Mutanda Mining (MUMI), a subsidiary of Glencore in the DRC, is in the process of stopping production at one of the world’s largest Cobalt mines. Sources agree that there is a possibility that this decision will be effective by the end of 2019. If nothing is official yet, the management of the company remains firm on the fact that the mine is no longer economically viable in the long run.

In a letter to its employees, MUMI mentions lower cobalt prices, higher inflation on key inputs (sulfuric acids) and additional taxes imposed by the new mining code.

Also, she announces to her staff the holding, this Wednesday, of a series of meetings this week during which the Plan of the new restructuring will be presented.

Undoubtedly, new changes and clarification of the future of operations in this mine are expected.

Indeed, the decision of the Swiss giant led by the billionaire Ivan Glasenberg comes at a time when prices of the key metal of the battery on the world market know a spectacular fall of more 40% to be at 25 000 USD per ton whereas in March 2018 they were around 95,000 USD per ton.

If this is the happiness of car manufacturers and their customers, the mining industry is slowly but surely at bay.

La redevance minière sur le cobalt est passée, depuis décembre 2018, de 3,5 à 10% de la valeur commerciale.Pourtant,depuis cette date, le prix à la tonne est passée de 55.000$ à 25.000$. Une telle incohérence fiscale de nature à encourager l’investissement dans le secteur minier

— Ikala Engunda Alain (@EngundaAlain) August 7, 2019

For some analysts, Glencore’s decision through MUMI is akin to blackmail to the Congolese government. Especially since their business plan provided Cobalt prices between 17,000 to 27,000 dollars per ton. During all this time, they produced and sold in particular to 70 000 USD by producing cobalt at the same costs releasing exorbitant super-profits. And now that there is a drop, add others, this mining giant seems to find some evasions by evoking the additional taxes of the new mining code.

As a reminder, the DRC holds 50% of world production of Cobalt, which is extracted from copper. The Mutanda mine produced about 200,000 tonnes of copper and over 27,000 tonnes of cobalt, which is one-fifth of the global supply in 2018.

Emilie MBOYO