Congo likely to start buying artisanal cobalt within eight weeks

Energia-africa juillet 12, 2021
Updated 2021/07/12 at 3:29 PM

The Democratic Republic of the Congo is expected to start purchasing cobalt from artisanal miners within eight weeks, as it aims to become the sole legal buyer of informal sector miners.

The government is seeking to capitalize on the growing demand for rechargeable lithium-ion batteries for electric vehicles and curb illegal exports that rob the state of necessary tax revenue. It also aims to put an end to unsafe labor practices and child labor.

Artisanal miners extract cobalt by hand under precarious conditions, often working on illegal or only semi-regulated sites. Most of these materials are purchased by Chinese traders and resold to refiners in China.

State buyer, Entreprise Générale du Cobalt (EGC), launched and announced a responsible sourcing standard in March.

Under the new regulations, tunneling will be prohibited at EGC approved sites and pits should not be deeper than 10 meters. Minors are required to wear  personal  protective equipment and carry a site registration ID card.

EGC is supported by the non-governmental organization Pact, with a mandate to ensure the  safety  , human rights and traceability of cobalt produced by miners at artisanal sites.

EGC will purchase artisanal cobalt in four to eight weeks based on « current knowledge and situation, » Mickaël Daudin  , deputy director of Pact , told Reuters  .

“The site chosen is Kasulo,” he said.

EGC has confirmed its intention to purchase artisanal cobalt on the Kasulo concession, currently operated by Congo Dongfang  Mining  (CDM), a unit of Chinese Zhejiang Huayou Cobalt.

Congo’s artisanal miners are the world’s second largest source of cobalt after the  country’s industrial mines  owned by companies such as Glencore and China Molybdenum.

The DRC produced around 100,000 tonnes of cobalt last year, or around 71% of the global total, according to Darton Commodities market analysis.

 »  Artisanal and small-scale mining (ASM) volumes  would have fallen to around 7,000 tonnes in 2020, » the review said.

The Cobalt Market is closely following the progress of  the  EGC Project as it would allow consumers to use artisanal cobalt, radically changing the landscape of the global market.

Traders expected EGC to start buying artisanal cobalt months ago.

“We’re already in the middle of the year and they still haven’t bought any,” said one cobalt trader. “The Chinese are still the only buyers of artisanal cobalt. « 

CRU analyst Harry Fisher said ASM production is difficult to predict, but estimates it could be between 10,000 and 12,000 tonnes this year.

Commodity trader Trafigura reached a five-year cobalt supply agreement with EGC last November under which it will fund the establishment of  controlled artisanal mining areas  , purchasing centers and  logistics  to trace the supply.



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