Cobalt crisis in Congo may increase prices of electric vehicles
The Democratic Republic of Congo is deeply in argument with some of the world’s largest mining companies. The reason is a revised mining law that is set to increase taxes on cobalt, an important metal for electric vehicle batteries. Under the amended legislation, royalties for cobalt could rise from 2 per cent to 10 per cent just as global carmakers look to secure supplies of the metal to meet ambitious targets for production of electric vehicles.
The law, which parliament passed at the weekend, also sets higher tax rates for copper and gold in the resource-rich country. The chief executiv es of Gl encore, the Swiss-based commodities group, and Randgold, the UK-listed gold miner, have both travelled to the DRC to oppose the new law, which still has to be signed by President Joseph Kabila, report the Financial Times. “One can expect unprecedented lobbying efforts from the sector to change the president’s mind before he signs the revised mining code into law,” said Elisabeth Caesens, of Resource Matters, a Brussels-based non-government organisation.
If signed by Mr Kabila, the revision of the 2002 law could substantially raise revenues for his government as it prepares for elections in December. About $10bn worth of copper and cobalt is exported from the DRC every year. The 2002 law was an attempt to increase transparency and predictability for foreign mining companies in the DRC, after years of civil war following the fall of former dictator Mobutu Sese Seko in 1997. It contained a clause that stated that mining companies would be protected for 10 years if any changes were made to the law.