China Settles Congo Copper And Cobalt Mining Dispute For $2 Billion - OilPrice.com
China Settles Congo Copper And Cobalt Mining Dispute For $2 Billion | OilPrice.com
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Chinese CMOC Group has settled a dispute with Congo’s state-owned mining firm Gecamines over royalties from one of the biggest copper and cobalt mines in the world, agreeing to pay a total of $2 billion in a settlement fee and accumulated dividends to the Congolese company.
CMOC Group, which bought the Tenke Fungurume Mining (TFM) operation in the Democratic Republic of Congo (DRC) in 2016, was locked in a dispute with Congo’s state firm Gecamines for a year, during which copper and cobalt exports from the huge mine were suspended.
The dispute started in July 2022 after Gecamines accused CMOC of understating the reserves at the Tenke Fungurume mine to reduce the amount of royalties it pays to the state miner. The Chinese firm holds 80% in the mining operation while Gecamines owns the rest.
Following a tentative deal to settle the dispute in April, CMOC said on Tuesday it would pay Gecamines an $800 million settlement fee by 2028 and another $1.2 billion in accumulated dividends.
“CMOC will further consolidate partnerships with Gécamines and expand co-operation in the new energy and other sectors,” the Chinese company told Reuters.
Due to the exports halt from the Congolese mine, CMOC expects its first-half profit to have slumped by between 81% and 85% compared to the same period last year, the Chinese company said in a profit alert last week.
CMOC Group is expected to become the world’s biggest producer of cobalt—toppling Glencore from the top spot—after it opens a new mine in the Democratic Republic of Congo later this year, according to company filings and estimates by Bloomberg.
CMOC Group became one of the world’s dominant players in cobalt when it bought in 2016 the Tenke Fungurume mine in DRC, giving China a strong position in yet another mineral critical for the energy transition.
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Now CMOC is expected to open a new mine in DRC, which would make it a larger producer of cobalt than Glencore.
By Charles Kennedy for Oilprice.com
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