More
Сhoose

DRC: Strategic minerals, for whom are they really?

DRC: Strategic minerals, for whom are they really?
Category: Analysis
Date: July 10, 2024
Author: Admin

The use of the term “energy transition” has highlighted the importance of strategic minerals. It was in Germany, in 1980, that this terminology appeared for the first time. The ambition was to abandon this dependence on fossil fuels (oil, gas, coal) for a transition of the current energy system towards low-carbon energy sources.

From that moment on, the duality of “energy transition” and “ecological transition” was very fashionable, especially after the signing of the Paris Climate Agreement, a binding international treaty on climate change, adopted in December 2015.

And at the basis of this energy transition is access to strategic minerals, which are found in abundance not only in the DRC, but also in other countries such as China and Chile. To meet the challenge of ecological transition, we cannot do without minerals such as: cobalt, copper, lithium, nickel, rare earths, etc., which the DRC abounds in.

The Democratic Republic of Congo is often described as a geological scandal, as it contains nearly 70% of the world’s reserves of cobalt and other minerals essential for the manufacture of batteries for electric vehicles, but also for uses in aeronautics, electronic and medical equipment, IT services, semiconductors, etc.

We are talking more and more about strategic minerals, but there is reason to question this concept by asking who are they really for? And above all, what is the strategy of Africa and, in particular, of the Democratic Republic of Congo, regarding the exploitation, marketing and processing of these minerals that the world covets so much.

The Democratic Republic of Congo presents a vision which, if implemented, will position it geopolitically against other powers. It must be recognized that in reality African countries are faced with structural problems. This prevents them from wisely exploiting their strategic mineral resources to the best of their interests.

For the particular case of the DRC, according to specialists in the mining sector, the country has not yet defined the contours of its national policy in this area. However, reading its legislation, provisions exist defining the expression “minerals declared strategic”.

The definition of “strategic minerals” according to the DRC is different from that of Westerners. Because, in the understanding of industrialized countries, the ecological dimension is not taken into account by Kinshasa. It is therefore not linked to the ecological or energy transition. In the DRC, minerals declared strategic are so according to world product prices. This means that if a mineral is well positioned economically, it can be declared strategic. The 2018 decree taken by the legislator designates three strategic mineral substances, namely cobalt, columbo-tantalite, germanium.

To mark this differentiation, the tax rate of the recovery tax collected on the marketing of so-called strategic minerals is 10%; while for other minerals, it oscillates between 3.5% and 6%. As a result, with the rise in cobalt prices in 2019, the government created the Entreprise Générale du Cobalt (EGC), which holds a monopoly on the marketing of artisanal mined cobalt.

We can also note the creation of the National Battery Council, which is a structure aimed at demonstrating the DRC’s desire to equip itself with instruments that can support its commitment to cleaning up the sector.

In the mining sector, there are two Memorandum Of Understanding (MOU), or Memorandum of Understanding signed between the DRC and Zambia and between the DRC-Zambia-USA which could help the sector. The latest memorandum of understanding, non-binding, aims to improve good governance and the fight against corruption in the sector.

Another “good” news is the relaunch of the Kisenge Manganèse company which remained on the back burner for a long time. The government would like to establish win-win partnerships with companies interested in the exploitation, marketing and local processing of manganese.

It would be appropriate to note that Congolese mining legislation provides for provisions on social responsibility in order to take into account the interests of local communities impacted by mining projects. On this subject, the legislation has defined certain mechanisms including:

– Signing of specifications between the operating company and local communities. The company is required to discuss with the community to mutually agree on development projects.

Posted in Analysis
Previous
All posts
Next