Turning Diplomatic Commitments into Mineral Investments in the Democratic Republic of Congo

Earlier this year, as hostilities escalated between Rwandan-backed M23 rebels and the Democratic Republic of the Congo (DRC), President Félix Tshisekedi proposed granting the United States access to the DRC’s mineral resources in exchange for security support. Following intensive negotiations in Washington and Doha, the foreign ministers of the DRC and Rwanda signed a peace agreement on June 27 in Washington, D.C. The focus now shifts to the next phase: advancing cooperation on critical minerals.

The DRC presents a markedly different case from Ukraine, where minerals featured prominently in the cooperation agreement signed in May. The DRC has a more developed mining sector than Ukraine and has consistently ranked among the world’s top recipients of mineral exploration investment. Exploration activity accelerated following the conclusion of the civil war in 2003, with spending increasing by 582.8 percent between 2005 and 2012—from $57 million to a peak of $389.2 million. Copper has remained the primary focus of this investment, accounting for between 35 and 67 percent of total exploration spending from 2004 to 2024. The DRC is home to some of the highest-grade copper deposits in the world, with ore grades exceeding 2.5 percent—more than 4 times the global average and 11 times that of Morenci, the largest operating copper mine in the United States. Additionally, it hosts four of the five largest cobalt mines globally. In 2024, the DRC attracted $130.7 million in exploration investment—more than any other African nation. In comparison, in 2017, which has the latest available exploration data in Ukraine, it received just $0.4 million in exploration investment.

The most impactful role the United States can play is to help foster a more enabling environment for private sector investment in the DRC’s mining sector. At present, Glencore is the only major Western operator there. Fewer than two decades ago, leading Western firms such as Anglo American, BHP, Freeport-McMoRan, and First Quantum Minerals had active operations in the country—but have since withdrawn. Given the country’s complex risk profile, the central question becomes: What conditions must be established to make long-term private investment in the DRC viable and attractive? Addressing this question is essential to moving beyond symbolic diplomatic engagement and enabling large-scale Western investment to advance mineral production and procurement.

The United States has historically been outmaneuvered by China in the DRC, primarily due to China’s strategic deployment of financing and coordinated government-to-government engagement. For example, in 2016, the U.S.-based company Freeport-McMoRan sold the Tenke Fungurume mine—one of the world’s most valuable copper and cobalt assets—to China Molybdenum Company. Of the $2.68 billion in credit used to finance the acquisition (adjusted to 2021 dollars), Chinese state-owned banks accounted for $2.48 billion.

For the United States to advance a credible and effective minerals diplomacy strategy in the DRC, it must be prepared to mobilize resources that reduce the cost and risk of doing business in the country. Ultimately, companies will only invest if their hurdle rate—or a minimum rate of return—will be met. In the mining sector, the hurdle rate is particularly important given that projects require significant upfront capital, are long-term, and can be undermined by geopolitical, operational, and commodity price risks. Potential measures include:

1. U.S. government equity: Minority ownership by the U.S. government is among the most effective tools for advancing strategic projects in the country. Government equity can make it significantly easier to attract other private equity while also supporting government-to-government cooperation for project negotiations and dispute resolution. It signals political support, strengthens diplomatic engagement, and boosts investor confidence by reducing risk and encouraging compliance with high international standards.
   
   Although the United States maintains a bilateral investment treaty (BIT) with the DRC—intended to promote and safeguard investment through clear legal frameworks and protections—the treaty has proven largely ineffective in practice. While the BIT, signed in 1984, remains in force, it has not provided adequate protection for U.S. investors on the ground. For example, Africell, a U.S.-owned mobile technology company operating in the DRC, is subject to over 25 different taxes levied not only by the Ministry of Finance but also by various other departments and agencies. In some cases, Congolese authorities have confiscated expatriate employees’ passports in response to disputes over arbitrary or newly imposed taxes. Against this backdrop, minority U.S. government equity participation offers a more effective tool than the BIT, as it provides stronger political backing and practical protection to investors in the event of disputes.
2. Utilize political risk insurance: The DRC is a high-risk mining jurisdiction. It has political, economic, and operational risks. Domestically, although the presidency remained relatively unchanged between 1965 and 2018, the broader political landscape has been marked by persistent instability—including frequent changes in government leadership, with nearly 30 prime ministers during that period—alongside recurring civil unrest and armed conflict. It was not until 2019 that the country experienced its first peaceful transfer of power, when President Félix Tshisekedi succeeded President Joseph Kabila following the December 2018 elections. There is still an ongoing domestic power struggle. At the regional level, the International Monetary Fund has identified a “high risk” of intensifying regional conflict. Such developments have the potential to significantly disrupt trade—including in energy, food, tourism, and critical supply chain components—as well as impact remittances, refugee movements, foreign direct investment, financial flows, and cross-border payment systems.
   
   Political risk insurance helps mitigate the unique and often significant risks associated with operating in politically unstable or unpredictable environments. It can provide protection against expropriation (outright confiscation or creeping expropriation, where a government gradually undermines an investor’s control or returns), political violence (including armed conflict and civil unrest), currency inconvertibility and transfer restrictions, breach of contract, and legal and regulatory challenges that are discriminatory or politically motivated, like permit revocations. Insurance is a key risk management tool that can allow companies to safeguard capital, reduce financing costs, and provide long-term investor confidence. However, the U.S. International Development Finance Corporation should not be the sole provider of political risk insurance. Multilateral development banks also have a vital role to play in de-risking investment in high-risk environments. In particular, the Multilateral Investment Guarantee Agency, a member of the World Bank Group, can serve as a key partner in mitigating political risk and enhancing investor confidence in mining projects within the DRC.
3. Subsidize geological mapping: Given that the DRC’s land mass is two-thirds the size of Western Europe, the country holds considerable potential for future greenfield development. However, realizing this potential will require comprehensive, modern geological mapping. As one of the most mineral-rich countries globally, the DRC presents a major opportunity for large-scale Western investment—provided that reliable geological data is available. In 2024, an official from the DRC’s Ministry of Mines’ Mining Cadaster Team noted that only 20 percent of the country has been mapped, with most existing geological data dating back over 70 years. Recognizing this constraint, bipartisan legislation has been introduced in the United States aimed at supporting overseas geological mapping efforts to facilitate and de-risk Western greenfield investment.
    

To complement U.S. efforts, authorities in the DRC must prioritize the establishment of a stable and transparent fiscal framework. While it is reasonable for the government to seek optimal revenue from the mining sector, it is equally important to recognize the industry’s hurdle rate and ensure investors are sufficiently compensated for the considerable risks involved in mining. Developing effective and durable revenue collection mechanisms remains a significant challenge, as evidenced by frequent changes to tax policies, arbitrary imposition of new taxes, and inconsistent enforcement of existing fiscal rules. To build a more predictable and investment-friendly environment, it is in the government’s interest to strengthen and institutionalize current tax systems—integrating provisions for both windfalls and downturns—rather than continually revising fiscal terms in response to commodity price fluctuations, new mineral discoveries, or shifting political priorities.

Conclusion

Transforming diplomatic cooperation into tangible investment in the DRC requires a strategic and sustained effort by the United States. While the DRC offers extraordinary mineral wealth and a relatively mature mining sector, its complex risk landscape—a myriad of legal, fiscal, legal, and regulatory risks—continues to deter private capital. To overcome these barriers, the United States must be willing to invest—not just diplomatically, but financially—by deploying targeted tools such as government equity participation, political risk insurance, and support for geological mapping. In parallel, Congolese authorities must advance reforms that foster a stable, transparent, and predictable environment—ensuring fiscal coherence with long-term project horizons, legal certainty to uphold contracts, and regulatory clarity with timely and transparent permitting. Only by addressing both sides of the investment equation can the United States move beyond handshake diplomacy and help unlock the DRC’s mineral potential in a way that is commercially viable, strategically aligned, and mutually beneficial.

Gracelin Baskaran is director of the Critical Minerals Security Program at the Center for Strategic and International Studies in Washington, D.C.