Democratic Republic of Congo state-owned company Generale du Cobalt (EGC) could become the fourth-largest Cobalt producer in the world by 2021, according to a new report by market analyst Rosskill.
If EGC can get its hands on the 8,000 tonnes of cobalt produced by artisanal and smaller miners, it could become a major player after Glencore, Eurasian Resources Group and Luoyang Molybdenum, Mr Roskill said.
The EGC was set up a year ago but became operational in late March.
The company has a monopoly on the purchase, processing, processing, sale and export of hand-mined cobalt ore from the Democratic Republic of the Congo and will sell cobalt hydroxide under a five-year contract with trading company Trafigura.
The state-owned cobalt mining company of the Democratic Republic of the Congo has officially started operations, with a monopoly on hand-mined cobalt ore
The Democratic Republic of Congo holds about 70 per cent of the world's cobalt reserves and is the largest cobalt producer, accounting for more than 70 per cent of global cobalt supply in 2020.
CRU, a consultancy, predicts that Congo's large and small mines will produce more than 100,000 tonnes of cobalt by 2021, or 71 per cent of the world's total.
But supply from Congolese artisanal miners is highly flexible and depends on current cobalt market prices.
According to Roskill, artisanal cobalt production has averaged 14 percent of DRC's annual output over the past five years (2016-2020).
In addition, EGC has been tasked with addressing the myriad environmental, social and governance factors affecting artisanal and small-scale cobalt production in the country, in particular child Labour and the lack of safety measures.
That is why the agreement with Trafigura also includes funds for the establishment of tightly controlled artisanal mines, procurement centres and logistics to track supply.
In Roskill's view, the creation of these fields presents some challenges, such as the practical possibilities of regulating them and enforcing the law.
Most of the designated areas are remote and not as well mineralized as the large concessions held by the major mining companies.
But if these challenges are addressed and changes are implemented, small-scale operations will provide EGC with an estimated 8,000 tonnes of cobalt this year, and the country, which is considered one of the poorest in the world, could have outstanding results.
Roskill estimates that more than 1m Congolese rely on income from the logistics and support operations associated with artisanal cobalt mining.
In addition, it is estimated that in the Democratic Republic of the Congo, each worker supports an average of nine dependants.
So a properly organised and thriving artisanal cobalt mining industry could be a huge force, one of the few positive legacies that could emerge from growing demand for raw materials for batteries.
