Glencore’s Congo mining conundrum – by Barbara Lewis and Aaron Ross (Reuters U.K. – May 3, 2018)

LONDON/DAKAR (Reuters) – Miner and commodities trader Glencore (GLEN.L) is embroiled in a legal tangle over its copper and cobalt operations in Democratic Republic of Congo, where conflict and changes to regulations have deterred many mining firms.

U.S. sanctions on Glencore’s former Israeli partner in Congo have been a trigger for litigation. At the same time, relations with the Congolese authorities are under strain from a dispute with the government over a new mining code.

Investors are watching closely, particularly for any impact on supplies of cobalt from Congo, which is by far the world’s biggest producer of the metal whose uses include making alloys for jet engines and batteries for electric cars and mobile phones.

Glencore accounts for more than a quarter of the world’s cobalt output, most of it from Congo, which itself is the source of 60 percent of global supplies. Any disruption could push up cobalt prices from already historic highs of $90,000 (66,383 pounds) a tonne. CBD3

“The price would absolutely go through the roof,” Bernstein analyst Paul Gait said. The copper price could also be affected by any disruption at Congolese mines but any impact is likely to be less dramatic as Congo is only the world’s fifth biggest producer, analysts say.

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