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Commodity TopNews
Fakten ● Analysen ● Wirtschaftliche Hintergrundinformationen 53
COBALT FROM THE DR CONGO – POTENTIAL, RISKS AND
SIGNIFICANCE FOR THE GLOBAL COBALT MARKET 1
Siyamend Al Barazi, Uwe Näher, Sebastian Vetter, Philip Schütte, Maren Liedtke,
Matthias Baier, Gudrun Franken
INTRODUCTION
Compared to other metals, international attention
on cobalt has increased substantially over the last
few months. This is due to expectations by market
participants following increasing global demand
and a relatively tense market situation for cobalt
where most of the production originates from the
Democratic Republic of the Congo (DRC). Cobalt
represents an important metal used in the fabri-
cation of batteries, super alloys, carbides, dyes
and magnets (Fig. 1). From 2010 to 2015 global
cobalt demand increased from 65,000 t to more
than 90,000 t per year. Over the same period the
mean compound annual growth rate for cobalt
demand was 7.5 % while the demand for cobalt-
based chemicals increased at an even steeper
rate of 10.6 % (CRU 2016). The CRU commodity
consulting agency forecasts a rise in global co-
balt demand up to 155,000 t by 2025. The study
“Commodities for Future Technologies”, recently
commissioned by the Federal Institute for Geo-
sciences and Natural Resources (BGR), points
out that even when only considering the emer-
ging technologies market (and especially lithium-
ion batteries used in electric cars), annual cobalt
metal demand should rise to 122,000 t by 2035
(Marscheider-WeideM ann et al. 2016).
Cobalt hydroxid from Tenke Fungurume (Picture: BGR)
1
This report represents a translated version of a Commodity Top News publication available at https://www.bgr.bund.de/SharedDocs/GT_
Produkte/Commodity_Top_News/CTN_genTab_DE.html | Please cite this report as BGR (2017): Cobalt from the DRC – Potential, Risks
and Signicance for the Global Cobalt Market (translated, original in German). Commodity Top News v. 53, Hannover.
Commodity TopNews
2
While cobalt demand and its relevance for emer-
ging technologies are continuously increasing,
mine supply is currently limited to few countries
with the DRC representing the main producer.
This constellation implies increasing supply and
price risks for cobalt.
Additionally, planning the future supply is affected
by the fact that the DRC’s cobalt mine production
partly originates from artisanal and small scale
mining (ASM) sources, in addition to industrial
mines. In recent years, there has been repeated
criticism by civil society regarding the circumstan-
ces of cobalt ASM production and trade in the
DRC. International cobalt supply chain stakehol-
ders sourcing from the DRC were requested to
step up their due diligence efforts in order to ma-
nage social problems such as child labor or un-
acceptable labor conditions.
This report serves to illustrate relevant facts on
cobalt production and trade in the DRC on the
background of the international cobalt market.
MINE AND REFINED COBALT
PRODUCTION
In 2015, global mine production of cobalt amoun-
ted to ca. 138,500 t (cobalt bulk metal content wi-
thout consideration of processing losses). With
a total production of 84,400 t cobalt (~ 60 % of
global production), the DRC was the largest pro-
ducer, followed by China, Canada and Austra-
lia (Fig. 2). Cobalt is primarily being mined as
a byproduct of nickel and copper mining. CRU
(2016) estimates that 61% of cobalt mine pro-
duction represents a byproduct of copper mining
whereas 37 % are the byproduct of nickel mining.
Only 2 % of global cobalt production is extracted
in mines with cobalt as the primary commodity;
the latter refers to a mine in Morocco and se-
lective artisanal cobalt mining in the DRC. Los-
ses from cobalt processing commonly vary from
15 – 50 %, depending on the composition of the
original ore. Generally, the main product is a con-
centrate with < 1 – 3 % cobalt content; extraction
of cobalt is then performed by either hydro-, pyro
or electrometallurgy.
42 %
4 %
Batteries
Superalloy (Ni, Co, Fe, Cr)
16 %
Carbides and Diamond tools
7 %
Hardfacing, HSS and other alloys
10 %
Dyes, Glas, Enamels, Plastics,
Ceramics, Artist colours, Fabrics
5 %
Magnets
5 %
Catalysts
7 %
Feedstuff, Biotechnology, Anodisation,
Recording media, Electrolysis
4 %
Adhesives for tyres, Soap,
Desiccant for paint and ink
Figure 1:
Share of cobalt use by different applications in 2014 (CDI 2016a).
Commodity TopNews Commodity TopNews 3
Global production of rened cobalt was 98,100 t
in 2015 (CDI 2016b), with ca. 50 % of rened co-
balt originating from China, followed by Belgium,
Finland and Canada (Fig. 3).
Around 60 % of rened cobalt is processed into
cobalt-based chemicals while 40 % are processed
into metal or powder. Outside of China, Glencore
plc, Umicore NV/SA, Sumitomo Chemical Co. Ltd
as well as Sherrit International Corporation repre-
sent the most important producers of rened co-
balt (cf. annex Table 1).
PRICE DEVELOPMENTS
Since the 1960s, cobalt mine production has been
focused on the DRC. The DRC’s political and eco-
nomic destabilization has led to a relatively high
cobalt price volatility and signicant price peaks,
compared to many other commodities. Increasing
cobalt prices since 2006 mainly reect increasing
demand from China which abruptly collapsed
during the nancial crisis in 2008/2009. After a
brief rise in 2010, the cobalt price fell to a low of
23 USD/kg in December 2015, followed by a sub-
stantial price recovery continuing to date. From
December 2015 until February 2017, the ave-
rage monthly cobalt price rose by more than 90 %
to 44 USD/kg (Fig. 4).
Being largely a byproduct of copper and nickel
mining, cobalt production is linked to the global
production of these commodities. Cobalt output
is directly affected by production cutbacks of cop-
per and nickel mines and reners; in 2016, this
happened, for instance, in Australia (Yabulu Ni-
ckel Renery), Brazil (Niquelandia Nickel Re-
nery) and in the DRC (Kamoto and Tilwezembe
mines of Katanga Mining Ltd.). Increasing cobalt
demand, therefore, cannot be met without conco-
mitantly increasing demand for copper or nickel.
Steep cobalt price increases, such as the one ob-
served in early 2017, are the result.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2005 2006 2007 2008 2009 2010 20112012 2013 20142015
Mine production [t Co-content]
DR Congo China Canada Australia Other Countries
Figure 2: Cobalt mine production from 2005 to 2015 (BGR 2017).
Commodity TopNews
4
SIGNIFICANCE AND RISKS OF
COBALT SOURCING FROM
THE DRC
With an estimated 48 % of global reserves, the
DRC should likely continue to play a key role for
global cobalt supply. Geologically, cobalt is mainly
associated with copper mineralization in the cen-
tral African Copper Belt. There, copper-cobalt mi-
neralization is hosted by the Roan Group as part
of an 880 million years old stratigraphic formation,
the Katanga Supergroup. This region forms one
of the world’s largest mining provinces extending
over 800 km along the border of Zambia and the
DRC where it covers large parts of the former Ka-
tanga administrative province (Fig. 5).
Cobalt has been mined since 1924 from primary
and secondary deposits as well as from histori-
cal mine tailings. During the long mining history of
the DRC, industrial cobalt mining was organized
by parastatal and private companies operating at
a large scale. The collapse of the DRC’s mining
sector in the 1990s, accompanied by the decline
of parastatal enterprises caused by war, crisis and
economic mismanagement led to a rise of artisa-
nal and small scale mining of copper and cobalt.
With the gradual rehabilitation of the DRC’s pri-
vate mining sector over the last decade, cobalt
production is nowadays a by-product of copper
mining in industrial open pit mines. However, part
of the cobalt production derives from the poorly
regulated ASM sector, partly also taking place on
historical tailing deposits of industrial mine sites.
Numerous UN-reports documented the links bet-
ween mining and trading of gold, tin, tantalum
and tungsten ores and illegal nancing of armed
groups in eastern DRC, coining the term “con-
ict minerals” for these commodities. Laws and
regulations requesting international mineral con-
sumers to comply with certain due diligence and
reporting obligations in their supply chains were
established in the United States in 2011 (Dodd-
Frank Act, Section 1502) and in the European Uni-
on in 2017 (european parliaMent 2017, Killiches
et al. 2014). The OECD Guidance for Responsible
Supply Chains of Minerals from Conict-affected
and High-Risk Areas provides recommendations
0
20,000
40,000
60,000
80,000
100,000
2005 2006 20072008 2009 2010 2011 2012 2013 2014 2015
Refined cobalt production [t Co-content
]
China Finland Belgium Canada Other Countries
Figure 3: Rened cobalt production from 2005 to 2015 (BGR 2017, CDI 2016b).
Commodity TopNews Commodity TopNews 5
0
20
40
60
80
100
120
1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
US$/kg
US-Government
terminates strategic
stockpile sales.
Gécamines S.A.
controles Cobalt
market price.
Crisis and wars in the DR
Congo (former Zaire)
Increasing demand
parcually in China
93 % price increase
since December 2015
for managing supply chain risks for all mineral
commodities, including cobalt. Although cobalt is
not dened as a “conict mineral” in a strict regu-
latory sense, given its geographical and environ-
mental sourcing framework, similar risks do apply
for cobalt supply chains originating from the DRC.
A number of companies and industry associations
in the downstream cobalt supply chain emphasi-
ze the importance of implementing adequate due
diligence. The Chinese Chamber of Commerce
for Metals, Minerals & Chemicals (CCCMC), to-
gether with other internationally operating com-
panies, founded the Responsible Cobalt Initiative
(RCI) which aims at supporting the implementa-
tion of the OECD Due Diligence Guidance in co-
balt supply chains.
When sourcing cobalt from the DRC, two ma-
jor risk categories apply. Firstly, there are supply
chain-related risks, to be considered in the con-
text of due diligence and the company’s reputati-
on. International press and civil society repeatedly
denounced unacceptable conditions such as child
labor or hazardous working conditions; they have
called on international mineral consumers to in-
creasingly assume responsibility for these condi-
tions in their supply chains (e.g. ÖKo-institut e.v.
2011, aMnesty in ternational 2016, soMo 2016,
Washington post 2016). Secondly, beyond sup-
ply chain-specic risks, mineral sourcing from the
DRC is generally related to an elevated country
risk due to weak administrative structures, vola-
tility of the country’s security situation as well as
the current political constellation, which could af-
fect even relatively stable regions like the former
Katanga province, the main area of copper and
cobalt production in DRC.
HISTORICAL DEVELOPMENT
OF COBALT PRODUCTION IN
THE DRC
At the beginning of the 20th century, cobalt pro-
duction was under the monopoly of the Union Mi-
nière de Haut Katana (UMHK). At that time cobalt
was merely considered as an associated impurity
in copper ores. In contrast, since 1924, cobalt was
Figure 4: Mean monthly cobalt price (99.8 % free market) from 1967 to February 2017 (BGR 2017).
Commodity TopNews
6
Figure 5: Map of the Central African Copper Belt giving an overview of DRC’s industrial and artisanal copper-
cobalt mines as well as reneries and smelters (BGR 2017, S&P 2017)
"
!
!
(
")
")
DR CONGOZAMBIA
9
4
3
2
1
14
13
12
11
e
d
c
b
25
25
26
26
27
27
28
28
29
29
13
13
12
12
11
11
10
10
8
"
a
6
10
Lualaba
Haut-Katanga
Haut-Lom
ami
5
7
ZAMBIA
Artisanal Cu-Co mine
Industrial Cu-Co mine
Refinery/Smelter
Roan Group
Water
Border
City
100 km25 500
Mine
1 Big Hill Tailings
2 Boss
3 Comide
4 Etoile
5 Frontier
6 Huachin
7 Kabolela
8 Kamoto
9 Kinsevere
10 Kipoi
11 Mutanda
12 Ruashi-Etoile
13 Tenke Fungurume
14 Tilwizembe
Refinery/Smelter
a Gecamines Refinery
b Lumbumbashi Refinery
c Luilu Refinery
d Mutanda SX-EW
e Usoke Smelter
Commodity TopNews Commodity TopNews 7
produced in the smelters of Luilu (Kolwezi) and
Shituru (Likasi) as a signicant byproduct of cop-
per ore processing from the Kambove, Kamoto
and Musonoi mines (Fig. 5). UMHK, a consortium
under Belgian control, was nationalized following
Congolese independence (1960) and the Katan-
gan secession (1963). The parastatal company
Gécamines S.A. took control over UMHK’s ope-
rations in 1967, extending production capacities
and optimizing smelting. The year 1974 marked
a record cobalt production peak of 17,545 t, an
amount not to be exceeded until 2004. For a cer-
tain time period, Gécamines S.A. was the world’s
largest cobalt and fourth largest copper producer,
exercising signicant control on the cobalt market
and its price dynamics.
As a result of the protracted crisis and war bet-
ween 1992 and 2000, accompanied by wides-
pread mismanagement of state-controlled mines,
the DRC’s mining sector suffered a signicant de-
cline in cobalt production. In 1993 industrial cobalt
production reached a low of 2,200 t; recovery was
slow, reaching an annual production of 27,100 t
in 2006. During this period of reduced industrial
production, the signicance of ASM cobalt pro-
duction rose sharply, further reinforced by miners
previously discharged from or not getting paid by
state-owned mining companies. Between 1998
and 2006 nearly 90% of total Congolese cobalt
production originated from the ASM sector (ÖKo-
institut 2011). Since 2006 the mining sector has
seen a steady increase in industrial copper-co-
balt production (Fig. 6) with multiple international
enterprises actively involved (cf. annex Table 2).
A cobalt production peak was reached in 2011
when the DRC mine production amounted to
98,000 t (Fig. 2). Since then, cobalt production
has somewhat stagnated or decreased, amoun-
ting to 76,475 t and 84,400 t in 2014 and 2015,
respectively (Ministère des Mines 2016). When
evaluating the DRC’s cobalt production statistics,
it is important to consider the meaning and accu-
racy of data from different sources. For a given
year, variations of reported production gures up
to 20 % appear to be the norm. The DRC Cham-
ber of Mines (Chambre des Mines 2015) reported
a cobalt production of 69,328 t for 2015, whereas
CRU (2016) indicated a production of 66,120 t; -
nally, the DRC Ministry of Mines reported a cobalt
production of 84,400 t. This variation may be due
to the fact that the Chamber of Mines represents
an association of industrial producers, therefore
not reecting artisanally produced cobalt in its sta-
tistics. CRU (2016) estimated that artisanal cobalt
production in 2014 and 2015 amounted to 8,000
t and 10,500 t, respectively.
Cobalt is mainly extracted via electrolysis as
either cobalt hydroxide or cobalt carbonate at
33 – 35 % cobalt content; the products are then
exported and rened abroad. Rened cobalt pro-
duction (at 99.6 % cobalt content) in the DRC itself
only amounts to 3,300 t corresponding to 3.4 % of
total global rened cobalt production (CDI 2016b).
INDUSTRIAL COBALT
PRODUCERS IN THE DRC
Cobalt production focuses on the southeastern re-
gion of the former Katanga province. Outside of
the Copper Belt, only two deposits exist in the Ka-
sai West Province – the cobalt-containing nickel-
chromium deposits of Nkonko and Lutshatsha.
In 2015 the biggest industrial cobalt producers
in the DRC were Glencore plc, Freeport-McMo-
ran and the Eurasian Resources Group (mines
and concessions of Boss Mining). Together, these
enterprises represent around 43 % of total cobalt
production (Fig. 6). The state-controlled compa-
ny Gécamines S.A. maintains minority shares in
all mines.
Glencore plc holds the license for the Mutanda
deposit and an 86 % share of Katanga Mining,
exploiting the Kamoto, Tilwezembe and Kananga
mines. In September 2015 Katanga Mining sus-
pended production for a preliminary period of 18
months but has not resumed work until the pre-
sent day (April 2017). Glencore’s cobalt produc-
tion was therefore limited to the Mutanda deposit
in 2016. Despite this, Glencore increased its total
cobalt production by 48 % to 24,500 t (glencore
plc 2017), making Glencore the world’s largest
cobalt producer in 2015-2016.
In 2015, Tenke Fungurume Mining (TFM) extrac-
ted 15,900 t of cobalt from their Tenke-Fungu-
rume deposit (Freeport-McMoran 2016). In May
2016, China Molybdenum Co. Ltd. bought a 56 %
share on this deposit from Freeport-McMoran for
2.65 billion USD.
Commodity TopNews
8
The Luxemburg-registered Eurasian Resources
Group (ERG) is currently producing copper and
cobalt in 24 mines in the DRC; the majority of
cobalt production originates from the Comide,
Frontier and Boss Mining deposits between Kol-
wezi and Sakania. Production has slightly decli-
ned since 2014 with a total production of 9,700 t
(S&P Global Market Intelligence 2017). Table 2
(annex) provides an overview of major industrial
cobalt producers in the DRC.
ARTISANAL COBALT MINING IN
THE DRC
When referring to “cobalt mining”, one should
keep in mind that artisanal and small-scale mi-
ning mostly refers to mixed cobalt-copper ore or
tailings (although, usually, miners only get paid
for the cobalt content in the concentrate). Arti-
sanal and small-scale cobalt mining represents
an essential livelihood in the Haut-Katanga and
Lualaba provinces (parts of the former Katanga
province). In the period after the second Congo
war (2002) an estimated 90 % of all cobalt mining
was done artisanally. Back then, up to 120,000
people were involved in artisanal mining. In 2011,
it is estimated that 67,000 to 79,000 persons were
involved in all-year ASM activities; when additio-
nal seasonal mining activities are taken into ac-
count, the total number of ASM cobalt miners in
2011 was estimated at 90,000 – 108,000 persons
(ÖKo-institut e.v. 2011). Currently (2015 – 2016),
a share of 15 – 20% of the DRC’s total cobalt pro-
duction is estimated to originate from ASM mine
sites (Fig. 6), corresponding to an amount of
approx. 12,000 – 18,000 t of cobalt at an export
value of 330 – 500 Mio USD. aMnesty international
(2016) assumes that 110,000 – 150,000 people
are currently involved in artisanal cobalt mining.
Even though the gures above mainly represent
mere estimates, it is obvious that artisanal and
small-scale cobalt mining involves a substantial
number of people. The number of cobalt miners
0
20,000
40,000
60,000
80,000
100,000
120,000
2009 2010 201120122013 2014 2015
Mine production [t Co-content]
Luiswishi (DRC) + diverse
Diverse (Metal Mines SPRL)
Mutanda
Big Hill
Etoile
Tenke Fungurume
Ruashi
Other operations
Boss Mining
Kamoto/KOV/T17 (Katanga)
Artisanal mining
Figure 6: Cobalt mine production in the DRC from 2009 to 2015 (CRU 2016, BGR 2017).
Commodity TopNews Commodity TopNews 9
is comparable to the number of people working in
the eastern DRC’s “conict mineral” sector (gold,
tin, tantalum and tungsten ores) which has recei-
ved considerable international attention over the
past few years (e.g., “blood coltan”). The actual
share of ASM cobalt production in the DRC’s to-
tal cobalt production for a given year is highly va-
riable, largely depending on developments in the
industrial cobalt mining sector as well as the in-
ternational market.
In contrast to industrial mining where cobalt is ext-
racted as a by-product of copper mining, artisanal
and small-scale cobalt mining tends to selectively
focus on cobalt extraction (hetegorenite); this is
done through cobbing, hand picking and manu-
al panning or sluicing (Fig. 7). These manual mi-
ning and processing methods often result in high
cobalt-copper ratios in concentrates, which are,
therefore, an indicator of the artisanal provenance
of the material. Consequently, market price vola-
tility is a factor that strongly inuences expansi-
on or reduction of ASM activities and their share
in total cobalt production.
Mineral extraction is done underground as well as
through open pit mining and on historical tailings.
Cobalt ores and concentrates are sold to local tra-
ders and then further sold to traders and mineral
processors who are frequently of Chinese, Indian
or Lebanese origin or business connections. Du-
ring these domestic sales transactions, undocu-
mented mixing of material originating from ASM
and industrial mining sources may take place.
Several hundred intermediaries and trading cen-
ters, partly ofcially registered, are active in mi-
ning centers like Musompo and Kisanfu (aMnesty
international 2016).
SUSTAINABILITY RISKS IN
COBALT SUPPLY CHAINS
According to recommendations by the OECD Due
Diligence Guidance (2016), international traders
sourcing cobalt from the DRC and their custo-
mers should ensure that mineral extraction and
processing meet due diligence standards such
as complying with the legal framework, avoiding
the worst forms of child labor and conict nan-
cing risks while ensuring traceability along their
mineral supply chains. Compliance with due dili-
gence standards and procedures should be eva-
luated critically, in particular in cases where an
ASM origin of the ores has been documented or
is suspected. Due diligence risks need to be as-
sessed for all supply chains, including for supply
chains where it is assumed that cobalt is exclu-
sively of industrial origin as these supply chains
may have been variably contaminated by cobalt
from ASM sources. It is important to note that an
ASM origin in itself is not problematic – as long
as there is a verication and, if applicable, impro-
vement of the conditions of ASM cobalt produc-
tion (OECD 2016).
A rst starting-point for a supply chain risk as-
sessment may be the distribution of artisanal and
small-scale cobalt mining in the DRC since the
late 1990s. The relative share of cobalt of ASM
origin is not constant but changes through the ye-
ars, reecting developments in the industrial mi-
ning sector and at the international market. While
a theoretical value of the ASM cobalt production
can be calculated, the actual grades of the con-
centrates are often only estimated during initial
sales transactions; consequently, prices received
by individual miners are poorly known.
Estimates of the total number of artisanal and
small-scale miners cannot be used to calculate
the exact proportion of artisanal cobalt produc-
tion with condence. While many miners work full
time, others dig either seasonally (in addition to
agricultural activities) or “part-time”. Some ASM
mines or cooperatives may operate in a rather
organized way within a formal and legal or se-
mi-legal framework while others lack any kind
of administrative structure. Due to these circum-
stances, international companies sourcing cobalt
from the DRC should attempt to trace their supply
chains and associated risks with particular care.
Both ÖKo-institut E.V. (2011) and aMnesty inter-
national (2016) reported the widespread exis-
tence of child labor in the DRC’s artisanal and
small-scale cobalt mining sector. Their estima-
tes, indicating the involvement of around 40,000
children in cobalt mining, are mainly based on
a study published by UNICEF in 2011, and re-
ferences cited therein. Estimates for the total
number of children in the entire Katanga region
represent extrapolations based on a signicant-
ly smaller sample size. Although the presented
estimates are hence associated with a signicant
Commodity TopNews
10
statistical uncertainty, it is clear that there is a lar-
ge number of children involved in artisanal and
small-scale cobalt mining in the DRC. The study
by ÖKo-institut e.v. (2011) further distinguishes
between different age groups as, according to
Congolese law, light work is considered legal for
children aged 15 and above. The “worst forms of
child labor” are dened in cases where hard or
hazardous labor has to be performed or in case
children are exploited or abused and cannot at-
tend school. Musao (2009), using a small statis-
tical sample in the Kolwezi area, illustrates that
about half of the children working in cobalt mines
perform hard and hazardous labor. Therefore, ar-
tisanal cobalt mining activities in the DRC imply
signicant risks that the worst forms of child labor
do occur in the sector. In accordance with OECD
Due Diligence Guidance, international cobalt con-
sumers hence have a responsibility to closely mo-
nitor supply chain risks and support improvement
of the situation in the DRC.
Besides child labor, many civil society organiza-
tions (e.g., global Witness 2006, ÖKo-institut e.v.
2011, soMo 2016, aMnesty international 2016)
reported additional severe risks associated with
ASM cobalt mining and supply chains, such as:
● Hazards and risks affecting the occupational
health and safety of artisanal miners (e.g., respi-
ratory and skin problems due to the lack of ap-
propriate personal protective equipment); linked
to this problem is the exposure of workers to
elevated radiation levels due to the fact that many
copper-cobalt ores are associated with high ura-
nium contents;
● Accidents, often fatal, due to insufcient safety
measures (e.g. cave-ins in underground tunnels);
● Illegal taxation (e.g. by members of Congole-
se administration and security forces) as well as
violent clashes between miners and private or pu-
blic security forces.
The risks in the DRC’s ASM cobalt sector iden-
tied by aMnesty international (2016) and other
organizations are, in many cases, similar to ob-
servations made by BGR in the context of Ger-
man-Congolese development cooperation.
Commissioned by the Federal Ministry for Eco-
Figure 7: Industrial (left: Kwatebala Mine of Tenke Fungurume, Haut Katanga province) and artisanal (right:
Kamwale Mine, Lualaba province) copper-cobalt mining in the DR Congo and its associated products cobalt
hydroxid and cobalt-copper-concentrate (Pictures: BGR).
Commodity TopNews Commodity TopNews 11
nomic Cooperation and Development (BMZ), the
technical cooperation project centers on auditing
and building capacities of ASM operations in the
eastern DRC. The project focuses on problems
associated with artisanal and small-scale mining
of gold, tantalum, tin and tungsten ores.
The Certied Trading Chains (CTC) approach,
developed by BGR and implemented together
with its Congolese partners, is based on facili-
tating joint responsibilities for improving the con-
ditions of mineral extraction and trade, including
through mineral producers themselves (e.g., ASM
cooperatives) as well as associated international
partners and specic supply chain stakeholders.
The CTC initiative focuses on mitigating severe
health and safety risks while also facilitating a so-
cially adequate local framework, e.g. with regards
to fair and transparent payment of miners or ma-
naging environmental risks. The CTC approach
directly focuses on specic pilot supply chains.
Indirectly, CTC is supposed to exert a positive in-
uence on the surrounding area beyond directly
involved pilot supply chains. This implies the need
for improving state control and governance of the
ASM sector, for instance through mining inspec-
tions. BGR is currently evaluating whether the
CTC approach could also be applied in the ASM
cobalt sector in the DRC.
CONCLUSIONS & OUTLOOK
Considering the rapidly growing electric car in-
dustry and the required supply of lithium-ion bat-
teries, global demand for cobalt is most likely to
increase signicantly. The DRC, as the world’s
largest cobalt miner, is set to be in the focus of
attention not only of battery makers but also car
manufacturers. Signicant price and supply risks
exist due to the dominant position of a single
country, the DRC, in global cobalt production. In
order to ensure that a given cobalt supply chain
in the DRC does not aggravate social problems
such as the worst forms of child labor, cobalt-con-
suming companies need to implement adequa-
te risk management and exercise due diligence.
The DRC hosts almost 50 % of global cobalt re-
serves and features an increasingly functional
industrial mining infrastructure. Therefore, the
country will most likely remain the world’s most
important primary cobalt producer and play an im-
portant role as key supplier to meet the global co-
balt demand. In this context, both industrial and
artisanal and small-scale mining will remain rele-
vant –their respective contributions to the DRC’s
total cobalt output were highly variable in the past.
Cobalt extraction as a byproduct of copper mi-
ning currently accounts for ca. 80 % of total cobalt
production; 20 % of the DRC’s cobalt production
originates from ASM sources, representing an es-
sential livelihood for the local population in the
eastern DRC.
Cobalt is not the primary economic target me-
tal in most industrial mining operations. As such,
cobalt prices do not signicantly affect industri-
al mine production patterns; the latter are rather
driven by copper price developments. In contrast,
the artisanal and small-scale cobalt sector is more
susceptible to cobalt price uctuations. Estimated
ASM production in the years of 2010 – 2011, at
cobalt prices of 35 – 50 USD/kg, was signicantly
higher than in the years 2012 – 2014 when cobalt
prices were somewhat lower. Given the current,
positive cobalt price development and assuming
that no fundamental changes of the political and
legal mining framework in the DRC will occur, ar-
tisanal and small-scale cobalt production should
be expected to increase even further. Poverty is a
main driving force for ASM activities in the DRC.
Therefore, in case of future cobalt price declines,
it should not automatically be assumed that the
total number of ASM miners involved in cobalt ex-
ploitation will be substantially reduced. The exis-
tence of alternative livelihoods and local cobalt
price dynamics – set by intermediaries in the DRC
– are additional factors impacting on the intensity
of ASM activities.
As part of their due diligence responsibilities, in-
ternational buyers of cobalt and processed cobalt
components, and their clients, should investiga-
te whether the cobalt originated in the DRC and,
if so, verify the applicable local standards of co-
balt production, transport and processing with
regards to international expectations. This inclu-
des tracking and tracing mineral supply chains
while implementing due diligence (OECD 2016).
Purchasing minerals from ASM sources does not
represent a problem in itself; boycotting such ma-
terial would not stop ASM activities but rather lead
to a decrease in transparency and deterioration
Commodity TopNews
12
glencore plc (2017): News Release. – Produc-
tion Report for the 12 months ended 31 Decem-
ber 2016: 19 S. – URL: http://www.glencore.com/
assets/investors/doc/reports_and_results/2016/
GLEN-2016-Q4-Production-Report-.pdf
global Wi tness (2006): Digging in corruption,
Fraud, abuse and exploitation in Katanga’s cop-
per and cobalt mines: 55 S. – URL: http://www.
africafederation.net/07digging.pdf
groupe Forrest international S.A. (2017): Me-
tallurgy & Mines. – URL: http://www.forrestgroup.
com/en/minesandmetallurgy.html
ITIE – initiative pour la transparence des indu-
stires extract ives (2014): comite executif de
l’initiative pour la transparence dans les indus-
tries extractives. – Rapport ITIE RDC 2014, 194
S.: Republique Democratique du Congo.
Katanga Mining ltd (2016): Katanga Mining Limi-
ted annual information form for the year ended
December 31, 2016. – URL: http://www.katanga-
mining.com/~/media/Files/K/Katanga-mining-v2/
investor_relations/annual-info-forms/aif-2016/aif-
2016.pdf
Killiches, F., schütte, P., FranKen, G., baruMe,
B. & näher, U. (2014) : Sorgfaltspichten in den
Lieferketten von Zinn, Tantal, Wolfram und Gold.
– Commodity TopNews 46 : 9 S. ; Hannover. –
URL : http://www.deutsche-rohstoffagentur.de/
DE/Gemeinsames/Produkte/Downloads/Commo-
dity_Top_News/Rohstoffwirtschaft/46_sorgfalts-
pichten_lieferketten.html?nn=4765688
Marscheider-WeideMann, F., langKau, S., huMMen,
T., erdMann, L., tercero espinoza, L., angerer, G.,
MarWede, M. & benecKe, S. (2016): Rohstoffe für
Zukunftstechnologien 2016. – DERA Rohstofn-
formationen 28: 353 S.; Berlin.
Ministère des Mines (2016): Statistiques Minieres
Annee 2015: 53 S. – URL: http://mines-rdc.cd/fr/
documents/Statistiques/2015/Statistiques_minie-
res_annee_2015.pdf
Musao, J. K. (2009): La problematique de
l'exploitation minière artisanale dans la province
du Katanga (cas du district de Kolwezi). Mémoire
de licence en sociologie industrielle, Lubumba-
shi: Institute Supérieur d'Etudes Sociales. – URL:
http://www.memoireonline.com/12/09/3006/La-
problematique-de-lexploitation-miniere-artisana-
le-dans-la-province-du-Katanga-cas-du-distr.html
of living and working conditions of artisanal co-
balt miners and their families in the DRC. Instead,
companies should closely monitor the conditions
of cobalt mining and trade and seek to impro-
ve performance along their supply chains. The
feasibility of such measures has already been de-
monstrated in comparable supply chains of tin
and tantalum (BGR 2016).
REFERENCES
aMnesty international ltd (2016): This is what we
die for: Human rights abuses in the Democratic
Republic of the Congo power the global trade in
cobalt: 88 S.; London. – URL: https://www.am-
nesty.org/en/documents/afr62/3183/2016/en/
BGR – bundesan sta lt F ür ge oW is se ns ch aF -
ten und rohs toFFe (2016): Mineral Certifica-
tion at the BGR. – URL: www.bgr.bund.de/
mineral-certication
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rohstoFFe (2017): Fachinformationssystem Roh-
stoffe. – unveröff.; Hannover.
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– URL: http://www.thecdi.com/cobaltfacts.php
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CRU – CRU international ltd. (2016): Cobalt
Market Outlook. – 2016 Edition: 96 S.; London.
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press-room/20170308IPR65672/conict-mine-
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importers
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center/nancial-information/annual-reports-and-
proxy/default.aspx
Commodity TopNews Commodity TopNews 13
OECD – organ isation Fo r econoMic co-ope-
ration a nd develo pM ent (2016): OECD Due
Diligence Guidance for Responsible Sup-
ply Chains of Minerals from Conict-Affected
and High-Risk Areas. – Third Edition: 118 S.,
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org/10.1787/9789264252479-en
ÖKo-institut e.v. (2011): Social impacts of artisa-
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blic of Congo: 65 S.; Freiburg.
shalina resources ltd (2017): Investors. – URL:
http://www.shalinaresources.com/investors.html
SOMO – stichting onderzoeK Multinationale on-
derneMingen (2016): Cobalt blues - Environmental
pollution and human rights violations in Katanga’s
copper and cobalt mines: 57 S.; Amsterdam. –
URL: https://www.somo.nl/cobalt-blues/
S&P global MarKet intelligence (2017): SNL Me-
tals & Mining. – Payable database; New York
tiger resources ltd (2017): Kipoi Overview. –
URL: http://www.tigerresources.com.au/kipoi_
overview.17.html
Washington post (2016): The cobalt pipe-
line - Tracing the path from deadly hand-
dug mines in Congo to consumers’ phones
and laptops. – URL: https://www.washing-
tonpost.com/graphics/business/batteries/
congo-cobalt-mining-for-lithium-ion-battery/
IMPRESSUM
Editor:
© Bundesanstalt für Geowissenschaften
und Rohstoffe, Hannover, Mai 2017
B1.1 Deutsche Rohstoffagentur (DERA)
in der Bundesanstalt für Geowissenschaften
und Rohstoffe (BGR)
Wilhelmstraße 25-30 | 13593 Berlin-Spandau
E-Mail: dera@bgr
www.deutsche-rohstoffagentur.de
www.bgr.bund.de
B1.2 Geologie der mineralischen Rohstoffe
Bundesanstalt für Geowissenschaften
und Rohstoffe (BGR)
Stilleweg 2 | 30655 Hannover
www.bgr.bund.de
B4.1 Internationale Zusammenarbeit
Bundesanstalt für Geowissenschaften
und Rohstoffe (BGR)
Stilleweg 2 | 30655 Hannover
www.bgr.bund.de
assisted by Kay Lang
Commodity TopNews
14
ANNEX
Company Country Project/Renery Production 2015
[t Co-cont.]
Share of global
production 2015
China China diverse 48,719 49.7 %
Freeport Cobalt
(China Molybde-
num Co.)
Finland Kokkola Finland 8,582 8.7 %
Umicore Belgium/China i. a. Olen renery 6,306 6.4 %
Sumitomo Japan Niihama renery 4,259 4.3 %
Sherritt
International Cuba/Canada Moa JV 3,734 3.8 %
Ambatovy Madagascar Ambatovy Renery 3,464 3.5 %
Glencore Australia Murrin Murrin 3,300 3.4 %
Glencore Canada Nikkelverk/Raglan/
Sudbury 3,100 3.2 %
Chambishi Metals Zambia Chambishi 2,997 3.1 %
Glencore DR Congo Katanga 2,900 3.0 %
Norilsk Russia Polar Division/Kola
MMC 2,040 2.1 %
Vale Canada Port Colborne 1,858 1.9 %
QNPL (Queens-
land Nickel) Australia Yabulu Renery 1,850 1.9 %
CTT (Compagnie
de Tifnout Tighani-
mine)
Marocco Bou-Azzer 1,722 1.8 %
South Africa South Africa Shu powders 1,300 1.3 %
Votorantim Brasil Niquelandia & Sao
Miguel Paulista 1,300 1.3 %
Gecamines DR Congo various 400 0.4 %
India India Nicomet 150 0.2 %
Eramet France Havre-Sandouville 133 0.1 %
Total 98,114 100.0%
Table 1: Producers of rened Cobalt 2015 (CDI 2016).
i. a. = inter alia
Commodity TopNews Commodity TopNews 15
Table 2: Cobalt producers in the DRC.
Company Mine/ Deposit Production
[t Co-cont.]
Reserves
[t Co-cont.]
Artisanal
share of total
prod.
Source
China Molybdenum Co. Ltd
former owner: (Freeport-
McMoRan)
Kwatebala,
Tenke Fungurume, Sefu,
Fwaulu
15,876
(2015) 569,000 no
Freeport-
McMoRan
(2016)
S&P (2017)
Glencore plc Mutanda, Kansuki 24,500
(2016) 1,144,000 no
Glencore Plc
(2017)
S&P (2017)
Eurasian Natural Resour-
ces Group
Boss, Frontier, Kalukundi,
Lonshi, Kabolela, Kam-
bove, Lodja, Dezita, RTR,
Comide, SMKK
5,400
(2014) 1,120,000 no S&P (2017)
CRU (2016)
Groupe Forrest Internatio-
nal S.A. (Entreprise Géné-
rale Malta Forrest))
Lubumbashi Tailings,
Big Hill
4,600
(2010) NA no
S&P (2017)
Groupe Forrest
International
S.A. (2017)
Shalina Resources Ltd Etoile, Etoile HMS 1,
Etoile HMS 2
1,800
(2015) 82,000 partially
Shalina
Resources Ltd
(2017)
S&P (2017)
CRU (2016)
Jinchuan Group Interna-
tional Resources Co. Ltd
Gecamines SARL
Ruashi-Etoile 3,400
(2016) 29,000 no S&P (2017)
Katanga Mining Ltd
Gecamines SARL
Dikuluwe, Kamoto East,
Tilwezembe, Kananga,
Kolwezi, KOV, KTC,
KTO, Luilu, Mashamba,
Mashamba East,
Musonoi, T17
2,901
(2015) 645,000 no
Katanga Mining
Ltd (2016)
S&P (2017)
Zhejiang Huayou Cobalt
Co. Ltd Luiswishi + weitere 6,200
(2015) 63,000 partially 1S&P (2017)
CRU (2016)
Shanghai Pengxin Mineral
Industry Investment Shituru 1,100
2015) NA NA S&P (2017)
CRU (2016)
Societe Miniere du Katan-
ga (SOMIKA)
Lubumbashi, Kimpe,
Kasenga, artisanal
995
(2015) NA partially 1CRU (2016)
Huachin Mining SPRL NA 810
(2015) NA NA CRU (2016)
Compagnie Miniere du Sud
Katanga (CMSK)
Luiswishi, Luishia +
weitere
480
(2015) NA no CRU (2016)
La Sino-Congolaise des
Mines (SICOMINES)
Dima (Dikuluwe),
Mashamba
100
(2015) NA NA CRU (2016)
ITIE (2014)
Volcano Mining Kawama,
Lumbumbashi
1,300
(2012) NA Yes (100 %) BGR internal
Data
Congo International Mining
Corporation (CIMCO) Luisha 2,000
(2012) NA partially BGR internal
Data
Congo MJM Co Ltd (Ji-
ayuan) NA 380
(2015) NA NA CRU (2016)
Tiger Resources Ltd Kipoi 0
(2015) 46,000 2no
Tiger
Resources Ltd
(2017)
Nanjing Hanrui Cobalt Co
Ltd NA 1,900
(2015) NA NA CRU (2016)
NA = not applicable, 1 Zhejiang Huayou Cobalt and Societe Miniere du Katanga (SOMIKA) are sourcing cobalt from artisanal and smale
scale mining, 2 Reserves & Resources
