Copper and Cobalt: The Return of Major Disciplines in the Democratic Republic of the Congo and Zambia

Copper and Cobalt: The Return of Major Disciplines in the Democratic Republic of the Congo and Zambia

Several major Western mining companies have significantly reduced their presence in Africa in recent years, particularly in the Democratic Republic of the Congo and Zambia, leaving room for Chinese competition to fill the void. But in recent months, such multinationals have re-emerged, such as Barrick Groups, Anglo American and BHP. The battle for cobalt and copper rages against the backdrop of the giant electric vehicle market.

On the sidelines of Mining Indaba 2022 held in Cape Town last May, the management of Barrick Gold, the world’s second largest gold producer, set a target for the group’s upcoming investments, with a particular focus on copper. The region appears to be ripe for welcoming the millions of dollars that the miner wants to devote to expanding its copper portfolio: the copper belt between Zambia and the Democratic Republic of the Congo. group that denounce In 2019, the ongoing changes in the Congolese tax system look more than ever ready to be ignored to tap the mineral potential of the Central African giant.

The appetite of multinational corporations for the Democratic Republic of the Congo

The same applies to Australian mining giant BHP, which is said to have recently been in talks to acquire the Western Forest copper project, adjacent to the giant Kamoa-Kakula copper complex currently being developed by Ivanhoe Mines in the Democratic Republic of the Congo. This is also the case with British holding company Anglo American, which signed a Memorandum of Understanding in May with Mining Company Junior Arch Minerals in Zambia. It relates to a joint venture to develop a copper and cobalt project in the Northwest Province. We should also point out the approval, as of May, of a 1.3 billion investment by First Quantum Minerals in copper and nickel in Zambia.

Interest in “green” minerals is the number one reason that justifies this rush by Western companies towards Zambia and the Democratic Republic of the Congo. These two countries concentrate a significant part of the world’s copper reserves and many deposits remain untapped there. But this is not the only reason, as the mention of the Australian BHP installation or the strengthening of presence in these two countries (for others) coincides with regulatory turmoil in other jurisdictions.

Mining Contract Review

In Chile, the world’s largest copper producer, a controversial bill is currently before the Senate that aims to increase royalties that the state collects on the income of mining companies. The situation appears more complex for mining investors in Peru, the world’s second largest copper producer. Having come to the head last year, Socialist President Pedro Castillo has already built his campaign trail on the idea of ​​a better distribution of wealth between the mining industry and the population, and has promised Peruvians he will review mining contracts for their status. End “Looting“.Since then, his government has talked about targeting tax.” excess profits Because of rising commodity prices, despite the opposition of the industry and part of the political class.

material back

The global commodities market is experiencing the dawn of a new super-cycle, according to many industry professionals. While not all metals may be affected, we are nonetheless seeing the first signs of this two-year forecast with the historical rise in the price of copper.

Zambia and the Democratic Republic of the Congo seem to have understood this, as the two countries concluded a memorandum of understanding in April to develop a supply chain for electric vehicle materials.. This sector could consume 4 million tons of copper per year by 2040 (compared to 300,000 tons in 2020) according to the CRU Group, and 320,000 tons of cobalt by 2026 (compared to 175 thousand tons in 2021, according to the Cobalt Institute). Quoted by Ecofin.

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