Kinshasa, April 13th, 2021 (CPA) – Congo’s General Enterprise of Cobalt (EGC) is poised to become the world’s fourth-largest producer of cobalt in 2021, says 2020 Roskill report, which was excerpted by CPA on Monday.
The source indicates that according to market analysts, if this company is able to capture all of 8,000 tons of cobalt that are expected to be produced by artisanal and small-scale miners in the African country, then it could become a major player, behind Glencore, ERG and China Molybdenum.
The report notes that the Democratic Republic of Congo (DRC) holds around 70% of the world’s cobalt reserves and is also the largest producer, accounting for more than 70% of the supply of cobalt mines in 2020. For 2021, the cabinet Consulting CRU expects Congo’s large and small mines to produce more, over 100,000 tons of cobalt, equivalent to 71% of the world total.
The same report also underlines that the supply of artisanal miners in the country is however very elastic and depends on the prevailing market prices for cobalt. According to Roskill, over the past five years, 2016-2020, it has averaged 14% of DRC’s annual production.
In addition to consistency issues, EGC has been tasked with addressing a myriad of environmental, social and governance factors affecting artisanal and small-scale cobalt mining production in the country, in particular child labor and the lack of metrics of security.
This is why the agreement with Trafigura also involves the financing of the creation of strictly controlled artisanal mining zones, purchasing and logistics centers to trace the supply. However, Roskill report believes that the creation of these zones involves challenges such as the real possibilities to control them and to enforce the law. Most of the designated areas are remote and not as well mineralized as large-scale claims held by large mining companies. As a result, these will continue to attract attention. Thus, the plan to combat artisanal miners and deter them from invading private mining concessions will need to be carefully determined and implemented.
“But if these challenges are met, changes are implemented and small-scale operations deliver 8,000 tons of cobalt expected for this year at EGC, the results for what is considered one of the poorest countries in the world, could be exceptional, as more than 1,000,000 Congolese depend on the income generated by ASM cobalt and its associated logistics and support activities. In addition, in DRC, it is estimated that each worker supports an average of 9 dependents. As a result, the development of a well-organized and thriving cobalt ASM sector in the country could be an immense force for good and one of the few positive legacies that can arise from the growing demand for raw materials for batteries”, notes the report.
The same report indicates that created 1 year ago, EGC became operational at the end of March 2021, specifying that the company holds the monopoly rights for the purchase, processing, transformation, the sale and export of the blue metal mined by hand from DRC and will sell cobalt hydroxide under a 5 year contract with the trading house Trafigura. ACP /