China Molybdenum Lost Cobalt Mine in Congo

The Democratic Republic of Congo has effectively taken back China Molybdenum Co., Ltd. (CMOC) from its ownership of the Tenke Fungurume cobalt mine. A court ruling has left the Chinese company as the owner of one of the world's largest cobalt mines.

Congo's own mining company, Gécamines, is trying to remove the China-based miner from the management of the mine after claiming that the China-based miner underdeclared copper and cobalt reserves at the site. In fact, the company did not pay the proper royalties to the Congolese government.

A third party will take over the operation of the mine for six months after the court ruling, while Gécamines will still be able to retain its 20% stake.

This series of events originated with Congolese President Felix Antoine. Tshisekedi. Felix Tshisekedi, who is known for his tough stance on China, set up a commission of inquiry. Tshisekedi has called for a review of mining contracts with Chinese companies, including allegations of corruption surrounding the mining consortium Sicomines.

This is not the first time the African country has thrown punches at Chinese mining companies operating on its land. in August 2021, Mwenga governor Theo Ngwabidje Kasi ordered the closure of six mining companies to ease tensions between Chinese gold miners and local Congolese living in the region. Christian Wanduma, a lawyer who is advising one of the affected communities, said: "Minerals are being exploited of the cobalt mine without respecting the mining code and regulations."

China appears to be seeking a balanced approach to resolving the above incidents in response. Wu Peng, Director-General of China’s Department of African Affairs, they are also investigating alleged violations, "will not just suspend the companies’ operations, but ask them to stop the relevant business."

The Congo provides 60% of the world's cobalt reserves (the largest in the world), and Luoyang Molybdenum's operations at the mine make it the second-largest cobalt producer in the world.

In 2019, China Molybdenum said that falling cobalt prices have made the mine a "deficit zone". But with the electric vehicle industry race pushing cobalt prices to a three-year high, stability in China's relationship with the African country is essential to boost its own electric vehicle industry.

China Molybdenum Co., Ltd was created in 1969 and after mixed-ownership reforms in 2004 and 2014, has become a private holding company with state-owned capital participation. The Company was listed on Hong Kong Exchanges and Shanghai Stock Exchange in 2007 and 2012, respectively. Of the 19 cobalt-producing mines in Congo, about 15 are owned or partially owned by Chinese companies.

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