Congo set to increase royalties on cobalt and other minerals.

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Mines Minister, Martin Kabwelulu, said the Prime Minister of Democratic Republic of Congo will sign a decree in the coming days to classify cobalt and other minerals as “strategic”, a term which subjects them to higher royalties.

Mining companies like Glencore and Randgold are against this initiative, which is part of a new mining code. The change will cut tax exemptions and hike royalties and profit taxes. The companies had hoped the rules would be watered down after further negotiations.

The other metals to be classified as “strategic” and subject to royalties of 10 percent under the new code,  have not been announced by the government. Companies paid a rate of 2 percent for cobalt before the code was introduced.

At a mining conference in the copper and cobalt mining city of Kolwezi, Kabwelulu said “in the coming days, you will see the Prime Minister sign a decree to declare cobalt and certain other substances as strategic”. Minerals with the “strategic” designation, are considered by the government to be important for the economic, social and industrial future of the country.

Kabwelulu also noted that all companies were paying the royalties and taxes stipulated by the new code. The companies with  major investments in Congo include AngloGold Ashanti, Ivanhoe Mines, China Molybdenum, Zijin Mining and MMG.

Congo is the world’s leading miner of cobalt and Africa’s top copper producer. There has been an increase in demand for cobalt, a mineral used to manufacture electric car batteries and mobile phones.

 

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