Glencore’s copper mine in the Democratic Republic of Congo is involved in a conflict over €800 million in owed royalties to the local tax authority, DGRAD. Despite the legal dispute, production levels of copper and cobalt remain unaffected. The Congolese government aims to clarify the situation while maintaining investment attractiveness. Kamoto Copper Co. has made substantial tax payments from 2021 to 2023 but has faced account freezes and asset seizures during negotiations.
A Glencore Plc-controlled copper mine located in the Democratic Republic of Congo is currently facing a significant dispute with local tax authorities concerning royalty payments. The agency, known by its French acronym DGRAD, claims that the Kamoto Copper Company owes over €800 million (approximately $894 million) to the Congolese government. Sources familiar with the situation, who requested anonymity due to the sensitivity of the matter, have noted that earlier this year, the company’s local bank accounts were frozen. Recently, tax officials briefly sealed a warehouse where metal was being stored by the company, indicating escalating tensions. Kamoto Copper Co., in which Glencore holds a 75 percent stake, is recognized as one of the largest copper mines in the region, with reported exports of 200,000 tonnes of copper and 16,000 tonnes of cobalt in 2023, according to government figures. Despite the ongoing dispute, production activities for both copper and cobalt at the mine have not been disrupted. In the first half of the year, the mine produced 89,000 tonnes of copper and 11,700 tonnes of cobalt, and Glencore operates an additional copper-cobalt project in the Congo. A representative from the Congolese Finance Ministry, which oversees the DGRAD, stated that the government is presently reviewing the financial accounts of Kamoto Copper Co. as part of efforts to preserve the business climate while safeguarding state interests. The ministry did not disclose further details regarding the investigation. In the interim, a spokesperson for Glencore declined to provide any commentary on the disagreement. Notably, Kamoto Copper Co. has made a total of $2.3 billion in tax and royalty payments in the Democratic Republic of Congo from 2021 to 2023, as reported by the company. The tax agency temporarily closed the Kamoto warehouse located in the mining center of Kolwezi; however, it was reopened shortly thereafter and normal operations resumed. This measure followed unsuccessful discussions between Kamoto and tax officials, prompting the agency to take stringent actions such as restricting bank accounts and seizing assets. In recent years, the Democratic Republic of Congo’s copper exports have seen a dramatic increase, tripling since 2015. The nation has recently surpassed Peru to become the world’s second-largest producer of copper, a crucial element for the green energy transition. Additionally, the country is the leading global supplier of cobalt, contributing to approximately 75 percent of the global output last year.
The current dispute between Glencore’s Kamoto Copper Co. and the DGRAD highlights the complexities and challenges associated with mining operations in the Democratic Republic of Congo. The DRC has significant mineral wealth, particularly in copper and cobalt, which are essential for green energy technologies. As demand for these metals increases, particularly in light of the global shift towards renewable energy, tensions between multinational corporations and local governments may intensify regarding taxation and royalty agreements.
The ongoing royalty dispute between the Kamoto Copper Co. and the Congolese government underscores the intricate relationship between mining companies and local authorities, particularly in resource-rich regions. With an outstanding claim of approximately €800 million, the situation remains delicate as both parties seek to navigate their interests without disrupting production or the business environment.
Original Source: www.mining.com
