China’s CMOC Group has resolved a long-running spat over mining royalties in the Democratic Republic of Congo (DRC), paving the way for its huge stockpile of battery metals to start flowing to global markets.
CMOC and its state-owned partner Gécamines reached a “consensus on the royalties issue” at the Tenke Fungurume operation, according to a Hong Kong stock exchange filing Wednesday. Exports from Tenke — a major source of copper and one of the world’s biggest cobalt mines — have been blocked by Congolese authorities since last July because of the dispute.
Smooth progress at Tenke will “further release” capacity at Tenke, and an expansion is expected to start producing this year, CMOC said in the statement. No financial details of the agreement were given.
Shares in the Chinese mining giant soared by their daily 10% limit in Shanghai, and surged 12% in Hong Kong.
The heart of the issue was state miner Gécamines’ claim that CMOC was lying about its mineral reserves, and that it owed Gécamines $7.6-billion in royalties and interest. The pair also needed to negotiate a sales contract to set the terms for future exports.
Tenke Fungurume accounts for about 15% of global supply of cobalt, and Bloomberg News reported in February that a pile of copper and cobalt worth about $1.5-billion was stuck in the African nation.
CMOC’s statement said the company will strengthen joint activities with Gécamines, promote the economic development and well-being of Congo, and make “greater contributions to friendly cooperations between China and the DRC.”