As part of its first purchases from artisanal miners in the DRC, the Enterprise Générale du Cobalt (EGC) will pay $ 30,000 for one tonne of cobalt. This entity, created in 2019, will begin purchasing within eight weeks and expects to obtain 7,000 tonnes of cobalt this year.
In a telephone interview with Reuters , Jean-Dominique Takis, CEO of EGC, confirmed that the Kasulo mining site, near Kolwezi in Lualaba province, was chosen for the first purchases. The purchased cobalt ore will be transformed into cobalt hydroxide at nearby processing facilities, before being exported, in particular through Trafigura.
According to an agreement reached a few months ago, the commodity trader will indeed be the recipient of EGC purchases even though EGC retains an option to sell 50% of the cobalt to other interested parties. Note that EGC will buy 15,000 tonnes of cobalt from miners next year and up to 20,000 tonnes in 2023.
It should be noted that the proposed purchase price of $ 30,000 remains fairly modest compared to the current market price, which is around $ 50,000 per tonne. Mr. Takis explains that in order not to subject artisanal miners to fluctuations in the stock market and to preserve the purchase price, a fund will be created. 3% of EGC revenue will go to the fund if the metal price is below $ 50,000 versus 5% of revenue if it is over $ 50,000 per tonne.
Recall that the objectives of EGC are to fight against illegal exports of cobalt and to formalize artisanal and small-scale mining (ASM), in order to silence the critics mainly of NGOs.