The Democratic Republic of Congo (DRC) has officially declared cobalt a strategic mineral. This, as reported by Reuters, has since tripled the royalty rate miners will pay to 10%. The decree was reportedly signed by Prime Minister Bruno Tshibala late last month.
According to media reports, the change had been flagged earlier on this year, with cobalt royalties already increased from 2% to 3.5%. This is under the country’s new mining code which came into effect mid-year, despite strong opposition by mining companies including Glencore.
The global miner and commodities trader had since indicated it would push back on the further cobalt royalty increase in the DRC. CEO Ivan Glasenberg, in an investor update before the release of the news, said that they are not going to accept the changes, seeing as to how they are paying the current royalties against their wishes. He further spoke about having talks with the government regarding the new mining code.
Mr. Glasenberg also mentioned arbitration as far as Glencore is concerned. This, he says, is in the event the situation becomes unsustainable. However, he was hopeful that their talks with the government would bear fruits.
Glencore has forecast a 74% increase in cobalt production between 2018 and 2021 to 68,000 tonnes. This is despite recently temporarily suspending cobalt exports from Katanga after finding alarming levels of uranium in its cobalt hydroxide.
DRC president Joseph Kabila told a mining conference in Kinshasa in September that the sector was seen as a growth driver of the economy. He was however quick to reiterate his concerns that the growth translates into the improvement of the daily lives of DRC’s population as a whole. That is, naturally starting from those located in ore-producing areas.