Conflict in Congo threatens one of the world’s largest cobalt mines

A dispute over one of the largest copper and cobalt mines in the Democratic Republic of the Congo has escalated, threatening to disrupt the export of key battery inputs and raise questions about the project’s future.

A senior manager of the state-owned mining company Gécamines said CMOC, a partner in the project, owed $ 7.6 billion in late payments, and accused the Chinese group, which specializes in the production and trading of minerals, of being a poses a threat to safety.

CMOC denied the allegations, saying it was “strong” against what it called an “unprovoked attack” and that it would defend its rights and interests.

According to Eastern Economy – Bloomberg, the dispute is mainly about the fees associated with the ownership of the mines, as Gigamemines, which owns 20% of the “Tink Fangorum” mine, the “CMOC” group, which owns a controlling stake possession, accused interest in the mine, of not Disclosure of mineral reserves, and data concealment to prevent higher fees being paid as agreed between them.

A court ruling was issued by a court earlier this year to temporarily run an mine official until the two parties end their differences. Despite this, CMOC says it is still responsible for managing the project, and insists that it function as usual.

Gigames has sharpened its rhetoric and last week threatened to scrap the partnership altogether and take back its rights. Executive Vice President Leon Moen-Capina said the company owes about $ 5 billion in royalties and is also demanding more than $ 2.5 billion se rente.

“If we decide that this method is not appropriate, then even in marriages there are always divorces,” Moen said in an interview with Gigamines’ headquarters in the Lubumbashi mining center on Monday. “This is the biggest robbery of the last 20 years, and Gigames will not continue like this,” he added.

The escalating dispute is becoming more important due to the Congo’s major role in supplying the world with cobalt, the essential ingredient in many electric car batteries.

The dispute comes against the backdrop of President Felix Tshisekedi’s efforts to step up the investigation into mining deals made under his predecessor, Joseph Kabila. The global mining industry cannot ignore the Congo’s mineral wealth, but many international companies have moved away due to concerns about the risks of working there, so international mining companies and potential investors are keeping a close eye on the dispute.

Moen said Gigamines’ next step might be to stop the sale of the Tink minerals, as the state-owned company had not signed the annual trade agreement with the project, without which any exports would become illegal.

CMOC says the allegations against the group are unfounded, and the fee payments are clearly defined in its agreement with Gigames.

According to CMOC in an email response, “There are people who ignore the basic facts and act contrary to what is stated in the agreement and try to spoil the work environment suitable for friendly conversations by spreading lies, problems cause and attack partners. is justified, and CMOC strongly opposes it, and we will reserve all means, including legal methods, to defend our legitimate rights and interests. ”

About five years ago, CMOC bought a controlling stake in Tenke Fungurume Mining Sarl from Phoenix-based Freeport McMoRan, in a deal that cost the company more than $ 3 billion.

CMOC announced last year that it was injecting $ 2.5 billion into the mine to double production, prompting questions from Gigamines and the government as to whether or not to disclose its reserves.

In the 2010 revised mining agreement, Tink Fungorum Mining will pay a $ 12 fee for each tonne of proven and probable copper reserves of more than 2.5 million tonnes for Gigamines.

Tshisekedi created a special commission in August to investigate the deal, which Moen coordinates, and Gigames filed a lawsuit against the company last December.

In February, the court ruled in favor of “Gigamines” and the ruling ruled that the management of “Tinc” mine for a period of at least six months by the official Sag Ngoy Mbayo. Gigamines backed Ngoy, which began taking over earlier this month, but was denied entry by Congolese soldiers who have been protecting the mine from craft miners since 2019.

Moen noted that the large military presence on the site, and the refusal to allow Ngwe to enter, posed a threat to national security.

The company’s executive vice president has also criticized Tink Fungorum Mining’s mining practices, as well as the number of migrant workers, who he says perform jobs that locals can easily do at the mine. “It’s not just money that matters to us, money matters, but business management,” Moen added.

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