The US is imposing sanctions on six individuals believed to have helped fuel the conflict in the eastern part of the Democratic Republic of Congo.

The six individuals are Rwandans and Congolese rebels, or members of their respective defence forces, in what could signal the cross-border complexity of the conflict.

And according to the US Treasury, each of these individuals has contributed to the instability in the eastern part of the country as DRC struggles to end decades of armed conflict.

They include Apollinaire Hakizimana, a Rwandan national playing his violence in the FDLR rebel group as a ‘defence commissioner.’ He is sanctioned alongside Sebastian Uwimbabazi, also from Rwanda but now in charge of FDLR’s intelligence. Also sanctioned in the group is Ruvugayimikore Protogene, fighting for Maccabe group affiliated to FDLR. He is also from Rwanda.

The US State Department said the individuals had been involved in “numerous cases, committing human rights violations, including sexual violence and violence against children.”

The sanctions also target M23 rebel group. Bernard Byamungu, a Congolese national and deputy commander of operations and intelligence was sanctioned.

The sanctions were also slapped on members of the armed forces in both countries.

Col. Salomon Tokolonga, a Congolese national and commander of the Congolese army (FARDC)’s 3411th regiment was sanctioned for leading armed groups to coalesce against the M23, continuing the conflict.

The US Treasury says he “entered Congolese territory and provided support to the M23, which has long-term connections with the Rwandan government.”

FDLR are an ethnic Hutu rebel group believed to be remnants of those who perpetrated the Genocide against the Tutsi in 1994 in Rwanda. They are seen as public enemy number one in Rwanda and Kigali accuses Kinshasa of supporting the group.

On the other hand, the M23 are composed of Tutsi fighters seen in Kinshasa as being supported by Kigali. It is one of the strongest and more organised rebel groups fighting inside the DRC.

Both sides have denied charges of fomenting instability.

The sanctions announced on Thursday means the US is targeting both sides. The sanctions include the freezing of assets held in the United States by the targeted individuals and a ban on any American citizen or entity doing business with either of them. The ban also covers any material support, in the form of food, goods or services, to these individuals.

In the east of the DRC, hundreds of armed groups have made life hell for civilians, who have fallen prey to barbarism. In the troubled eastern part of the DRC, armed conflict has for a long time fuelled cases of abuse and sexual violence. This violence has increased in intensity. According to a report on the Democratic Republic of Congo by UN Secretary-General Antonio Guterres, “between 2021 and 2022, gender-based violence increased by 23 percent nationally and by 73 percent in the province of North Kivu alone, and this trend is set to continue in 2023.”

“These violations and abuses are linked to the proliferation of armed elements in areas hosting displaced people, and to the frequent failure to respect the civilian and humanitarian nature of refugee and displaced person camps. The number of acts of sexual violence committed against children more than doubled between 2021 and 2022″.

The United Nations Children’s Fund (Unicef) and its partners say they helped about 8,100 survivors of gender-based violence at the national level in 2022, compared with 3,500 in 2021, according to the report on the situation in the Democratic Republic of Congo.

The United States says it is committed to advancing efforts to resolve the crisis and to addressing human rights violations and the dire humanitarian situation.

The sanctions against the six individuals come almost a week after the United States sanctioned Congolese officials for corruption, poaching and illegal trafficking of wildlife in North Kivu.

Cosma Wilungula, former director-general of the Congolese Institute for Nature Conservation (ICCN); Léonard Muamba Kanda, former head of department of the DRC’s management body for the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and director of ICCN; and Augustin Ngumbi Amuri, director-coordinator of the DRC’s CITES management body and legal adviser to ICCN have been banned from travelling to the United States. 

The US State Department said that these officials, “responsible for wildlife protection, abused their public office by trafficking chimpanzees, gorillas, okapis and other protected wildlife from the DRC, primarily to the People’s Republic of China, using falsified permits in exchange for bribes.”

Source: Nation Africa

When Guy Robert Lukama looked out at thousands of illegal gold diggers hacking away at the verdant hills in remote northeastern Congo, he glimpsed opportunity where previous owners saw only an intractable problem.

Lukama’s former employer, South Africa’s AngloGold Ashanti, had for years sought to develop the 3,260 square kilometre Mongbwalu concession but pulled out partly due to concern over the sprawling blue-tented camps full of miners.

When he led a buyout of AngloGold’s 86 percent stake in the Mongbwalu Gold Mine (MGM) last year, Lukama knew he couldn’t chase them away if he was to succeed in mining any of the 2.5 million ounces of gold estimated to lie trapped in the earth. Instead, he decided to put them on the payroll.

“We cannot avoid the fact that … we [have] to manage the presence of [the diggers],” Lukama told Reuters.

It is an innovative attempt to address one of the knottiest problems facing industrial miners around the world and the first initiative of its kind in Congo, where up to 2 million people mine with rudimentary tools, most illegally and in dangerous conditions.

While some mines in South America and elsewhere in Africa have experimented with similar concepts, MGM’s could be the most ambitious, particularly in light of concerns over so-called Congolese “conflict minerals.”

Armed groups have long dominated small mines in eastern Congo, a legacy of nearly two decades of war and unrest.

A study by the Antwerp-based International Peace Information Service found that 64 percent of gold miners in Congo work under the influence of armed actors, most commonly government soldiers.

Once the scene of militia violence, Mongbwalu is peaceful these days but the police and army continue to levy illegal taxes on artisanal miners.

“It’s a very fundamental problem,” said Valery Mukasa, chief of staff to Congo’s mines minister. “We don’t need armed men where there is mining.”

Conflict minerals

The 2010 U.S. Dodd-Frank financial reform law requires firms sourcing gold and the “3Ts” — tin, tungsten and tantalum — from Congo or neighboring countries to conduct supply chain due diligence.

Traceability schemes, such as “bag and tag,” which labels minerals by point of origin, have helped reduce armed influence over 3T extraction but have proved unworkable for gold, which is much more lucrative.

In his shop in downtown Mongbwalu, one middleman boasted that he once smuggled abroad 850 kg of gold — worth almost $34 million at current prices – bought from local diggers.

“You put the gold in the suitcase and you drive into Uganda,” he laughed, brandishing a 500 gram brick of solid gold in one hand, a Ugandan driver’s license in the other.

A panel of U.N. experts estimated in 2013 that 98 percent of Congo’s artisanal gold production was illegally smuggled out of the country.

Lukama’s solution depends on establishing partnerships with cooperatives of about 100 diggers each who will work limited plots that can be monitored for evidence of armed influence.

They will be given better equipment and access to areas with high ore grades but which are not suitable for industrial mining. Most importantly their ore will be processed more efficiently at MGM’s industrial plant, allowing the company to
pay them better than the smugglers.

MGM plans to start buying from local miners next month and pour its first gold in the first quarter of next year.

“If MGM helps us with small things … people are going to accept it because they are looking for a livelihood and nothing else,” said digger Freddy Ngoy, 44, over the churning of pumps draining flood water from the recent rains.

“Outside the box”

Not everyone is happy with MGM’s plan. Since March, as the company has laid the groundwork for its scheme, tens of thousands of new illegal diggers have flocked to its concession. Lukama and local activists say they are backed
by local military and political officials.

Congo’s army spokesman did not respond to requests for comment. The director of the provincial division of mines referred questions to the governor of Ituri province, who did not respond to requests for comment.

Even if the initiative succeeds in Mongbwalu, there’s no guarantee other companies will be willing to replicate it, said Gregory Mthembu-Salter, a former member of the U.N. panel of experts specializing in mining supply chains.

“The precedent is a difficult one for industrial miners to swallow because they like to deny the presence of artisanal miners on their concessions,” he said.

MGM estimates around 25,000 diggers mine its concession illegally. Others put the figure as high as 100,000. At most the new scheme will employ around 1,500 informal miners.

Though MGM’s initiative also aims to promote agricultural jobs and develop infrastructure that should boost the local economy, Lukama fully recognizes its limitations.

But with up to 10 million people, or around one in seven Congolese, economically dependent upon the informal mining sector, Lukama said it’s imperative that companies play a role in improving those livelihoods.

“We are not there to fix all the problems. … In a post-conflict area, you should from day one keep in mind how to make it beneficial for most of the stakeholders,” he said. “We have decided to think outside the box.”

Source: VOA News

Global nations are accelerating their efforts to acquire the rich resource base of the African continent, which is expected to become one of the world’s main sources of raw materials in the future.

Perhaps one of the most important of such states is the Democratic Republic of the Congo (DRC). Once a Belgian colony, according to analysts, the country has an economic potential comparable to the strongest regional powers, although currently remains one of the world’s poorest countries.

Being the second largest African country, the DRC is incredibly rich in natural resources. Oil, coal, diamonds, cobalt, zinc, silver, tungsten and other rare metals have been found and mined here. Moreover, the share of the republic in the global production of cobalt reaches 70%. The situation is almost the same with tantalum and coltan (a mixture of columbite and tantalite), which are necessary in the production of electronic equipment, in particular, for military purposes. In addition, the country ranks fourth in the world in terms of diamond production.

Still, political instability and the resulting decentralization of power have resulted in almost 30% of all mining activities in the country being carried out artisanally in hand-dug mines, where safety standards are absent and child labor is actively used. Only in the last two years the government of Kinshasa (the capital of the Congo) has been taking efforts to bring this situation under state control.

According to experts of the Russian Izvestia business paper, until the early 2000s, the DRC, like its neighbours in Central Africa, regularly served as a resource base for Europe (mainly France) and the United States, despite its formally independent status received in 1960. The main assets were controlled by North American (First Quantum Minerals, Barrick Gold, Chevron Texaco and others) and European (Glencore, Areva) companies. For Washington, this source is still of strategic importance. According to some reports, 75% of the cobalt and 50% of tantalum used in the US military-industrial complex is mined in the DRC.

In recent years, the DRC, along with other African states, which are characterized by rich raw material resources, have faced an active expansion of Chinese investors. Over the last decade, overall capital investments of Chinese business in the African mining sector have grown by 22 times, to US$220 billion, and the volume of issued loans increased 74 times (US$100 billion). A significant part of these investments was accounted for in the DRC.

In recent years, imports of some critical minerals, which are produced in the African continent for China, has also increased. For example, since 2015 imports of cobalt to China have grown by 3,000% and copper ore by 1,700%. In the case of the DRC, for 20 years Beijing has effectively withdrawn the US from the mining sector of the country. The latest major US asset in the country’s mining industry was Tenke Fungurume Mining, which was sold to China Molybdenum in 2020.

In the meantime, the mining sector of Congo, along with the country’s hydrocarbons resource base, is also within the sphere of interests of Russia for which the expansion in the African continent, after the exodus from the majority of Western markets, is considered as one of its priorities. As part of these plans, Russia plans to transfer some of its technologies in oil and gas production to the DRC, that will allow to significantly increase their production already in the short-term.

At the moment, the country produces only 22,000 of oil barrels per day, although the DRC hopes to increase these figures by more than 10 times.

Still, the traditional political and economic instability and the simmering military conflict with neighboring Rwanda, which led to the Second Congo War (the origins of which, go back to the bloody war between the Hutus and Tutsis in Rwanda) poses a threat for the active development of the DRC’s rich raw materials base.

The biggest instability is currently observed in the eastern part of the DRC. The situation is complicated by the fact that the republic’s central government does not fully control individual regions of the country. Chinese and Western companies have learned to work in this environment. They seek to form an autonomous environment which includes tools to ensure the security of mines under their control, create logistics corridors, conduct a dialogue with local communities.

According to analysts, the future situation in the region will be determined by the ability of the central government of the Democratic Republic of the Congo to establish control over the activities of foreign business and limit the influence of other regional players, including Rwanda and Tanzania, as well as to send an income from the export of raw materials to the development of the eastern provinces of the country.

Source: Resource World

A $2.6 billion deal announced last week has set the stage for a potentially landmark shift in the metal and mining investment landscape: the arrival of Saudi Arabia as a pivotal player.

The agreement with Vale SA gives the kingdom a 10% slice in one of the world’s crucial suppliers of nickel and copper — essential metals needed to decarbonize. It’s also held other talks, including with Barrick Gold Corp. about investing in a big Pakistan copper mine, according to people familiar with the matter. Speaking privately, executives at top miners said the value of Thursday’s deal made clear that the Saudis are ready to splash cash around.

The move comes as the question of who controls the commodities needed to both sustain and decarbonize the world’s economies has turned into a global flashpoint, jumping to the top of agendas in the US and Europe.

China has for years been the dominant buyer and a key source of funding, as it sought to secure supply for its rapid industrialization. But as tensions with the West have mounted, the mining industry is now facing increased pressure to look elsewhere.

Saudi Arabia is seeking to take minority stakes in global mining assets that will over time help provide access to supplies of strategic minerals. The country also is looking to build a metals-processing industry that could in turn make it more attractive for international miners to exploit its mineral deposits — a central pillar of Saudi efforts to diversify the economy away from oil.

The kingdom has invested heavily into industrial and financial assets and even turned the world of sport upside down by essentially buying the game of professional golf and piling into soccer. However, the Vale deal announced last week is its first major foray into mining. Manara Minerals, a new venture between the kingdom’s sovereign wealth fund and state mining company, will get a stake in Vale’s base metals business, giving Saudi Arabia an interest in mines from Indonesia to Canada producing copper, nickel and other industrial metals.

For western producers, the kingdom offers access to deep pools of capital, which are appealing as Chinese funds become less politically palatable, but also as some institutional investors have turned less comfortable with mining over environmental concerns.

Investors from the region — Qatar is already a major backer of Glencore Plc — are now likely to become one of the most important financiers for the capital hungry sector, according to serial mine builder Robert Friedland, who spent the last few years developing one of the world’s biggest copper operations, in the Democratic Republic of Congo, with the help of Chinese funds.

“Now, probably, the largest supply of capital to the mining industry will come from the Middle East,” he said in an interview last month.

But Saudi Arabia offers something else beyond cold cash: political backing for companies looking to expand into the Muslim world as deposits in more traditional jurisdictions are depleted.

Canada’s Barrick has been in talks with the Public Investment Fund about a potential stake in its Reko Diq copper project in Pakistan, which is a relatively untouched frontier for the international mining industry, according to people familiar with the matter. Bringing the Saudis on board would not only ease Barrick’s funding burden, but also introduce a partner that has significant political influence in Pakistan, the people said.

Spokespeople for the PIF and Barrick did not comment.

Saudi Arabia’s deep pockets may also present some challenges for the biggest producers who are looking for deals of their own. Keen to get more exposure to copper and nickel, miners have started writing the biggest checks in more than a decade. BHP Group and Rio Tinto Group — the two largest — have just completed multi-billion dollar deals to grow in copper, while Glencore Plc tried to buy Teck Resources Ltd.

For years, the big producers have found themselves repeatedly outbid by Chinese companies when it comes to buying mines. China’s state-owned metal and mining companies have been willing to pay valuations that western firms simply couldn’t match. Saudi Arabia now seems willing to do the same, potentially putting some deals beyond the reach of the industry’s traditional buyers.

Executives at two of the biggest mining companies, which have spent years assessing base metal assets such as those owned by Vale, said privately that they were surprised by the price tag in last week’s deal, which valued the unit at $26 billion (RBC Capital Markets said it was worth about $21 billion.)

Still, unlike Chinese companies, Saudi Arabia is currently more interested in securing stakes — guaranteeing future supply of critical minerals — rather than buying outright and then operating the assets.

Saudi Arabia set down a marker earlier this year when it announced the new firm to invest in mining assets globally, with $3.2 billion for initial investments. The country holds an annual mining conference, which this year featured the CEO of the world’s biggest mining company, BHP’s Mike Henry, as well as the chairman of no. 2 producer Rio Tinto — a major step up from past speakers. CEOs from other top miners are expected to attend next year.

For mining companies looking for funds, the US and Canadian governments’ recent crackdown on Chinese investment in key metals companies has changed the investment landscape. That’s given an opening to Middle Eastern countries like Saudi Arabia to fill the gap.

“Everything’s changed,” said Friedland.

“The American government has an ‘ABC’ policy: Anything But China. So the American government instead goes to rulers in the Middle East and says, “You should be giving the African people an alternative for financing mines in Africa. Recycle some of those petro-dollars.”

Source: Mining.com

A DW journalist has been given unprecedented access to rebel-controlled gold mines in the Democratic Republic of Congo. Miners and civilians are forced to risk their lives, while the wealthy buy gold in the global north.

We’ve been waiting for hours to meet rebel leader William Yakutumba. As darkness falls, a man who had introduced himself as Raymond, Yakutumba’s secretary general, assures our group of journalists that the rebel strongman is marching through the forest that surrounds Misisi town with his security escort.

He and some other rebels are drinking beers in a hideout, which from the outside looks like a hotel closed for construction. But from behind a barrier, it serves as a base for the Mai-Mai Yakutumba rebels who are from one of the most active groups in eastern Democratic Republic of Congo (DRC).

The Mai-Mai Yakutumba are feared for their brutality. They have repeatedly attacked an ethnic group called the Banyamulenge, a Tutsi group, that they say doesn’t belong to the DRC. They drive them out, indiscriminately raping and killing as they burn down entire villages.

‘Friends in high places’

The rebels can move freely without having to hide because they work together with the army, Raymond explains.

“A colonel of the Congolese army is my good friend,” he brags, calling what he says is the colonel’s number. He has a brief conversation on speakerphone — “proof” for the international journalists.

He shows us pictures on his cellphone: His rebel colleagues posing with AK47s and other heavy weapons as children stand among them. They all wear uniforms he claims they stole from defeated Congolese army soldiers.

“We have all kinds of uniforms. If I want to, I can become a police officer.” He joined the rebels after his whole family was killed when he was 9 years old, he says. They see themselves as a self-defense group against their enemies.

We wait in vain. Yakutumba never shows up. But we receive his permission to enter two mines that the group controls: Mitondo and Makungu, near Misisi town.

Who controls the mines?

According to a recent UN report, the group not only controls these two mines but also the routes to them and a vast area around them.

Our journey brings us to Nyange village, located beside the mines. But the village chief is not happy with our permits. Nor is he convinced by our letter stamped by the governor of South Kivu region. It seems the local chief doesn’t want us to go there.

Officially, the mine is controlled by the local authorities and the mining ministry, but after hours of discussions the village chief eventually admits to our local contact: He can’t let us go to the mines — it’s not safe because the rebels control it, not him.

After a long conversation, we admit to him that the rebels have given us their permission to visit.

He’s stunned. And lets us proceed. But only after we agree to be accompanied by a police officer, a soldier, an intelligence officer, the son of the chief, and a man who introduces himself as part of the local mining cooperative — but whom we later learn is actually one of the rebels.

Rebels in red

We notice all rebels we meet wear something red. Red trousers, red hats, a red ribbon somewhere. Red is their distinguishing feature so that villagers know who they are. They live among the villagers. Everyone knows they control the mine and tax the people working there.

According to the UN report, the Mai-Mai have been in control since December 2021, when they forced government troops out.

The Mai-Mai appointed a parallel administration to govern the mine, says the UN report, which miners confirm.

According to the report, up to 150 diggers are at the site, which produces between 1 and 2 grams of gold per week.

Miners extorted

At the Mitondo mine, our local contact manages to distract our entourage, allowing us to hide in one of the narrow tunnels and speak to one of the miners, who we call Michael. He tells us that he has to pay a “tax” of a few dollars each month to the rebels just to access the mine.

Together with different government taxes and the contribution for the mining cooperative, there’s not much of his salary left on which to survive.

“They take over what is most lucrative. They know exactly which mine is producing most gold, down to which tunnel,” Michael tells us.

In meter-wide tunnels that feel overwhelmingly hot, he scrapes out a gold-bearing rock. He tells us about their special breathing technique to help deal with the stifling heat. Flat, regular breaths to prevent fainting. “When you go to work, you just pray to God. Because we’re feeling like it’s a death sentence,” he says.

Often it is — when the mines cave in. Six years ago, more than 20 people were buried alive.

Another digger, Patrice, remembers it well. “I was there with my three brothers and other miners. All of them were trapped inside the mine. Up until now, their bodies are still inside. I was sad, really sad. But I can’t be sad for long. I have to earn a living.”

Other miners have similar stories. They say the Mai-Mai are never far away, even now that they’re hiding further up the mountain because they were told that we were coming.

Later, we confronted the Mai-Mai Yakutumba via WhatsApp about these allegations, but they never replied. Local government officials also repeatedly declined our interview requests. Several sources tell us that the rebels often work together with local authorities and even share profits with them.

Surviving a rebel attack

We later meet Esther Nanduhura, who is from the Banyamulenge ethnic group targeted by the rebels. She describes how she survived an attack by the Mai-Mai Yakutumba. 

“They found us at the place we had sought refuge and they killed three people. Then they murdered my father-in-law and injured my mother-in-law,” she recalls.

Both of them were over 80, she says. She and her family were forced to march for days with no food. Then they took her husband. She never saw him again. Later she learned he had been hacked to death with a machete. They killed dozens, displaced hundreds in several attacks. 

Now Esther is safe, sheltering with her eight children at a friend’s house in a bigger city.

She is aware that gold from DRC ends up in the rich part of the world; people there pay a lot of money for it.

“The Mai-Mai sell gold to white people to buy weapons — that’s why they sell the gold. I want to tell these white people to stop buying from them. So they stop killing us with these weapons.”

For Esther it is a simple equation: As long as armed groups can reap profits from gold mining, they will keep earning the cash to kill. 

Fake gold certificates

The Democratic Republic of Congo has some of the purest gold in the world. Belgian businessman Yasin Karim Somji tells us that he is convinced of the purity of the gold in Misisi and other places in the North and South Kivu regions. He plans to soon open the first gold refinery in the DRC and export the gold to Europe, Asia and America.

“At the moment we are in long discussions with the government. They will check all artisan mine workers who will come here; they will try and trace it and maybe it will help. I hope it will help,” Somji says.

But it will be hard to make sure the gold that comes out of the region is not linked to rebels. Traders tell us that tracing certificates that indicate the origin of the gold are already altered in the first city they reach, Bukavu, in the DRC’s East.

From here it is often smuggled or officially exported — with fake certificates — across the border to Rwanda and other East African countries. Then it is transported to Dubai, a worldwide trading center for gold.

Eventually, it’s sold to the end consumer in Europe, the United States and other countries.

The vast majority of gold from DRC is smuggled illegally across the border. When it reaches its final destination it is virtually impossible to know where it originally came from.

Source: DW

Paris-headquartered minerals giant Imerys plans to develop a lithium extraction project that it’s hoped will help meet demand and secure supply for Europe’s emerging electric vehicle market.

In a statement Monday, Imerys said its Emili Project would be located at a site in the center of France, with the company targeting 34,000 metric tons of lithium hydroxide production each year from 2028.

According to the business, this level of production would be enough to “equip approximately 700,000 electrical vehicles per year.”

Alongside its use in cell phones, computers, tablets and a host of other gadgets synonymous with modern life, lithium — which some have dubbed “white gold” — is crucial to the batteries that power electric vehicles.

The project being planned by Imerys is taking shape at a time when major economies like the EU are looking to ramp up the number of electric vehicles on their roads.

The EU plans to stop the sale of new diesel and gasoline cars and vans from 2035. The U.K., which left the EU on Jan. 31, 2020, is pursuing similar targets.

With demand for lithium rising, the European Union — of which France is a member — is attempting to shore up its own supplies and reduce dependency on other parts of the world.   

In a translation of her State of the Union speech last month, European Commission President Ursula von der Leyen said “lithium and rare earths will soon be more important than oil and gas.”

As well as addressing security of supply, von der Leyen, who switched between several languages during her speech, also stressed the importance of processing.

“Today, China controls the global processing industry,” she said. “Almost 90% … of rare earth[s] and 60% of lithium are processed in China.”

“So we will identify strategic projects all along the supply chain, from extracting to refining, from processing to recycling,” she added. “And we will build up strategic reserves where supply is at risk.”

Back in France, Imerys said it was finalizing what it described as a “technical scoping study” in order to “explore various operational options and refine geological and industrial aspects relating to the lithium extraction and processing method.”

The site selected for the project has, since the end of the 19^th century, been used to produce a type of clay called kaolin for use in the ceramics industry.

The construction capital expenditure of the proposed lithium project is estimated to be around 1 billion euros (roughly $980 million), Imerys added.

“Upon successful completion, the project would contribute to the French and European Union’s energy transition ambitions,” the company said. “It would also increase Europe’s industrial sovereignty at a time when car and battery manufacturers are heavily dependent on imported lithium, which is a key element in the energy transition.”

In recent years, a range of factors has created pressure points when it comes to the supply of the materials crucial for EVs, an issue the International Energy Agency highlighted earlier this year in its Global EV Outlook.

“The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge,” the IEA’s report noted, adding that prices of materials like lithium, cobalt and nickel have soared.

“In May 2022, lithium prices were over seven times higher than at the start of 2021,” it added. “Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors.”

In a recent interview with CNBC, the CEO of Mercedes-Benz sketched out the current state of play, as he saw it when it came to the raw materials required for EVs and their batteries.

“Raw material prices have been quite volatile in the last 12 to 18 months — some have spiked and actually some have come back down again,” Ola Kallenius said.

“But it is true as we become electric, all-electric and more and more automakers go into the electric space, there is a need to increase mining capacities and refining capacities for lithium, nickel, and some of those raw materials that are needed to produce electric cars.”

“We have everything that we need now, but we need to look into the mid to long-term and work with the mining industry here to increase capacities.”

Source: CNBC

The global market size of cobalt is expected to grow from $8.7 billion in 2021 to over $19.4 billion by 2030 according to a recently updated report from Straits Research. Demand for cobalt and other raw metals necessary for electrification is ramping up substantially.

Cobalt is a raw material that has a wide range of uses across many industries and is a by-product of nickel or copper mining. It’s a key component in rechargeable batteries and demand is anticipated to drive a 9.3% compound annual growth rate for the metal between now and 2030.

Use cases for cobalt continue to grow, as the metal is known for its high-temperature resilience, energy storage capabilities, hardness, process efficiency, and more according to the report. Demand is growing within the artificial intelligence industry, additive manufacturing, as well as digital processing as R&D drives continued innovation in the use of cobalt.

Cobalt is currently used in several sectors. It’s used in batteries of portable electronics like laptops and smartphones. It is in integrated circuits, in permanent magnets in wind turbines, and rechargeable batteries for storing renewable energy. It is also used in superalloys used by the aerospace and defense sector as well as in orthopedics and dental implants.

Over half of the cobalt produced today is used for rechargeable batteries for electric vehicles, with each battery requiring between 5-15 kilograms (11-33 pounds) of cobalt. As demand increases exponentially for EVs, so too will the demand for cobalt.

Investing in Cobalt and Electrification Metals With KMET

KraneShares launched its newest fund this month, the KraneShares Electrification Metals ETF (KMET), which offers targeted exposure to the metals that will be necessary for the electrification and clean energy transition of the world’s economy in the pivot to net-zero emissions.

The fund seeks to track the Bloomberg Electrification Metals Index and is comprised of futures contracts on copper, nickel, zinc, aluminum, cobalt, and lithium. These metals are all core components for batteries, electric vehicles, and the renewable energy infrastructure that is being created and expanded as countries aim for net-zero emissions by 2050 to curtail global warming.

KMET has an expense ratio of 0.79% and is part of the climate-focused lineup of funds from KraneShares.

Source: ETF Trends

Shortly before arriving at the Paris Motor Show on Monday, French President Emmanuel Macron told the financial daily Les Echos that his administration wanted to make electric vehicles “accessible to everyone”.

Macron then proceeded to announce a series of measures to enable households to acquire electric vehicles. With the EU seeking to ban the sale of combustion engine vehicles from 2035, France is trying to gradually phase out fossil-fuel cars. While the move is seen as an essential step on the road to energy transition, it also poses a serious problem: it will require massive quantities of metals needed to manufacture batteries, especially lithium.

The figures speak for themselves. Since 2015, production volumes of lithium – also known as “white gold” – have tripled worldwide, reaching 100,000 tonnes per year by 2021, according to the International Energy Agency. The volumes could increase sevenfold by 2030. At the European level, about 35 times more lithium will be needed in 2050 than today, according to an April study by KU Leuven, a Catholic research university in Belgium.

“We are at a stage where all countries are starting their energy transition more or less at the same time and this generates very significant metal needs,” noted Olivier Vidal, a geologist and director of research at the French National Centre for Scientific Research (CNRS). “This will certainly create tensions in the coming years, with expected increases in costs and, possibly, supply difficulties. So, there is a real strategic and sovereignty issue for states.”

The European Commission is well aware of these concerns and included lithium in the list of critical raw materials with a risk of shortage, back in 2020. Lithium “will soon be even more important than oil and gas”, said European Commission chief Ursula von der Leyen in September 2022.

Extraction projects in their infancy

Lithium production today is dominated by just a handful of countries: Australia, which has 20% of the world’s reserves of “white gold”, and Argentina, Chile and Bolivia, which have 60%. China, on the other hand, was an early investor in refining and controls 17% of the world’s lithium production. With just five countries controlling 90% of world production, the International Energy Agency calls it a “quasi-monopoly” situation.

Europe hopes to make the most of the new “white gold” rush by exploiting its own subsoil. The continent’s main reserves are in Portugal, Germany, Austria and Finland. In France, the French Geological and Mining Research Bureau (BRGM) drew up an inventory in 2018 highlighting reserves in Alsace, the Massif Central region, as well as in the Armorican Massif area in Brittany.

Europe’s lithium extraction and production projects have been mostly undertaken by small and medium-scale companies across the continent. “The most successful ones are in Finland. Lithium production could start in 2024 thanks to the exploitation of a small mining site located about 600 km north of Helsinki,” explained Christian Hocquard, a geologist-economist and co-author of a book on lithium energy transition. “In the Czech Republic, an Australian company, European Metals, wants to exploit old tin mines located north of Prague. There are similar projects in Germany and Austria,” he noted.

“These are generally minor projects, carried out by small companies. The big ones prefer to invest in Australia or Latin America,” explained Hocquard. “Few of them will see the light of day, blocked by the difficulties of obtaining permits but above all due to resistance from local communities,” he predicted.

Facing the environmental consequences of our consumption

Mining projects often faced public discontent. In Portugal, an open-pit mine – the largest in Western Europe – was supposed to be built in 2026 in the village of Covas do Barroso. Work has however been currently suspended following numerous protests. In Serbia, the opening of the Jedar mine was cancelled a few months before the January 2022 presidential election. In France, Barbara Pompili, former ecological transition minister, floated the idea of exploiting lithium in the tiny village of Tréguennec, in Brittany’s Finistère region back in February 2021. The area however is classified as a protected zone and sparked a local outcry.

Lithium extraction “produces considerable volumes of waste that must then be stored. The waste can also lead to water or air pollution,” explained Vidal.

While Vidal views the outcry as “completely understandable”, he nevertheless supports these projects. “It would be much more ethical. We consume lithium daily, it would be normal for us to suffer the impacts related to our use. Today, this pollution already exists, but in other countries, far from our eyes. This would raise awareness among users, who would be confronted with the impacts of their consumption,” he said.

France looks to ‘green lithium’

France, for its part, is studying an alternative, called the extraction of “green lithium”. Unlike extractions from rocks or salt deserts, which function like traditional mines, “green lithium” is produced from geothermal sources, with an extraction method similar to that of a well. In France’s Alsace region, the European project EuGeLi (for European Geothermal Lithium) is a pioneer in this field. It recently succeeded in extracting its first kilograms of lithium using this technique. “For the time being, however, the technique remains too expensive to be considered on an industrial level,” noted Hocquard.

The other alternative is to focus on refining lithium rather than mining it. A project was announced in Germany in early June and the Strasbourg-based company Viridian Lithium plans to open the first French lithium factory for batteries there by the end of 2025. It will source ores from Latin America and aims to produce 100,000 tons of lithium hydroxide by 2030. “This would not solve the issue of dependence, but it would create know-how and jobs,” said Vidal.

From an ecological perspective, this would also have a major advantage. At present, lithium is almost systematically transited through China to be refined. The EU now plans to open three “gigafactories” for battery production.

Focusing on battery recycling

Vidal warns that even if all these projects come to fruition, they would still not be able to compete with the salt deserts of South America or with Australian production. “On the other hand, where the European Union could really make its mark in the coming years is in battery recycling,” he noted.

“Currently, the quantities of metals to be recycled are still limited since lithium batteries did not exist ten years ago. But by 2035, we will have batteries for electric vehicles at the end of their life and therefore a stock that can be recycled,” he explained. According to the University of Leuven, 40% to 75% of the EU’s metal needs could be met through recycling by 2050. This would guarantee supply security as well as reduce the environmental impact.

“For that to happen, we have to act now,” said Vidal. “We need to design products that will be easily recyclable, at lower cost, to reassure investors.”

But most important, according to Vidal, is our consumption habits. “We need to think about our uses. Lithium is certainly used in car batteries, but also in many everyday gadgets,” he explained. “One of the levers is also to learn to move towards more material sobriety.”

Source: France24

Mining represents a critical sector for the development of the Democratic Republic of the Congo (DRC). According to the World Bank, the mining sector has dominated the Congolese economy since the early 1910s.

This domination is unsurprising, given that the country is incredibly rich in minerals. For example, the Katanga Copper Belt’s cobalt reserves total an astounding 5 million tonnes, making it the world’s largest known cobalt deposit. The DRC also possesses the largest known diamond deposits and the largest gold deposits in the world. Its copper reserves make this region the second richest copper region in the world, with 70 million tonnes, surpassed only by Chile. Other significant mineral resources in the DRC include tin, tantalum and tungsten.

Since peace returned to the DRC, successive governments have faced significant challenges in their efforts to establish or re-establish both industrial production and a legal framework for this key sector.

After several years of discussion, the Congolese Mining Code was enacted by the Congolese Congress in 2002, replacing outdated mining legislation. This resulted in both an increase in foreign direct investments and a steady increase in copper production in the years prior to the global financial crisis of 2008. Despite this crisis, more than 1 million tonnes of copper were transported in 2014, up from 9,000 tonnes in 2003, the year a peace agreement officially ended Africa’s deadliest civil war.

The 2002 Mining Code was substantially amended by Law No. 18-001 of 9 March 2018 (the New Mining Code). The New Mining Code notably reinforces local content requirements, reduces the tax regime attractiveness and abrogates the 10-year stability clause provided for in the 2002 Mining Code.

Major mining companies have threatened to challenge the New Mining Code through international investment arbitration. However, the DRC government has maintained all the problematic amendments in the New Mining Code.

Some commentators had predicted that, as a consequence, the DRC’s mining sector could suffer a slowdown. This has, however, not been the case and the DRC’s mining sector continues to grow. In 2021, the mining sector was still a key driver of DRC’s growth, with copper and cobalt production rising by 12 per cent and 7.6 per cent respectively.

Legal Framework

The New Mining Cod was adopted by the Congolese Parliament on 27 January 2018 and promulgated by the President of the DRC on 9 March 2018. The implementing measures of the New Mining Code are set forth in the Mining Regulations adopted in June 2018.

The DRC is a member of several international organisations, including the World Trade Organization, the World Bank Group, the Multilateral Investment Agency, and the International Centre for Settlement of Investment Disputes. The DRC has also ratified the 1958 New York Convention on the recognition of foreign arbitral awards.

In addition, the DRC voluntarily adhered to the Extractive Industries Transparency Initiative criteria, and has entered into several bilateral investment treaties and into a convention for the avoidance of double taxation with Belgium.

Additionally, with the stringent UK Bribery Act and US Foreign Corrupt Practices Act in force, it is essential for any company doing business in the DRC to seek professional commercial and legal guidance to mitigate business and regulatory risks. Section 1502 of the US Dodd–Frank Wall Street Reform Act and the new EU Conflict Minerals Regulation are also relevant for businesses active in the DRC. Depending on the type of mineral traded (tin, tungsten, tantalum and gold), these laws impose extensive supply-chain due diligence obligations on both upstream and downstream companies.

At the regional level, in July 2012 the DRC joined the Organisation for the Harmonisation of Business Law in Africa (OHADA). OHADA law can only benefit further investment by providing companies doing business in the DRC with a single, modern, flexible and more reliable business law framework, which already applies in 17 OHADA Member States and which supersedes previous or subsequent national legislation. OHADA law is of particular interest to mining companies, as it primarily covers commercial, corporate, loan-guarantee, accounting and arbitration law. OHADA law entered into force in the DRC on 12 September 2012. In addition, a one-stop shop for business start-ups was instituted and shows encouraging development.

Congolese law, which is based on civil law and closely modelled on Belgian law in particular, will remain applicable in areas not governed by OHADA law. It will, thus, be of paramount importance to understand the myriad applicable pieces of legislation to properly navigate the remaining bureaucratic, legal and, especially, cultural and linguistic hurdles.

The Mining Cadastre receives applications for mining rights, grants mining rights and keeps records of mining rights, among other functions. Moreover, the DRC has created a national transparency initiative committee with respect to the management of extractive industries in the DRC. Any regulation is issued by the Ministry of Mines, which supervises mining activities at the national level. At the highest level, the President of the DRC is empowered to enforce the mining regulations and to classify mineral substances as reserved mineral substances, if applicable.

Mining rights and required licenses and permits

Underground minerals belong exclusively to the state. However, any private party may be authorised by the state to engage in mining activities (from exploration to exploitation and distribution), provided that specific objectives of eligibility, priority and capacity criteria set forth in the Mining Code are met. The types of mining permits available in the DRC are research permits, exploitation permits (including small-scale mines) and tailing exploitation permits. Specific legislation regarding artisanal mining and quarry rights also exists.

Companies that wish to develop mining activities in the DRC are required either to incorporate a Congolese company or to elect domicile with a ‘mining agent’ as a condition of eligibility to obtain an exploitation permit. In addition, to be eligible for a mining permit, companies are obliged to either form a joint venture with a state-owned company (such as Gécamines) that already holds the necessary permits, or freely assign a mandatory 10 per cent stake of its share capital to the DRC.

Any person wishing to engage in prospecting or reconnaissance activities must make a prior declaration to the Mining Cadastre and seek a prospecting permit. This permit entails no priority whatsoever in relation to potential future exploration or exploitation rights.

An exploration permit may be granted to any eligible private company for a period of five years, renewable once for the same duration, with respect to all mineral substances (Article 52). To be eligible for an exploration permit, a company must demonstrate a minimum financial capacity of at least five times the total amount of the annual surface rights payable for the area covered by the exploration permit (Article 58). The surface rights amount to US$5.89 per square metre (Article 397). In addition, the company will have to submit a rehabilitation and mitigation plan before starting any research activity. There are specific obligations for maintaining the permit, including the requirement to start exploration work within one year of delivery of the permit (Article 197).

Should the holder of a research permit demonstrate through a feasibility study the existence of an economically workable ore deposit (including tailings, for which specific permits exist) and sufficient financial capacity for the development, construction and exploitation of a mine, the Minister of Mines may grant an exploitation permit for a duration of 25 years, renewable for successive periods of 15 years. The exploitation permit may be refused by the Minister of Mines only for specific reasons, which are exhaustively listed in the Mining Code. Obtaining an exploitation permit obliges the operator to transfer to the state a free carry participation of 10 per cent of the operator’s share capital (Article 71). In practice, however, operators that are engaged in joint ventures with state-owned permit holders, such as Gécamines, are not required to transfer 10 per cent of their share capital to the state.

In addition to exploration and exploitation permits, the Mining Code contains specific provisions with respect to artisanal or small to very small-scale mining rights, and quarry rights. Quarry rights relate to construction materials rather than mineral substances.

The timeline for obtaining an exploration or exploitation permit is as follows.

The Mining Cadastre has 20 working days to examine the request and to make a decision (Article 40). Following this, the Directorate of Mines must conduct a technical investigation. The office in charge of the protection of the environment examines the environmental impact study and the environment management plan. These reviews must be conducted within a period of time set forth in the Mining Code for each type of request (typically, for exploitation permits, within 30 working days for the Mining Cadastre, 60 working days for the Mining Directorate and 180 working days for the environmental investigation). Should any of the aforementioned authorities fail to reach a decision within the required time frame imposed by the Mining Code, the mining permit will be considered granted.

When a favourable decision is made, the Mining Cadastre will then grant the mining permit to the applicant, provided that the relevant surface rights have been paid for within 30 business days.

All mining rights are conveyable under the Mining Code. A specific right of amodiation (comparable to a long lease agreement) also entitles the holder of an exploitation permit to transfer all or part of such rights under a rental scheme. Exploitation permits can also be mortgaged. Finally, while mining rights are valid only for specified mineral substances, permits can be extended to additional minerals through specific procedures.

Processors of mineral substances who do not hold mining rights and whose activities are limited to processing activities must obtain a specific licence in this respect pursuant to the Mining Code.

The holder of a research permit will also have to submit a rehabilitation plan for the site after its closure to be eligible for an exploitation permit. The closure of a research or exploitation centre must be promptly notified to the Mining Administration.

The holder of the mining rights is required to obtain a financial guarantee in an amount sufficient to carry out environmental rehabilitation.

Environmental and social consideration

iEnvironmental, health and safety regulations

The New Mining Code and the Mining Regulations contain several environmental and health and safety regulations. Environmental regulations are by far the most detailed.

While most health and safety regulations are contained in the Congolese Labour Code, and are therefore not specific to the mining sector, the Mining Regulations do contain specific safety directives regarding the use of explosives.

In order to conduct mining operations, an Environmental Exploitation Permit from the Ministry of the Environment is mandatory, in addition to the environmental obligations arising from the New Mining Code.

Environmental Compliance

Environmental compliance obligations exist at every stage of a mining project:

1. the holder of an exploration permit must apply for the approval of a mitigation and rehabilitation plan in which the measures taken to limit and remedy environmental damage caused by exploration work are described;
2. any person applying for an exploitation permit is required to submit an environmental impact study and a project environmental management plan, which must contain a description of the ‘greenfield’ ecosystem and of the measures envisaged to limit and remedy harm caused to the environment throughout the duration of the project; and
3. to be granted an environmental exploitation permit, the holder of a mining right is required to submit an environmental impact study and an environment management plan to the Ministry of the Environment for approval.

As mentioned above, rehabilitation costs must be covered by a financial guarantee to be set up in accordance with the Mining Regulations.

Under the Mining Code, occupants of the land covered by a mining permit have a right to be indemnified when their activities (such as agriculture) are affected by a mining project, in accordance with the conditions set out in the New Mining Code.

Other rights include an obligation for the operator to consult with local authorities.

Additional provisions of the New Mining Code are intended to ensure the conservation of any archaeological findings that occur during the course of the project.

Generally speaking, the DRC’s infrastructure is either outdated or non-existent. In order to develop and maintain activities and personnel, mining operators are therefore frequently required to participate in local development, for instance by funding roadworks, hospitals or schools.

The New Mining Code authorises a permit holder obtaining any further licences or permits to install and operate processing plants inside the perimeter of the relevant permit.

There are no specific restrictions on the import of equipment and machinery, or on the use of foreign labour and services, save for certain tax measures pursuant to the New Mining Code. However, when applying for the granting of a mining right, mining operators must, pursuant to the New Mining Code, commit to process and manufacture minerals in the DRC. If for any reason it is impossible to do so, a derogation may be granted subject to the fulfilment of several criteria. However, current mining title owners will benefit from a three-year period to comply with this industrialisation requirement.

Expatriate labour may be hired but the New Mining Code (like its predecessor) provides that, assuming equal qualifications, priority must be given to the local labour force for the performance of mining operations.

The sale and processing of mineral substances are unrestricted under the New Mining Code: the exploitation permit holder is free to sell the products to customers of his or her choice, at freely negotiated prices.

Generally, there are no legal restrictions on foreign investment in the mining sector, and currency exchange provisions are quite liberal.

There are, however, some basic obligations with which operators must comply. The DRC adopted new Exchange Control Regulations on 25 March 2014, which have been in force since 24 September 2014. Their main characteristics are as follows:

1. the export or import of funds equal to or above US$10,000 is subject to a licence called ‘Modèle RC’ issued by the Central Bank as an approved intermediary; certain documents justifying the transfer will need to be provided;
2. subject to the relevant tax being paid, the filing of the Modèle RC form and the delivery of other supporting documents required by the Central Bank, commercial banks in the DRC are authorised to transfer dividends, capital gains, interest, principal, fees and commissions on foreign loans outside the DRC. There is no exchange control restriction on transfers abroad of profit by a foreign company;
3. there is a restriction for the payment in cash of amounts above or equal to US$10,000;
4. repatriation of incomes is within 60 days;
5. transactions are paid for in local currency, unless otherwise agreed; and
6. taxes are paid in local currency.

A recent ministerial decree adopted on 2 February 2022 introduced the Centre de négoce (Trading Centre), which takes the form of a public centre for artisanal miners with adequate infrastructure to regulate and facilitate activities related to the sale of mineral substances from areas open to artisanal mining.

Trading Centres will offer a range of practical and supply chain-related services to artisanal miners, such as the receipt of batches, weighing, sampling, packaging, sealing and quantitative and qualitative analysis of mineral substances. Trading Centres aim to provide a safe space whereby offer and demand for artisanal mining can meet in a regulated environment. They will also serve as central points for the collection of taxes and duties that are due as a result of the mining operations and transactions.

Each Trading Centre is to be formally and effectively set up by a provincial decree deliberated in the provincial council of ministers, on a proposal of the provincial minister of mines, after consultation with other state services and civil society organisations.

This initiative constitutes a revolutionary step towards the formalisation of the artisanal mining sector, subject to significant tensions between miners and traders.

The tax and customs regime applicable to DRC mining companies is exhaustively set forth in the New Mining Code.

The main taxes levied on mining companies include surface taxes and rights, corporate income taxes, royalties, taxes on dividends and interest rates, and taxes on wages.

The value added tax regime entered into force on 1 January 2012. Since then, import of goods is subject to VAT at a rate of 16 per cent. The tax base equals the cost, insurance and freight value plus any (customs) duties and taxes (with the exception of VAT itself). Import of goods is deemed to take place when the goods cross the border of the DRC, but VAT is only due upon the declaration for release of the goods.

Prior to the entering into force of the DRC 2021 Financing Act, the Ordinance Act instituting the VAT, as amended and completed from time to time, exempted the imports of goods made by the mining companies from VAT. However, the 2021 Financing Act has removed this special VAT exemption and introduced a new VAT treatment for the imports of goods by mining companies. The VAT due on goods imported by mining companies will now be established and liquidated by way of declaration of goods to customs at the point of entry and will subsequently be declared to the DRC tax administration department to which the licensed company belongs at the first VAT declaration due date following the import.

The modalities of application of the provisions of the 2021 DRC Finance Act, with respect to the aforementioned VAT regime on importation of goods, remain to be set out in a Ministerial Decree of the Minister of Finance.

Royalties (i.e., specific mining tax) are due on the gross commercial value of all commercial products. Royalties become due at the exploitation phase and are payable at the leaving of the goods from the exploitation or processing site of the project. They amount to 1 per cent for iron or ferrous metals, 3.5 per cent for non-ferrous metals, 3.5 per cent for precious metals, 6 per cent for gemstones, 1 per cent for industrial minerals, zero per cent for common construction materials and 10 per cent for strategic minerals determined by the government (i.e., copper, cobalt and coltan and geranium).

Although mining royalties are deductible expenses for the determination of corporate income tax, they are due regardless of the mining company’s profitability (Article 255).

The corporate income tax rate is set at 30 per cent of turnover, as it is the case under the DRC’s common regime.

Specific taxes are subject to the standard or common tax regime, such as taxes on rental revenues, real estate contributions (for surfaces falling outside the scope of the mining surface taxes or rights) and taxes on vehicles and roads.

The tax rate on expatriate remunerations only amounts to half the common tax rate set at 25 per cent.

The withholding tax rate payable on dividends is set at 10 per cent of the gross amount.

In principle, withholding tax on interest is levied at the ordinary rate of 20 per cent on the gross amount.

However, interest paid in respect of loans granted from abroad in a foreign currency is not subject to withholding tax provided that the interest rate and other loan conditions are at least as favourable as those the company could obtain from unaffiliated companies.

The New Mining Code has further implemented a super profit tax at a rate of 50 per cent. The super profit tax is due when the commodity prices rise by 25 per cent in comparison to those referred to in the feasibility study. The revenues subject to the super profit tax are then exempted from the profit tax (i.e., the corporate income tax at 30 per cent).

Lastly, the New Mining Code has introduced a capital gain tax, which will become due in the case of a share transfer; the amount that is taxable is calculated on the basis of the share transfer price and the accounting value of the share.

The customs regime applicable to mining companies includes some exemptions, particularly for temporary (for up to 18 months) imports, furniture imported by expatriates, etc. In addition, various preferential rates on imports apply to mining companies. These rates increase as the project progresses:

1. 2 per cent for all goods and products strictly for mining use, which are imported before exploitation of the mine has commenced;
2. 5 per cent for all goods and products strictly for mining use, which are imported after exploitation of the mine has commenced; and
3. 5 per cent for fuel, lubricants, reagents and consumer goods, which are destined for mining activities throughout the duration of the project.

The preferential rates of 2 per cent and 5 per cent only apply to goods that appear on the list that the holder of the mining licence must submit to the Congolese authorities, which must be approved by a joint Decree issued by the Ministry of Mines and the Ministry of Finance.

Any holder of a research or exploitation permit is subject to a surface right at the rate of US$5.89 per quadrangle.

The 2021 Financ ing Act provides for the application of the ‘non-tax revenue procedure’ to: (1) the payment of the 50 per cent share of royalties; (2) the transfer of grants; (3) the additional royalty; and (4) rents (in the case of amodiation) provided for in various mining contracts and paid to the companies in the state’s mining companies.

Outlook and trends

In early 2013, the Congolese government initiated a review of the 2002 Mining Code. The fact that some international institutions, such as the Carter Centre and The World Bank, have pointed out several flaws in the 2002 Mining Code has undoubtedly influenced the government’s decision to initiate such a major review of the Code. According to the New Mining Code’s explanatory statement, among other points, the aim of the Code is to:

1. enhance the government’s control over the mining sector;
2. increase the state revenues generated by mining activities;
3. further regulate elements related to the social and environmental responsibility of mining corporations; and
4. incorporate the latest changes in the Congolese administrative context; for instance, the introduction of VAT in the Congolese tax regime.

In 2015, the government decided to suspend the review of the 2002 Mining Code, presumably because of the turmoil that the contemplated amendments would cause for the mining industry. However, in May 2017, the new DRC government announced that it would pursue the review.

On 27 January 2018, after unsuccessful discussions with mining operators, the New Mining Code was approved by Parliament, promulgated by the President of the Republic on 9 March and published in the Official Gazette on 28 March 2018. In June 2018, a new mining regulation came into force, closing the legislative procedure of the mining sector reform.

Mining companies seeking to invest in the DRC must note that, pursuant to the New Mining Code, subcontracting activities in the mining sector are subject to Act No. 17/001 of 8 February 2017 establishing the rules applicable to subcontracting in the private sector (the Subcontracting Act). The Subcontracting Act notably provides that:

1. activities can only be subcontracted to Congolese-owned companies promoted by Congolese nationals (with strictly limited exceptions);
2. all companies established on Congolese national territory must put in place, internally, a policy of training that should allow Congolese nationals to acquire the technical know-how and the qualifications necessary to accomplish certain activities; and
3. companies may not subcontract more than 40 per cent of the value of a contract.

In this respect, whereas local content requirements were already imposed on subcontracting activities in the mining sector by a Ministerial Decree, the Subcontracting Act’s implementation measures impose rather unclear obligations on mining operators and subcontractors. Furthermore, it appears that the subcontracting authority has recently increased the frequency of its on-the-ground visits to control compliance of the mining actors with the Subcontracting Act and related regulations.

In line with a current African trend, the New Mining Code reinforces local content requirements. By way of example, 25 per cent of purchase desks’ share capital is reserved for Congolese citizens.

From a political point of view, DRC President Felix Tshisekedi has stated, in May 2021, his intention to revise all the contracts the DRC has signed with China as the scope of the terms of these contracts is now deemed contrary to the national interest and inequitable for the DRC. In particular, the contracts that were entered into between the DRC and China under the ‘infrastructure for minerals’ deal have remained on the President’s radar since then. The announced renegotiations are not expected to impact the current state of the mining sector at large.

The adverse economic conditions continue to take a high toll on several local mining companies, which are frequently managed primarily for the benefit of foreign shareholders, to the detriment of the companies themselves.

In November 2021, and after reading a parliamentary report denouncing the illegal exploitation of the country’s mines, specifically in South Kivu, DRC President Felix Tshisekedi issued a list of recommendations, including the suspension of the granting and transfer of mining permits and rights, both for research and for exploitation, until further notice.

The lifting of this measure was confirmed in a notice signed on 14 March 2022 by the General Director of the Mining Registry, on the instructions of the Minister of Mines in her letter No. CAB.MIN/MINES.ANSK/000589/01/2022 of 5 March 2022.

On 29 March 2022, the DRC became the seventh member of the East African Community (EAC). The accession to the EAC will imply access for the DRC to the customs union and single common market existing between the Member States of the Community. This will facilitate cross-border trade and transport of mining products, including through a better access to the strategic ports of Mombasa (Kenya), and Dar es Salaam (Tanzania).

Source: Lexology

The story of humankind is largely a tale of conflict, often brought about by the uneven distribution of resources. For as long as we’ve been down out of the trees, and probably considerably before that too, our ancestors have been struggling to get what they need to survive, as often as not at the expense of another, more fortunate tribe. Food, water, land, it doesn’t matter; if They have it and We don’t, chances are good that there’s going to be a fight.

Few resources are as unevenly distributed across our planet as cobalt is. The metal makes up only a fraction of a percent of the Earth’s crust, and commercially significant concentrations are few and far between, enough so that those who have some often end up at odds with those who need it. And need it we do; what started in antiquity as mainly a rich blue pigment for glass and ceramics has become essential for important industrial alloys, high-power magnets, and the anodes of lithium batteries, among other uses.

Getting access to our limited supply of cobalt and refining it into a useful metal isn’t a trivial process, and unfortunately its outsized importance to technological society forces it into a geopolitical role that has done a lot to add to human misery. Luckily, market forces and new technology are making once-marginal sources viable, which just may help us get the cobalt we need without all the conflict.

A Side of Cobalt

The chemical properties of cobalt play a large role in its uneven distribution. Like aluminum, it’s essentially impossible to find any elemental cobalt in nature, and for much the same reason — it reacts readily with oxygen, forming oxides that are fairly inert. It also tends to form minerals that are closely associated with other metals, like copper and nickel. In fact, almost all cobalt produced today — 98% — is a byproduct of mining and refining those two important industrial metals.

Cobalt also easily forms minerals that incorporate sulfur and, unfortunately, arsenic. There are over 30 different ores that bear cobalt in commercially significant concentrations, making it hard to pinpoint one main ore. However, the geology that makes these diverse ores readily available is fairly limited, and knowing what sorts of rock formations cobalt ores are likely to be found in helps explain why viable deposits are scattered around the globe.

Cobalt ores tend to occur in two broad geological settings: sedimentary and volcanogenic. Sedimentary deposits, which account for more than 50% of cobalt mining today, are sandstones and shales that formed beneath ancient oceans and lakes, where organic sediments accumulated and eventually mineralized, mainly with metal sulfides. Two large sedimentary deposits are the European Kupferschiefer, or “copper shale”, and the Central African Copperbelt. Both of these deposits contain vast amounts of copper sulfides along with a significant amount of associated cobalt minerals.

Volcanogenic ore deposits, on the other hand, come from hydrothermal processes, where copper and cobalt sulfide minerals precipitate from fluids passing through hydrothermal vents. These mineral deposits originally form on the sea floor, but tectonic activity and other geological processes eventually expose these minerals or put them close enough to the surface to make for relatively easy access. Volcanogenic cobalt deposits are very rare indeed, with only a handful scattered across the globe, and are the only formations where cobalt is mined as a primary product, rather than as a byproduct of copper or nickel mining.

Old Sources, New Methods

The vast majority of cobalt currently produced is a byproduct of copper production, and since the ores for the two metals are so closely associated in their sedimentary deposits, it’s not possible to selectively mine one or the other. So the process of extracting cobalt from its ores is essentially the same as mining and refining copper, which we’ve already covered in this series. Briefly, crushed sulfide ore from vast open-pit mines is heaped up in pits with impervious linings to catch a rich mineral soup that’s leached from the rock by a constant rain of sulfuric acid. Copper is pulled out of the solution by electrolysis, leaving behind a spent electrolyte that is relatively rich in cobalt and other metals.

A series of chemical precipitation steps and a secondary leaching step selectively remove the other metals from the electrolyte, gradually enriching the cobalt in the solution until it can finally be precipitated out by adding lime to create cobalt (II) hydroxide. Despite cobalt’s association with the color blue, the precipitate is a lovely shade of pink; the famous “Cobalt Blue” pigment only results when cobalt (II) oxide is mixed with aluminum oxide.

For the few commercially viable volcanogenic cobalt sources, such as the Bou-Azzer mine in Morocco and the new Idaho Cobalt Operations (ICO) project, the recovery process is quite a bit different, mainly because the cobalt concentration in the rocks is usually significantly lower. The plan for the ICO project, which will be the only cobalt mine in the United States and the first to open in decades, shows just what’s involved in recovering cobalt as a primary product from these deposits.

The ICO project is located outside of the city of Salmon, Idaho, in the middle of the Salmon-Challis National Forest. The site is located in a 1.6-billion-year-old geological formation known as the Idaho Cobalt Belt, which was first developed in the 1940s as the need for a domestic source of cobalt became obvious after World War II. An open-pit mine operated there until the early 1980s, when cheaper foreign sources of cobalt made it hard for the mine to stay viable.

An open-pit mine in the middle of a pristine forest would be a hard sell these days, of course, so the mine’s new owners, Australia’s Jervois Mining, will be investing in deep-shaft mining to access the ore, which is primarily cobaltite, which is a compound of cobalt, arsenic, and sulfur (CoAsS). The veins they’ve identified are up to 1% cobalt, which is pretty rich for a volcanogenic deposit, and occurs alongside some decently rich chalcopyrite copper ore, as well as a good amount of gold.

The ICO project is just getting started, with work beginning on the mine workings and on the concentrator plant that will process the ore on site. When the project is in full swing, ore will be transported up from the mine face to the surface, to be stockpiled before being fed into a jaw crusher plant. The crushed ore will then be sent to a ball mill to be reduced to a powder and made into a slurry with the addition of water. A surfactant called potassium amyl xanthate (PAX) will then be added before the slurry is sent to a series of froth flotation tanks. Here, air will be injected into the slurry, which thanks to the PAX will form large bubbles. The metal sulfides will float to the top and be skimmed off, while the heavier rock bits will fall to the bottom of the tank. After thickening with vacuum filtration, the concentrate will be dried, bagged, and shipped off-site for further refining using the electrowinning methods described above.

Cobalt at Any Price

The ICO project is expected to produce about 45 million pounds (20,400 tonnes) of cobalt and 175 million pounds (80,000 tonnes) of copper before being closed up for site remediation by around 2030. In a global market that produces about 116,000 tonnes every year, the Idaho project might seem like small potatoes, but the fact that new sources of cobalt are being developed is good news, primarily because it stands to offset some problematic cobalt sources.

In 2021, about 60% of the world’s supply of cobalt came from the Democratic Republic of Congo (DRC), which sits atop a big chunk of the Central African Copperbelt and is no stranger to conflict over cobalt. The majority of that is mined in traditional mines and refined as described above, but a huge portion comes from what’s euphemistically known as “artisanal miners.” These are generally desperately poor people who locate high-grade cobalt deposits outside traditional mines and gather ore manually. The work is incredibly dangerous, both in terms of the usual hazards found in any mine, and compounded by the lack of personal protective equipment, the presence of toxic materials, and the threat of violence from other miners. Children are used as labor, and the miners sometimes earn only pennies a day.

Despite the challenges, the artisanal miners are incredibly productive — in 2021, they produced more than twice as much cobalt as Russia did. Bringing previously unviable deposits like those in the Idaho Cobalt Belt into production might offset some of this demand, which is of course a double-edged sword since cobalt is the only source of income for many artisanal miners. The whole thing may be academic, though, since global cobalt demand is predicted to rise to almost a quarter-million tonnes annually by 2025, which suggests the struggle for cobalt will do nothing but continue to escalate.

Source: Hackaday