An advisor to Congolese Prime Minister Jean Nkunza on Wednesday said the Democratic Republic of Congo will declare cobalt and coltan, as “strategic” minerals which will earn the country higher royalties.
The natural mineral resources are used in the production of electric vehicle and renewable energy technology.
A new mining code was signed into law on Friday by President Joseph Kabila despite opposition by global mining companies with operations in the DRC such as Glencore, Randgold and China Molybdenum.
We need to make enough money before we run out of these minerals so that is why they are strategic to the country.
Royalties paid to the government from cobalt and coltan mining will jump from 2 percent to 10 percent .
Miners of the two metals used in batteries, would have paid a royalty of 3.5 percent under the new code if they had not been designated as strategic.
The government considers minerals with the “strategic” designation important for the economic, social and industrial future of the country.
“We need to make enough money before we run out of these minerals so that is why they are strategic to the country,” said Jean Nkunza.
“We have to make sure for the next 20 years we make money from these minerals because demand is going to be so high. It’s going to continue to grow and we are not going to stop raising the royalties on these minerals.”
Other “strategic” minerals on the list include lithium and germanium, Nkunza said.
International mining companies have said the new mining code will deter foreign investment but have agreed to start negotiations with the government over measures to implement the code.
The announcement by the prime minister’s office, however, appears to pre-empt those negotiations, which were due to determine, among other things, how metals would be classified.
The code also removes a clause that protected miners from changes to the fiscal and customs regime for 10 years and raises royalties and taxes across the board.
Low commodity prices in recent years hit Congo’s resource-dependent economy hard, causing inflation to swell to nearly 50 percent in 2017, and the government is desperate to increase its revenues.
The DRC is the world’s biggest source of cobalt, the price of which more than doubled last year.