DRC:EGC to purchase 7,000 tonnes of cobalt from artisanal miners for a value of USD 150 million
The General Cobalt Company (EGC) plans to purchase 7,000 tonnes of cobalt from artisanal miners, for an aggregate value of US $ 150 million (USD). The ton will trade at 30,000 USD. This is part of EGC’s first purchases from artisanal miners.
According to internal EGC sources, the Kasulo mining site, near Kolwezi in Lualaba province, was chosen for the first purchases.
The source indicates that the purchased cobalt ore will be transformed into cobalt hydroxide at nearby processing facilities, before being exported, notably through the company Trafigura, under the terms of an agreement between the parties there. a few months ago.
The agreement concluded within this framework provides that “ the commodity trader will in fact be the recipient of EGC purchases, even if the latter retains an option to sell 50% of the cobalt to other interested parties ”.
In 2022, EGC will purchase 15,000 tonnes of cobalt from miners as well as up to 20,000 tonnes in 2023.
It should be noted that the purchase price of 30,000 USD proposed per tonne of cobalt remains quite modest compared to the current market price which is around 50,000 USD per tonne.
Experts explain that in order not to subject artisanal miners to fluctuations in the stock market and to preserve the purchase price, a Fund will be created; that is, 3% of EGC revenue will go to the Fund if the price of the metal is less than US $ 50,000, compared to 5% of revenue if it is above US $ 50,000 per tonne.
As a reminder, the Entreprise Générale du Cobalt SA ” EGC ” is a subsidiary of GECAMINES (State mining company) created in 2019 and having received the mandate from the State to exercise in the DRC a purchasing monopoly on cobalt from artisanal mining, requiring processing prior to export before marketing it and ensuring that this production meets the highest standards in terms of social and environmental responsibility and traceability.
Among the main objectives of EGC are the fight against illegal exports of cobalt and the formalization of artisanal and small-scale mining (ASM).
Possessing more than 67% of the world production of cobalt, the Democratic Republic of Congo has risen to the rank of the largest producer of cobalt in the world.
