The Democratic Republic of Congo is considering more than doubling royalties on cobalt, a key ingredient in lithium-ion batteries.
Mines minister Martin Kabwelulu said on Wednesday that a new mining code is nearing parliamentary approval as nearly two-thirds of the world’s cobalt comes from Congo.
A proposed revision to Congo’s 2002 mining code, which was approved by parliament’s lower house last month and is now being considered by the upper chamber, would increase royalties across the board and impose a 5 percent royalty on “strategic metals”.
Demand for the metal has surged due to expected growth in the electric vehicle sector, causing the price on the London Metal Exchange to triple over the last two years.
Under the existing code, cobalt is charged a 2 percent royalty as a base metal alongside copper, of which Congo is Africa’s leading producer. The royalty on base metals would increase to 3.5 percent under the revised code.
Mining companies operating in Congo argue that the proposed code, which would also increase certain taxes and the state’s share in new projects, would make investments in the sector unprofitable.
But the government says the proposed rates are lower than in competitor nations such as neighbouring Zambia and that the measure is essential to boosting meager public revenues.
