The decision to end the cobalt mining in the southern part of the Democratic Republic of Congo (DRC), will have a major impact on the country’s economy and on the population, according to experts. The impact will be more severely felt in the employment front, where more than 3000 people are now employed. Recently, mining major Glencore has announced stoppage of cobalt production for two years. The Swiss giant –Glencore- is accused by activists of taking advantage of the global drop in the price of this mineral to obtain a revision of the mining code and to avoid tax. The company closed the Mutanga mine, which produces nearly one fifth of world production.
It appears that the company has informed the employees about the closure of the mine through a letter. Glencore is facing many hurdles in DRC with the implementation of a new mining code. Also, the company is caught up with many legal disputes. But according to the company, the major reason for its temporary closure is the drastic reduction in the prices of cobalt and high input costs. Coupled with additional taxes imposed by the government through the new mining code, operations of cobalt mines have become unfeasible, according to the company. Cobalt spot prices, has just halved to US$ 27,800 pe r tonne, which was ruling as high as close to US$ 60,000 tonne some months back.
There are reports that a lot of illegal miners are operating in the mines owned by Glencore. Recently, there was a major accident in one of the mining sites, which had taken the lives of 36 people. The company maintained that those who died in the accident were illegal miners and not the employees of the company. Cobalt mining in particular and mining in general are subjected to a lot of restrictions and reviews. There is a general feeling that the taxes being paid by the mining companies, which are mostly owned by foreigners, are paying lesser taxes and often indulge in corrupt practices like over and under invoicing while exporting their products abroad and that too most of the time to the parent companies of the mining subsidiaries of the companies operating in Africa.
