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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Simon is the founder of Foreign Brief who served as managing director from 2015 to 2021. A lawyer by training, Simon has worked as an analyst and adviser in the private sector and government. Simon’s desire to help clients understand global developments in a contextualised way underpinned the establishment of Foreign Brief. This aspiration remains the organisation’s driving principle.