As the global demand for electric vehicles continues to grow, the value and importance of cobalt has soared in recent years, and copper and nickel mining has become a key component of batteries. In 2017, Congo’s mines accounted for two-thirds of global production, or 81,000 metric tons.
Congo is the world's largest cobalt producer and one of the poorest countries. Congo is now seeking more income from natural resources, which is said to account for almost all of its export earnings, accounting for a quarter of government revenue. about.
According to Bloomberg, the Democratic Republic of the Congo will announce cobalt as a strategic metal and impose a 10% tax on producers including Glencore and Luoyang Molybdenum. In fact, earlier this year, the Congo has overhauled the regulations, increased royalties on cobalt, copper and gold, and introduced new taxes, which will further increase the cost of mining companies.
Mining Minister Martin Kabwelulu said in the southeast of Koluwezi on Saturday that "strategic material will be defined in the decree issued by the Prime Minister in the next few days, and you will see that the Prime Minister will sign this decree, declaring that cobalt and certain other substances have Strategic significance."
When the new industry guidelines came into effect in June, the royalties for cobalt and copper were raised from the previous 2% to 3.5%. The Act also established a “strategic” mineral category with an application rate of 10%. Including Glencore, ChinaMoly and RandgoldResourcesLtd. Investors have criticized the revised code and threatened to challenge it through international arbitration unless it is softened.
One reason for the anger is that the Congo has lifted a 10-year stabilization clause that appeared in the law that was replaced in 2002 to protect mining companies from financial changes until 2028.
The most uncomfortable blow
Glencore and ChinaMoly may be greatly affected after the announcement of cobalt as a strategic resource in the Congo. Glencore's Mutanda division is the world's largest metal mining company by 2017, with a production of more than 23,000 tons. ChinaMoly owns TenkeFungurume Mining, last year. Nearly 17,000 tons of cobalt were mined.