Democratic Republic of Congo Mining Minister, Prof Willy Kitobo Samsoni, stated that the country aims to position DRC as a key cobalt producer on the international stage.
He said this while responding to questions that had been submitted by the audience during the live session.
Following 17 June’s opening keynote panel at the start of Digital DRC Mining Week, the country’s mining minister, Prof Willy Kitobo Samsoni, agreed to stay online and spend some time responding to these questions.
The moderators were Louis Watum, MD DRC Operations, Ivanhoe Mines DRC and President of the DRC Chamber of Mines and Elodie Delagneau, DRC Mining Week event director.
1.Honourable Minister, last April, in an article called “DRC, five measures to reduce the impact of the COVID-19 pandemic on the mining sector”, you suggested as a proposal, to facilitate the supply and export of commercial mining products. What has actually been done in this regard, to date?
We indeed published measures proposed by our government to mitigate the negative impact of the pandemic on the mining sector.
Concerning the issue of import, with the closure of our borders, as you know, we import from South Africa, China, products that are necessary for the extraction and exploitation of our mines.
So when there is no input, it is like having no air, we cannot produce. Aside from sulfuric acid, which is produced locally, much chemical input comes from abroad. They are collectors and concentrators for mineral flotation that are essential such as sodium sulfhydrate. Production, therefore, slowed down significantly, even stopped.
The same applied to exports; we need to be able to take our products outside of the DRC.
The government then had to intervene on a diplomatic level, to make sure the closure of borders did not include the transport of above-mentioned products that are used in mining activity, both for import and export.
At the customs level, we also instructed that the customs offices speed up the process for mining-related applications, for the import of chemicals and the export of commercial products.
The procedures have been accelerated; in some cases, we even made use of emergency procedures to facilitate trade.
To date, we are monitoring these measures and I make sure to intervene personally, along with the Minister of Finance, when there are any issues or hold-ups.
2.Is the decline in cobalt prices compatible with the current position of cobalt as a strategic mineral, with the consequence of a higher associated tax?
This is an important question and I will use this opportunity to clarify this matter.
When we say that metal is strategic, it is unrelated to its price. What it means is that the metal in itself is strategic in our economic agenda. Few other countries produce cobalt and we want to position DRC as a key cobalt producer on the international stage.
When we enacted the Mining Code in 2018 and decided to tax strategic products at 10% of their market value, cobalt was priced at around $90k a ton. When it dropped to around $38k a ton, people started asking if we could review its strategic position.
Today, cobalt is at $29.8k a ton. What other metal has this price in DRC today? Copper, also a strategic metal, is at $5.7k a ton. All of the other strategic metals have a lower price than cobalt.
When engaging with miners we try to understand, what the minimum threshold is for cobalt before it is no longer profitable. That is the question we struggle with to agree on. What is the cost of production and at what level do we say cobalt is not interesting?. For years, the cobalt price was oscillating between $14k and $15k a ton. When the big projects started with cobalt in DRC, it was worth half of its current price.
How can we claim that at $29k today, it is no longer strategic?
3.These particular metals are in high demand and we are using advanced technology to find them. With the COVID-19 pandemic increasing the use of technology, do you think there will be a tendency to adopt new automation and robotics to improve operational efficiency, productivity and security on the mines? If so, what would be the impact on the job market in DRC?
I think the automation of the industry did not start with COVID-19, it has been in progress for a while. Automation improved working conditions and avoided the manipulation of dangerous products or heavy lifting.
We already have mines that are automated. I was at Kibali Gold recently and all the transport is done in an automated way. This allows for better safety of the workers and reduces casualties in the case of accidents or landslides. These technologies can help save lives.
Man is still needed to control and oversee the operations; there will always be the need for workers. But this requires qualified labour to adapt to new technologies. I don’t believe there will be job losses. For each innovation, there is a shift and the need for new skills. We can’t stop technology and the progress of tomorrow and we have to find our place and adapt.