Trafigura inks DRC cobalt offtake deal that benefits artisanal miners

23rd November 2020 By: Simone Liedtke - Writer

Trafigura inks DRC cobalt offtake deal that benefits artisanal miners

Commodities trading group Trafigura has signed an offtake deal to buy cobalt from Entreprise Générale du Cobalt (EGC) – the Democratic Republic of Congo’s (DRC’s) State-owned buyer that markets cobalt from artisanal miners.

Under the agreement, Trafigura will provide funding for the creation of strictly controlled artisanal mining zones, the installation of ore purchasing stations and costs related to the transparent and traceable delivery of cobalt hydroxide on an export cleared basis.

EGC will ensure that the ore marketed by Trafigura complies with Organisation for Economic Cooperation and Development (OECD) due diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

EGC MD Jean-Dominique Takis Kumbo said the partnership with Trafigura would carry significant potential for the Congolese artisanal cobalt sector.

“For our country to benefit from the intrinsic value of cobalt, currently boosted by the development of carbon-free energies, it is essential that measures be taken to support the formalisation of this industry. In fact, by cleaning-up this sector, which has been subject to recurring illegality and fraud for several years, and of which artisanal miners are the first victims, society stands to benefit as a whole,” Kumbo commented in a statement on November 23. 

Trafigura executive chairperson and CEO Jeremy Weir added that the legitimacy of efforts to formalise and bring controls to the sector would depend on broad-based consultation and assurance that OECD standards would be upheld.

“We will continue to engage and collaborate with stakeholders to be part of the solution to supply cobalt responsibly.”

In support of this agreement, EGC would establish a technical committee through which Trafigura and the international nonprofit organisation Pact, among others, will promote responsible sourcing diligence.

Pact works alongside local communities in nearly 40 countries to eradicate poverty, notably by making artisanal and small-scale mining formal, safer and more productive. 

In 2018, Trafigura and Pact first piloted an approach to the responsible sourcing of cobalt from semi-mechanised operations at the Mutoshi concession in the DRC.