A Democratic Republic of Congo state-owned company with monopoly rights to the purchase and sale of the country’s hand-mined cobalt started operations on Wednesday.
Entreprise Generale du Cobalt will sell cobalt hydroxide under a five-year deal with trading house Trafigura Group, which will also provide financing for the Congolese company. Congo is the world’s biggest producer of cobalt, a mineral used in the lithium ion batteries that power electric vehicles.
The cobalt industry has been criticized dangerous working conditions at so-called artisanal mining sites, where deaths and child labor are common. Despite its mineral riches, Congo remains one of the poorest countries in the world.
“Our mission is to defend our most vulnerable communities as well as to ensure that the Democratic Republic of the Congo, which has 80% of the world reserves of this strategic mineral, can continue to benefit from its significant natural resource wealth,” EGC Managing Director Jean-Dominique Takis Kumbo said in an e-mailed statement.
Trafigura will help finance the creation and control of so-called artisanal mining zones, ore purchasing stations and “all costs related to buying, transforming, and delivering of cobalt hydroxide to end buyers,” the EGC statement said.
EGC is a wholly owned subsidiary of state-miner Gecamines. The terms of its agreement with Trafigura have not been made public.
Congo’s artisanal miners are responsible for as much as 20% of the country’s cobalt exports when prices are high, according to Congo’s ministry of mines. In 2019, amid lower prices, artisanal production dropped below 8,000 tons, representing about 8% of the country’s output, according to Darton Commodities.