of violence,
corruption, and human rights abuse, as well as the dominance of exploitative practices in a
largely underdeveloped and informal economy.
Despite, relative economic improvements over the last decade, the state’s stability is still fragile
and prone to shocks (Institute for Economics & Peace 2017). As a result, when we look at the
domestic value addition by sectors of the economy (figure 1 below), and their levels of GVC
integration, we find little progress and limited integration. Apart from financial services,
traditional sectors like textile and garments and those related to mining activities – i.e.,
electrical and machinery – are the only ones have shown some increases in domestic value
addition.
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Figure 1: GVC integration, foreign and domestic value addition, DRC, 2015.
6.0
5.0
4.0
3.0
2.0
1.0
0.0
FVA 2015 DVX 2015 GVC 2015
Source: authors based on EORA
The governance of the mining sector has been weak, and cases from the sector have been often
used as examples of the ‘dark side of mining’ (Marin and Goya, 2021). For example, the mining
of cobalt in DRC has often been relabelled as the “blood diamonds of this decade” (Wilson,
2017). More critically, mineral rents have fuelled conflicts. Illegal armed groups have fought
for control of the mines, exploited widespread artisanal mining, and use profits to fund
armaments and continue conflict (Natural Resources Governance Institute, 2017). Between
2013 and 2017, armed groups were reported to be present at 938 of the 2,150 mine sites
surveyed by the International Peace Information Service (USGS, 2022).
With the advancement in the peace process and stabilisation of the economy, several initiatives
have been put in place to improve the situation in the economy, especially in the mining
sector. However, some of these initiatives face implementation and enforcement problems.
For example, in April 2013, the Government issued a decree that banned the export of cobalt
and copper concentrates to promote domestic downstream processing of cobalt and copper.
Companies were given several rounds of moratorium in recognition of the fact that power
shortages limited downstream processing of concentrates. In December 2017, the National
Assembly approved a new mining code that replaced the 2002 law. Passed in 2018, the law
increased royalties on cobalt, copper, and gold to 3.5% of mining revenues and introduced a
windfall profits tax; the code also increased the Government’s free-carried and non-dilutable
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share in mining projects from 5% to 10% and reduced the guaranteed period for contract
renegotiation from 10 years to 5 years.
The mining sector is a major employer in DRC, especially in copper and cobalt mines.
According to Yager (2022), large-scale mines employed at least 75,572 Congolese nationals in
2015. However, the majority of employers are artisanal miners, which in the diamond mining
sector alone were estimated around 450,000. An additional 100,000 artisanal miners were
estimated to be employed in cobalt mining. Attempts to formalise artisanal mining have been
piloted to improve working conditions and safety standards. In Mutoshi in Lualaba province
in the south of the DRC, formalisation of artisanal mining meant that registered miners who
extract the cobalt with basic tools got access to a mechanically prepared mine site with open
pits where site-safety standards were implemented, among other measures (Baumann-Pauly,
2023).
These improvements are essential for attracting investments in the mining sector and pivot
critical minerals for broader diversification of the economy. Artisanal mining accounts for 15%
to 30% of cobalt production in DRC. The DRC, in turn, provides over 70% of the cobalt used
in rechargeable batteries worldwide. Securing supply chains that meets human rights
standards and transparency has become increasingly important for international companies,
especially after several countries in Europe have enacted legislation requiring companies to
assess their operations for potential human rights violations. In December 2022, the EU
released a new regulation replacing the existing Battery Directive of 2006 and requiring
companies to source battery minerals “responsibly,” which includes conducting human rights
due diligence across their entire value chain.
To further understand the emerging opportunities and challenges for diversification into
mobile phone technologies value chains by the Democratic Republic of the Congo (DRC), the
paper develops a framework that maps the mobile phone technologies value chain and analyses
how DRC can potentially localise and capture value within these supply networks, including
leading the building and development of mobile phone technology regional value chains.
The remainder of the paper is structured as follows. Section 2 discusses the role DRC’s natural
endowments could play in driving medium-and-high technology industrialisation in DRC and
on the continent. Sections 3 critically discusses two diversification routes for DRC and 4
concludes the paper with policy recommendations.
2. Critical minerals in DRC
Despite political economy and structural challenges, DRC is increasingly playing a significant
role in the world’s production of cobalt, copper, diamond, gold, tantalum, and tin. In 2017, the
country’s share of the world’s mined cobalt production was more than 60%; tantalum, 42%;
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diamond, 12%; copper, 5%; tin, 3%; and gold, 1%. DRC also accounted for about 49% of the
world’s cobalt reserves. (USGS, 2022). If we look at the critical minerals export basket portfolio
of DRC in 2021 (see figure 2 below), it is clear that cobalt accounts for almost half of the export
basket given its high value and increasing international demand for electronic products and
projected cobalt gap. In addition to unprecedented demand, this risk and supply gap is in part
due to the way that cobalt is mined. Cobalt is mined as a by-product of either nickel or copper
and therefore can be dependent on price fluctuations and demand of the two. DRC also export
significant amounts of PGMs, copper and tungsten.
Figure 2: Critical minerals export basket of DRC in 2021
Tin
Tungsten 3%
10%
Copper
14%
Cobalt
45%
Platinum Group
Metals
28%
Source: Authors based on UNCOMTRADE
In the mineral and mining industry we find the state-owned company La Générale des
Carrières et des Mines (Gécamines), producing cobalt and copper both directly and indirectly
via shareholding of between 5% and 40% in numerous cobalt and copper mining operations.
Glencore is the leading producer of cobalt, with about 31% of global capacity coming from its
Katanga and Mutanda mines in the DRC. China Molybdenum's (CMOC) Tenke Fugurume
mine in the DRC produced about 15,436 tons of cobalt in 2020. It plans to produce about 16,500
to 20,000 tons in 2021. Some of the recent investments in these DRC mines have been at the
centre of international tensions, especially because of Chinese increasing dominance of
upstream and midstream segments. Mining activities under control of Chinese companies
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accelerated between 2013 to 2018, to reach almost 7% of the total value of African mines by
the end of the period. This figure peaks in countries like the DRC (24%) and Zambia (12%),
where Chinese companies were more able than transnational competitors to bear the country
risk and revamp production in high-grade copper deposits which had been abandoned by
nationally owned companies (e.g., Gecamines in the DRC). In the DRC, Chinese companies
control 41% of cobalt production, as well as around 28% of copper in the DRC and Zambia
(Ericsson, et al. 2020).
Refining capability remains limited. In 2017, the share of copper and cobalt production that
was refined prior to export was 76% and less than 1%, respectively. Additional cobalt and
copper mine production was exported after processing to intermediate products, such as cobalt
carbonate, cobalt hydroxide, and black copper (USGS, 2022). Energy shortage and lack of
reliability of the energy supply are among the main factors responsible for low levels of
domestic cobalt refining. As a result, domestic value addition remains limited, and even when
mineral rents are effectively extracted, reinvestment in industrial activities has lagged behind.
However, initial business cases have been advanced which suggest both domestic and regional
opportunities for diversification.
3. Pivot for industrial diversification and technological
deepening in the DRC
In this section, we critically discuss two main diversification route and opportunities into
mobile phone technologies value chains by the Democratic Republic of the Congo (DRC).
3.1 Diversification route 1: Precursors industry development
As discussed above, alongside lithium, cobalt is widely used in the battery industry, with
applications in the automotive and electronics industry amongst many others. BloombergNEF
(2021) has recently published a study modelling a business case for developing a precursors
industry in DRC, as shown in figure 3. Positive initiatives have been also emerging in DRC
which seems to go in the same direction. In April 2022, a new Centre of Excellence for
Advanced Battery Research was officially launched. The Centre is hosted within the
University of Lubumbashi.
According to this study, annual lithium-battery demand is expected to reach 4.5 terawatt hours
(TWh) annually by 2035. This creates a huge demand upstream in the value chain for critical
minerals, metals, precursor and cell production. The demand for cobalt from the lithium-ion
industry alone will grow 1.5 times between 2021 and 2030 (the demand for Nickel is expected
to grow five times, the one for copper six times in the same period). As discussed above, the
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battery industry is segmenting with OEMs producing passenger electric vehicles using high
nickel and cobalt chemistry batteries for performance applications, and lithium-iron-
phosphate (LFP) for low-cost entry-level vehicles. DRC could capture this massive market
expansion by targeting production of precursors. Indeed, BloombergNEF (2021) estimates that
building a 10,000 metric-ton precursor facility in the DRC could cost $39 million. This is three
times cheaper than what it would cost for a similar plant in the US.
Figure 3: Capital cost of a 10,000 metric tons precursor plant, cost components, and aggregate
cost comparators
Source: BloombergNEF, 2021.
The DRC produced about 70% of global cobalt supply in 2020. In April 2021, leading battery
manufacturer, Contemporary Amperex Technology (CATL) announced it will acquire 25% of
CMOC’s stake in the Kisanfu mine in the DRC with estimated reserves of about 3.1 million
tons of cobalt (Daly, 2021). The company wants to process the ore at the nearby Tenke
Fugurume mine. While this is an interesting development, DRC does not produce other two
critical minerals – nickel and manganese – needed to produce battery precursors. These critical
minerals are however available in neighbouring countries. For example, nickel could be
sourced from Madagascar’s Ambatovy mine (or South Africa and Zimbabwe where it is a by-
product of PGMs); while manganese could be procured from Gabon or South Africa and
transported into the DRC. Developing a precursors industry could also untap other critical
minerals available in DRC like manganese, which are currently unexploited. Developing of
manganese could offer further diversification downstream in the battery value chain, given
that manganese is used in the manufacturing of lithium-ion battery cathodes.
Recently, African governments’ awareness of the strategic value of critical minerals for
domestic and regional industrialisation and production linkages development has been
increasing. Governments in the region will have to closely collaborate and partner to create
an African battery production industry. Recognizing this, the DRC and Zambia have
established a “Joint Battery Council.” The two countries form part of the so called “Copper
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belt” which stretches from the Central African Republic, the DRC and Zambia. This region
accounts for the world’s largest supply for cobalt, a mineral used in the production of lithium-
ion batteries. By locating domestic strategies as part of regional industrial development plans,
African countries could also exert more bargaining power and realise greater cluster and scale
economies. UNECA has identified several opportunities for regional value chains development
cutting across Central Africa into East and Southern Africa for battery-minerals and electric-
vehicles; a regional nitrogen, phosphorous and potassium ‘super-fertilizer’ value chain linking
DRC, Ethiopia and Morocco and natural-gas-producing East, West, and Central African
countries (Pedro, 2021). In February 2021, in the Africa Business Forum, the establishment of
an African Battery Alliance was launched, a regional development model which has been
already developed for batteries and hydrogen technologies across Europe.
3.2 Diversification route 2 : Mobile phone technologies
The development of precursors for batteries would allow DRC to diversify from minerals
downstream into the batter value chain, while establishing regional collaboration. There is,
however, another route to diversification, one that starts from other electronic products for
which demand in the African market is constantly rising. These are mobile phones. The
African mobile market is very diverse. Mobile cellular subscriptions are far in excess of 100
per 100 inhabitants in 12 out of 44 countries, namely Seychelles, South Africa, Botswana,
Mauritius, Côte d’Ivoire, Gambia, Gabon, Ghana, Mali, Namibia, Senegal, Cabo Verde and
Kenya. Twenty countries have subscription rates per 100 inhabitants below the African
average of 82.3, while 12 other countries have less than 50 subscriptions per 100 inhabitants,
as shown in figure 4 (ITU, 2021).
African active mobile broadband subscriptions per 100 inhabitants reached 33.1 in 2019, far
below the world average of 75 per 100 inhabitants. However, in six countries in the Africa
region, including South Africa, Ghana, Gabon, Seychelles, Botswana, Mauritius and Cabo
Verde, figure 5 below shows that active mobile broadband subscription rates per 100
inhabitants are above the world average.
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Figure 4: Mobile cellular subscriptions, African countries, 2019 and Compound Annual
Growth Rate (%) between 2015-2019
Source: Based on the ITU WTI Database, December 2020 edition
Figure 5: Active mobile broadband subscriptions for 100 inhabitants, 42 African countries,
2019
Source: Based on the ITU WTI Database, 2020 estimates
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Demand for affordable and reliable smartphones has increased significantly, hence
manufacturers are now competing for the middle range smart phone and budget phone
brackets. The leading company is called Transsion, a Chinese led group that started in Africa
in 2006 and focuses on emerging markets outside of China. Since 2011, every phone it sells in
Africa has been assembled in Ethiopia and the company claims to have over 10,000 local
employees. Its well-known branded phones TECNO is the single biggest smartphone seller on
the continent (Dahir, 2018). TECNO has focused on developing product and service solutions
targeted to the African consumer and context, specifically challenges with access to electricity.
While domestic solar panels and kiosks are improving access, customers need long life battery.
The company developed a technology that provides 72-hour battery life and up to six days in
standby mode. Furthermore, the company developed enhanced camera phones that are
optimised for darker skin tones. Finally, it introduced phones with dual SIM cards in
recognition of the fact that consumers use multiple sims to reduce costs.
Several African companies have also emerged in the market over the last decade, however
most of them are mainly focused on assembling of components imported from abroad (mainly
China). For example, In South Africa, Onyx was launched in 2017 as a start-up. Onyx imports
its components from overseas and builds its smartphones from the circuit board up in South
Africa. More recently, in 2018, Mara Group—a pan-African multi-sector business services
company—recently opened a smartphone factory in Rwanda. The factory will be producing
two Maraphone models, the Mara X and the Mara Z. Mara brags that its smartphones are
entirely home-made—produced and packaged in DRC’s neighbour Rwanda (Uwiringiyimana,
2019).
In 2021, Africell and Industry Five launched a pilot project to develop assembling facilities for
mobile phones in the Democratic Republic of Congo (DRC) for the first time. Industry Five’s
factory in Kinshasa has been equipped with modular and mobile workstations, and workers
have been trained to reach quality standards and handle Africell’s proprietary featurephone
handsets. Workers are assisted by state-of-the art collaborative robots. Performance testing
and quality checks will also occur at the facility (Barton, 2021).
As shown in the figure 6 below, the mobile phone global value chain (GVC) – from product
conception to after-use – includes the following major segments: input materials; hardware
manufacturing; software development; sales and marketing; mobile service and use; and after-
use (Lee, Gereffi and Nathan, 2013). It is a truly global value chain, involving African minerals
like cobalt and coltan, assembly workers in China and software developers in India.
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Figure 6: The mobile phone value chain
Source: Lee, Gereffi and Nathan, 2013
Upstream in the supply chain is the raw materials extraction to make the basic components of
a phone (figure 7). The composition of phones varies depending on the brand, but an average
materials list for a smartphone is: 25% silicon, 23% plastic, 20% iron, 14%, aluminium, 7%
copper, 6% lead, 2% zinc, 1% tin, 1% nickel and 0.03% barium. The next few steps in the
supply chain require manufacturers to transform the raw material into a usable material or
component. The end product is made up of many different components each with its own
supply chain. Component suppliers are numerous and will often specialise in particular parts
and components which may be used by many different brands. These include circuit board
containing the brains of the phone; antenna; liquid crystal display (LCD); microphone;
speaker; battery; and camera.
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Figure 7: Africa’s critical minerals in different components of a mobile phone
Source: Adapted from USGS and data compiled by authors
Note: NA - no data available for African countries
The five main raw materials used in the current lithium-ion batteries are lithium, cobalt,
nickel, manganese and graphite. Other materials include copper, aluminium and iron. The
feedstocks used in the production of lithium-ion batteries are in the form of metal salts,
predominantly sulphates. The sulphates for cobalt, nickel and manganese are combined in
various ratios depending on the chemistry type to form the precursor cathode active material
(precursors). If DRC was moving towards precursors development, as discussed above,
companies who are developing mobile phone capacities in DRC such as Africell and Industry
Five could develop further stages upstream in the chain and develop a vertical for electronics.
There are already some positive signs. In 2021, Africell undertook a record-breaking network
expansion in DRC, extending infrastructure and launching telecommunications services in
several new provinces. Meanwhile, Industry Five’s facilities in DRC are diversifying towards
tablets, laptops, high performance servers, and data storage solutions. The company expects to
generate up to five thousand skilled technical jobs in DRC within five years. 1
1
Mobile phones to be assembled in DRC for first time - Developing Telecoms
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4. Concluding remarks and policy direction
The Democratic Republic of Congo (DRC) is a vast country well-endowed with critical
minerals such as cobalt, copper, diamond, gold, tantalum, and tin. These critical mineral
resources are pivotal to clean energy manufacturing and the green transition agenda and offer
a new window of opportunity for structural transformation of the DRC. However, the prospect
of a critical mineral-led development in the DRC is threatened by continuous conflicts and
political instability over the last decades.
To reverse the country’s development trajectory and tap into the green windows of
opportunity, this paper develops a framework that maps the global mobile phone technologies
value chain and analyses how the DRC can potentially leverage its mineral resources to localise
and capture value within mobile phone technologies technologies, including leading the
building of regional value chains in Africa. In doing this, we develop an in-depth country case
study and highlights DRC’s specific routes to diversification and technological deepening,
including opportunities for regional coordination and industrial development.
The case study discussed in the paper highlights two main diversification routes for the DRC
and route precursors for industry development and diversification into the production of
electronic products and mobile phone technologies. However, the paper also identified several
challenges that require active and effective industrial policy to tap into the green windows of
opportunity. For one, the case study emphasised the need for DRC to implement sector-
specific policies that position the country to leverage their unique strengths towards playing
lead roles in the development of the mobile technologies regional value chains in Africa. The
DRC can leverage its vast reserves of cobalt, a critical mineral for mobile phone batteries, to
promote local assembly and manufacturing of mobile phones by effectively creating special
economic zones and offering tax breaks, for instance. However, these approaches can only go
so far given that the DRC has technological disadvantage. To take advantage of its natural
capital, there is need for the Government to work closely with regional partners to create,
develop and reinforce robust regional value chains. Recognizing the strategic value of critical
minerals for domestic and regional production linkages development, the DRC and Zambia,
for instance, have established a “Joint Battery Council” based on their vibrant mining sectors
to closely collaborate and partner to create an African battery production industry. Both
countries form part of the so called “Copper belt” and accounts for the world’s largest supply
for cobalt, a mineral used in the production of lithium-ion batteries. The “Joint Battery
Council” can help to leverage the opportunities the natural capital offers for industrial
development of both countries.
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