Glencore is set to send home its workers from Democratic Republic of Congo’s (DRC) Mutanda mine. This move, according to a press statement from the company, follows low cobalt prices and higher costs under the new mining code.
Acording to reports from internal sources, the company is also not looking to renew contracts for external contractors. This also follows Glencore’s rather pessimistic view on the development of Mutanda. In its 2018 resources and reserves report, published this week, the company said it had reclassified an ore body at Mutanda to “probable” rather than “proved”. This has since been attributed to the uncertainty that is the country’s political atmosphere.
Mutanda is one of Glencore’s core assets and the world’s biggest cobalt mine. It produced almost 200,000 tonnes of copper last year and more than 27,000 tonnes of cobalt. This is more or less equal to a fifth of global supplies of the critical battery metal.
Last year the company revealed that Mutanda was under review. This is following drilling results that showed a quick transition to a new type of metal bearing ore. Furthermore, to process this material — and give Mutanda a mine life of 15 years — Glencore would need to invest heavily in new processing equipment. This comes at a time when cobalt prices have fallen to their lowest in two years because of ample supplies.
In its resources report, Glencore said a feasibility study would be completed this year. This will weigh several factors, including costs, returns, the outlook for prices and the political backdrop in the DRC. Last year, Joseph Kabila, the DRC’s former president, signed into law a new mining code that increases royalties and taxes on international mining companies, especially on cobalt, which was declared a “strategic” metal because of its use in electric car batteries.
