The Government of the Democratic Republic of Congo (DRC) and foreign mining companies will begin month-long discussions on the country’s new mining law on Friday.
This follows the newly passed mining code which sees royalties increasing from 2% to 3.5% on base metals and up to 10% on the ‘strategic metal’ of cobalt, riling miners.
DRC is home to 60% of the world’s cobalt production crucial in the manufacturing of computer chips, mobile phones and lithium-ion batteries. As reported by Foreign Brief, since the new code came was passed on March 9, the price of the metal has risen 8% with mining firms warning that the changes will deter further investment.
Acording to Foreign Brief, more concerning for foreign investors are reports that Congo’s state-owned miner is pushing to renationalise the industry. The country’s information minister has refused to directly comment on the report, simply stating the government was yet to make a decision.
There is fear that, 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. The parties in the negotiations include Randgold Resources, AngloGold Ashanti, Glencore, Ivanhoe, Gold Mountain, and the talks will wrap up on April 24.
Source: Foreign Brief