The Democratic Republic of Congo (DRC) is expected to start buying cobalt from artisanal miners within eight weeks, with the aim of becoming the sole legal buyer for miners in the informal sector, Reuters reported.
The DRC government is seeking to capitalise on soaring demand for rechargeable lithium-ion batteries for electric cars and curb illegal exports that drain state tax revenues. It also aims to end unsafe work practices and child Labour.
Manual miners mine cobalt by hand under dangerous conditions, often working in illegal or semi-regulated locations. Most of the raw materials are bought by Chinese traders and then sold to Chinese smelters.
The national buyer, General Cobalt Corporation (EGC), introduced a responsible procurement standard in March.
Under the new rules, tunneling at EGC-approved sites will be prohibited, and the depth of the pit will not exceed 10 meters. Miners are required to wear personal protective equipment and carry identification cards for on-site registration.
PACT, a non-governmental organisation that supports EGC, aims to ensure the safety, human rights and traceability of cobalt produced by miners in artisanal mines.
PACT deputy director Mickael Daudin told Reuters that EGC would buy the artisanal cobalt mine within four to eight weeks, depending on "current knowledge and conditions." "The chosen site is Kasulo"
EGC confirmed it was aiming to acquire artisanal cobalt from the Kasulo mine, which is currently operated by Congo Dongfang Mining, a subsidiary of China's Zhejiang Huayou Cobalt.
Congo's artisanal mines are the world's second-largest source of cobalt, after the country's industrial mines owned by companies such as Glencore and China Molybdenum.
The DRC produced about 100,000 tonnes of cobalt last year, or about 71 per cent of the world's total, according to Darton Commodities' market assessment.
"Manual and small-scale mining (ASM) production is believed to have fallen to around 7,000 tonnes by 2020," the report said.
The cobalt market is closely watching the EGC project as it will allow consumers to use handmade cobalt ore, fundamentally changing the global market landscape.
Traders had expected EGC to start buying artisanal cobalt several months ago.
"We are halfway through the year and they still haven't bought any cobalt," said one cobalt trader. "The Chinese are still the only buyers of artisanal cobalt."
CRU analyst Harry Fisher said artisanal and small-scale mining (ASM) output is difficult to predict but is expected to be between 10,000 and 12,000 tonnes this year.
Trafigura, the commodities trader, agreed a five-year cobalt supply deal with EGC in November. Under the agreement, Trafigura will finance the establishment of controlled artisanal mines, procurement centres and logistics to track supplies.
