Congolese mining company Entreprise Générale du Cobalt, or EGC, signed an offtake agreement with commodity trading group Trafigura in a bid to fomalise artisanal and small-scale cobalt mining in the Democratic Republic of Congo (DRC).
The trading agreement includes the provision of finance by Trafigura to fund the creation of strictly controlled artisanal mining zones, the installation of ore purchasing stations and costs related to the transparent and traceable delivery of cobalt hydroxide to Trafigura on an export cleared basis.
Under the supply terms, EGC will ensure that the ore marketed by Trafigura complies with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
In support of this agreement, EGC will establish a Technical Committee through which Trafigura and the international non-profit organisation Pact, among others, will promote responsible sourcing diligence. Pact works alongside local communities in nearly 40 countries to eradicate poverty, notably by making artisanal and small-scale mining formal, safer and more productive.
In 2018, Trafigura and Pact first piloted an approach to the responsible sourcing of cobalt from semi-mechanised operations at the Mutoshi concession in the DRC.
Read more about the Trafigura and Pact partnership here
“Today’s announcement is very important for the Congolese artisanal cobalt sector,” says EGC MD Jean-Dominique Takis Kumbo.
“This partnership responds to the will of the Government through its initiative for the defence and promotion of national artisanal production. For our country to benefit from the intrinsic value of cobalt, currently boosted by the development of carbon-free energies, it was essential that measures be taken to support the formalisation of this industry. In fact, by cleaning-up this sector, which has been subject to recurring illegality and fraud for several years, and of which our artisanal miners are the first victims, society stands to benefit as a whole.
“Our mission is therefore as much in a perspective of the defence of our most vulnerable communities, as in the affirmation of the central positioning of the Democratic Republic of Congo, which has 70% of the world reserves of this strategic mineral. We are confident that Trafigura, through its experience and expertise, will support us in our mission and ultimately enable us to achieve our goals,” says Takis Kumbo.
Trafigura’s executive chairman and CEO, Jeremy Weir, comments: “Cobalt has a vital role to play in the world’s energy transition and electrification. Artisanal mining or ASM, provides an important livelihood in the DRC. Ultimately, the legitimacy of efforts to formalise and bring controls to the sector will depend on broad-based consultation and assurance that OECD standards will be upheld. We will continue to engage and collaborate with stakeholders to be part of the solution to supply cobalt responsibly.”
President and CEO of Pact, Caroline Anstey, says: “Artisanal and small-scale miners are one of the world’s largest, and most vulnerable, workforces. For decades, Pact has been working with governments, industry and miners themselves to maximise ASM’s contributions to development, particularly at the local and community level.
“We will leverage this expertise and experience, as well as our successful work with Trafigura and its partners, to support responsible sourcing and sustainable small-scale cobalt production through the collaboration between EGC and Trafigura. Our objective is to play our part in ensuring ASM material is not only responsibly sourced but provides social and economic benefits to artisanal miners and nearby communities,” concludes Anstey.