LONDON, Feb 7 (Reuters) – The government of the Democratic Republic of Congo has announced ambitious plans to take control of the country’s wild-west artisanal cobalt sector.
A new state company, Entreprise Generale du Cobalt (EGC), has been given monopoly powers to purchase and market cobalt from the informal sector. The move is being hailed by the government as a way to clean up a sector that is tarnished with a reputation for child labour, lax safety and illegal activity.
That would be very good news for the cobalt market. The human cost of mining in the Congo, which accounts for more than 60% of global cobalt production, is one of the reasons companies such as Tesla are actively trying to engineer the metal out of their battery supply chain.
Congo’s humanitarian goals however go hand-in-hand with financial motives, firstly to boost tax revenues and secondly to exert more control over the cobalt price. That may be less good news for the cobalt market.
“We are going to eliminate child labour, we are going to eliminate labour by pregnant women and we are going to eliminate fraud in this sector so that the cobalt (…) will be responsible cobalt,” according to Albert Yuma, chairman of state mining company Gecamines, which will oversee the EGC.