Glencore cobalt mine scrutinised as Congo evaluations offers

Democratic Republic of Congo added Glencore Plc’s large Mutanda copper and cobalt operation to an inventory of tasks that might face renegotiation, simply as the important thing battery metals mine is within the technique of restarting.

The transfer to probe Mutanda comes as Congo President Felix Tshisekedi will increase his scrutiny of extractive offers made below his predecessor, Joseph Kabila. Congo is inspecting copper and cobalt tasks managed by China Molybdenum Co. and China Railway Group, whereas the president’s advisers are additionally renegotiating the rights to a number of uncooked materials permits and royalty streams managed by Israeli billionaire Dan Gertler.

“When you see what happened in this sector during the previous regime, it was scandalous in terms of concessions given to foreign companies,” Andre Wameso, the president’s deputy chief of workers for financial points, stated in an interview on Thursday within the capital Kinshasa.

Some of Mutanda’s permits expire subsequent month, and Tshisekedi has used the renewal course of to create an ad-hoc fee that can assess the challenge’s advantages for Congo, Wameso, stated.

Mutanda has not been formally notified in respect of any fee, a Glencore spokesman stated by e mail Friday.

Glencore confirmed in December that it deliberate to reopen Mutanda, which was placed on care and upkeep in 2019 after cobalt costs slumped. The operation will produce about 11 000 tons of cobalt a 12 months between 2022 and 2025, with output over the total 20-year mine life anticipated to common about 76 000 tons copper and 21 000 tons cobalt, the commodity large stated.

A reopening of Mutanda comes amid renewed demand for battery metals from automakers as economies shift towards cleaner applied sciences that use electrical energy for vitality. Cobalt and copper are key metals in that inexperienced transition.

Three of Mutanda’s 4 permits are set to run out in May, in line with Congo’s mining cadastre.

“This is an opportunity for us to see very calmly how things have been done and if there are improvements in terms of rebalancing the partnership with Glencore,” he stated. “We have nothing against Glencore,” Wameso stated, including that any rebalancing could be to make sure that the state’s “interests are preserved.”

Congo’s mining code stipulates that miners submit allow renewal functions solely by means of the cadastre and the mines ministry. Neither responded to requests for remark. The code additionally requires firms to cede 5% of their shares to the state on the time of renewal.

According to the code, the cadastre offers the permit-renewal file to the mines minister, who has 30 days to just accept or reject it. If the minister says nothing, the allow then is taken into account accepted, presuming the cadastre has suggested that it’s accepted.

After that the renewal should be registered by the cadastre.

Mutanda is following the method set out in Congo’s mining code in respect of its renewal, which it expects to be registered within the coming weeks, the Glencore spokesman stated.

Mutanda produced a fifth of the world’s cobalt and practically 200,000 tons of copper in 2018, its final 12 months of full manufacturing. The firm restarted processing stockpiles of oxide ore late final 12 months whereas it explores the long run mining of Mutanda’s sulphide assets, in line with Glencore’s 2021 annual report.

Negotiations with China Moly over its Tenke mine are gridlocked over a dispute regarding totally different definitions for estimating the mineral reserves within the challenge, in line with Wameso.

Congo believes the Chinese firm has underreported its reserves, ravenous its minority accomplice, state-owned miner Gecamines, of contractual funds. Last month, the federal government stated it was making an attempt to resolve the dispute amicably and that Gecamines was suspending a court docket case towards China Moly’s Tenke Fungurume Mining SA.

Wameso declined to touch upon authorized proceedings.

The two sides are participating a third-party to conduct an evaluation, stated Vincent Zhou, a spokesman for China Moly, who added that Tenke Fungurume posted better-than-planned manufacturing leads to the primary quarter of 2022.

© 2022 Bloomberg

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