May 19, 2022
  • May 19, 2022

Glencore cobalt mine scrutinized as Congo scrutinizes deals

By on April 23, 2022 0

The Democratic Republic of Congo has added Glencore Plc’s giant Mutanda copper and cobalt operation to a list of projects that could be subject to renegotiation, just as the main battery metal mine is in the process of restarting .

The move to investigate Mutanda comes as Congolese President Felix Tshisekedi steps up his scrutiny of extractive deals struck under his predecessor, Joseph Kabila. Congo is reviewing copper and cobalt projects controlled by China Molybdenum Co. and China Railway Group, while the president’s advisers are also renegotiating rights to several commodity licenses and royalty streams controlled by Israeli billionaire Dan Gertler.

“When you see what happened in this sector under the previous regime, it was outrageous in terms of the concessions given to foreign companies,” André Wameso, the president’s deputy chief of staff for economic issues, said on Thursday. an interview granted to the capital Kinshasa. .

Some of Mutanda’s permits expire next month, and Tshisekedi has used the renewal process to create an ad hoc commission that will assess the project’s benefits for Congo, Wameso said.

Mutanda has not been officially notified of any commission, a Glencore spokesman said by email on Friday.

Glencore confirmed in December that it planned to reopen Mutanda, which was put on care and maintenance in 2019 after cobalt prices fell. The operation will produce around 11,000 tonnes of cobalt per year between 2022 and 2025, with production over the 20-year mine life expected to average around 76,000 tonnes of copper and 21,000 tonnes of cobalt, said the commodities giant.

Mutanda’s reopening comes amid renewed demand for battery metals from automakers as economies shift to cleaner technologies that use electricity as a source of energy. Cobalt and copper are key metals in this green transition.

Three of Mutanda’s four permits expire in May, according to the Congolese mining cadastre.

“This is an opportunity for us to see very calmly how things have been done and if there are any improvements in terms of rebalancing the partnership with Glencore,” he said. “We have nothing against Glencore,” Wameso said, adding that any rebalancing would be aimed at ensuring the “interests of the state are preserved.”

Congo’s mining code stipulates that miners submit license renewal applications only through the cadastre and the ministry of mines. Neither responded to requests for comment. The code also requires companies to surrender 5% of their shares to the state upon renewal.

According to the code, the cadastre submits the permit renewal dossier to the minister of mines, who has 30 days to accept or refuse it. If the Minister says nothing, then the permit is considered accepted, assuming that the cadastre has notified that it is accepted.

After that, the renewal must be registered by the cadastre.

Mutanda is following the process set out in Congo’s mining code regarding its renewal, which it expects to register in the coming weeks, the Glencore spokesman said.

Mutanda produced a fifth of the world’s cobalt and nearly 200,000 tons of copper in 2018, its last year of full production. The company restarted processing oxide ore stockpiles late last year as it explored the future exploitation of Mutanda’s sulphide resources, according to Glencore’s 2021 annual report.

Negotiations with China Moly over its Tenke mine have been stalled by a dispute over different definitions for estimating the project’s mineral reserves, according to Wameso.

Congo believes the Chinese company under-reported its reserves, depriving its minority partner, state-owned mining company Gécamines, of contractual payments. Last month, the government said it was trying to resolve the dispute out of court and Gécamines was suspending legal action against China Moly’s Tenke Fungurume Mining SA.

Wameso declined to comment on the lawsuits.

Both sides are bringing in a third party to conduct an assessment, said China Moly spokesman Vincent Zhou, who added that Tenke Fungurume posted better-than-expected production results in the first quarter of 2022.

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