The Democratic Republic of Congo (DRC) is planning to increase its share of the global copper and cobalt trade by securing the rights to buy and sell the metals from its joint venture partners, according to Reuters. The state-owned mining company Gecamines, which holds stakes in several major mines in the country, said it wants to be directly involved in supplying the critical minerals for the green energy transition.
The DRC is the world’s top producer of cobalt, a key ingredient for electric vehicle batteries, and the third largest copper producer after Peru and Chile. However, most of the profits from these minerals have been captured by foreign investors, such as Glencore and China’s CMOC Group, while the DRC has struggled with poverty, conflict and corruption.
Gecamines Chairman Guy Robert Lukama told Reuters that the joint venture partners “can no longer get all the off take of the production”. He said Gecamines now wants to be able to buy copper and cobalt proportional to its stakes in the joint ventures, which range from 20% to 49%, and then trade them on its own. He said the plan had the backing of President Felix Tshisekedi, who is seeking re-election in the Dec. 20 presidential vote.
Tshisekedi has made reforming the mining sector a priority, saying it should benefit the Congolese people and the national economy. He has also renegotiated a $6 billion minerals-for-infrastructure deal with China, which was seen as too favourable to Beijing. The deal, known as Sicomines, involves a Chinese consortium mining copper and cobalt in exchange for building roads, hospitals and other projects in the DRC.
Lukama said Gecamines had already reached a deal with CMOC Group, which operates the Tenke Fungurume mine, one of the world’s largest copper and cobalt mines. The deal includes a $800 million settlement and at least $1.2 billion in dividends to end a dispute over royalties. He said Gecamines was also in talks with Glencore to receive a share of the off take from the Kamoto Copper Co (KCC) mine, where it owns 25%.
The new strategy of Gecamines is expected to boost the DRC’s revenues from its mineral resources, which are in high demand as the world shifts to cleaner energy sources. According to the World Bank, the DRC’s real GDP growth is projected to reach 6.8% in 2023, driven by the mining sector. However, the country still faces challenges such as insecurity, governance, infrastructure and human development.
The DRC’s civil society groups have called for more transparency and accountability in the mining sector, as well as respect for human rights and environmental standards. They have also urged the government to diversify the economy and invest in other sectors, such as agriculture, manufacturing and services, to create more jobs and reduce dependency on minerals.
Source: Reuters
