KINSHASA – Eurasian Resources Group will halt production at a copper and cobalt mine in the Democratic Republic of Congo, as it considers future investment in new production methods.
The shutdown at Boss Mining Sprl will curb cobalt supplies from a nation that accounts for three-quarters of global production of the metal used in rechargeable batteries. The suspension comes at a time of strained relations between Congo and investors after the nation last year introduced new taxes, including a 10% levy on cobalt exports.
Operations are being suspended while a feasibility study is conducted on building two processing facilities to treat ores at the site, ERG said Tuesday in an emailed response to questions. Boss is running out of oxide ores that can be processed and the company will have to invest in new treatment methods to exploit the remaining sulfide deposits, a person familiar with the matter said earlier.
“Boss Mining will be placed into care and maintenance from the end of February,” ERG said. “We are in discussions with the relevant labour unions and once these are completed we will be writing to employees directly.”
The company plans to dismiss 2 700 workers and the conditions of their departure are being negotiated, according to the person familiar with the matter.
Boss is a joint venture between ERG, which owns 51% of the Lubumbashi-based company, and State-owned Gecamines. Albert Yuma, the president of Gecamines, didn’t answer calls and emails seeking comment. Mines Minister Martin Kabwelulu said in an email he didn’t have any official information about Boss’s closing.
Yuma has repeatedly criticized Gecamines’ existing partnerships as too generous to international mining companies, yielding minimal benefits to the government and state miner in the form of profit taxes and dividends.
ERG and Gecamines in December concluded a second revision of their joint venture agreement, after the state mining company sought a greater share of revenue from the project. Gecamines boosted its stake to 49% from 30% and ERG converted into equity more than $1.5-billion of intra-group loans granted to Boss.
Boss exported about 24,000 tons of copper metal and 33,000 tons of cobalt concentrate in the first nine months of last year, generating export revenue of about $310-million, according to Mines Ministry data. The company’s concentrate production was equivalent to about 3 300 t of cobalt in the whole of 2018, according to Darton Commodities, accounting for about 3.5% of Congo’s output.
ERG has three other mines in Congo, including the Metalkol Roan Tailings Reclamation project, which recently resumed operations and may become one of the world’s largest cobalt producers.