Via Metal Miner
It has the largest reserves of cobalt in the world and the 7th largest deposit of copper, making it the cynosure of the mining world. The Democratic Republic of Congo (DRC) plays a central role in the world's rollover to renewable energy and in cobalt price movements. As a result, the central African nation surfaces in global headlines almost every other month.
Last month, Amnesty International called the nation out for human rights abuses due to the expansion of its mines to extract cobalt and copper. Now, the DRC is in the news again, but this time for a little more positive development.
The Kazakhstan-backed Eurasian Resources Group (ERG) recently announced it will invest U.S. $800 million to revive its idle Comide copper and cobalt mine in the DRC. While the announcement itself certainly qualifies as news, the move has not come as a surprise. Indeed, the Congo makes up for about 70% of the world's total cobalt production and is number three in copper production. These facts alone make the country an attractive destination for mineral and metal companies.
ERG's announcement dovetails with its stated objective to tap into the increasing demand for green-energy minerals. Still, the current cobalt price may not inspire much investor confidence these days, it having hit a four-year low this May. However, ERG holds an optimistic outlook on the long-term potential of the cobalt market, as the metal remains a critical component in electric vehicle batteries. Current plans are for the Comide plant to ramp up production to around 14,000 tons of cobalt a year.
Several weeks ago, the Democratic Republic of Congo said it was backing a move for a new copper-cobalt plant from domestic firm Buenassa Sarl. Meanwhile, Washington-based financial consulting firm Delphos International Ltd. would pull in the financing for the U.S. $350 million dollar plant.
Congolese businessman Eddy Kioni owns Buenassa Sarl. He and his firm continue to work with state-run Entreprise Generale du Cobalt, a struggling company that holds all the rights to Congo's hand-mined cobalt. EGC was founded in 2019 with the goal of improving the working conditions of artisanal miners. That said, the DRC plans to reverse how it currently controls its national minerals and the income generated from them.
As per the initial plans, Buenassa will produce 30,000 tons of copper cathode and about 5,000 tons of cobalt hydroxide. However, in this case, the latter would be mostly made up of minerals mined by human hands, something unique to this part of the world. The company will also process the ore for the new smelter and is already said to be in talks with a U.S. commodities trader to market the final product.
As with many other African countries, China is the biggest player when it comes to copper and cobalt in the Congo. But recently, the red dragon's slipping economy has competitors trying to move in. Currently, a vast majority of DRC's minerals end up going to China for refining. In fact, there's already a $6.2 billion minerals-for-infrastructure agreement in place between the two countries, which is up for fresh negotiations. By breathing new life into a dormant mine, the ERG hopes to establish itself as a major player in the global cobalt supply chain. This could, in turn, give them increased influence over the global cobalt price.
Meanwhile, in September of this year, Amnesty International and the DRC-based organization IBGDH released a detailed report titled, "Powering Change or Business as Usual?" In it, the groups highlighted how the enlargement of mining operations compelled whole communities to vacate their homes and move from their lands. Agnes Callamard, Amnesty International's secretary general, was quoted in the report as saying that companies expanding their copper and cobalt mines was leading to large-scale displacement and disruption of lives and, therefore, needed to halt.
By Sohrab Darabshaw
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