Congo-Kin leader in the world cobalt market – Congo Indépendant

2023-05-28 20:29:47

The share of the DRC in the growth of the world supply of cobalt should be 44%, against 37% for Indonesia which becomes the second world producer.

Gaston Mutamba Permission

In 2022, Congo-Kin produced 115,371 tons of cobalt in 2022 against 93,144 tons in 2021, an increase of 23.86%, according to Central Bank statistics. This production represents nearly 73% of the world supply of cobalt. Other major cobalt producers in the world are Russia, Australia, the Philippines, Cuba, Madagascar, Papua New Guinea and Canada. But in 2030, this order risks being upset with the arrival in force of a new actor. This is Indonesia, which has just multiplied its production by 10. It has gone from less than 1,000 tonnes in 2020 to 10,000 tonnes in 2022. If this trend continues, Congo should represent only 57% of the supply. of cobalt in 2030 according to the latest report on the state of the world market from the Cobalt Institute. And according to the Ecofin Agency, over the period 2022-2030, Indonesia should multiply its production by 10, while that of the DRC should only increase by two thirds. Consequently, the share of the DRC in the growth of the world supply of cobalt should be 44%, against 37% for Indonesia which becomes the second world producer. Congo’s exports, which are in their raw state, are mainly directed towards China, the country of origin of the cobalt mining companies. It is therefore only natural that China finds itself at the 1^is world rank of cobalt refining countries.

The country does not take full advantage of its natural resources

The Congo does not have refining capacity due in particular to the insufficient supply of electrical energy. It therefore does not benefit from the added value due to refining despite its dominant position. The same is true for other stages of the cobalt value chain. This is the case of the manufacture of batteries used in electric vehicles where there is a card to play. In 2021, the government has expressed its desire to build an electric battery manufacturing plant in Lubumbashi, in the province of Haut-Katanga. It was during the “DRC-Africa Business Forum 2021” which was held on November 24 and 25, 2021, in Kinshasa. This forum, which was organized in partnership with the United Nations Economic Commission for Africa (ECA), brought together the heads of state of Zambia and Congo/Kinshasa, ministers, banks and companies. The aim was to determine how to develop a value chain around the battery, electric vehicle and clean energy industry. The initiators of the project want to capture part of the 8,000 billion dollars of the battery and vehicle market by 2025. The United Nations estimates that the market will be 46,000 billion by 2050. Congo is counting on its reserves of 400 million tons of lithium and 25 million tons of cobalt to supply this industry. To date, the project is still at the pre-feasibility study stage. Lithium is also essential for the production of electric batteries. The Australian company AVZ Minerals planned to launch in 2023 the exploitation of the largest hard rock lithium deposit in the world in Manono, in the province of Tanganyika. Proven and exploitable reserves of 132 million tons of lithium have been discovered. Unfortunately, quarrels between the shareholders delayed the start of production. These are the Congolese State via Cominière and the Chinese companies Dathomir and Zijin.

Lack of electricity and transport infrastructure affects cobalt revenues

If the success of these projects allowed the country to take advantage of the current and future favorable context, the Congo should nevertheless avoid the pitfalls that have so far prevented it from taking full advantage of its natural resources. These are the lack of electricity production, the lack of competitiveness of evacuation routes, corruption, the signing of contracts léoninswith foreign groups, not to mention non-compliance with the Mining Code. All of this constitutes so many obstacles to the country’s attractiveness to mining investors. According to the Project Coordination and Management Unit of the Ministry of Water Resources and Electricity (UCM), Katanga’s mining industry has an energy deficit of around 700 to 900 megawatts. This will increase further in the following years if the country does not make an effort to cover this energy need. A study shows that this energy deficit in the mining industry is a shortfall for the Congolese state. According to UCM experts, cach megawatt supplied to Katanga’s mining industry provides additional revenue to the state. “If we bring 100 megawatts more, that means that the state has additional revenue of 300 million taxes”. To fill this energy deficit, several private companies have embarked on the production of electricity. During the stay in China, from May 24 to 29, of President Félix Tshisekedi, the Chinese group CNEEC (China National Electric Engineering Company) said it was ready to disburse 230 million dollars for the rehabilitation and modernization of 3 groups of the Inga II hydroelectric dam. At the end of the work, which could begin in two months and last two years, the Inga dam will be able to recover 510 MW. In addition, the company CMOC Group Limited (China Molybdenum Company), majority shareholder of Tenke Fungurume Mining, intends to finance the construction of a hybrid dam (hydro-solar), with a power of 630 MW in the basin of the Lualaba river to $610 million. Currently, mining exports are carried out by truck via the southern route, namely the port of Durban in South Africa due to the lack of port infrastructure in the Congo. Previously, shipments of mining products from Zambia and Congo passed through the port of Lobito in Angola (Lobito Corridor). The destruction of the Dilolo-Lobito railway during Angola’s civil war increased transport times and costs. Today, Angola has put back into operation the 1,340 kilometers of the Benguela railway. In January, Angola signed an agreement with Congo and Zambia to develop rail and port infrastructure linked to the Angolan port of Lobito, which will open up the two countries. The US government also announced, on May 22, an investment of $250 million in the development of infrastructure in the Lobito corridor “to connect and develop commercial and economic activity from Angola to the DRC”. It should be noted that Angola had announced, in July 2022, the awarding of a 30-year concession contract, with the possibility of a 20-year extension, of the Lobito rail corridor to a consortium composed of the private companies Trafigura Group Pte, Vecturis, Mota-Engil, Engineering and Construction Africa. This contract covers the operation, operation and maintenance of rail transport.

Gaston Mutamba Permission