Congo’s government and foreign mining companies will begin month-long discussions on the country’s new mining law today. The changes see
Congo’s government and foreign mining companies will begin month-long discussions on the country’s new mining law today. The changes see royalties increase from 2% to 3.5% on base metals and up to 10% on the ‘strategic metal’ of cobalt, riling miners.
Home to 60% of the world’s cobalt production—crucial to the manufacture of computer chips, mobile phones and lithium-ion batteries—Kinshasa’s new code has roiled markets. The price of the metal has risen 8% since the law was signed on March 9, with mining firms warning that the changes will deter further investment.
Even more concerning for foreign investors are reports that Congo’s state-owned miner is pushing to renationalise the industry. The country’s information minister refused to deny the report, simply stating the government was yet to make a decision.
With the price of cobalt having risen almost threefold over the past decade, any potential nationalisation push poses a serious risk—not only to miners but also to downstream producers of devices and, increasingly, electric vehicles.
The current round of negotiations will see miners push for the reinstatement of a clause that provided a 10-year exemption from tax hikes to current projects. Talks will wrap up on April 24.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.