Congo Triples Lithium Taxes as China Trains

Royalty rates tripled overnight. On Friday, the Democratic Republic of Congo's council of ministers approved a decree moving lithium to its "strategic minerals" list, Bloomberg reported. The change forces miners to pay 10% royalties instead of 3.5% — a decision that lands just as China's Zijin Mining prepares to commission the country's first industrial-scale lithium mine this month at Manono, one of the world's largest hard-rock deposits.

The timing is deliberate. Congo holds some of the planet's richest lithium reserves and has watched Australia and Chile capture the value while African nations supplied the ore. Now Kinshasa is asserting control. Tantalum, niobium, tungsten, uranium and rare earths also joined the strategic list, according to a video posted by the mines ministry. The government's stated goal, per meeting minutes: "to allow our country to profit from the critical and geo-strategic character of the endowments found in its soil."

For Zijin, which has sunk roughly $1 billion into Manono and expects to produce 130,000 tonnes of lithium carbonate equivalent annually at full capacity, the decree means materially higher costs before the first tonne ships. For the West, it's a reminder that the critical minerals race is being fought on multiple fronts — and China is playing a longer game.

Can the West Catch Up on Talent?

Several hundred young adults head to northern China each year to study rare earths at schools like Inner Mongolia University of Science and Technology, Reuters reported this week. They're enrolling in programs that don't exist anywhere else. Jiangxi University of Science and Technology launched a dedicated Rare Earth Science and Engineering undergraduate degree this year, with 70 students studying everything from mining to magnets. The curriculum, reviewed by Britain's Durham University, is "highly specialized" and reflects China's dominance in the field, according to rare earths expert David Parker.

The U.S. awarded just over 200 generalist undergraduate mining and metallurgical engineering degrees in 2023, per the Society for Mining, Metallurgy and Exploration. No American university offers a rare earths-specific bachelor's program. The mining industry "has historically held little appeal for U.S. students, many of whom see it as dirty and dated," Reuters noted.

China didn't stumble into this lead. The rare earths processing industry was "wiped out" in the West by the 1990s, said Ed Richardson, CEO of U.S. magnet producer Thomas & Skinner. "Therefore, the schools have not been educating mining students for this task." In contrast, Chinese universities, research institutes and state-owned enterprises collaborate closely. Scientists at Beijing's National Engineering Research Center for Rare Earths developed technology that Gansu Rare Earth New Materials adopted in 2023 at a refinery churning out 50,000 metric tons annually.

Billions of federal dollars have flowed into U.S. mining schools and research programs since 2024 as Washington scrambles to rebuild expertise, according to the Department of Energy. The Colorado School of Mines is developing two new critical minerals research facilities, with the first expected to open in 2027. Congress is considering legislation to fund international cooperation on mining education. But talent pipelines take decades to build. China's head start is structural, not cyclical.

Where Will the Copper Come From?

Copper prices hit a record $6.65 per pound this month before easing, up roughly 40% over the past year, The Northern Miner reported. Traders are pricing in tighter supply and stronger demand from electrification, data centers and grid expansion. The problem: supply isn't keeping pace.

"We need to find six of these kind of [1-billion-tonnes-plus] mines every year till the year 2050," mining financier Frank Giustra told Mining.com. "Six and put them into production." There are only four near-surface copper deposits in the world with more than 1 billion tonnes, he said. Big porphyry copper deposits often take 10 to 15 years from discovery to production — sometimes closer to 20 years.

S&P Global's January study was blunt: copper demand will surge 50% to 42 million metric tons by 2040, driven by AI, defense spending, EVs and renewable energy. Supply will fall short by 10 million tonnes, creating a "systemic risk for global industries, technological advancement and economic growth." Data centers alone are projected to require 500,000 tonnes of copper by 2030, Giustra noted.

JPMorgan forecasts a 2-million-tonne deficit by 2030, widening to 8 million tonnes by 2035. The International Copper Study Group now projects a refined copper deficit of 150,000 tons in 2026, reversing its earlier surplus forecast, according to Crux Investor. Refined production growth is slowing to just 0.9% this year, down from 3.4% in 2025.

The market hasn't fully priced the scarcity yet, Giustra argues. "The price of copper has to go up. As these deficits come upon us, you're going to require a higher copper price to incentivize the building of mines faster than we've been doing it in the past." That will drive more M&A as producers compete for a shrinking pool of large assets. "This M&A has started," he said. "It will get there because, quite simply, there is a scarcity of these deposits."

What Changed This Week

Congo moved from passive supplier to active price-setter, tripling lithium royalties and signaling that resource nationalism is accelerating across Africa. China's rare earths education infrastructure — now producing specialized engineers at scale — widened the structural gap with Western competitors still rebuilding basic mining expertise. And copper's supply crunch shifted from forecast to present tense, with refined output growth collapsing to under 1% even as prices hit records.

What to Watch

Zijin's Manono lithium mine is expected to begin production this month, making Congo a significant new supplier just as the royalty increase takes effect. Watch whether other African nations follow Congo's lead on strategic minerals taxation. The Colorado School of Mines' first critical minerals research facility is slated to open in 2027 — a test of whether U.S. institutions can accelerate talent development. And copper: JPMorgan expects the U.S. to face a refined copper deficit of 330,000 metric tons this year, with prices averaging $12,075 per metric ton. If Giustra is right, the real supply squeeze — and the M&A wave — is just beginning.