Chinese mining firm, CMOC Group, has finally settled a contentious royalties dispute with its DR Congo partner, Gecamines, agreeing to pay a staggering $2 billion (R35 billion), according to a stock exchange filing on Tuesday, July 18th.
The dispute had caused months of uncertainty over a substantial reserve of copper and cobalt within the African country.
At the heart of the conflict was CMOC’s ownership of the Tenke Fungurume mine, which faced an export ban from July 2022 to April after Gecamines, a minority shareholder, accused the Chinese company of withholding critical information about the mine’s reserves.
During the standstill, an estimated 13,000 tonnes of cobalt powder, accounting for approximately 7% of the world’s production in the previous year, were left inaccessible in the Tenke Fungurume mine.
The situation only escalated over nine months, with a significantly larger stockpile of copper accompanying the unresolved dispute.
Thankfully, the situation saw a resolution in April, leading CMOC to start moving its substantial metal stash this year.
However, the specific details of the settlement remained undisclosed until Tuesday, when CMOC revealed that $800 million would be paid as a settlement amount to Gecamines.
Additionally, CMOC committed to pay at least $1.2 billion in dividends over several years.
Moving forward, CMOC pledged that Gecamines would be entitled to 20% of the overall value from project subcontracting, and they would also have the right to acquire a volume of production proportional to their 20% stake in TFM at market rates and in compliance with Congolese laws.
The Democratic Republic of Congo is renowned as Africa’s largest mineral producer, responsible for supplying more than 70% of the world’s cobalt, a metal crucial for electronics and electric vehicle batteries. As such, the nation heavily relies on its mining sector.
Tenke Fungurume, the world’s second-largest cobalt mine, boasted impressive figures with a production of approximately 20,000 tonnes of copper and 1,500 tonnes of cobalt per month throughout 2022, according to company records.
