The Democratic Republic of Congo has declared its huge resources of electric car battery metal cobalt “strategic” and tripled the amount of money international miners need to pay the state for every tonne of metal they sell.
The decree, which was promulgated as part of the country’s new mining code, will increase the royalties on cobalt from 3.5 per cent to 10 per cent, hitting some of the largest international miners such as Glencore and China Molybdenum.
International miners have vociferously opposed the DRC’s new mining legislation, which was signed into law by President Joseph Kabila in March.
Ivan Glasenberg, chief executive of Glencore, said on Monday the company was “still trying to have constructive discussions with the government regarding the new mining code,” but had included the new royalty levels into its forecasts.
The DRC is the world’s largest source of cobalt, a critical ingredient for lithium-ion batteries used in electric cars.
While carmakers are trying to reduce the amount of cobalt they use in every electric car battery, demand for the metal is still expected to surge over the next decade due to rising sales.
Cobalt prices have more than doubled since the beginning of 2017 to trade at $33.5 a pound, according to Fastmarkets.