As global interest in DR Congo’s lithium deposits soars, the industry could be “seriously undermined” by governance, environmental and social risks – investigation

13 December 2021 (Updated 31 January 2022) – A new investigation into the DRC’s nascent but globally significant lithium sector sounds the alarm on a swathe of potential supply chain risks. Global Witness’ report raises key questions around how future production and its environmental impacts will be managed and who stands to benefit if the DRC’s deposits of hard-rock lithium are exploited to meet the growing demand for minerals critical to renewable energy technologies. 

The country’s lithium production is set to begin in 2023, driven by richer nations' efforts to decarbonise their economies. Global lithium demand could grow 40 fold by 2040 [1]. But unless regulators, companies and investors take urgent action, what are currently potential environmental and human rights risks, as well as a lack of accountability and transparency, could end up hardwired into the sector.

Global Witness’ investigation looked at a sample block of 51 mining concessions, concentrated close to the town of Manono in southern DRC, where globally significant, hard-rock lithium deposits have been discovered. Three companies – AVZ Minerals Limited, Critical Resources Limited and Tantalex Resources Corporation – have publicly announced plans to carry out lithium exploration or production at mining concessions in the area.

Drawing back the curtain on the companies and people involved in this new, potentially globally significant lithium industry, the investigation found concessions on and around DRC’s lithium deposits are or were held by or involved a small number of people with close business relationships – including a now-serving government official and those reportedly close to former President Kabila.

Cong Maohuai, reported to have been an adviser to former DRC president Joseph Kabila, a claim he denies, is or was associated with companies with ownership links to six concessions investigated by Global Witness. Documents seen by Global Witness also appear to show there have been long-standing business links between Cong and now-serving Minister Guy Loando Mboyo. Cong Maohuai told Global Witness that Mr. Mboyo had served as a lawyer representing him and his businesses, although that representation had ended since 2019 and Mr Mboyo’s election to the Senate. Recent reports published independently of Global Witness relating to Congo Hold Up, the biggest leak of financial information from Africa to date, make separate allegations of business links between the two [2]. 

Local Manono communities appear to have differing and at times unclear understanding of the projects and risks related to the impact of the lithium mines, including their environmental impacts.

“For decades, Global Witness has documented how humanity has already pushed the planet to the brink through reckless management of fossil fuels and minerals. We must not repeat those mistakes with the energy transition. Our investigation shows that investors need to think critically before endorsing DRC’s lithium sector. Company contracts, payments and beneficial ownership in key deals are not being fully and publicly disclosed, despite this being required by Congolese law. Companies must also ensure they fully respect the environment and communities in the mining areas,” said Paul Donowitz, Head of Natural Resource Governance Campaigns at Global Witness.

“There is a small window of opportunity to address the potential supply chain risks in DRC’s lithium sector, before production begins. Companies, investors and governments – both of the DRC and companies’ home states – must act now or the whole industry risks being seriously undermined by governance risks and harms to people and the planet,” said Paul Donowitz.

Recommendations

• Companies financing, producing, using or trading DRC’s lithium must ensure that their investments and operations, as well as those of their subsidiaries and suppliers, adhere to international governance, environmental and human rights standards, and all existing Congolese laws, (whichever are stronger): this includes those pertaining to ownership and control, payments, and contracts, and protection of the environment, health and safety, natural resource extraction and management, wildlife conservation, waste management, hazardous material activity, and air, water, land and groundwater pollution;
• Companies must take responsibility to conduct, disclose and implement robust due diligence policies and procedures to prevent, identify, mitigate and account for human rights, environmental and governance risks in their operations, including supply chains and business relationships;
• The Congolese government should ensure disclosure of all beneficial owners of mining companies, mining contracts and public, project-level payment reporting for all of Congo’s mining contracts, in line with Extractive Industries Transparency Initiative (EITI) reporting standards and best practice.