Trafigura is ending an artisanal cobalt formalisation project in Democratic Republic of Congo, which it has run alongside miner Chemaf and NGO PACT for nearly two years, the commodities trader said on Thursday.
A cooperative of artisanal miners on the Mutoshi project site has produced cobalt, a key battery metal, and sold it to Trafigura since early 2019.
The site has been shut since March 2020 because of the Covid-19 pandemic. Trafigura said the project will end on Dec. 31 as Chemaf aims to develop an industrial mine at Mutoshi.
Trafigura said the decision in part reflects the fact that Congolese law now requires all artisanal cobalt production to be marketed through the state cobalt company Entreprise Generale du Cobalt (EGC).
Trafigura struck a five-year supply deal with the EGC last month under which the commodities trader will finance the creation of controlled artisanal mining zones, buying centres and logistics to trace supply.
Mutoshi is one of several projects in the Congo aiming to regulate artisanal cobalt mining - work which often takes place in a legal gray area with frequent accidents and child labour. It also provides a livelihood for an estimated 150,000 Congolese.
End-users of cobalt such as carmakers are under increasing pressure to make sure their supply chains are free from conflict and poor working practices.
The chief financial officer of Chemaf - the Congo subsidiary of Dubai-based Shalina Resources - did not immediately reply to a call and an emailed request for comment on the end of the Mutoshi project.
Congo's mines minister said the Mutoshi project ending would not change the country's overall cobalt production.
For 2020, consultancy CRU expects 8% of the Congo's cobalt production to come from artisanal sources.