JOHANNESBURG (miningweekly.com) – The Democratic Republic of Congo (DRC) will vie with Peru as the fastest growing major mining market in the world during the next five years, forecasts research firm BMI.
The firm states that the DRC benefits from low labour costs, high ore grades and vast untapped resources that will attract foreign investment into some of its largest gold and copper deposits, particularly from China.
Further, the rise in global cobalt demand will further fuel potential for growth in the DRC's mining sector owing to the country's vast reserves of the battery-making commodity.
“Containing over 50% of the world's cobalt reserves, the DRC will be a beneficiary of the booming cobalt industry in the coming years. Primarily used in rechargeable batteries, we project that solid future growth in global battery demand will support cobalt consumption and prices for decades to come,” BMI said.
“We forecast DRC's cobalt production to increase from 70 100 t in 2017 to 82 000 t by 2021.”
However, BMI warned that, despite strong growth projections, recent moves aimed at reforming the mining code to increase royalties and taxes have the potential to disrupt BMI’s forecasts, while uncertainty regarding the upcoming DRC elections may lead to social unrest.
“BMI's country risk team believes it is likely that the elections will be postponed to 2018, which could lead to a cut in foreign aid and discontent among the population,” BMI said.