To power the clean energy transition, China is securing minerals critical for producing advanced technologies, such as lithium batteries, electric vehicles, and solar panels. Through its flagship Belt and Road Initiative, Beijing has ramped up related investments in resource-rich countries, fueling the extraction of these transition minerals. While China already dominates the midstream processing of these minerals and downstream product development, AidData finds that its state-backed financing is strategically targeting upstream extraction in low- and middle-income countries.
Over the past two decades, Chinese state-owned lenders have bankrolled the acquisition, development, and operations of numerous copper and cobalt mines globally, with a sharp focus on mining operations in Peru and the Democratic Republic of the Congo (DRC). While located in distinct parts of the world, these two countries emerged as the top destinations for China’s state-directed lending for the transition mineral sector—-receiving $29.8 billion dollars between 2000 and 2021, or more than half of all Chinese lending to developing countries for these minerals.
As part of our work on China’s financing for transition minerals, AidData has published new profiles on five mining sites in these countries. The profiles detail the financing, ownership, and operations of the Las Bambas, Toromocho, Sicomines, Tenke Fungurume, and Kinsenda mines.
Beijing’s bid for transition minerals
These five mines—two in Peru and three in the DRC—represent just part of China’s foothold on global transition mineral operations. AidData’s new Chinese Financing for Transition Minerals Dataset, Version 1.0 (CFTM 1.0) tracks grant and loan commitments from Chinese official sector institutions that supported transition mineral extraction and processing operations in low- and middle-income countries between 2000 and 2021 (see Figure 1). The accompanying policy report, Power Playbook: Beijing’s Bid to Secure Overseas Transition Minerals, sheds light on China’s overall strategy for securing access to transition minerals globally.
Figure 1: Global distribution of China’s official sector loans and grants for transition mineral operations in developing countries
In total, Beijing has directed nearly $57 billion in loans and grants to 19 BRI participant countries for the extraction and processing of copper, nickel, lithium, cobalt, and rare earth elements. The mining site profiles in Peru and the DRC corroborate several key findings from Power Playbook:
- Project companies: All five mining sites involve lending to a project company operating a mining site. Rather than directing funding to host government agencies, Beijing’s state-backed financiers have extended the majority of its funding to project companies—special purpose vehicles (SPVs) with a single shareholder, or joint ventures (JVs) with multiple shareholders—that manage the financing, development, and operation of their overseas transition mineral investments. The use of SPVs and JVs shields the parent companies from some of the financial risks associated with developing and maintaining the transition mineral operation.
- Chinese-owned mines: The profiles of the mines in Peru and the DRC demonstrate Beijing’s strategy to selectively fund mining operations where Chinese companies have an ownership stake. In fact, 97% ($16.1 billion) of China’s state-directed transition mineral lending to Peru and 95% ($12.5 billion) of lending to the DRC between 2000 and 2021 specifically supported transition mineral operations which are partially or wholly Chinese-owned.
- Relationship banking: China directed multiple loans over time to each of the five mining sites featured in Peru and the DRC. This serial lending provided ongoing financial backing for Chinese companies’ overseas transition mineral operations. Between 2000 and 2021, mines targeted by Chinese state-directed serial lending received an average of 3.6 loans from Chinese state-owned creditors.
- Acquisition lending: China’s playbook includes an aggressive acquisition lending program during the BRI period, with Las Bambas and Tenke Fugurume as the two mining sites supported by the most acquisition lending. Both examples represent a unique approach to lowering the barriers to entry for associated Chinese firms to break into the mining industry in Peru and the DRC.
Peru: China’s portfolio in the Las Bambas and Toromocho mines
Two of the largest destinations for Chinese state-directed financing for overseas transition mineral operations can be found in Peru—the Las Bambas and Toromocho copper mines. These two mining sites have received a combined amount of over $16 billion in financial commitments from Chinese creditors between 2010 and 2023. Between 2000 and 2022, Chinese state-owned creditors funneled a total of $20.9 billion in loans and grants to Peru across all sectors, making these two mining sites the recipient of 75% of China’s total state-directed lending and grant-giving portfolio to Peru.
Las Bambas copper mine is the single-largest destination for China’s state-directed lending for overseas transition mineral operations, receiving $12.3 billion in loans from a network of six Chinese state-owned banks and companies between 2014 and 2023. Just over a decade ago, three Chinese companies established the joint venture Minera Las Bambas S.A. and wholly acquired the mine, with China Minmetals holding a majority stake through its subsidiary company MMG. Chinese state-owned banks provided two multi-billion dollar syndicated loans to finance the acquisition in 2014, and, since then, Chinese creditors have provided ongoing support for the mine’s operations. Las Bambas has now become one of the world’s largest copper mines, producing 322,912 metric tons of copper in 2024 alone.
Toromocho was the first greenfield copper mine developed by a Chinese company overseas. The mine is one of the largest copper mines in the world, with estimated annual production levels reaching over 200,000 tons of copper. While the state-owned Aluminum Corporation of China Limited (Chinalco) used its own capital to acquire the mine in 2007, Chinese state-owned banks subsequently provided 10 loans worth $3.9 billion between 2010 and 2017 to finance the development and operations at Toromocho. Under the management of Minera Chinalco Perú S.A.—an SPV and wholly-owned subsidiary of Chinalco—the mine officially began commercial operations in 2015. At both Las Bambas and Toromocho, expansion works are already planned or underway at the sites.
Copper and cobalt mining in the DRC
In sub-Saharan Africa, China’s transition mineral portfolio is concentrated on mining operations in the DRC, with three major mining sites profiled by AidData: Tenke Fungurume, Kinsenda, and Sicomines. Here, Chinese companies have developed copper and copper-cobalt mines. In total, Chinese creditors have provided over $11 billion in loans and grants to these three mining sites between 2008 and 2022, with 42% of China’s total state-backed lending and grant-giving portfolio in the DRC ($24.3 billion) directed to these three sites.
Tenke Furungume is the DRC mine in AidData’s dataset that was most recently acquired by a Chinese company. The acquisition was enabled by $2.7 billion in loans from Chinese creditors. According to China Molybdenum (CMOC), the mine is the world’s fifth-largest copper mine and the world’s second-largest cobalt mine. In 2016, CMOC acquired its first stake in the operating entity Tenke Fungurume Mining S.A. (TFM), which is jointly owned by TF Holdings (80%) and the DRC state-owned company Gécamines (20%). By 2017, CMOC had fully acquired TF Holdings, supported by $2.68 billion in credit provided by state-owned and private Chinese banks.
The Kinsenda mine is the world’s second highest-grade active underground copper mine, with operations beginning as early as 1977. The Congolese state-owned company Sodimico and South African private company Metorex started operations at the mine in 2007. Then, in 2011, Chinese state-owned company Jinchuan Group acquired Metorex and its 77% stake in the Kinsenda mine. Between 2013 and 2022, Metorex and the Kinsenda mine project company in which Metorex holds a majority stake were the recipients of $526 million in financing provided by China Development Bank to support the development and operations of the mine.
The Sicomines copper and cobalt mine is at the center of a resource-for-infrastructure (RFI) deal that reshaped the DRC's extractives industry. The deal involved the establishment of a Sino-Congolese joint venture, Sino-Congolaise des Mines (Sicomines) SARL, which received the rights to develop this mine in Kolwezi in exchange for sweeping financing for infrastructure projects. The initial terms of the RFI deal were codified in September 2007 and April 2008, although subsequent amendments approved between June 2008 and March 2024 reveal a long history of renegotiations and controversy. The Chinese companies China Railway Group Limited (CREC), Sinohydro, and Zhejiang Huayou Cobalt hold a joint stake of 68% in Sicomines, which was officially incorporated in 2008, with a total of $7.8 billion in lending from Chinese creditors provided to Sicomines SARL between 2008 and 2013 for the mine’s development.
Implications of Chinese financing and ownership of mining sites
While significant amounts of financing made the extraction of copper and cobalt at these sites feasible, these large-scale operations have encountered multiple environmental, social, and governance (ESG) challenges. These have occurred despite measures taken by the Chinese-controlled project companies to mitigate the ESG risks associated with their mining activities. In Peru, for example, affected communities have protested the Las Bambas project since the early stages of development, due to environmental degradation caused by overland trucking for toxic chemicals and dust pollution. Local protests resurged again in 2021 and 2022. In the DRC, mining operations are heavily concentrated in the mineral-rich district of Kolwezi. At the Sicomines site, environmental pollution from mining operations led to the destruction of agricultural infrastructure and local fields, with the local population fearing eviction and resettlement from their communities.
These five mines in Peru—Las Bambas and Toromocho—and in the DRC—Tenke Furungume, Kinsenda, and Sicomines—show how Beijing has employed its “power playbook” at individual mining sites. But they also highlight that China’s strategy to gain access to transition minerals can adapt: while mining sites in Peru that benefit from large-scale Chinese state-directed financing are typically wholly owned by Chinese companies, in the DRC the state requires that it be given a significant equity stake alongside the Chinese controlling shareholder. But across both countries, Chinese companies maintain majority ownership in these five mining sites—guaranteeing Beijing access to these critical minerals now and long into the future.
To learn more about the individual mining sites, visit https://www.aiddata.org/china-transition-minerals. To access the dataset, see AidData’s Chinese Financing for Transitional Minerals Dataset, Version 1.0.
Methodology note
This analysis relies upon grant and loan commitments from 2000 to 2023, which are denominated in constant 2021 U.S. dollars. It is based upon AidData’s Chinese Financing for Transition Minerals Dataset, Version 1.0, which covers 2000-2021, as well as supplemental data collection completed for post-2021 financial commitments for the mining site profile case studies.
