Foreign miners begin talks on tax hike in DR Congo as cobalt risk rises

Congo’s government and foreign mining companies will begin month-long discussions on the country’s new mining law today. The changes see royalties increase from 2% to 3.5% on base metals and up to 10% on the ‘strategic metal’ of cobalt, riling miners.

Home to 60% of the world’s cobalt production—crucial to the manufacture of computer chips, mobile phones and lithium-ion batteries—Kinshasa’s new code has roiled markets. The price of the metal has risen 8% since the law was signed on March 9, with mining firms warning that the changes will deter further investment.

Even more concerning for foreign investors are reports that Congo’s state-owned miner is pushing to renationalise the industry. The country’s information minister refused to deny the report, simply stating the government was yet to make a decision.

With the price of cobalt having risen almost threefold over the past decade, any potential nationalisation push poses a serious risk—not only to miners but also to downstream producers of devices and, increasingly, electric vehicles.

The current round of negotiations will see miners push for the reinstatement of a clause that provided a 10-year exemption from tax hikes to current projects. Talks will wrap up on April 24.

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