Democratic Republic of Congo will declare cobalt and coltan, used in electric vehicle and renewable energy technology, as “strategic” minerals which will earn the country higher royalties, a report on Reuters said.
This follows on a new mining code that was signed into law on Friday by President Joseph Kabila despite vigorous opposition by global mining companies with operations in Congo such as Glencore, Randgold and China Molybdenum.
Royalties paid to the government from cobalt and coltan mining will jump to 10 percent from 2 percent previously. Miners of the two metals used in batteries, would have paid a royalty of 3.5 percent under the new code if they had not been designated as strategic.
The government considers minerals with the “strategic” designation important for the economic, social and industrial future of the country.
As reported on Reuters, Jean Nkunza said “We need to make enough money before we run out of these minerals so that is why they are strategic to the country”.
“We have to make sure for the next 20 years we make money from these minerals because demand is going to be so high. It’s going to continue to grow and we are not going to stop raising the royalties on these minerals.”
Other “strategic” minerals on the list include lithium and germanium, Nkunza said.
Congo is the world’s biggest source of cobalt, the price of which more than doubled last year. The central African country is also Africa’s top copper producer.
International mining companies have said the new mining code will deter foreign investment but have agreed to start negotiations with the government over measures to implement the code.
The announcement by the prime minister’s office, however, appears to pre-empt those negotiations, which were due to determine, among other things, how metals would be classified.
The code also removes a clause that protected miners from changes to the fiscal and customs regime for 10 years and raises royalties and taxes across the board.
Low commodity prices in recent years hit Congo’s resource-dependent economy hard, causing inflation to swell to nearly 50 percent in 2017, and the government is desperate to increase its revenues.