DRC’s copper exports have been suspended as a result of failure to pay duties in late 2015, early 2016. This comes barely a week after Glencore subsidiary Katanga Mining halted cobalt exports from its Kamoto mine.
In its third-quarter results announcement, Katanga said that the DRC’s customs authority had temporarily blocked its 75%-owned subsidiary Kamoto Copper Company (KCC) from importing or exporting any material or production.
Katanga explained that the dispute arose as a result of the overstatement of copper cathode production in December 2014. According to media reports the production was provisionally invoiced at US $43m in December 2014. However, this was eliminated in the restated financial statements for the years ended December 2015 and 2016.
Furthermore, according to Katanga, the copper cathode production at issue was never produced and not sold. As such, KCC does not believe that any export duties were owed on the overstated copper.
The suspension of KCC imports and exports comes as the company on November 6 announced that sales from the Kamoto mine were suspended after detecting levels of uranium in supplies above those allowed for export. The company plans to stockpile the cobalt supplies until the middle of next year, while it is building a special plant to remove radioactivity.
Meanwhile, Katanga reported an increase in copper and cobalt revenue in the third quarter. This year, copper revenue has since increased to $597.15m. Moreover, cobalt revenue stands at US $322.97m, from nil at the same time last year. This reflects an increase in sales of copper cathode and cobalt contained in hydroxide. According to media reports, this can be attributed to the resumption of production in December 2017.
Katanga warned that unless KCC was permitted to resume imports and exports in the near future, the suspension would negatively impact on its production and revenue.