JOHANNESBURG (miningweekly.com) – Democratic Republic of Congo (DRC) State-owned company Entreprise Générale du Cobalt (EGC) on March 31 officially launched its activities to support the commercialisation of responsibly sourced artisanal cobalt in the country.
EGC, a subsidiary of Gécamines, was established in November 2019, with a strategic economic mandate to exclusively formalise the artisanal cobalt sector in accordance with the DRC’s mining regulatory framework.
EGC holds the monopoly for the purchase, treatment, transformation, sale and export of cobalt extracted by artisanal miners or artisanal mining companies in the DRC.
During a live stream event, the company published its Responsible Sourcing Standards to define the operational principles that EGC will require to support the establishment of safe and strictly controlled artisanal cobalt mining zones.
The artisanal and small-scale mining (ASM) of cobalt in the DRC is a sector responsible for millions of livelihoods and is a key growth driver for the country's economic development, speakers emphasised during the launch event.
Ambassador of the DRC to South Africa Bene M'Poko said cobalt mined in the DRC accounts for more than 63% of global production, with ASM activity responsible for about 20% of that production.
International commodities trading company Trafigura executive chairperson and CEO Jeremy Weir pointed out that global demand for cobalt was rapidly increasing alongside the growth in electric vehicles, as well as new mobile network developments, with fifth-generation mobile handsets requiring 20% more cobalt than equivalent fourth-generation models.
He said that,cobalt demand is projected to double from 145 000 t in 2020 to 290 000 t by 2030, with the DRC supplying an even larger share of global output.
Therefore, this provides opportunities for the DRC, and the artisanal mining industry can play a role in filling the supply gap, he noted.
Therefore, the DRC government established EGC to work alongside the State's Agency for Regulation and Control of Strategic Mineral Substance Markets (Arecoms) to formalise the ASM cobalt supply chain with a primary focus to preserve and protect respect for human rights, safety and environmental standards.
These principles are embodied within the Responsible Sourcing Standard, which defines the operational requirements for artisanal cobalt production.
As part of EGC’s formalisation strategy, it is responsible for buying all domestically produced ASM cobalt ore, prior to processing and/or transformation and marketing.
Through the consistent application of the EGC Standard, and its associated control framework, cobalt buyers and supporting financial institutions would be assured that EGC cobalt has been brought to market in a responsible manner, emphasised EGC MD Jean-Dominique Takis.
EGC has structured its activities around two strategic pillars – production and marketing.
"EGC's production phase will cover the mining of cobalt ores by artisanal miners from artisanal mining areas, their transit to trading centres and their subsequent processing into cobalt hydroxide in local plants. This phase, which involves a large number of stakeholders, requires the execution of the contractual activities with the subcontractors in charge of operational support and the effective implementation of various activities on the sites.
A critical aspect is providing guidance to the artisanal miners in their day-to-day activities in terms of safety, or to the neighbouring communities,” Takis explained.
For additional support in terms of its marketing responsibilities, EGC has entered into a trading agreement with Trafigura.
A component of the agreement includes support by Trafigura to EGC and its partners for the development of controls and traceability associated with ASM cobalt production.
Moreover, Trafigura will assist in identifying industrial buyers for the cobalt sold by EGC.
The partnership also includes financing for the creation of strictly controlled ASM mining zones, the financing of ore excavated by the artisanal miners and additional costs related to ensuring the transparent and traceable delivery of cobalt hydroxide.
EGC is making arrangements for the development of its first site, to be announced in due course, with production of cobalt hydroxide to start in the coming months.
Through its strong partnerships with several government institutions in more than 40 countries, the not-for-profit organisation PACT will also support continuous improvement against the EGC Responsible Sourcing Standard.
The reorganisation of the artisanal cobalt sector was highlighted as a crucial step in structuring this industry in the DRC. As the world transitions to a different, more sustainable energy mix, cobalt represents an opportunity to improve the business climate in the DRC, boost its economic attractiveness, and the fight against poverty, speakers noted.