London, July 13th (Argus) - Glencore, a Swiss-based commodities trader, is challenging the tax claims made by the authorities of the Democratic Republic of Congo, adding uncertainty to the already constrained cobalt market due to export control restrictions.
A source from Glencore said that the company is "raising objections and engaging with the relevant government authorities" after it was reported that officials had sealed the offices of its Kamoto Copper & Gold Corporation. The source stated that it is too early to determine any impact on marketing, logistics or cobalt sales. Kamoto accounted for over 15% of Congo (DRC)'s export quota allocation in the fourth quarter of last year.
This dispute comes at a time when Congo (DRC) continues to impose stricter controls on its cobalt industry. The country suspended cobalt exports last year and replaced it with a quota system aimed at limiting supply and supporting prices.
Glencore is one of the producers most affected by these measures. Its cobalt production in the first quarter dropped 39% year-on-year to 5,800 tons, and the quota system prompted companies to pay more attention to copper production.
"Everything depends on whether the dispute escalates, to what extent it escalates, and whether they will therefore prevent Glencore from exporting any materials," a trader said. "If so, it could have a significant impact."
"But I think they will seek negotiations and dialogue, and then implement a comprehensive export ban," the trader added.
