Chinese mining giant CMOC disclosed its net profit for H1 2024 last week: $762 million. Year-on-year the figure soared by 670%, a performance attributed to significant production growth and “major advancements at its operations in the Democratic Republic of Congo (DRC)”.

Over the period reviewed, CMOC's copper production doubled to 313,788 tons and cobalt production surged by 178.22% to 54,024 tons.

CMOC reported that its TFM East plant in the DRC reached production targets for H1 2024, with “five production lines now operational”. This has helped push TFM’s annual production capacity to 450,000 tons of copper and 37,000 tons of cobalt–making the mine the world’s fifth-biggest copper mine and second-biggest cobalt mine. Meanwhile, KFM, CMOC’s other project in the DRC, maintained a “high production” with “an annual capacity exceeding 150,000 tons of copper and 50,000 tons of cobalt, solidifying its position as the largest cobalt mine in the world”. CMOC can thus produce 600,000 tons of copper and 87,000 tons of cobalt annually from these two projects. 

Besides the rise in production, the Chinese giant attributed the surge in its net profits to other factors such as "the rise in metal prices on world markets, particularly for copper and cobalt".  Cobalt and copper were the main drivers of CMOC’s profits but the firm also produces molybdenum, tungsten, niobium, and phosphate fertilizers.

CMOC’s success should help consolidate the DRC’s position in the global copper and cobalt market. The Central African country is the world’s top cobalt product and second-largest copper producer. This success also highlights the potential for increased government revenues from mining, through taxes and royalties, among others. 

According to IMF data, the DRC’s mining revenues rose from an average of $4 billion between 2013 and 2017 to $5.5 billion from 2018 to 2022, "thanks to increased production of the main mining export products (copper and cobalt) and by the larger share of mining company profits attributed to the government".

Louis-Nino Kansoun

The inflation rate in the Democratic Republic of Congo (DRC) is showing signs of slowing down. According to the Central Bank, prices increased by 14.5% year-on-year for the four weeks ending in August 2024. Earlier in same the month, inflation had already decreased to 15.25%, down from 23.75% at the end of January 2024.

Despite this progress, the government is still far from meeting its target of limiting annual inflation to 11.5%. According to many, the depreciation of the Congolese franc is among the primary factors behind rising prices, particularly in Kinshasa, the capital, which has a population of nearly 23 million.

However, recent reports by the Central Bank indicate that the national currency has begun to appreciate, reflecting improvements in the trade balance, where exports now exceed imports. Still, at the microeconomic level, there were no improvements in the purchasing power of millions of Congolese citizens, as high transportation costs for goods continue to impact prices.

The government’s ability to stabilize prices is limited by the high costs associated with transporting consumer goods, whether produced locally or imported. The Ministry of Economy notes that taxes account for only 23% of product costs, while the country faces significant production deficits in staple goods like maize, necessitating imports.

The DRC's monetary system is heavily dollarized, with the US dollar dominating transactions. This reliance complicates the Central Bank's efforts to manage inflation, as the local currency constitutes only 18% of the money supply and is costly to obtain due to high intervention rates (25%).

Georges Auréole Bamba