(Bloomberg) -- Democratic Republic of Congo said it’s backing plans for a new domestically owned copper-cobalt plant to help formalize artisanal mining in the country, at a time when minerals crucial to electric vehicles are moving further into the global spotlight.
The project, which will be developed by privately held Congolese firm Buenassa Sarl, is expected to cost about $350 million, and Washington-based financial consulting firm Delphos International Ltd. has agreed to help raise financing, representatives from the two companies and the government said in an interview.
Congo supplies about 70% of the world’s cobalt and is a top-three copper producer, which means it will play a key role in the world’s green-energy shift. The country’s output is dominated by industrial mines owned by foreign firms like Glencore Plc and China’s CMOC Group Ltd., but both the government and industry have faced pressure to help improve conditions for informal miners, who dig by hand in often hazardous conditions.
The involvement of Delphos also highlights a growing focus among western governments on ensuring security of supply for strategic minerals such as copper and cobalt while reducing dependency on China. Delphos works closely with the US government, specializing in development and export-credit financing, and the Buenassa project “is very much aligned with the geopolitical goals of the United States,” said Delphos International Chairwoman Roya Rahmani.
A US agreement to support a plan between Congo and neighboring Zambia to develop an electric-vehicle value chain was a key factor behind the firm’s decision to sign on to the smelter project, she said.
Read: US Agrees to Support EV-Battery Plan by Congo, Zambia
Buenassa, owned by Congolese businessman Eddy Kioni, is working with Entreprise Generale du Cobalt, a state-owned company with the right to all of Congo’s hand-dug cobalt. EGC has struggled to set up operations since it was founded in 2019 to help formalize and improve the conditions of so-called artisanal mining.
“The idea is to reverse the way the minerals and the wealth generated is controlled,” Kioni said in an interview last week on the sidelines of the annual United Nations General Assembly meetings in New York.
Buenassa initially planned to produce 30,000 tons of copper cathode and 5,000 tons of cobalt hydroxide, largely sourced from the hundreds of thousands of Congolese who mine the minerals by hand. But Kioni now anticipates the project will expand with Delphos’ and government backing.
The new smelter will ensure “that all the cobalt from the artisanal sector can be concentrated at this refinery,” said Ministry of Industry Julien Paluku.
Buenassa will also process industrial ore to ensure the smelter’s profitability and is in talks with a US-based commodities trader to market the output, Kioni said, declining to say which one.
Most of Congo’s minerals currently end up in China for final refining. The two countries have a $6.2 billion minerals-for-infrastructure deal that is under renegotiation to create “a new adventure” between them, President Felix Tshisekedi said last week.
The president declined to give specifics, but the government is asking for more control of the deal. Kioni said Buenassa could be a beneficiary of the renegotiations.
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