Trading house Trafigura Group Ltd. is in talks with the Democratic Republic of Congo about financing a new state-controlled company that will buy all the African nation’s hand-mined cobalt.
Entreprise Generale du Cobalt will need $80 million to $100
million to begin buying cobalt from so-called artisanal miners,
according to people familiar with the matter, who asked not to
be named because the negotiations are private. Mines Minister
Willy Kitobo Samsoni said last week that hand-dug metal accounts
for a fifth of cobalt output in Congo, the world’s biggest
producer of the essential ingredient in lithium-ion batteries
for electric vehicles.
Trafigura declined to comment. Kitobo didn’t respond to
messages seeking comment, nor did Albert Yuma, chairman of
state-owned miner Gecamines.
Gecamines set up EGC last year in a bid to influence cobalt
prices and better regulate small-scale artisanal mining, long
criticized for unsafe working conditions and its use of child
labor. Warnings about long-term shortages caused cobalt prices
to spike in 2017 and 2018, before slumping from too much supply.
Lower prices cut production by artisanal miners last year,
according to trading house Darton Commodities.
Congo supplies more than 60% of world cobalt production, mainly
through industrial miners like Glencore Plc and China Molybdenum
Co. The new company will have a monopoly on the purchase of all
artisanally mined cobalt ore, which it will sell to processing
plants in Congo.
Trafigura already purchases artisanally mined cobalt in the
country, and is funding a pilot project to formalize such
digging at Chemaf Sarl’s Mutoshi mine.
“The project is by no means perfect,” James Nicholson,
Trafigura’s head of corporate responsibility, wrote in a report
on the project last year. But “it has delivered a notable social
and economic impact at a local level,” he said.
More than 200,000 people make their living digging cobalt and
copper in Congo’s southeast Katanga region, according to the