Tens of thousands of tons of copper cathodes and cobalt powder are piling up in the huge Tenke Fungurume mine in southeastern DRC. The amount of cobalt alone is estimated at 13,000 tons, which is about 7% of last year's global production.

The products were blocked there for more than nine months, due to a royalty dispute between China's CMOC Group, which owns 80 percent of the mine, and its Congolese joint venture partner, state-owned mining company Gécamines.

The case coincides with the DRC's stated desire to renegotiate contracts it considers to be to its disadvantage. President Felix Tshisekedi visited China at the end of May to discuss, among other things, Chinese mining contracts.

At the Tenke Fungurume mine in southeastern Democratic Republic of Congo, June 17, 2023 © Emmet LIVINGSTONE / AFP

From July 2022 to last April, an export ban hit Tenke Fungurume, the world's second-largest cobalt mine with a monthly output of some 20,000 tons of copper and 1,500 tons of cobalt, according to company figures.

The quantities are "staggering," said a mining expert in the DRC on condition of anonymity. "It's nine months of production that rest right there, on the ground. The shortfall for the Congolese treasury is obvious," he said.

The value of the stocks concerned is estimated at some $1.5 billion for copper and $340 million for cobalt.

Price pressure

With an agreement reached in April and the export ban lifted, CMOC began to evacuate its huge reserve.

At the Tenke Fungurume mine in southeastern Democratic Republic of Congo, June 17, 2023 © Emmet LIVINGSTONE / AFP

A sudden release of cobalt could cause a collapse of the market, where prices are already at their lowest. But the decision to sell the product little by little has dispelled initial fears that Tenke Fungurume's rebound sales could lead to turbulence.

"The price of cobalt is not affected," said Zhou Jun, vice president of CMOC and mine manager. Most of the cobalt will be sold gradually, under long-term supply contracts, he said.

Harry Fisher, an analyst at Benchmark Mineral Intelligence, also said it was unlikely that the price of cobalt would fall further. But inventories could extend the period of low prices, he said.

Cobalt prices fell 65 percent from May 2022, from about $40 to $14 per pound, according to Fastmarkets, a price information company.

For copper, with world production amounting to millions of tonnes per year, the stock should not cause prices to fall.

Trucks leave the Tenke Fungurume mine in southeastern Democratic Republic of Congo on June 17, 2023 © Emmet LIVINGSTONE / AFP

Vincent Zhou, spokesman for CMOC, said 57,000 tonnes of copper left Tenke Fungurume in May and confirmed that cobalt will leave gradually, "depending on market demand".

During AFP's visit to the mine, trucks loaded with copper were leaving the site, but there was little sign of cobalt leaving.

Logistical challenge

However, CMOC faces a major challenge in terms of disposing of stocks.

Endless rows of bags of cobalt hydroxide powder line up at the mine site, next to piles of copper cathodes gathering dust.

Tons of copper cathodes piled up at the Tenke Fungurume mine site in southeastern Democratic Republic of Congo, June 17, 2023 © Emmet LIVINGSTONE / AFP

Analyst Harry Fisher believes it could take up to ten months to liquidate stocks, a "logistical challenge" he said.

To evacuate the ore, a road leads to Indian Ocean ports such as Durban or Dar es Salaam. But there is only one and it is punctuated by tolls, frequently targeted by thieves and subject to heavy traffic jams.

The content of the agreement reached in April between CMOC and Gécamines has not been made public. The vice president of the Chinese company compares the dispute to a simple argument in "a couple bickering".

The anonymous mining expert suggests that the feud was finally settled because Kinshasa needed funds ahead of next December's presidential election. According to him, the export ban has in any case benefited no one. "They all lose money," he says.

Cobalt powder mined at the Tenke Fungurume mine in southeastern Democratic Republic of Congo on June 17, 2023 © Emmet LIVINGSTONE / AFP

This case illustrates the cost of commercial litigation in the Congolese mining industry.

The DRC is Africa's largest mining producer and supplies more than 70% of the world's cobalt, a crucial metal for batteries used in electronics and electric cars. The country, where two-thirds of its estimated 100 million people live below the poverty line, relies heavily on its mining sector.

Asked for comment, Gécamines did not respond.

AFP visited the Tenke Fungurume mine as part of a trip organized by the Cobalt Institute, a lobby group.

© 2023 AFP