Congo’s state-owned mining company has accused Toronto-listed Katanga Mining Ltd. of draining hundreds of millions of dollars from their joint-venture copper and cobalt mining company.
Katanga, owned by Swiss-based mining giant Glencore PLC, had seen its share price soar over the past year on projections that it will become the world’s biggest producer of cobalt, an essential element in batteries for electric cars.
The boom in electric cars, which has led to a tripling of cobalt prices over the past two years, has boosted Glencore into a powerful position as a dominant supplier to the auto industry, despite investor jitters about instability and corruption in the Democratic Republic of the Congo.
But the fragility of Katanga’s position became clear this week. The revelation of the dispute between Glencore and state-owned Gécamines, including the state company’s threat to dissolve their joint venture, triggered a 50-per-cent drop in Katanga’s shares on the Toronto Stock Exchange on Monday.
Its share price recovered slightly on Tuesday, but its conflict with Gécamines continued to escalate as the Congolese company intensified its attack.
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