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Congo cobalt mining dispute ends with deal as China’s CMOC agrees to pay $2 billion

China Molybdenum Company Limited (CMOC), the second largest producer of cobalt in the world, has announced it’s reached a deal with the Democratic Republic of Congo’s state mining company to life the ban on export of cobalt and copper from the country.

The deal includes:

the total amount of the settlement payment resolving the dispute is US$800 million,
payable to Gécamines over six years from 2023 to 2028

the company will pay cumulatively to Gécamines a minimum amount of US$1.2 billion of
dividends over the current project service period starting from 2023 (inclusive)

Gécamines will be entitled to 20% of the total value of the project’s subcontracting and the right to acquire a volume of production proportional to its subcontracting and the right to acquire a volume of production proportional to its 20% stake on market terms and in compliance with Congolese laws

The Congolese government stopped CMOC’s exports in 2022 after disagreement over CMOC’s official figures on reserves and royalties from Tenke Fungurume mine.

Congo accounted for 73% of global cobalt supply in 2022, and the ban had a significant impact on prices.

Share of mined cobalt supply in 2022 congo china - The Oregon Group - Critical Minerals and Energy Intelligence

Mining has continued throughout the export ban, meaning billions of dollars of reserves have accumulated. And, despite an agreement to resume these exports, they are only expected to resume later this year when logistical and transportation issues are resolved.

The agreement comes as CMOC is set to become the world’s top cobalt producer this year, overtaking Glencore Plc, as demand for critical minerals intensifies.

Our latest analysis on the long-term opportunities in cobalt:

Don’t count cobalt out in the long-term

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