Cobalt, Lithium Producers Want New Rules On Mineral Extraction

The Democratic Republic of the Congo (DRC), the world’s largest producer of cobalt, is starting to flex its muscles when it comes to the metals needed for the energy transition.

Photo Insert: For cobalt, the DRC accounts for 70 percent of global mining.

CMOC, the Chinese operator of the Tenke-Fungurume mine, agreed in April to pay $800 million to the government to settle a tax dispute which had seen the company slapped with an export ban for the previous 10 months, Leslie Hook, Harry Dempsey and Ciara Nugent reported for Financial Times.

Now, the DRC government is undertaking a sweeping review of all its mining joint ventures with foreign investors.

“We’re not satisfied. None of these contracts create value for us,” says Guy Robert Lukama, head of the DRC’s state-owned mining company Gécamines. He would like to see more jobs, revenue, and higher-value mineral activities captured by the DRC. The DRC is far from alone.

As the world moves from an energy system built on fossil fuels to one powered by electricity and renewables, global demand for materials such as copper, cobalt, nickel, and lithium is transforming the fortunes of the countries that produce them.

The mining of certain metals is highly concentrated among just a few countries. For cobalt, the DRC accounts for 70 percent of global mining. In nickel, the top three producers (Indonesia, the Philippines, and Russia) account for two-thirds of the market.

While for lithium, the top three producers (Australia, Chile, and China) account for more than 90%.

Demand is only going to grow in the coming years. Under current plans, none of these key commodities will have enough operating mines by 2030 to build the infrastructure necessary to limit global warming to 1.5C above preindustrial levels, according to the International Energy Agency (IEA).

By the end of this decade, the nascent lithium market needs to triple in size, while copper supply will be short by 2.4 million tons, it says. The growing demand for these commodities is starting to shake up both the economics and the geopolitics of the energy world.

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