Small miners make Congo one of the largest producers of Cobalt in the world

Congo's Entreprise Générale du Cobalt (EGC) could become the fourth largest cobalt producer in the world in 2021, according to a new Roskill report. According to the market analyst, if the state-owned company is able to capture all 8,000 tons of cobalt expected to be produced by artisanal and small-scale miners in the African country, it could become a major player, just behind Glencore, ERG and China Molybdenum . EGC was founded a year ago, but has only been operational since the end of March. The company has monopoly rights to buy, process, transform, sell and export DRC handcrafted blue metal and will sell cobalt hydroxide under a five-year contract with trading house Trafigura. The Democratic Republic of the Congo has around 70% of the world's cobalt reserves and is also the largest producer, covering over 70% of the cobalt mine supply in 2020. In 2021, consulting firm CRU expects the Congo's large and small mines to produce more than 100,000 tons of cobalt, which is 71% of the world's total. However, the supply from small-scale miners from the country is very elastic and depends on the prevailing cobalt market prices. According to Roskill, it accounted for an average of 14% of DRC's annual production over the past five years (2016-2020). In addition to questions of consistency, the Entreprise Générale du Cobalt has the task of dealing with a large number of environmental, social and governance factors (ESG) that influence cobalt production in the country's artisanal and small-scale mining, in particular child labor and the lack of safety measures. For this reason, the deal with Trafigura also includes the financing of the establishment of strictly controlled artisanal mining zones, shopping centers and logistics for tracking the supply. However, in Roskill's view, creating these zones presents challenges such as: B. the real ways to monitor them and enforce the law. Most of the designated zones are remote and not as well mineralized as the large-scale concessions of the major mining companies. "So these will continue to attract attention. Therefore, the plan to target and discourage artisanal miners from entering private mining concessions needs to be carefully defined and implemented," the report said. But if these challenges are addressed, changes are implemented, and small businesses are supplying EGC with the 8,000 tons of cobalt expected this year, the results for what is considered one of the poorest countries in the world could be excellent. "Roskill estimates that more than a million Congolese depend on the income from cobalt ASM and related logistics and support businesses. In addition, it is estimated that in the DRC, each worker supports an average of nine dependents. Hence the development of one well-organized and thriving cobalt ASM sector in the country will be an immense force for good and one of the few positive legacies that could arise from the growing demand for battery raw materials, "the report said.