The Democratic Republic of Congo (DRC) has suspended nine subcontracting companies operating at mines managed by Eurasian Resources Group (ERG), adding to the challenges faced by the cobalt and copper producer in the country.
The government announced the ban on March 14, citing non-compliance with Congolese ownership requirements.
Despite a meeting with ERG representatives last week, the regulator confirmed on Tuesday that the sanctions remain in place.
Miguel Kashal Katemb, director general of the Regulatory Authority for Subcontracting in the Private Sector, emphasized the need for ERG to engage subcontractors with genuine Congolese shareholders.
The move underscores strained relations between ERG and the DRC, a major supplier of cobalt and copper globally.
The government aims to maximize domestic benefits from its critical resources, mined by international companies.
State-owned miner Gecamines seeks to assume control of some ERG assets, alleging slow development. Additionally, environmental concerns led to the suspension of activity at one of ERG’s copper projects.
ERG Africa, in response, asserts its commitment to compliance with local laws and regulations. The company highlights its substantial expenditure in Congo, primarily directed to Congolese suppliers, and pledges to collaborate with regulators for adherence to local laws.
The affected subcontractors operate at ERG’s Metalkol and Frontier projects, major sources of cobalt and copper.
Output is expected to remain unaffected during the transition period for the introduction of new subcontractors.
The regulatory action aligns with legislation mandating Congolese majority ownership in subcontracting businesses.
However, concerns persist regarding the genuine involvement of purported Congolese shareholders in these firms.
ERG, controlled by individuals and entities primarily from Kazakhstan, faces similar scrutiny in other projects, including the Sicomines joint venture.
The DRC government has undertaken various measures to reclaim undeveloped permits and address environmental issues.
Despite challenges, ERG continues its investment in Congo, with plans for a significant revamp of its Comide project to produce copper and cobalt over the long term.
