The elements of power, p.19
The Elements of Power, page 19
The road to prosecution was paved with public and private deals. In 2008, Och-Ziff bought $150 million worth of shares in a Congolese mining company owned by the agent and then, over the next few years, gave him $254 million in loans that were funded out of the hedge fund’s investment capital. Prosecutors from the Eastern District of New York would later contend in a lawsuit against two Och-Ziff employees that they violated the Foreign Corrupt Practices Act (FCPA), because they were certain the money “would be used to bribe high-ranking government officials in connection with the acquisition of assets on behalf of Och-Ziff.”
“The DRC landscape is in the making and I am shaping it—like no one else,” the agent wrote in an email recovered by federal prosecutors. “You see there is a bigger picture in all of this.” When I spoke to a former Och-Ziff manager in 2021, he told me that the fund had changed. “I wasn’t on that desk,” he insisted. “But it was pretty clearly an open-and-shut case of bribery.”
* * *
In 2007, Glencore bought its first shares in Mutanda, the mine that Alex Hayssam Hamze had managed to take control of. Hamze was a plainspoken man, and said that Glencore was wasting money and could act more efficiently in Congo; Glencore’s engineers disagreed and frequently squabbled with Hamze’s team.
An associate of Hamze’s told me that Ivan Glasenberg “randomly ran into” Hamze while prospecting another copper-cobalt mine during a visit to Kolwezi. Glasenberg, who liked scrappy rags-to-riches stories, was impressed. “Glasenberg recognized that when he came to Kolwezi. He said, ‘You guys aren’t running the show—it’s this kid here,’ ” the Hamze associate said. Still, an engineer who used to work for Bazano told me that it was mostly an act. “Alex bought a lot of brand-new machines,” the engineer said. The equipment painted a picture, and Glencore understood that MUMI could be a world-class mine if managed correctly.
A Gertler company soon acquired a strategic parcel of land next door at a knockdown price from Gécamines. By 2011, Glencore realized that MUMI was running out of space to develop and needed the land next door to develop the mine, so the Swiss resources company decided to enter into yet another joint venture with a Gertler company. “Gertler had the other mine with them,” Hamze’s associate said. Hamze “didn’t get on with Gertler. He’s a powerful local guy. Dan didn’t like that.” Finally, Le Petit called Gertler out on the price he was offering: “Hamze said it was too low,” the associate remembered, referring to the price offered by Gertler for MUMI shares. “Why should the guy get in at a fraction of the price?”
* * *
Hamze felt that Glencore had been strong-armed into the merger with Gertler’s company: He understood that the mine next door was worthless. He wrote Glencore a short note protesting the sale, and though it resulted in his asset price rising, he remained incredulous. “How can you force a merger,” Hamze’s associate remembered him asking, “with a company that is literally worth zero for thirty percent of the world’s best cobalt deposits?”
In 2012, Glencore signed a deal that would see it pay $480 million to take control of Mutanda by buying shares owned by Bazano and another Hamze company, High Grade Minerals. The next year, it bought the rest of Hamze’s shares for almost as much. Le Petit had been paid out almost $1 billion for an asset that he had acquired for $300,000 only seven years earlier.
According to Hamze’s associate, Glencore insisted that Gertler be allowed to enter the Mutanda joint venture. “They did it to please the president and to please Dan Gertler.” (Glencore said it was not a matter of pleasing Gertler, but rather that it needed the next-door space; the merger was completed in July 2013.) “We are delighted this investment is now starting to bear fruit,” Gertler said publicly.
Glencore officials from the time remember Gertler being less cheery in private. The Israeli businessman’s shares had been diluted during the Katanga Mining deal, and he was upset at having lost family money on the deal. He was still very wealthy by most standards, but he was suspicious he would lose money again on the MUMI deal; in a separate transaction later on, he would successfully buy the royalty stream for the mine from Gécamines, ensuring him a steady income from the sale of MUMI’s minerals.
By the time of the merger, Hamze, on the other hand, had become seriously wealthy. “He was making millions,” Hamze’s engineer told me. “There weren’t enough trucks to get the minerals out.” He built a hospital and a park, refurbished a golf course, and even created the town of Likasi’s central marketplace. Bazano, his company, had a farm with cattle and vegetables. Hamze remained devoted to his mother and would always make sure to pick her up from the airport when she returned to Congo after traveling to Lebanon, her suitcase stuffed with Levantine flatbread. For fun, Hamze’s family Jet-Skied on Lake Nzilo. One day, a Bazano employee was hurt in a crash. One of Hamze’s family members pulled $300 from his pocket, handed it to the injured worker, and told him to go on leave until he felt better. “They were very generous people,” the engineer remembered.
But through the stormy negotiations, Hamze had also made a powerful enemy: Gertler. Soon, the government was creating problems for Hamze everywhere he turned. He left the country, traveling to South Africa, Malta, and Dubai. “I said, ‘Just look at how many zeros you have on your account,’ ” the associate told me.
Hamze hadn’t fully retreated from Congo, though: Bazano and affiliated companies still do business there, and I was put in touch with a cousin of his who was running an element of logistics for him. Le Petit also owned permits to mine at the Shabara mine, which abuts Mutanda. It was crawling with artisanal miners who had formed a collective called COMAKAT. Hamze was buying copper and cobalt off the artisanals using another company. In 2015, Glencore bought that mine too, although by the end of 2024, it had not managed to expel COMAKAT.
Hamze had been popular in Congo. Jeef Kazadi, for instance, remembered him calling in journalists and offering them money to write stories about his operations. Hamze’s associate remembered visiting Kolwezi and Likasi with him. “It’s like a riot when he’s on the street. It’s like—I don’t know—being with Eisenhower or something,” he told me when we spoke. “He is now sitting bored in Dubai.”
One of the interesting things about the Hamze story is that it shows just how unconcerned the United States was with critical metals during the 2000s and the first part of the 2010s. The presence of Hamze—who had family connections to a part of Lebanon where Iran held sway, in close vicinity to a metal that was used in power storage for almost all cell phones and computers—didn’t seem to raise an eyebrow. (Several well-connected Lebanese sources told me that Hamze had nothing to do with politics in his home country.) U.S. officials at the embassy in Kinshasa didn’t seem to care who he was.
After Hamze left Congo, however, the U.S. government did appear to take an interest in him. He constructed a lavish home near the town of Naxxar on the island of Malta; in 2022, a summary of Maltese planning applications showed he was having an issue with his boundary wall. “I saw him out one night with these two security guards,” a Malta-based U.S. official told me in 2024. “One of them was very pushy.”
During the early part of the Cold War, U.S. spies had fought hard to keep Congo’s uranium out of Soviet hands; during the Mobutu era, the CIA had backed a coup and provided logistics support to keep the dictator in power; now, under Kabila, no one seemed to believe that cobalt was important. The world’s largest economy was still run on hydrocarbons—it was even fighting a losing war for them in Iraq. Perhaps that was why the U.S. government barely seemed to notice when China began to move into the southern Democratic Republic of the Congo.
Chapter 25
A New Cathode
Denise Gray was a company woman: She had grown up in Detroit and risen in the ranks at General Motors since her college days, in the 1980s. As an engineer, she had worked on the electromechanical systems and transmissions of cars. She was even married to a GM executive. After Bob Lutz directed his staff to create an electric vehicle, they had to figure out what type of battery to use. The task fell to Gray, who, in 2006, was promoted to lead GM’s energy-storage solutions. “Lithium-ion is the reason we can do a Volt,” Gray would say. Journalists typically didn’t ask for more specificity on things like cathode composition.
There were, by the mid-2000s, several choices, in fact, when it came to battery chemistry. John B. Goodenough and other scientists had spent the last two decades figuring out how to make more powerful and more cost-effective batteries. What this meant was that Gray’s team wasn’t bound to the LCO cells that powered cars like Teslas and portable devices like laptops. And executives at GM were not advertising the makeup of their batteries—they were playing their cards close to their chests. Gray had quickly alighted on a battery chemistry called lithium nickel manganese cobalt, or NMC.
As with the Japanese lithium-ion batteries, the origins of NMC are contested between a few different laboratories, including Pacific Lithium in New Zealand, Dalhousie University in Canada, and Osaka City University in Japan. The first patents for the battery, however, were filed in the U.S. by researchers at the Argonne National Laboratory in Lemont, Illinois.
The scientists at Argonne were led by Michael M. Thackeray, a sandy-haired South African marathoner who had worked at John B. Goodenough’s Oxford laboratory in the 1980s. There he had discovered that metal spinels—a type of crystalline structure composed of tetrahedron-shaped ion arrangements linked at their corners—were good hosts for lithium ions. (When Thackeray first suggested this to Goodenough, the older professor queried whether there would be enough space for the lithium ions to be intercalated during discharge: “By all means try, but I suggest that you look around the laboratory to see what other projects are going on.”) After a few false starts, Thackeray found that a compound of manganese, a brittle element used in alloys, might provide a suitable receptacle for the lithium-ions in the cathode. “This discovery,” Goodenough remarked to Thackeray in his typically understated manner, “may have commercial significance.”
After a stint in South Africa, Thackeray took a job back at Argonne, arriving during “a blizzard to pale the skin” in February 1994. He would spend the next few years quietly working with a tightly knit team of twelve battery scientists to fashion new cathode materials. One such project involved tests on a material that layered lithiated nickel manganese cobalt oxide with spinels of lithium manganese oxide, a structure that would support the cathode as the battery was charged and discharged.
In 2000, when Thackeray attended a conference in Como, Italy, the birthplace of Alessandro Volta, he got wind of a project by a lab in New Zealand that used lithium-manganese-chromium oxide. Anxious not to be outmaneuvered by the Kiwi team, Thackeray quickly phoned Argonne. His team threw together a patent application, which was provisionally filed in a matter of weeks. The patent gave the team the exclusive right to a cathode of nickel, manganese, and a third metal—cobalt. NMC was combined with the spinel technology to get around the latter’s lower energy density. This new material allowed 60 or 70 percent of the lithium ions to migrate out of the cathode, 10 or 20 percent more than from lithium cobalt oxide, resulting in a more powerful battery. The battery also had a longer cycle life, meaning it would last longer.
NMC batteries allowed electric vehicles to go farther and faster than Goodenough’s original batteries. These days, they are especially popular in the United States and in Europe. As Steve LeVine writes in The Powerhouse, a book about the lab at Argonne that produced the new material, NMC was a “superior” cathode material, and perhaps even a supreme one when it came to electric-vehicle design. Nickel and manganese “really made the price come down for cathode materials,” Shirley Meng, a materials scientist, told me. When we spoke, Meng was working at the University of California, San Diego. She has since moved to the University of Chicago and taken the position of chief scientist at the Argonne Collaborative Center for Energy Storage Science. In the years since the Volt’s release, NMC batteries have been adopted by companies like Audi, Ford, and Tesla as they compete to produce better electric vehicles.
* * *
Like Tesla, General Motors needed to master the art of industrial scale: It needed a place to make the batteries. Gray, the engineer, had winnowed down a list of battery-cell producers. High on her list was A123, a U.S. start-up. The company, where the battery innovator Mujeeb Ijaz worked, was in dire financial straits. It had invested too much in production capacity for orders that never materialized. In many ways, the company’s bosses had repeated the mistakes of Robert R. Aronson, the ’70s electric-car innovator: They had scaled up production too early and too quickly. Only, this time, they had used federal loans to do so. (The Republican presidential candidate Mitt Romney’s campaign would later use the company as a prime example of how the Obama administration was “gambling away” taxpayer money on pie-in-the-sky schemes.) Beijing, on the other hand, was making the gambles it needed to create more powerful batteries and cheaper electric cars.
As A123 crashed, Gray took a job with LG Chem, part of LG, the Korean chemicals behemoth. The subsidiary for which she worked—Compact Power Inc., or CPI—began producing the batteries. It had conveniently placed its offices in Troy, Michigan, about half an hour from GM’s headquarters on the Detroit River. CPI was positioning itself to the U.S. automotive industry as a “one-stop shop” for battery solutions. Compact Power had also received federal funding to build a battery-production facility in Holland, Michigan. That money, like the A123 loans, had come out of President Barack Obama’s American Recovery and Reinvestment Act, a stimulus package created in the wake of the 2008 financial crisis—in many ways, a ringer for President Joe Biden’s 2022 Inflation Reduction Act, which also had as its goal the spurring of battery development.
GM was careful with what it released publicly. The veil of secrecy extended up and down the supply chain. It was broadly known that the Volt used a laminated flat-pack battery, but information about the chemistry used in the cathode was patchy. A website called Green Car Congress reported that “CPI is using manganese-spinel (LiMnO2), which features high stability and resistance to thermal runaway.” The author of the article was apparently unaware of the battery’s NMC component.
Finally, on January 6, 2011, GM held a conference call with Argonne and Mohamed Alamgir, the research director of Compact Power. GM had licensed a new battery technology from Argonne called NMC, Alamgir announced, but he also let slip that the license covered technologies already being used in the Volt. On the call, GM Ventures’ Jon Lauckner noted that NMC was “probably the most capable cathode material we have seen out there.”
The technology took off. By 2019, NMC battery output made up 69 percent of total lithium-ion battery production. “Due to its quality uniformity and high energy density, NCM batteries have become the most widely used component in the battery industry in total,” an LG Energy Solution report informed its readers. (The nickel-rich cathode material is known as both NMC and NCM, depending on whether the cathode contains more manganese or more cobalt.)
Using the stable and thermally resistant spinel technology, LG was able to reduce the amount of cobalt in the cathode. Cobalt formed only 20 percent—and later 10 percent—of an NMC cathode, far less than Goodenough’s original LCO cathode, which contained about 60 percent cobalt. Battery makers in the 2000s had already become concerned about cobalt, not so much for its association with child miners as for its high price. (According to the U.S. Department of Energy, in 2023, cobalt, followed by nickel, was the costliest material used in cathodes.) “There’s a huge drive to cut the cost of lithium-ion batteries. By going from one-third cobalt to, let’s say, fifteen percent cobalt, it cuts the price of that particular material by about forty percent,” said M. Stanley Whittingham, the creator of the first lithium-ion battery. “It’s a huge incentive to get the cobalt out.”
Whittingham, speaking in 2020, also pointed out cobalt’s association with human-rights abuses in Congo. During the 2010s, those concerns would begin to surface not just in Africa but in the U.S. Some people took to calling NMC cathodes “low-cobalt cathodes,” and they became the standard for high-performance electric vehicles. “Cobalt—I mean, that problem—we solved that problem,” a senior scientist with the Argonne National Laboratory confidently told me at the Battery Show in Novi, Michigan, just outside Detroit, in 2022. “And it was scientists at Argonne who did it.”
But cobalt was still needed in NMC, just in lower quantities. And lithium cobalt oxide wasn’t going away anytime soon. It still had many advantages: Batteries made with it, for example, could maintain a high voltage even when low on charge. Well into the 2020s, tech companies that made smaller devices like laptops and cell phones—Apple, for instance—would still use LCO batteries. But there was another problem with NMC: To produce it at scale, battery makers were going to need a whole heap of nickel.
Chapter 26
Nickel from the Forest
Morning in Bahodopi, on the Indonesian island of Sulawesi, begins with fajr, the dawn prayer. It crackles out of clapped-out speakers over a town of corrugated roofs, muddy streets, and tens of thousands of men pulling on blue-and-green smocks and fumbling for hard hats in the morning’s half-light. When the prayer is over, new sounds commence, as if summoned by the incantations to Allah: the crash of hammers and the whir of drills. The town, which sits in a jumble of humid forest, is still being fashioned.
